AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 5, 1997.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
VERSA TECHNOLOGIES, INC.
(NAME OF SUBJECT COMPANY)
------------------------
APPLIED POWER INC.
TVPA CORP.
(BIDDERS)
------------------------
COMMON STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
925116-10-5
(CUSIP NUMBER OF CLASS OF SECURITIES)
------------------------
ROBERT C. ARZBAECHER
APPLIED POWER INC.
13000 WEST SILVER SPRING DRIVE
BUTLER, WI 53007
(414) 781-6600
(414) 781-0629 (FAX)
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
------------------------
Copy to:
ANTHONY W. ASMUTH III, ESQ.
QUARLES & BRADY
411 EAST WISCONSIN AVENUE
MILWAUKEE, WISCONSIN 53202
(414) 277-5000
(414) 271-3552 (FAX)
CALCULATION OF FILING FEE
- ----------------------------------------------------------------------------------------------------------
Transaction Valuation: $147,130,041 Amount of Filing Fee: $29,427*
- ----------------------------------------------------------------------------------------------------------
* For purposes of calculating fee only. This amount assumes the purchase of
5,974,824 shares of Common Stock, par value $.01 per share, of the Subject
Company, on a fully diluted basis (consisting of 5,596,083 shares currently
outstanding plus an additional 378,741 shares issuable upon exercise of
options) at $24.625 in cash per share. The amount of the filing fee,
calculated in accordance with Regulation 240.0-11 of the Securities Exchange
Act of 1934, equals 1/50 of one percentum of the value of the shares to be
purchased.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
AMOUNT PREVIOUSLY PAID: NOT APPLICABLE FILING PARTY:
FORM OF REGISTRATION NO.: DATE FILED:
================================================================================
CUSIP NO. 925116-10-5 SCHEDULE 14D-1
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
TVPA Corp.
39-1904753
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCES OF FUNDS
AF (from Parent)
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(E) OR 2(F)
[ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[ ]
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0%
10 TYPE OF REPORTING PERSON
CO
2
CUSIP NO. 925116-10-5 SCHEDULE 14D-1
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Applied Power Inc.
39-0168610
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCES OF FUNDS
BK, WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(E) OR 2(F)
[ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Wisconsin
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[X]
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0%
10 TYPE OF REPORTING PERSON
CO
3
ITEM 1. SECURITY AND SUBJECT COMPANY
(a) The name of the subject company is Versa Technologies, Inc., a Delaware
corporation (the "Company"). The address of the principal executive offices of
the Company is set forth in Section 7 ("Certain Information Concerning the
Company") of the Offer to Purchase, dated September 5, 1997 (the "Offer to
Purchase"), a copy of which is filed as Exhibit (a)(1) hereto.
(b) This Statement relates to a tender offer by TVPA Corp., a Delaware
corporation (the "Purchaser") and a wholly-owned subsidiary of Applied Power
Inc., a Wisconsin corporation ("Parent"), to purchase all outstanding shares of
common stock, par value $.01 per share (the "Common Stock"), including the
associated rights to purchase Series A Junior Participating Preferred Stock
(together with the Common Stock, the "Shares"), of the Company, at a purchase
price of $24.625 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase and in the related
Letter of Transmittal, a copy of which is filed as Exhibit (a)(2) hereto. The
Offer to Purchase and Letter of Transmittal (which, together with any
supplements or amendments, collectively constitute the "Offer") are incorporated
herein by reference. The information set forth in the Introduction of the Offer
to Purchase is incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND
(a)-(g) The information set forth in the Introduction, Section 8 ("Certain
Information Concerning Parent and the Purchaser") and Schedule I of the Offer to
Purchase is incorporated herein by reference. During the past five years,
neither the Purchaser, Parent, nor any of the persons listed in Schedule I of
the Offer to Purchase has been (i) convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or (ii) a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction, and,
as a result of such proceeding, was or is subject to a judgment, decree or final
order enjoining further violation of, or prohibiting activities subject to,
federal or state securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY
(a)-(b) The information set forth in the Introduction, Section 7 ("Certain
Information Concerning the Company"), Section 8 ("Certain Information Concerning
Parent and the Purchaser"), Section 10 ("Background of the Offer; Contacts with
the Company; the Merger Agreement") and Section 11 ("Purpose of the Offer; Plans
for the Company After the Offer and the Merger") of the Offer to Purchase is
incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
(a)-(b) The information set forth in the Introduction and Section 9
("Financing of the Offer and the Merger") of the Offer to Purchase is
incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER
Introductory Paragraph; (a)-(e) The information set forth in the
Introduction, Section 10 ("Background of the Offer; Contacts with the Company;
the Merger Agreement") and Section 11 ("Purpose of the Offer; Plans for the
Company After the Offer and the Merger") of the Offer to Purchase is
incorporated herein by reference.
(f)-(g) The information set forth in Section 13 ("Effect of the Offer on
the Market for the Shares; Nasdaq Listing and Exchange Act Registration") of the
Offer to Purchase is incorporated herein by reference.
4
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
(a) The information contained in Items 7, 8 and 9 of the cover pages hereto
is incorporated herein by reference. The information set forth in the
Introduction, Section 8 ("Certain Information Concerning Parent and the
Purchaser") and Schedule II of the Offer to Purchase is incorporated herein by
reference.
(b) The information contained in Section 10 ("Background of the Offer;
Contacts with the Company; The Merger Agreement"), Section 11 ("Purpose of the
Offer; Plans for the Company After the Offer and the Merger") and Schedule II of
the Offer to Purchase is incorporated herein by reference.
ITEM 7.CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES
The information set forth in the Introduction, Section 9 ("Financing of the
Offer and the Merger"), Section 10 ("Background of the Offer; Contacts with the
Company; The Merger Agreement") and Section 16 ("Fees and Expenses") of the
Offer to Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED
The information set forth in the Introduction and Section 16 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS
The information set forth in Section 8 ("Certain Information Concerning
Parent and the Purchaser") of the Offer to Purchase is incorporated herein by
reference.
The incorporation by reference herein of the above-referenced financial
information does not constitute an admission that such information is material
to a decision by a holder of Common Stock of the Company whether to sell, tender
or hold securities being sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION
(a) Not applicable.
(b)-(c) The information set forth in Section 15 ("Certain Regulatory and
Legal Matters") of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 9 ("Financing of the Offer and the
Merger"), Section 13 ("Effect of the Offer on the Market for the Shares; Nasdaq
Listing and Exchange Act Registration") and Section 15 ("Certain Regulatory and
Legal Matters") of the Offer to Purchase is incorporated herein by reference.
(e) Not applicable.
(f) Reference is hereby made to the Offer to Purchase and the related
Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1)
and (a)(2), and are incorporated herein by reference in their entirety.
5
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
(a)(1) -- Offer to Purchase, dated September 5, 1997.
(a)(2) -- Form of Letter of Transmittal, dated September 5, 1997.
(a)(3) -- Form of Notice of Guaranteed Delivery.
(a)(4) -- Form of Letter for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(5) -- Form of Letter to Clients from Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) -- Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(a)(7) -- Text of Joint Press Release, dated September 3, 1997.
(a)(8) -- Form of Summary Advertisement, dated September 5, 1997.
(a)(9) -- Form of Letter to Participants in the Versa Technologies,
Inc. Stock Purchase and Dividend Reinvestment Plan.
(b)(1) -- Commitment Letter between Bank of America National Trust and
Savings Corporation, BankAmerica Securities, Inc., PNC Bank,
National Association and Applied Power Inc. dated August 29,
1997 (including the Summary of Terms and Conditions attached
thereto).
(c)(1) -- Agreement and Plan of Merger, dated as of September 2, 1997,
among Applied Power Inc., TVPA Corp. and Versa Technologies,
Inc.
(d) -- Not Applicable.
(e) -- Not Applicable.
(f) -- Not Applicable.
6
SIGNATURES
After due inquiry and to the best of its knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: September 5, 1997
TVPA CORP.
BY: /s/ ROBERT C. ARZBAECHER
------------------------------------
Robert C. Arzbaecher, Vice President
APPLIED POWER INC.
BY: /s/ ROBERT C. ARZBAECHER
------------------------------------
Robert C. Arzbaecher, Vice President
and Chief Financial Officer
S-1
EXHIBIT INDEX
EXHIBIT
NO.
- -------
(a)(1) -- Offer to Purchase, dated September 5, 1997.
(a)(2) -- Form of Letter of Transmittal, dated September 5, 1997.
(a)(3) -- Form of Notice of Guaranteed Delivery.
(a)(4) -- Form of Letter for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(5) -- Form of Letter to Clients from Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) -- Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(a)(7) -- Text of Joint Press Release, dated September 3, 1997.
(a)(8) -- Form of Summary Advertisement, dated September 5, 1997.
(a)(9) -- Form of Letter to Participants in the Versa Technologies,
Inc. Stock Purchase and Dividend Reinvestment Plan.
(b)(1) -- Commitment Letter between Bank of America National Trust and
Savings Corporation, BankAmerica Securities, Inc., PNC Bank,
National Association and Applied Power Inc. dated August 29,
1997 (including the Summary of Terms and Conditions attached
thereto).
(c)(1) -- Agreement and Plan of Merger, dated as of September 2, 1997,
among Applied Power Inc., TVPA Corp. and Versa Technologies,
Inc.
(d) -- Not Applicable.
(e) -- Not Applicable.
(f) -- Not Applicable.
EI-1
EXHIBIT (a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK)
OF
VERSA TECHNOLOGIES, INC.
AT
$24.625 NET PER SHARE
BY
TVPA CORP.
A WHOLLY OWNED SUBSIDIARY OF
APPLIED POWER INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., EASTERN TIME, ON
FRIDAY, OCTOBER 3, 1997, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE A NUMBER OF SHARES OF
COMMON STOCK, PAR VALUE $.01 PER SHARE, INCLUDING THE ASSOCIATED RIGHTS TO
PURCHASE SHARES OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK, OF VERSA
TECHNOLOGIES, INC. REPRESENTING NOT LESS THAN A MAJORITY OF THE SHARES THEN
OUTSTANDING AND ENTITLED TO VOTE, MEASURED ON A FULLY DILUTED BASIS. THE OFFER
IS ALSO CONDITIONED UPON CERTAIN OTHER TERMS AND CONDITIONS, INCLUDING THE
EXPIRATION OR TERMINATION OF ALL WAITING PERIODS IMPOSED BY THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE
REGULATIONS THEREUNDER. SEE SECTIONS 14 AND 15. THE OFFER IS NOT CONDITIONED ON
THE RECEIPT OF FINANCING.
------------------
THE BOARD OF DIRECTORS OF VERSA TECHNOLOGIES, INC. (THE "COMPANY") HAS
UNANIMOUSLY APPROVED THE OFFER AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
TENDER THEIR SHARES PURSUANT TO THE OFFER.
------------------
IMPORTANT
Any shareholder desiring to tender all or any portion of such shareholder's
shares of common stock, par value $.01 per share, of the Company (the "Common
Stock"), including the associated rights to purchase Series A Junior
Participating Preferred Stock (the "Rights" and, together with the Common Stock,
the "Shares"), should either (1) complete and sign the Letter of Transmittal (or
a facsimile thereof) in accordance with the instructions in the Letter of
Transmittal, including any required signature guarantees, and mail or deliver
the Letter of Transmittal (or such facsimile) with the certificate(s) for the
tendered Shares and any other required documents to the Depositary, (2) follow
the procedures for book-entry tender of Shares set forth in Section 3, or (3)
request such shareholder's broker, dealer, commercial bank, trust company or
other nominee to effect the transaction for such shareholder. Shareholders
having Shares registered in the name of a broker, dealer, commercial bank, trust
company or other nominee are urged to contact such broker, dealer, commercial
bank, trust company or other nominee if they desire to tender Shares so
registered.
A shareholder who desires to tender Shares and whose certificates for such
Shares are not immediately available, or who cannot comply with the procedures
for book-entry transfer on a timely basis, may tender such shares by following
the procedures for guaranteed delivery set forth in Section 3.
QUESTIONS AND REQUESTS FOR ASSISTANCE MAY BE DIRECTED TO THE INFORMATION
AGENT AT ITS ADDRESS AND TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THIS
OFFER TO PURCHASE. ADDITIONAL COPIES OF THIS OFFER TO PURCHASE, THE LETTER OF
TRANSMITTAL AND THE NOTICE OF GUARANTEED DELIVERY MAY ALSO BE OBTAINED FROM THE
INFORMATION AGENT OR FROM BROKERS, DEALERS, COMMERCIAL BANKS OR TRUST COMPANIES.
------------------
SEPTEMBER 5, 1997
TABLE OF CONTENTS
PAGE
----
INTRODUCTION................................................ 1
1. Terms Of The Offer; Expiration Date................... 2
2. Acceptance For Payment And Payment For Shares......... 3
3. Procedures For Accepting The Offer And Tendering
Shares............................................... 4
4. Withdrawal Rights..................................... 7
5. Certain Federal Income Tax Consequences............... 8
6. Price Range Of Shares; Dividends...................... 8
7. Certain Information Concerning The Company............ 9
8. Certain Information Concerning Parent And The
Purchaser............................................ 13
9. Financing Of The Offer And The Merger................. 14
10. Background Of The Offer; Contacts With The Company;
The Merger Agreement................................. 15
11. Purpose Of The Offer; Plans For The Company After The
Offer And The Merger................................. 23
12. Dividends And Distributions; Stock Issuances.......... 25
13. Effect Of The Offer On The Market For The Shares;
Nasdaq Listing And Exchange Act Registration.......... 25
14. Certain Conditions Of The Offer....................... 26
15. Certain Regulatory And Legal Matters.................. 27
16. Fees And Expenses..................................... 31
17. Miscellaneous......................................... 31
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE
PURCHASER................................................. I-1
SCHEDULE II
PARENT AND THE PURCHASER PURCHASES OF SHARES................ II-1
To the Holders of Common Stock
of Versa Technologies, Inc.:
INTRODUCTION
TVPA Corp., a Delaware corporation (the "Purchaser") and a wholly owned
subsidiary of Applied Power Inc., a Wisconsin corporation ("Parent"), hereby
offers to purchase all of the outstanding shares of common stock, par value $.01
per share (the "Common Stock"), of Versa Technologies, Inc., a Delaware
corporation (the "Company"), including the associated rights to purchase Series
A Junior Participating Preferred Stock (the "Rights") issued pursuant to the
Rights Agreement dated as of December 13, 1988, as amended (the "Rights
Agreement"), between the Company and Firstar Trust Company, as rights agent (the
Common Stock and the Rights together are referred to herein as the "Shares") at
$24.625 per Share, net to the seller in cash, without interest thereon (the
"Offer Price"), upon the terms and subject to the conditions set forth in this
Offer to Purchase and in the related Letter of Transmittal (which, as either may
be amended or supplemented from time to time, collectively constitute the
"Offer"). Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, subject to Instruction 6 of the Letter of Transmittal, transfer
taxes on the purchase of Shares by the Purchaser. The Purchaser will pay all
charges and expenses of ChaseMellon Shareholder Services, L.L.C., which firm is
acting as the Depositary (the "Depositary"), and of Georgeson & Company Inc.,
which firm is acting as the Information Agent (the "Information Agent"),
incurred in connection with the Offer. See Section 16 herein.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE A NUMBER OF SHARES OF
COMMON STOCK, PAR VALUE $.01 PER SHARE, INCLUDING THE ASSOCIATED RIGHTS TO
PURCHASE SHARES OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK, OF VERSA
TECHNOLOGIES, INC. REPRESENTING NOT LESS THAN A MAJORITY OF THE SHARES THEN
OUTSTANDING AND ENTITLED TO VOTE, MEASURED ON A FULLY DILUTED BASIS (THE
"MINIMUM CONDITION"). THE OFFER IS ALSO CONDITIONED UPON CERTAIN OTHER TERMS AND
CONDITIONS, INCLUDING THE EXPIRATION OR TERMINATION OF ALL WAITING PERIODS
IMPOSED BY THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED,
AND THE REGULATIONS THEREUNDER. SEE SECTIONS 14 AND 15. THE OFFER IS NOT
CONDITIONED ON THE RECEIPT OF FINANCING.
The Offer is being made pursuant to an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of September 2, 1997, among the Company, Parent
and the Purchaser, pursuant to which, after the completion of the Offer, the
Purchaser will be merged with and into the Company and each outstanding Share
(except as described below) will be converted into the right to receive $24.625
in cash (the "Merger").
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT EACH
OF THE OFFER AND THE MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF, THE
SHAREHOLDERS OF THE COMPANY, AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS TENDER
THEIR SHARES PURSUANT TO THE OFFER.
According to the Company, as of September 2, 1997, there were 5,596,083
Shares outstanding and there were 378,741 Shares subject to issuance pursuant to
the Company's stock option and incentive plans. According to the Company, there
are no other classes of capital stock issued and outstanding as of the date
hereof other than the Common Stock.
Assuming each Option (as defined in Section 10) is repurchased as described
in Section 10, which Parent and the Purchaser anticipate will be the case, then
the Minimum Condition would be satisfied by the tender of 2,798,042 Shares,
provided none of such Shares is withdrawn in accordance with the procedures set
forth in Section 4. If none of the Options is repurchased as described in
Section 10, then the Minimum Condition would be satisfied by the tender of
2,987,413 Shares, provided none of such Shares is withdrawn in accordance with
the procedures set forth in Section 4. The actual number of Shares that must be
tendered and
not withdrawn in order for the Minimum Condition to be satisfied will depend
upon the facts as they exist on the date of purchase.
The purpose of the Offer is to acquire for cash as many outstanding Shares
as possible as a first step in acquiring the entire equity interest in the
Company. Upon the consummation of the Offer, Parent intends to consummate, as
soon as possible after completion of the Offer, the Merger pursuant to and in
accordance with the terms set forth in the Merger Agreement. The Merger
Agreement provides that, among other things, as soon as practicable after the
purchase of Shares pursuant to the Offer and the satisfaction of the other
conditions set forth in the Merger Agreement and in accordance with the relevant
provisions of the Delaware General Corporation Law ("DGCL"), the Purchaser will
be merged with and into the Company. Following consummation of the Merger, the
Company will continue as the surviving corporation (the "Surviving Corporation")
and will become a wholly owned subsidiary of Parent. At the effective time of
the Merger (the "Effective Time"), each Share issued and outstanding immediately
prior to the Effective Time (other than Shares held in the treasury of the
Company or owned by the Purchaser, Parent or any direct or indirect wholly owned
subsidiary of Parent or the Company, and other than Shares held by shareholders
who shall have demanded and perfected appraisal rights, if any, under the DGCL)
will be canceled and converted automatically into the right to receive $24.625
in cash, without interest (the "Merger Consideration"). See Sections 10 and 11.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER; EXPIRATION DATE. Upon the terms and subject to the
conditions set forth in the Offer (including, if the Offer is extended or
amended, the terms and conditions of such extension or amendment), the Purchaser
will accept for payment, and pay for, all Shares validly tendered on or prior to
the Expiration Date and not withdrawn as permitted by Section 2. The term
"Expiration Date" means 5:00 p.m., Eastern time, on Friday, October 3, 1997,
unless and until the Purchaser, in its sole discretion, shall have extended the
period of time during which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended by the Purchaser, will expire.
In all cases, payment for Shares tendered and purchased pursuant to the
Offer will be made only after timely receipt by the Depositary of, among other
things, certificates representing Rights ("Rights Certificates"), if such Rights
Certificates have been distributed to shareholders. See Sections 3 and 7. Any
reference in this Offer to Purchase to Shares shall be deemed to include, when
appropriate in the context, a reference to such Rights Certificates following
any distribution thereof.
The Purchaser expressly reserves the right, in its sole discretion but
subject to the provisions of the Merger Agreement, at any time or from time to
time, to extend the period of time during which the Offer is open by giving oral
or written notice of such extension to the Depositary. See Section 10. Any such
extension will also be publicly announced by press release issued no later than
9:00 a.m., Eastern time, on the next business day after the previously scheduled
Expiration Date. During any such extension, all Shares previously tendered and
not withdrawn will remain subject to the Offer, subject to the right of a
tendering shareholder to withdraw his Shares. See Section 4. Subject to the
applicable regulations of the Securities and Exchange Commission (the
"Commission"), the Purchaser also expressly reserves the right, in its sole
discretion but subject to the provisions of the Merger Agreement, at any time or
from time to time, (i) to delay acceptance for payment of or, regardless of
whether such Shares were theretofore accepted for payment, payment for any
Shares or to terminate the Offer and not accept for payment or pay for any
Shares not theretofore accepted for payment, or paid for, upon the occurrence of
any of the conditions specified in Section 14 and (ii) to waive any condition or
otherwise amend the Offer in any respect, by giving oral or written notice of
such delay, termination, waiver or amendment to the Depositary and by making a
public announcement thereof. See Section 10. If the Purchaser accepts any Shares
for payment pursuant to the terms of the Offer, it will accept for payment all
Shares validly tendered prior to the Expiration Date and not withdrawn, and,
subject to (i) above, will promptly pay for all Shares so accepted for payment.
The Purchaser confirms that its reservation of the right to delay payment for
Shares which it has accepted for payment is limited by
2
Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which requires that a tender offeror pay the consideration
offered or return the tendered securities promptly after the termination or
withdrawal of a tender offer.
Any extension, delay, termination or amendment of the Offer will be
followed as promptly as practicable by public announcement thereof, such
announcement in the case of an extension to be issued no later than 9:00 a.m.,
Eastern time, on the next business day after the previously scheduled Expiration
Date. Subject to applicable law (including Rules 14d-4(c) and 14d-6(d) under the
Exchange Act, which require that any material change in the information
published, sent or given to shareholders in connection with the Offer be
promptly disseminated to shareholders in a manner reasonably designed to inform
shareholders of such change) and without limiting the manner in which the
Purchaser may choose to make any public announcement, the Purchaser shall have
no obligation to publish, advertise or otherwise communicate any such public
announcement other than by making a release to the Dow Jones News Service and
making any appropriate filing with the Commission.
The Purchaser confirms that if it makes a material change in the terms of
the Offer or the information concerning the Offer, or if it waives a material
condition of the Offer, the Purchaser will extend the Offer to the extent
required by Rules 14d-4(c) and 14d-6(d) under the Exchange Act.
If, prior to the Expiration Date, the Purchaser, with the Company's
consent, shall decrease the percentage of Shares being sought or the
consideration offered to holders of Shares, such decrease shall be applicable to
all holders whose Shares are accepted for payment pursuant to the Offer and, if
at the time notice of any decrease is first published, sent or given to holders
of Shares, the Offer is scheduled to expire at any time earlier than the tenth
business day from and including the date that such notice is first so published,
sent or given, the Offer will be extended until the expiration of such ten
business-day period. For purposes of the Offer, a "business day" means any day
other than a Saturday, Sunday or federal holiday and consists of the time period
from 12:01 a.m. through 12:00 Midnight, Eastern time.
The Offer is being mailed to holders of Shares from a list provided to the
Purchaser by the Company pursuant to the Merger Agreement.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and
subject to the conditions of the Offer (including, if the Offer is extended or
amended, the terms and conditions of any such extension or amendment), the
Purchaser will accept for payment, and will pay for, Shares validly tendered and
not withdrawn as promptly as practicable after the later of (i) the expiration
or termination of the waiting period applicable to the acquisition of Shares
pursuant to the Offer under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended ("HSR Act"), and (ii) the Expiration Date. Parent expects to
file a Notification and Report Form under the HSR Act on or about September 8,
1997, and unless earlier terminated or extended by a request for additional
information, the waiting period under the HSR Act would expire at 11:59 p.m.,
Eastern time, on the fifteenth day following such filing. See Section 15. In
addition, subject to applicable rules of the Commission, the Purchaser expressly
reserves the right to delay acceptance for payment of or payment for Shares in
order to comply, in whole or in part, with any applicable law. See Section 14.
In all cases, payment for Shares tendered and accepted for payment pursuant to
the Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares (or a confirmation of a book-entry transfer of such
Shares into the Depositary's account at The Depository Trust Company (the
"Book-Entry Transfer Facility")), (ii) a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) and (iii) any other required
documents.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment Shares validly tendered and not withdrawn as, if and when the
Purchaser gives oral or written notice to the Depositary of its acceptance for
payment of such Shares pursuant to the Offer. Payment for Shares accepted for
payment pursuant to the Offer will be made by deposit of the purchase price
therefor with the Depositary, which will act as agent for the tendering
shareholders for purpose of receiving payments from the Purchaser and
transmitting such payments to the tendering shareholders. Under no circumstances
will interest on the purchase price for Shares be paid, regardless of any delay
in making such payment.
3
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, or if certificates are submitted for
more Shares than are tendered, certificates for such unpurchased Shares will be
returned, without expense to the tendering shareholder (or, in the case of
Shares tendered by book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility pursuant to the procedures set forth
in Section 3, such Shares will be credited to an account maintained with the
Book-Entry Transfer Facility), as soon as practicable following expiration or
termination of the Offer.
The Purchaser 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 the Purchaser of its
obligations under the Offer and will in no way prejudice the rights of tendering
shareholders to receive payment for Shares validly tendered and accepted for
payment pursuant to the Offer.
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES. In order for a
holder of Shares validly to tender Shares pursuant to the Offer, either (a) a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions of the Letter of Transmittal, with
any required signature guarantees, along with certificates for the Shares 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
delivered pursuant to the procedures for book-entry transfer described below
(and a confirmation of such delivery received by the Depositary, including an
Agent's Message (as defined herein) if the tendering shareholder has not
delivered a Letter of Transmittal), prior to the Expiration Date, or (c) the
tendering shareholder must comply with the guaranteed delivery procedures set
forth below. The term "Agent's Message" means a message, transmitted by the
Book-Entry Transfer Facility to, and received by, the Depositary and forming a
part of a book-entry confirmation, which states that the Book-Entry Transfer
Facility has received an express acknowledgment from the participant in such
Book-Entry Transfer Facility tendering the Shares which are the subject of such
book-entry confirmation, that such participant has received and agrees to be
bound by the terms of the Letter of Transmittal and that the Purchaser may
enforce such agreement against the participant.
Unless a Distribution Date (as defined in Section 7) occurs, the Rights
will be transferred with and only with the certificates for Common Stock and the
surrender for transfer of any certificates for Common Stock will also constitute
the transfer of the Rights associated with the Shares represented by such
certificate. Prior to entering into the Merger Agreement, the Company amended
the Rights Agreement so that neither Parent nor the Purchaser will be deemed an
Acquiring Person (as defined in Section 7), no Stock Acquisition Date (as
defined in Section 7) or Distribution Date will occur or be deemed to occur.
Accordingly, the Rights will not become subject to an adjustment or become
exercisable or separate from the Shares as a result of entry into the Merger
Agreement, commencement or consummation of the Offer or the Merger, or the other
transactions contemplated by the Merger Agreement. If the Rights Agreement
should otherwise be triggered and separate certificates representing the Rights
are issued to holders of Common Stock prior to the time a holder's shares of
Common Stock are tendered pursuant to the Offer, certificates representing a
number of Rights equal to the number of shares of Common Stock tendered must be
delivered to the Depositary, or, if available, a Book-Entry Confirmation (as
defined herein) received by the Depositary with respect thereto, in order for
such shares of Common Stock to be validly tendered. If a Distribution Date
occurs and separate certificates representing the Rights are not distributed
prior to the time shares of Common Stock are tendered pursuant to the Offer,
Rights may be tendered prior to a shareholder receiving the certificates for
Rights by use of the guaranteed delivery procedures described below. A tender of
shares of Common Stock constitutes an agreement by the tendering shareholder to
deliver certificates representing all Rights formerly associated with the number
of shares of Common Stock tendered pursuant to the Offer to the Depositary prior
to expiration of the period permitted by such guaranteed delivery procedures for
delivery of certificates for, or a Book-Entry Confirmation with respect to,
Rights (the "Rights Delivery Period"). However, after expiration of the Rights
Delivery Period, the Purchaser may elect to reject as invalid a tender of shares
of Common Stock with respect to which certificates for, or a Book-Entry
Confirmation with respect to, the number of Rights required to be tendered with
such Common Stock have not been received by the Depositary. Nevertheless, the
4
Purchaser will be entitled to accept for payment shares of Common Stock tendered
by a shareholder prior to receipt of the certificates for the Rights required to
be tendered with such shares of Common Stock, or a Book-Entry Confirmation with
respect to such Rights, and either (a) subject to complying with applicable
rules and regulations of the Commission, withhold payment for such shares of
Common Stock pending receipt of the certificates for, or a Book-Entry
Confirmation with respect to, such Rights or (b) make payment for shares of
Common Stock accepted for payment pending receipt of the certificates for, or a
Book-Entry Confirmation with respect to, such Rights in reliance upon the
agreement of a tendering shareholder to deliver Rights and such guaranteed
delivery procedures. Any determination by the Purchaser to make payment for
shares of Common Stock in reliance upon such agreement and such guaranteed
delivery procedures or, after expiration of the Rights Delivery Period, to
reject a tender as invalid will be made in the sole and absolute discretion of
the Purchaser.
Book-Entry Delivery. 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 Book-Entry Transfer Facility's systems
may make a book-entry transfer of Shares by causing the Book-Entry Transfer
Facility to transfer such Shares into the Depositary's account 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, either
the Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, together with any required signature guarantees, or an Agent's Message
in lieu of the Letter of Transmittal, and any other required documents, must, in
any case, be transmitted to and received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase by the
Expiration Date, or the tendering shareholder must comply with the guaranteed
delivery procedures described below. If a Distribution Date occurs, the
Depositary will also make a request to establish an account with respect to the
Rights at the Book-Entry Transfer Facility, but no assurance can be given that
book-entry transfer of Rights will be available. If book-entry transfer of
Rights is available, the foregoing book-entry transfer procedures will also
apply to Rights. If book-entry transfer of Rights is not available and a
Distribution Date has occurred, a tendering shareholder will be required to
tender Rights by means of physical delivery to the Depositary of certificates
for Rights (in which event references in this Offer to Purchase to Book-Entry
Confirmations with respect to Rights will be inapplicable). The confirmation of
a book-entry transfer of shares of Common Stock or Rights into the Depositary's
account at the Book-Entry Transfer Facility as described above is referred to
herein as a "Book-Entry Confirmation." 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 SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
IT IS RECOMMENDED THAT THE SHAREHOLDER USE PROPERLY INSURED REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
Signature Guarantees. Except as otherwise provided below, all signatures on
a Letter of Transmittal must be guaranteed by a financial institution (including
most commercial banks, savings and loan associations and brokerage houses) that
is a participant in the Securities Transfer Agents Medallion Program, the New
York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange
Medallion Program (an "Eligible Institution"). Signatures on a Letter of
Transmittal need not be guaranteed (a) if the Letter of Transmittal is signed by
the registered holder (which term, for purposes of this section, includes any
participant in the Book-Entry Transfer Facility's systems whose name appears on
a security position listing as the owner of the Shares) of Shares and such
registered holder has not completed the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" on the Letter
of Transmittal or
5
(b) if such Shares are tendered for the account of an Eligible Institution. See
Instructions 1 and 5 of the Letter of Transmittal. If the certificates for
Shares are registered in the name of a person other than the signer of the
Letter of Transmittal, or if payment is to be made or certificates for Shares
not tendered or not accepted for payment are to be returned to a person other
than the registered holder of the certificates surrendered, then the tendered
certificates must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name or names of the registered holders or
owners appear on the certificates, with the signatures on the certificates or
stock powers guaranteed as described above. See Instructions 1 and 5 of the
Letter of Transmittal.
Guaranteed Delivery. A shareholder who desires to tender Shares pursuant to
the Offer and whose certificates for Shares are not immediately available, or
who cannot comply with the procedure for book-entry transfer on a timely basis,
or who cannot deliver all required documents to the Depositary prior to the
Expiration Date, may tender such Shares by following all of the procedures set
forth below:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, is received
by the Depositary (as provided below) prior to the Expiration Date; and
(iii) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation with respect to all such Shares),
together with a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), with any required signature guarantees (or, in the
case of a book-entry transfer, an Agent's Message in lieu of the Letter of
Transmittal), and any other required documents, are received by the
Depositary within (a) in the case of shares for Common Stock, three trading
days after the date of execution of such Notice of Guaranteed Delivery and
(b) in the case of Rights, a period ending on the later of (1) three
trading days after the date of execution of such Notice of Guaranteed
Delivery or (2) three trading days after the date certificates for Rights
are distributed to shareholders by the Rights Agent. A "trading day" is any
day on which the New York Stock Exchange is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by facsimile transmission or mail to the Depositary
and must include a guarantee by an Eligible Institution in the form set forth in
such Notice of Guaranteed Delivery.
Stock Purchase and Dividend Reinvestment Plan. Holders of Shares through
the Company's Stock Purchase and Dividend Reinvestment Plan ("DRIP") will need
to contact the DRIP administrator, Firstar Trust Company, at 1-800-637-7549 in
order to make arrangements to tender Shares held in the DRIP pursuant to the
Offer.
Other Requirements. Notwithstanding any provision hereof, payment for
Shares accepted for payment pursuant to the Offer will in all cases be made only
after timely receipt by the Depositary of (a) certificates for (or a timely
Book-Entry Confirmation with respect to) such Shares, (b) a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message in lieu of the Letter of Transmittal) and (c) any other
documents required by the Letter of Transmittal. Accordingly, tendering
shareholders may be paid at different times depending upon when certificates for
Shares or Book-Entry Confirmations with respect to Shares are actually received
by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE OF
THE SHARES BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR
ANY DELAY IN MAKING SUCH PAYMENT.
Tender Constitutes An Agreement. The valid tender of Shares pursuant to one
of the procedures described above will constitute a binding agreement between
the tendering shareholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
Appointment. By executing a Letter of Transmittal as set forth above, the
tendering shareholder irrevocably appoints designees of the Purchaser as such
shareholder's proxies, each with full power of
6
substitution, to the full extent of such shareholder's rights with respect to
the Shares tendered by such shareholder and accepted for payment by the
Purchaser and with respect to any and all other Shares or other securities
issued or issuable in respect of such Shares on or after September 5, 1997. All
such proxies will be considered coupled with an interest in the tendered Shares.
Such appointment is effective when, and only to the extent that, the Purchaser
deposits the payment for such Shares with the Depositary. Upon the effectiveness
of such appointment, all prior powers of attorney, proxies and consents given by
such shareholder will be revoked, and no subsequent powers of attorney, proxies
and consents may be given (and, if given, will not be deemed effective). The
Purchaser's designees will, with respect to the Shares for which the appointment
is effective, be empowered to exercise all voting and other rights of such
shareholder as they, in their sole discretion, may deem proper at any annual,
special or adjourned meeting of the shareholders of the Company, by written
consent in lieu of any such meeting or otherwise. The Purchaser reserves the
right to require that, in order for Shares to be deemed validly tendered,
immediately upon the Purchaser's payment for such Shares, the Purchaser must be
able to exercise full voting rights with respect to such Shares.
Determination Of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Purchaser in its sole discretion, which determination
will be final and binding. The Purchaser 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 or payment for which may, in the opinion of the Purchaser's
counsel, be unlawful. The Purchaser also reserves the absolute right to waive
any defect or irregularity in the tender of any Shares of any particular
shareholder whether or not similar defects or irregularities are waived in the
case of other shareholders. No tender of Shares will be deemed to have been
validly made until all defects and irregularities relating thereto have been
cured or waived. None of the Purchaser, 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. The Purchaser's interpretation of the terms and conditions of the
Offer (including the Letter of Transmittal and Instructions thereto) will be
final and binding.
Backup Withholding. In order to avoid "backup withholding" of Federal
income tax on payments of cash pursuant to the Offer, a shareholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such shareholder's correct taxpayer identification number ("TIN") on a
Substitute Form W-9 and certify under penalties of perjury that such TIN is
correct and that such shareholder is not subject to backup withholding. If a
shareholder does not provide such shareholder's correct TIN or fails to provide
the certifications described above, the Internal Revenue Service (the "IRS") may
impose a penalty on such shareholder and payment of cash to such shareholder
pursuant to the Offer may be subject to backup withholding of 31%. All
shareholders surrendering Shares pursuant to the Offer should complete and sign
the main signature form and the Substitute Form W-9 included as part of the
Letter of Transmittal to provide the information and certification necessary to
avoid backup withholding (unless an applicable exemption exists and is proved in
a manner satisfactory to the Purchaser and the Depositary). Certain shareholders
(including, among others, corporations and certain foreign individuals and
entities) may not be subject to backup withholding. Non-corporate foreign
shareholders should complete and sign the main signature form and a Form W-8,
Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See Instruction 9 to the
Letter of Transmittal.
4. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer are
irrevocable except that Shares tendered pursuant to the Offer may be withdrawn
pursuant to the procedures set forth below at any time prior to the Expiration
Date and, unless theretofore accepted for payment by the Purchaser pursuant to
the Offer, may also be withdrawn at any time after November 3, 1997.
To be effective, a written, telegraphic, telex or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase. Any notice of
withdrawal must specify the name of the person having tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the names in which the
certificate(s) evidencing the Shares to be withdrawn are registered, if
different from that of the person who tendered such Shares. The signature(s) on
the notice of withdrawal must be guaranteed by an Eligible Institution, unless
such Shares have been tendered for the account of any Eligible Institution. If
Shares have been tendered pursuant to the procedures for book-entry
7
tender as set forth in Section 3, any notice of withdrawal must specify the name
and number of the account at the Depository Institution to be credited with the
withdrawn Shares. If certificates have been delivered or otherwise identified to
the Depositary, the name of the registered holder and the serial numbers of the
particular certificates evidencing the Shares withdrawn must also be furnished
to the Depositary as aforesaid prior to the physical release of such
certificates. All questions as to the form and validity (including time of
receipt) of any notice of withdrawal will be determined by the Purchaser, in its
sole discretion, which determination shall be final and binding. None of the
Purchaser, Parent, 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 such
notification. Withdrawals of tenders of Shares may not be rescinded, and any
Shares properly withdrawn will be deemed not to have been validly tendered for
purposes of the Offer. However, withdrawn Shares may be retendered by following
one of the procedures described in Section 3 at any time prior to the Expiration
Date.
If the Purchaser extends the Offer, is delayed in its acceptance for
payment of Shares, or is unable to accept for payment Shares pursuant to the
Offer, for any reason, then, without prejudice to the Purchaser's rights under
this Offer but in accordance with any applicable rules or interpretations of the
Commission, the Depositary may, nevertheless, on behalf of the Purchaser, retain
tendered Shares, and such Shares may not be withdrawn except to the extent that
tendering shareholders are entitled to exercise, and do duly exercise,
withdrawal rights as set forth in this Section 4.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. Sales of Shares pursuant to the
Offer and the exchange of Shares for cash pursuant to the Merger will be taxable
transactions for Federal income tax purposes and may also be taxable under
applicable state, local and other tax laws. For Federal income tax purposes, a
shareholder whose Shares are purchased pursuant to the Offer or who receives
cash as a result of the Merger will realize gain or loss equal to the difference
between the adjusted basis of the Shares sold or exchanged and the amount of
cash received therefor. Such gain or loss will be capital gain or loss if the
Shares are held as capital assets by the shareholder.
A shareholder (other than certain exempt shareholders including, among
others, certain corporations, foreign individuals and foreign entities) who
tenders Shares may be subject to 31% backup withholding unless the shareholder
provides its TIN and certifies that such number is correct or properly certifies
that it is awaiting a TIN, or unless an exemption applies. A shareholder that
does not furnish its TIN may be subject to a penalty imposed by the IRS. See
Section 3.
If backup withholding applies to a shareholder, the Depositary is required
to withhold 31% from payments to such shareholder. Backup withholding is not an
additional tax. Rather, the amount of the backup withholding can be credited
against the federal income tax liability of the person subject to the backup
withholding, provided that the required information is given to the IRS. If
backup withholding results in an overpayment of tax, a refund can be obtained by
the shareholder upon filing an appropriate income tax return.
THE INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE TO SHAREHOLDERS IN SPECIAL SITUATIONS
SUCH AS SHAREHOLDERS WHO RECEIVED THEIR SHARES UPON THE EXERCISE OF EMPLOYEE
STOCK OPTIONS OR OTHERWISE AS COMPENSATION AND SHAREHOLDERS WHO ARE NOT UNITED
STATES PERSONS. SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT
TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE OFFER AND THE MERGER, INCLUDING
THE APPLICATION AND EFFECT OF STATE, LOCAL, FOREIGN OR OTHER TAX LAWS.
6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are listed on The Nasdaq
Stock Market, Inc.'s ("Nasdaq") National Market (the "Nasdaq NM") and trade
under the symbol VRSA. The following table
8
sets forth, for the periods indicated, the high and low last reported sales
prices for the Shares on the Nasdaq NM and the amount of cash dividends paid per
Share, based upon public sources:
COMMON STOCK
----------------------------
HIGH LOW DIVIDEND
---- --- --------
Fiscal Year Ended March 31, 1996:
First Quarter............................................. $15.00 $13.75 $.09
Second Quarter............................................ 15.75 13.75 .45*
Third Quarter............................................. 18.00 13.50 .10
Fourth Quarter............................................ 16.25 13.25 .10
Fiscal Year Ended March 31, 1997:
First Quarter............................................. 14.25 13.25 .10
Second Quarter............................................ 14.25 13.125 .45*
Third Quarter............................................. 14.25 12.50 .10
Fourth Quarter............................................ 13.75 13.125 .10
Fiscal Year Ended March 31, 1998:
First Quarter............................................. 15.75 12.25 .10
Second Quarter (through September 2, 1997)................ 22.50 14.75 --**
- -------------------------
* Including a special cash dividend of $.35 per Share.
** On July 22, 1997, the Board of Directors of the Company announced an increase
in the Company's regular quarterly dividend from $.10 to $.11 per Share,
beginning on November 10, 1997 to shareholders of record on October 31, 1997.
On August 27, 1997, the last full trading day prior to the Company's press
release indicating a possible transaction was being negotiated with Parent at a
price of $24.625 per Share, the last reported sales price of the Shares on the
Nasdaq NM was $18.00. On September 2, 1997, the last full trading day prior to
announcement that the Merger Agreement had been signed, the last reported sales
price on the Nasdaq NM was $22.125. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT
MARKET QUOTATIONS FOR THE SHARES.
The Rights trade together with the Common Stock. Upon the occurrence of a
Distribution Date, the Rights are to detach, and may trade separately, from the
Common Stock. See Section 7. The Company has entered into an amendment to the
Rights Agreement so that a Distribution Date will not occur in connection with
the Merger Agreement, the Offer or the Merger. See Sections 3 and 7. However, if
the occurrence of a Distribution Date is otherwise triggered and the Rights
begin to trade separately from the Common Stock, shareholders should also obtain
current market quotations for the Rights.
7. CERTAIN INFORMATION CONCERNING THE COMPANY. The Company is a Delaware
corporation with its principal offices at 9301 Washington Avenue, Racine,
Wisconsin 53408. The following description of the Company's business has been
taken from the Company's Form 10-K for the fiscal year ended March 31, 1997 (the
"Company 10-K"):
The Company comprises three business segments serving diverse markets. The
Electronics Segment designs and manufactures custom electronic and electrical
systems for a broad range of applications. The Engineered Materials Segment
fabricates custom components from elastomers for special applications requiring
a high degree of engineering expertise and product quality. The Fluid Power
Segment manufactures custom engineered cylinders; hydraulic devices that raise,
lower, stabilize, or level semitrailers, trucks, recreational vehicles and a
variety of off-highway vehicles and equipment; and electrically powered systems
that serve as drive mechanisms for slideout rooms on trailers and recreational
vehicles.
Selected Consolidated Financial Data. Set forth below is certain summary
consolidated financial information for the Company's last three fiscal years
ended March 31, 1997 as contained in the Company 10-K and for the three months
ended June 30, 1997 as contained in the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1997. More comprehensive financial information is
included in such reports (including management's discussion and analysis of
financial condition and results of operations) and
9
other documents filed by the Company with the Commission, and the following
summary is qualified in its entirety by reference to such reports and other
documents and all of the financial information and notes contained therein.
Copies of such reports and other documents may be examined at or obtained from
the Commission or from Nasdaq in the manner set forth below under "Available
Information".
VERSA TECHNOLOGIES, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED
JUNE 30, FISCAL YEAR ENDED MARCH 31, 1997
------------------ --------------------------------
1997 1996 1997 1996 1995
---- ---- ---- ---- ----
(UNAUDITED)
STATEMENTS OF EARNINGS DATA:
Net Sales.................................... $27,057 $19,365 $87,596 $70,699 $66,965
Operating Income............................. 3,426 2,425 9,962 8,209 9,992
Net Earnings................................. 2,113 1,644 5,703 5,899 6,806
Net Earnings Per Share....................... $ 0.38 $ 0.29 $ 1.02 $ 0.99 $ 1.13
Weighted Average Shares Outstanding.......... 5,581 5,729 5,601 5,970 6,039
AT DECEMBER 31,
AT JUNE 30, ------------------
1997 1997 1996
----------- ---- ----
(UNAUDITED)
BALANCE SHEET DATA:
Total Current Assets...................................... $28,289 $27,298 $35,082
Total Assets.............................................. 62,933 61,991 57,438
Total Current Liabilities................................. 11,099 11,870 7,169
Long-Term Debt............................................ -- 0.00 0.00
Shareholders' Equity...................................... 46,736 45,126 46,984
The Company has indicated that it intends to borrow up to $6,000,000 from
its existing credit facility to fund the repurchase of options and the payment
of certain deferred compensation liabilities in connection with the Merger. See
Section 10. Upon completion of the Merger, this indebtedness will become
indebtedness of the Surviving Corporation.
In connection with Parent's review of the Company and in the course of the
negotiations between the Company and Parent described in Section 10, the Company
provided Parent with certain business and financial information which Parent and
the Purchaser believe is not publicly available. The additional information
included business plans, forecasts, customer and supplier information and
current results for the Company's segments including business unit detail.
Results of various environmental procedures that had been performed during the
past few years, as well as current union contracts, health and welfare plans and
employee agreements, were also received.
The Rights. Prior to entering into the Merger Agreement, the Company
amended the Rights Agreement so that neither Parent nor the Purchaser will be
deemed an Acquiring Person (as defined below), no Stock Acquisition Date or
Distribution Date (each as defined below) will occur or be deemed to occur, and
the Rights will not become subject to an adjustment or become exercisable or
separate from the Shares as a result of entry into the Merger Agreement,
commencement or consummation of the Offer or the Merger, or the other
transactions contemplated by the Merger Agreement. Set forth below is a summary
description of the publicly available information concerning the Rights.
According to the Company's Registration Statement on Form 8-A, dated
December 13, 1988 and filed with the Commission on December 16, 1988 (the
"Company 8-A"), the Board of Directors of the Company declared a dividend on
December 13, 1988 of one Right for each outstanding share of Common Stock. The
dividend was payable on December 21, 1988 to shareholders of record on that date
(the "Record Date").
10
Each Right entitles the registered holder to purchase from the Company one
one-hundredth of a share of Series A Junior Participating Preferred Stock, $.01
par value (the "Preferred Shares"), of the Company at a price of $60 per one
one-hundredth of a Preferred Share, subject to adjustment (the "Purchase
Price"). The description and terms of the Rights are set forth in the Rights
Agreement between the Company and the Rights Agent, which was included as an
exhibit to the Company 8-A. The following information concerning the Rights and
the Rights Agreement is taken from or is based upon information presented in the
Company 8-A.
The Rights are represented by and traded with the Common Stock certificates
and are not exercisable or transferable apart from the Common Stock until the
earlier of (i) twenty business days after a public announcement that a person or
group has acquired beneficial ownership of 20% or more of the Voting Power (such
person or group being called an "Acquiring Person" and such date of first public
announcement being called the "Stock Acquisition Date") or (ii) twenty business
days after a person or group commences, or announces it intends to commence, a
tender or exchange offer, the consummation of which would give such person or
group 30% or more of the Voting Power (the earlier of such days being called the
"Distribution Date"). "Voting Power" means the voting power of all securities of
the Company then outstanding generally entitled to vote for the election of
directors of the Company. Separate certificates for the Rights will be mailed to
holders of Common Stock as of the Distribution Date, and thereafter the separate
Rights certificates alone will evidence the Rights.
The Preferred Shares comprise a series of preferred stock that is
nonredeemable and which may rank junior to other series of preferred stock of
the Company that may be issued in the future. Each Preferred Share will be
entitled to a minimum preferential quarterly dividend of $5 per share but will
be entitled to an aggregate dividend equal to 100 times the dividend declared
per share of Common Stock. In the event of liquidation, each Preferred Share
will be entitled to a minimum preferential liquidation payment of $6,000 per
share but will be entitled to an aggregate payment of 100 times the payment made
per share of Common Stock. Each Preferred Share will have 100 votes, voting
together with the Common Stock. Finally, in the event of any merger,
consolidation or other transaction in which shares of Common Stock are
exchanged, each Preferred Share will be entitled to receive 100 times the amount
received per share of Common Stock. These rights are protected by customary
antidilution provisions. Because of the nature of the Preferred Shares'
dividend, liquidation and voting rights, the value of the one one-hundredth of a
share purchasable upon exercise of each Right should approximate the value of
one share of the Common Stock.
In the event that, after December 21, 1988, any person becomes the
beneficial owner of 30% or more of the Voting Power, the Rights will adjust so
that, assuming the Rights are then exercisable, each Right (other than Rights
held by an Acquiring Person) will entitle its holder to purchase, at the then
current price of the Right, that number of shares of Common Stock of the Company
having, at the time of such transaction, a market value of two times the
exercise price of the Right. However, the Rights will not so adjust if the event
causing the 30% ownership threshold to be crossed is a tender offer or exchange
offer for all outstanding shares of Common Stock at a price and on terms
determined by a majority of the members of the Board of Directors of the Company
who are not officers of the Company and who are Continuing Directors (as defined
below), after receiving advice from the Board's financial advisors, to be at a
fair price and otherwise in the best interests of the Company and its
shareholders, provided that such tender offer results in the offeror
beneficially owning at least 80% of the Voting Power (a "Fair Tender Offer").
Furthermore, in the event that, on or after the Stock Acquisition Date, the
Company is acquired in a merger or other business combination or 50% or more of
its assets or earning power is sold, each Right, assuming it is then
exercisable, will entitle its holder to purchase, at the then current exercise
price of the Right, that number of shares of Common Stock of the surviving
company having, at the time of such transaction, a market value of two times the
exercise price of the Right. In the event that the Company is the surviving
corporation in a merger involving an Acquiring Person and the Common Stock is
not changed or exchanged, or in the event of certain types of self-dealing
transactions by an Acquiring Person, each Right (other than Rights owned by the
Acquiring Person), assuming it is then exercisable , will entitle its holder to
purchase at the then current exercise price of the Right, that number of shares
of Common Stock of the Company having, at the time of such transaction, a market
value of two times the exercise price of the Right.
11
Notwithstanding the foregoing, the provisions of this paragraph will not apply
to a "second-step" merger or other business combination between the Company and
an Acquiring Person who has completed a Fair Tender Offer, provided that the
price per share of Common Stock offered in the second-step transaction is not
less than the price paid in the Fair Tender Offer and the form of consideration
offered in the second-step transaction is the same as that paid in the Fair
Tender Offer.
At any time after the Distribution Date, the Board of Directors of the
Company may exchange the Rights (other than Rights owned by such Acquiring
Person, if they have become void), in whole or in part, at an exchange ratio of
one share of Common Stock, or one one-hundredth of a Preferred Share (or of a
share of a class or series of the Company preferred stock having equivalent
rights, preferences and privileges), per Right (subject to adjustment). Under
certain circumstances, authorization of any such exchange must be by a majority
of the Continuing Directors (as defined below) then in office.
At any time prior to the occurrence of an event that causes each Right to
become exercisable for Common Stock (or common stock of an acquiring company)
having a market value of two times the exercise price of the Right (a
"Triggering Event"), the Company, at its option, may redeem the Rights at a
price of $.01 per Right (the "Redemption Price"); provided that if the Board of
Directors of the Company authorizes redemption of the Rights under certain
circumstances, there must be at least one Continuing Director and such
authorization shall require the approval of a majority of the Continuing
Directors then holding office. Immediately upon the authorization of the
redemption of the Rights by the Board of Directors of the Company, the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
"Continuing Director" means a director who (i) either (A) was a member of
the Board of Directors of the Company prior to December 21, 1988, or (B)
subsequently became a director of the Company and whose initial election or
initial nomination for election subsequent to such date was approved by a vote
of a majority of the Continuing Directors then on the Board of Directors of the
Company, and (ii) is not an Acquiring Person or an affiliate or associate of an
Acquiring Person or a representative of an Acquiring Person or any such
affiliate or associate.
The Rights expire on December 21, 1998, unless earlier redeemed by the
Company as described above. Until a Right is exercised, the holder thereof has
no rights as a stockholder of the Company, including without limitation, the
right to vote or to receive dividends.
So long as the Rights are attached to the Common Stock, the Company issues
one Right with each new share of Common Stock issued so that all such shares
will have attached Rights. No fractional shares will be issued, other than
fractional Preferred Shares that are integral multiples of one one-hundredth of
a share, and a cash payment will be made in lieu thereof based on the market
price of the preferred stock or Common Stock on the last trading day prior to
the date of exercise.
The Board of Directors of the Company may amend the Rights Agreement. After
the Distribution Date, however, the Board of Directors of the Company may amend
the Rights Agreement only to cure any ambiguity, to cure any defective or
inconsistent provisions, to make changes which do not adversely affect the
interest of the holders of the Rights (other than an Acquiring Person or an
affiliate or associate of an Acquiring Person) or to shorten or lengthen any
time period under the Rights Agreement; provided that no amendment to adjust the
time period governing redemption may be made at any time when the Rights are not
redeemable. In addition, no supplement or amendment may be made which changes
the Redemption Price, the final expiration date, the Purchase Price or the
number of Preferred Shares for which a Right is exercisable, unless at the time
of such supplement or amendment there is no Acquiring Person and such supplement
or amendment does not adversely affect the interests of the holders of Rights
certificates (other than an Acquiring Person or an affiliate or associate of an
Acquiring Person).
As described above, prior to entering into the Merger Agreement and as
authorized by the Board of Directors of the Company, the Company amended the
Rights Agreement, effective September 2, 1997, making the Rights Agreement
inapplicable to the Offer, the Merger and the other transactions contemplated by
the Merger Agreement.
12
The foregoing summary of the Rights Agreement does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement.
The Rights Agreement should be available for inspection and copies thereof
should be obtainable in the manner set forth below under "Available
Information".
Company Information. Except as otherwise set forth herein, the information
concerning the Company contained in this Offer to Purchase has been taken from
or based upon publicly available documents and records on file with the
Commission and other public sources and is qualified in its entirety by
reference thereto. Although Parent has no knowledge that would indicate that any
statements contained herein based on such documents and records are untrue,
Parent cannot take responsibility for the accuracy or completeness of the
information contained in such documents and records, or for any failure by the
Company to disclose events which may have occurred or may affect the
significance or accuracy of any such information but which are unknown to
Parent.
Available Information. The Company is subject to the information and
reporting requirements of the Exchange Act and in accordance therewith is
obligated to file reports and other information with the Commission relating to
its business, financial condition and other matters. Information, as of
particular dates, concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal holders of the
Company's securities, any material interests of such persons in transactions
with the Company and other matters is required to be disclosed in proxy
statements distributed to the Company's shareholders and filed with the
Commission. Such reports, proxy statements and other information are available
for inspection and copying at the public reference facilities of the Commission
located at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Commission's regional offices at Seven World Trade Center,
13th Floor, New York, New York 10048 and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. The Commission also maintains an
Internet site on the World Wide Web at that contains
reports, proxy statements and other information. The information also should be
available at The Nasdaq Stock Market, Inc., 1735 K Street, N.W., Washington,
D.C. 20006.
8. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER. The Purchaser
is a newly incorporated Delaware corporation organized in connection with the
Offer and the Merger and to date has engaged in no activities other than those
incident to its formation and the commencement of the Offer. The Purchaser is a
wholly owned subsidiary of Parent. The Purchaser does not presently own any
Shares. The principal offices of the Purchaser are located at 13000 West Silver
Spring Drive, Butler, Wisconsin 53007. Until immediately prior to the time that
the Purchaser will purchase Shares pursuant to the Offer, it is not anticipated
that the Purchaser will have any significant assets or liabilities or engage in
activities other than those incident to its formation and capitalization and the
transactions contemplated by the Offer and the Merger. Because the Purchaser is
newly formed and has minimal assets and capitalization, no meaningful financial
information regarding the Purchaser is available.
Parent is a company organized under the laws of the State of Wisconsin with
its principal offices at 13000 West Silver Spring Drive, Butler, Wisconsin
53007. Parent does not presently own any Shares. Through its subsidiaries,
Parent is engaged in three business segments: (i) Distributed Products, which
designs and manufactures specialized tools and consumables sold primarily
through distribution; (ii) Engineered Solutions, which develops and markets
hydraulic motion and vibration isolation customized products and systems
primarily sold to original equipment manufacturer (OEM) customers; and (iii)
Technical Environments and Enclosures, which designs, manufactures and sells
technical environment solutions for offices and laboratories.
Available Information. Parent is subject to the informational requirements
of the Exchange Act and in accordance therewith files periodic reports, proxy
statements and other information with the Commission relating to its business,
financial condition and other matters. Such reports, proxy statements and other
information are available for inspection and copying at the offices of the
Commission in the same manner as set forth with respect to the Company in
Section 7. Such reports and other information also should be available at the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
13
Selected Consolidated Financial Data. Set forth below is certain summary
consolidated financial information with respect to Parent for the three fiscal
years ended August 31, 1996, as well as interim information for the nine months
ended May 31, 1997.
APPLIED POWER INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
NINE MONTHS ENDED
MAY 31, FISCAL YEAR ENDED AUGUST 31,
------------------- ------------------------------
1997 1996 1996 1995 1994
---- ---- ---- ---- ----
(UNAUDITED)
STATEMENT OF EARNINGS DATA:
Net Sales............................... $484,105 $423,919 $571,215 $527,058 $433,644
Operating Earnings(1)................... 53,091 41,859 57,393 48,858 37,117
Net Earnings(2)......................... 30,107 24,505 33,729 25,005 16,896
Net Earnings Per Share(2)............... $ 2.10 $ 1.75 $ 2.41 $ 1.82 $ 1.27
Weighted Average Shares Outstanding..... 14,313 13,968 13,983 13,746 13,289
AT MAY 31, AT AUGUST 31,
----------- -------------------
1997 1996 1995
---- ---- ----
(UNAUDITED)
BALANCE SHEET DATA:
Current Assets............................................ $224,471 $206,905 $190,464
Total Assets.............................................. 455,618 381,241 332,946
Current Liabilities....................................... 110,409 107,729 97,447
Long-Term Debt (less current portion)..................... 122,351 76,548 74,156
Shareholders' Equity...................................... 194,387 168,455 131,686
- -------------------------
(1) Operating earnings for the three fiscal years ended August 31 have been
reduced from the amounts reflected in Parent's Form 10-K for the fiscal year
ended August 31, 1997 to reflect a reclassification of amortization.
(2) From continuing operations, before extraordinary charges.
Certain Other Information. The name, citizenship, business address,
principal occupation or employment, and material positions held during the last
five years for each of the directors and executive officers of the Purchaser and
Parent are set forth in Schedule I hereto.
9. FINANCING OF THE OFFER AND THE MERGER. The total amount of funds
required by the Purchaser to consummate the Offer and the Merger is estimated to
be approximately $139,500,000, including related fees and expenses. The
Purchaser will obtain all of such funds from Parent. Parent will provide such
funds from the financing sources discussed below.
On August 29, 1997, Parent executed a commitment letter (the "Commitment
Letter") issued by Bank of America National Trust and Savings Corporation
("BoA"), PNC Bank, National Association ("PNC"; BoA and PNC are sometimes
referred to collectively herein as the "Lenders"), and BancAmerica Securities,
Inc., as arranger ("BASI"). Pursuant to the Commitment Letter, the Lenders
agreed, subject to the terms and conditions contained therein, to commit to fund
a $140 million 364-day revolving credit facility (the "Facility"). BASI will act
to assemble a syndicate of lenders to commit to a portion of the Facility if the
Lenders determine to assign or participate their current loan commitments. The
Facility is to be used to finance the Offer and for other general corporate
purposes.
In the event that the Facility is syndicated, the Commitment Letter
provides that Parent will actively assist BASI in achieving a mutually
acceptable syndication. In connection therewith, Parent has agreed, among other
things, to prepare and provide to BASI and BoA all information which those
parties may
14
reasonably request, to assist in the preparation of a confidential informational
memorandum, and to make senior management available to attend meetings with
prospective lenders.
The obligation of the Lenders to fund the Facility is subject to terms and
conditions customary for transactions of this type, including, without
limitation, the negotiation and execution of a definitive credit agreement and
related documentation, the absence of material adverse changes affecting Parent
and the Company, the non-occurrence of any material adverse change in loan
syndication or capital market conditions which would affect the syndication of
any portion of the Facility and the condition that there be no competing
offering, placement or arrangement of any debt securities or bank financing by
or on behalf of Parent (other than for certain permitted exceptions).
Whether or not the Facility closes, Parent has agreed to indemnify and hold
harmless the Lenders and BASI (as well as their respective directors, officers,
employees and affiliates) from and against all losses, damages and liabilities
that arise out of or relate to the Commitment Letter or to the syndication of
the Facility. Parent also would reimburse such indemnified parties for
reasonable expenses incurred in connection with defending any such loss. This
indemnification obligation would not arise, however, in respect of a loss
resulting from the gross negligence or willful misconduct of the party seeking
indemnification. Neither the Lenders nor BASI are liable to Parent for any
consequential damages.
The Commitment Letter provides that Parent will reimburse BoA and BASI for
reasonable out-of-pocket costs and expenses incurred by those parties in
connection with the negotiation and preparation of documents for the Facility.
Finally, the Commitment Letter specifies that the Lenders' commitment thereunder
will expire on November 14, 1997 if the Facility has not been closed on or
before that date.
Attached to the Commitment Letter is a Summary of Terms and Conditions
which describes certain relevant features of the proposed Facility. Among the
matters described therein: (i) the revolving credit loans can accrue interest,
at Parent's option, at either an alternate reference rate or an interbank market
rate; (ii) Parent will pay an unused facility fee; (iii) loans can be prepaid
without premium or penalty (other than standard breakup fees for prepaying
interbank market loans prior to the expiration of their applicable interest
period); (iv) the definitive credit agreement will contain representations,
warranties, covenants (including minimum consolidated shareholders' equity,
minimum fixed charge coverage ratio, and maximum total funded indebtedness),
conditions to borrowing, and events of default which are consistent with
Parent's existing revolving credit agreement; (v) the Lenders reserve the right
to sell participations in their respective loans and commitments to certain
eligible assignees; and (vi) interest rates and the unused facility fee will be
subject to a "pricing grid" tied to Parent's ratio of total funded debt to
capitalization.
On August 29, 1997, Parent also executed a fee letter with each of the
Lenders and BASI, pursuant to which Parent agreed to pay customary closing fees
in respect of the Facility to PNC and BASI.
Although no definitive plan or arrangement for repayment of borrowings
under the Facility has been made, Parent anticipates such borrowings will be
repaid through a refinancing of its current revolving credit facility. Parent
has commenced negotiations with its lenders with respect to such a refinancing,
which would include an increase in its credit line from $170,000,000 to
$350,000,000. In the event such negotiations successfully conclude prior to
consummation of the Offer, Parent may choose to finance the Offer through
borrowings under the refinanced credit facility in lieu of closing on the
Facility.
The foregoing summary of the Commitment Letter is qualified in its entirety
by reference to Exhibit (b)(1) to the Tender Offer Statement on Schedule 14D-1
filed by Parent and the Purchaser with the Commission on the date hereof (the
"Schedule 14D-1"), which is incorporated herein by reference.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; THE MERGER
AGREEMENT.
Background Of The Offer. Parent continuously seeks to strengthen its
business segments by adding new products and businesses that enhance its overall
operations, including through acquisitions. Since 1990, Parent has considered
the Company an attractive acquisition candidate given the natural fit of the
Company's operations with existing business segments of Parent. Parent's
Engineered Solutions segment is an OEM business based upon hydraulic motion and
vibration control. Parent believes that the Company's Engineered
15
Materials segment and the Power Gear part of its Fluid Power segment fit well
with Parent's Engineered Solutions segment. Power Gear would provide an entree
for Engineered Solutions into the recreational vehicle market, and Parent
believes that its expertise in hydraulics could significantly strengthen and
expand the presence of both companies in this important market. Within
Engineered Solutions, Parent's Barry Controls business has a competence in
rubber molding which complements the similar capabilities of the Company's
Engineered Materials segment in silicon molding.
The other part of the Company's Fluid Power segment is Milwaukee Cylinder,
which sells hydraulic and pneumatic cylinders through distributors. This
business is similar to Parent's Enerpac business, which sells high pressure,
hydraulic tools through distributors. Parent expects that synergies, both in
sales and distribution as well as manufacturing, would result from the
integration of these two businesses.
The remaining business segment of the Company is the recently acquired Eder
business. Eder, as an expert in designing and manufacturing electronic controls
for industrial customers, could directly support the active products of Parent's
Engineered Solutions segment. Parent manufactures a significant number of
products that use electronic sensors to control hydraulic motion and vibration
to create active or "smart" products. The Eder business would strengthen
Engineered Solutions' capabilities in this area. It is also expected that Eder
would play a role with respect to Parent's Technical Environments and Enclosures
segment. The Hormann business that Parent recently acquired in Cork, Ireland is
a very similar business to Eder except that its customers are in the electronics
industry whereas Eder's customers are industrial. Parent believes that there
could be a number of shared benefits between these two businesses.
On several occasions since 1990, Richard G. Sim, Chairman and Chief
Executive Officer of Parent, communicated Parent's interest in exploring a
possible business combination with the Company to James E. Mohrhauser, the
Company's Chairman and Chief Executive Officer. The only contacts between the
two companies until recently consisted of periodic letters and telephone
conversations. Throughout this period, Mr. Mohrhauser declined any offer to
explore a possible combination of the two companies.
On May 22, 1997, Mr. Sim contacted William P. Killian, a director of the
Company, to express Parent's continuing interest in a possible business
combination with the Company. At that time, Parent suggested a transaction
involving the issuance of shares of Parent common stock in payment of the
transaction price, with the intention of accounting for the transaction using
the pooling-of-interests method of accounting. On the same day as his
conversation with Mr. Killian, Mr. Sim wrote a letter to Mr. Killian summarizing
Parent's views with respect to integrating the Company's businesses with those
of Parent as well as providing certain information concerning Parent's recent
financial results. On June 3, 1997, Mr. Sim and Mr. Killian spoke on the
telephone to discuss the results of a meeting between Mr. Killian and Mr.
Mohrhauser which occurred earlier that day. In that telephone call, Mr. Killian
indicated that Mr. Mohrhauser would contact Mr. Sim in order that they could
meet and get to know each other. Mr. Sim and Mr. Mohrhauser spoke later that day
and agreed to meet three days later.
Mr. Sim and Mr. Mohrhauser met at the University Club in Milwaukee,
Wisconsin on June 6, 1997. Mr. Sim anticipated that the meeting would provide an
opportunity for Mr. Sim and Mr. Mohrhauser to become better acquainted and to
begin a dialogue concerning a possible transaction. In follow-up to that
meeting, Parent received, on June 9, 1997, a Non-Disclosure Agreement which the
Company requested Parent execute prior to the provision of any due diligence
materials in connection with the parties' exploration of a possible transaction.
That Non-Disclosure Agreement was signed by Mr. Sim on behalf of Parent the same
day and at that point Parent began receiving from the Company certain financial
information and business plans. A meeting between various representatives of the
Company and Parent was scheduled for June 20, 1997 in order to discuss certain
operational matters. Between June 9, 1997 and June 20, 1997, there were numerous
telephone calls between representatives of the Company and Parent in order to
clarify details of the information previously provided by the Company and to
prepare for the June 20, 1997 meeting.
In addition to Mr. Sim and Mr. Mohrhauser, Thomas J. Magulski (President
and Chief Operating Officer of the Company), Robert M. Sukalich (Vice
President-Finance and Treasurer of the Company), Gustav H.P. Boel (Vice
President of Parent), William J. Albrecht (Vice President of Parent) and Gary
Weismann (a financial executive of Parent's Engineered Solutions segment)
attended the June 20, 1997
16
meeting. The focus of that meeting, which took place at the Company's
headquarters in Racine, Wisconsin, was a presentation by the Company of its most
recent results and strategies and a discussion of Parent's inquiries resulting
from its review of the initial due diligence materials.
In order to facilitate a more detailed due diligence analysis of the
Company, Parent forwarded a lengthy due diligence request to the Company on June
27, 1997. On July 2 and 3, 1997, Parent representatives, accompanied by
representatives of the Company, visited the Company's Moxness facilities in
Racine, Portage and Wausau, Wisconsin, the Company's Milwaukee Cylinder plant in
Cudahy, Wisconsin and the Company's Eder Industries facility in Oak Creek,
Wisconsin. Following those visits, Mr. Sim and Robert C. Arzbaecher, Parent's
Vice President and Chief Financial Officer, met with Mr. Mohrhauser and Mr.
Killian on July 7, 1997 to present an offer to acquire the Company in a stock
transaction at a price of $18.50 per share. Mr. Mohrhauser and Mr. Killian
agreed to discuss Parent's proposal with the full Board of Directors and the
Company's advisors.
In order to explore the possibility of accounting for the transaction as a
pooling-of-interests, Mr. Arzbaecher, Richard D. Carroll (Parent's Controller)
and Douglas R. Dorszynski (Vice President, Tax and Treasurer of Parent) met with
Mr. Sukalich and representatives of Deloitte & Touche LLP, independent public
accountants to Parent and the Company, on July 14, 1997 to discuss certain
accounting issues relating to the structure being considered. The issues
discussed at that meeting were summarized by Mr. Arzbaecher in a letter to Mr.
Killian and Mr. Mohrhauser dated July 18, 1997. As described in that letter,
while certain issues had to be addressed in order to proceed with a pooling
transaction, Parent believed that the issues were relatively straightforward and
that none was insurmountable.
On July 23, 1997, Mr. Mohrhauser called Mr. Sim to advise him that on July
22, 1997, the Board of Directors of the Company had met to discuss the proposed
transaction and to express the Company's lack of interest in a pooling
transaction. Mr. Mohrhauser also indicated that the Board thought that the
$18.50 per share offered by Parent was too low. In response, Mr. Sim sent a
letter to the Board of Directors of the Company on July 29, 1997 outlining his
thoughts as to the advantages of a pooling transaction for the shareholders of
both companies. Mr. Sim urged the Board of Directors of the Company to
reconsider its position.
On July 31, 1997, Mr. Sim met with Mr. Mohrhauser to further discuss a
pooling transaction. At that meeting, Mr. Sim, acknowledging the increase in
market price of the Shares following the Company's recent earnings release,
increased Parent's offer to $22.00 per share. On August 7, 1997, Mr. Mohrhauser
called Mr. Sim to advise him that the Board of Directors of the Company had met
on August 6, 1997 and had decided to decline Parent's most recent offer.
On August 14, 1997, Mr. Sim wrote to the Company Board of Directors to
express Parent's continued interest in acquiring the Company. In that letter,
Mr. Sim indicated that Parent was willing to accept the Company's preference for
an all cash offer and indicated that Parent was prepared to pay $24.25 per share
in a cash merger transaction. In a letter dated August 15, 1997 to Mr. Sim, Mr.
Mohrhauser acknowledged receipt of Mr. Sim's August 14, 1997 letter and
indicated that he was looking forward to discussing it with the Board of
Directors of the Company in the near future.
The Board of Directors of the Company met once again on August 21, 1997.
That evening, following the meeting of the Company's Board of Directors, Mr. Sim
spoke with Richard P. Kiphart of William Blair & Company, L.L.C. ("William
Blair"), the Company's financial advisor, who indicated that the Board of
Directors of the Company was willing to support a tender offer by Parent at
$25.00 per Share in cash. Mr. Kiphart acted as a go-between for Mr. Sim and Mr.
Mohrhauser and, after several telephone calls, the parties agreed to proceed to
prepare documents for a transaction at a price of $24.625 per Share in cash.
On August 28, 1997, while the parties were negotiating a definitive
agreement and related documents, Nasdaq contacted the Company to indicate that
there had been unusual market activity in the Common Stock and thereafter placed
a halt on trading in the Common Stock. In response, the Company issued a press
release announcing that it was engaged in discussions with Parent which could
result in the acquisition of the
17
Company by Parent at a price of $24.625 per Share, subject to negotiation of a
definitive agreement and other conditions.
On September 2, 1997, the Board of Directors of the Company met to
consider, and approved, the proposed transaction. Parent's Board of Directors
likewise met and approved the transaction that day, and Parent, the Purchaser
and the Company entered into the Merger Agreement. In a joint press release
issued prior to the commencement of trading on September 3, 1997, Parent and the
Company announced, among other things, that they had entered into the Merger
Agreement and that Parent intended to commence the Offer within five business
days following execution of the Merger Agreement. On September 5, 1997, the
Purchaser commenced the Offer.
Contacts With The Company. Except as set forth in this Offer to Purchase
(including Schedule II attached hereto), none of the Purchaser, Parent or, to
the best of their knowledge, any of the persons listed in Schedule I hereto, or
any associate or majority-owned subsidiary of such persons, beneficially owns
any equity security of the Company, and none of the Purchaser, Parent or, to the
best of their knowledge, any of the other persons referred to above, or any of
the respective directors, executive officers or subsidiaries of any of the
foregoing, has effected any transaction in any equity security of the Company
during the past 60 days.
On October 26, 1995, Parent's Enerpac division acquired the assets of
Designed Fluid-Air Systems, Inc. ("DFAS"). In addition to designing and
manufacturing die changing equipment, DFAS also represents Milwaukee Cylinder,
one of the Company's operating divisions, as a distributor in Northern Illinois.
Total sales by DFAS of Milwaukee Cylinder products are immaterial in relation to
either the Company or Parent.
Except as set forth in this Offer to Purchase, none of the Purchaser,
Parent, or, to the best of their knowledge, any of the persons listed in
Schedule I hereto, has any contract, arrangement, understanding or relationship
with any other person with respect to any securities of the Company, including,
without limitation, any contract, arrangement, understanding or relationship
concerning the transfer or the voting of any securities of the Company, joint
ventures, loan or option arrangements, puts or calls, guaranties of loans,
guaranties against loss or the giving or withholding of proxies. Except as set
forth in this Offer to Purchase, none of the Purchaser, Parent or, to the best
of their knowledge, any of the persons listed in Schedule I hereto has had any
transactions with the Company, or any of its executive officers, directors or
affiliates that would require reporting under the rules of the Commission.
Except as set forth in this Offer to Purchase, there have been no contacts,
negotiations or transactions between the Purchaser or Parent, any of their
respective subsidiaries, or, to the best of their knowledge, any of the persons
listed in Schedule I hereto, on the one hand, and the Company or its executive
officers, directors or affiliates, on the other hand, concerning a merger,
consolidation or acquisition, tender offer or other acquisition of securities,
election of directors, or a sale or other transfer of a material amount of
assets that would require reporting under the rules of the Commission.
The Merger Agreement. The following is a summary of the Merger Agreement, a
copy of which is filed as an Exhibit to the Schedule 14D-1 on file with the
Commission. Such summary is qualified in its entirety by reference to the Merger
Agreement.
The Offer. The Merger Agreement provides for the commencement of the
Offer no later than five business days after the initial public
announcement of the execution of the Merger Agreement. The obligation of
the Purchaser to accept for payment Shares tendered pursuant to the Offer
is subject, among other things, to the satisfaction of the Minimum
Condition. See Introduction. The Purchaser and Parent expressly reserve the
right to waive any condition to the Offer (except the Minimum Condition)
without the consent of the Company; provided, however, that neither the
Purchaser nor Parent will, without the prior written consent of the Board
of Directors of the Company, make any change in the Offer which decreases
the price per Share or changes the form of consideration payable in the
Offer, reduces the Minimum Condition, imposes conditions to the Offer in
addition to those set forth in the Merger Agreement, changes the conditions
to the Offer, or modifies or amends any terms of the Offer in a manner
adverse to the Company's shareholders. The Purchaser and Parent have the
right to (i) extend the Offer if at the then scheduled Expiration Date any
of the conditions to the Offer shall not have been
18
satisfied or waived, until such conditions are satisfied or waived, (ii)
extend the Offer for any period required by any rule, regulation,
interpretation or position of the Commission or its staff applicable to the
Offer, and (iii) extend the Offer for any reason on one or more occasions
for an aggregate period of not more than 30 business days (for all such
extensions) beyond the latest Expiration Date that would otherwise be
permitted under (i) or (ii). The Company has represented to Parent that it
has been advised by each of its directors and executive officers that such
person intends to tender all Shares owned by such person pursuant to the
Offer.
Approval Of The Company's Board Of Directors. The Board of the
Directors of the Company has unanimously determined that the Offer and the
Merger, taken together, are fair to and in the best interests of the
Company's shareholders, and has approved and adopted the Merger Agreement
and the transactions contemplated thereby, including the Offer and the
Merger. The Company's Board of Directors also unanimously resolved to
recommend that the Company's shareholders tender their Shares thereunder to
the Purchaser and, if necessary, approve and adopt the Merger Agreement and
the Merger. William Blair has rendered its opinion to the Company's Board
of Directors in writing that the consideration to be received by the
Company's shareholders in the Offer and the Merger, taken together, is fair
to such shareholders from a financial point of view. The Company has agreed
to file with the Commission a Solicitation/Recommendation Statement on
Schedule 14D-9 (the "Schedule 14D-9") containing the recommendation of the
Board of Directors that the Company's shareholders tender their Shares, and
mail the Schedule 14D-9 to the Company's shareholders on or about the date
of the commencement of the Offer.
Board Control. The Merger Agreement provides that promptly following
the purchase by the Purchaser of Shares pursuant to the Offer, either (i) a
majority of the members of the Board of Directors of the Company shall
resign, and the remaining Board members shall fill the positions vacated
with persons designated by Parent, or (ii) the size of the Board of
Directors of the Company shall be expanded and the vacant seats filled with
persons designated by Parent so that, in either case, a majority of the
members of the Board of Directors of the Company are persons designated by
Parent. There are currently eight directors of the Company.
The Company's obligation to appoint designees to the Board of
Directors of the Company following the purchase by the Purchaser of Shares
pursuant to the Offer is subject to Section 14(f) of the Exchange Act and
Rule 14f-1 thereunder (which require that information be furnished to the
Company's shareholders about Parent's nominees to the Company's Board of
Directors not later than 10 days prior to the time such nominees take
office as directors). The Company has agreed to take all actions required
under such section and rule in order to fulfill its obligation to cause a
majority of its directors to consist of persons designated by Parent and to
include information about such persons in the Schedule 14D-9. At this time,
Parent intends to designate five persons to the Company's Board of
Directors, following the resignation of five of the Company's current
directors. The Company has indicated that it will include the names and
ages of, and biographical information about, Parent's five designees in the
Schedule 14D-9.
From and after the time, if any, that Parent's designees are appointed
to the Company's Board of Directors, any amendment of the Merger Agreement,
any termination of the Merger Agreement by the Company, any extension of
time for performance of any of the obligations of Parent or the Purchaser
thereunder, or any waiver of any condition to the obligations of the
Company or any of the Company's rights thereunder may be effected only by
the action of a majority of the directors of the Company then in office who
were directors of the Company on the date of the Merger Agreement, which
action will be deemed to constitute the action of the full Board of
Directors of the Company; provided, however, that in no event may the
Company, Parent or the Purchaser amend the provision of the Merger
Agreement regarding the continuation of indemnification and insurance for
the Company's officers and directors. In addition, until the Effective
Time, the Company will use reasonable efforts to retain as members of its
Board of Directors at least two directors who were directors on the date of
the Merger Agreement (the "Company Designees"). If any or all of the
Company Designees resign, the remaining Company Designees (or, if no other
Company Designees remain on the Board, the last resigning Company Designee)
shall have the right to appoint a successor or successors to serve as
Company Designees.
19
Parent and the Purchaser have agreed to cause each such appointment to be
effective. Nothing in this provision prohibits, or should be construed to
prohibit, any of Parent's designees to the Company's Board of Directors
from voting on the termination of the Merger Agreement.
The Merger. The Merger Agreement provides that, upon the terms and
subject to the conditions thereof, and in accordance with the DGCL, at the
Effective Time, the Purchaser shall be merged with and into the Company. As
a result of the Merger, the separate corporate existence of the Purchaser
will cease and the Company will continue as the Surviving Corporation and
will become a wholly owned subsidiary of Parent.
Upon consummation of the Merger, each issued and then outstanding
Share (other than any Shares held in the treasury of the Company, or owned
by the Purchaser, Parent or any direct or indirect wholly owned subsidiary
of Parent or of the Company, or dissenting shares) shall be automatically
converted into, and exchanged for, the right to receive $24.625 in cash
(the "Merger Consideration").
The Merger Agreement provides that the directors of the Purchaser
immediately prior to the Effective Time will be the initial directors of
the Surviving Corporation and that the officers of the Company immediately
prior to the Effective Time will be the initial officers of the Surviving
Corporation. The Merger Agreement also provides that, at the Effective
Time, the Certificate of Incorporation and Bylaws of the Purchaser, each as
in effect immediately prior to the Effective Time, will be the Certificate
of Incorporation and Bylaws of the Surviving Corporation.
The Merger is subject to the satisfaction of the following conditions
(which may be waived, where permissible): (a) there shall not be in effect
any statute, rule, regulation, executive order, decree, ruling or
injunction or other order of a court or governmental or regulatory agency
of competent jurisdiction directing that the transactions contemplated in
the Merger Agreement not be consummated; provided, however, that prior to
invoking this condition each party shall use best efforts to have any such
decree, ruling, injunction or order vacated; (b) all governmental consents,
orders and approvals legally required for the consummation of the Merger
and the transactions contemplated by the Merger Agreement shall have been
obtained and be in effect at the Effective Time; (c) all necessary
requirements of the HSR Act shall have been complied with and any "waiting
periods" applicable to the Merger and to the transactions described in the
Merger Agreement which are imposed by the HSR Act shall have expired prior
to the closing date for the transactions described in the Merger Agreement
or shall have been terminated by the appropriate agency; (d) the Purchaser
shall have purchased pursuant to the Offer all of the Shares validly
tendered and not withdrawn; and (e) to the extent required by applicable
law, the Merger Agreement, the Merger and the transactions contemplated by
the Merger Agreement shall have received the requisite approval and
authorization of the Company's shareholders (with Parent and the Purchaser
and their respective subsidiaries required to vote all of their Shares in
favor of the Merger).
Stock Options And Deferred Compensation. From and after the date and
time that the Company executes the Merger Agreement, the Company is
prohibited by the Merger Agreement from granting any options or other
rights to acquire Shares. As promptly as practicable following the
execution of the Merger Agreement, the Company has agreed to offer to
repurchase each outstanding stock option ("Option"), whether or not such
Option is then exercisable, for a cash purchase price (subject to
withholding taxes) equal to the product of (i) the number of Shares subject
to such Option and (ii) the excess of the per Share Merger Consideration
over the exercise price per Share applicable to such Option. Each such
offer to repurchase Options is subject to the prior acceptance for payment
by the Purchaser of Shares in the Offer and provides for the payment of the
cash purchase price (described above) for the Option immediately after the
acceptance for payment by the Purchaser of the Shares. The Company has
represented to Parent and the Purchaser that there are no outstanding
Options as to which the exercise price per share exceeds the Merger
Consideration.
The Company has agreed to take such action as is necessary to
terminate, as of the Effective Time, the Company's 1982 Employee Incentive
Stock Option Plan, 1992 Employee Incentive Stock Option Plan, Directors and
Officers Stock Option Plan, 1996 Employee Stock Purchase and Payroll
Savings Plan
20
and all outstanding Options which, as of the Effective Time, have not been
exercised or repurchased by the Company as provided above.
On or prior to the Effective Time, the Company has agreed to
distribute in lump sum payments all amounts in each participant's deferred
compensation account in accordance with the Company' Deferred Compensation
Plan for Executives and Deferred Compensation Plan for Directors, and to
terminate such plans.
Acquisition Proposals. The Company has agreed that neither it nor any
of its subsidiaries nor any of their respective officers, directors,
employees, agents and representatives shall, directly or indirectly,
initiate, solicit or encourage any inquiries concerning an Acquisition or
an Acquisition Proposal (each as defined below); engage in any negotiations
concerning, or provide any confidential information or data to, or have any
discussions with, any person relating to an Acquisition or an Acquisition
Proposal; facilitate any effort or attempt to make or implement an
Acquisition Proposal; or consummate, agree or commit to consummate any
Acquisition or Acquisition Proposal. The term "Acquisition" means any or
all of the following, other than the Offer and the Merger: a merger, share
exchange, consolidation, reorganization, combination or similar transaction
involving the Company or any of its subsidiaries; a purchase, exchange or
tender offer for twenty percent (20%) or more of the outstanding shares of
the Company's Common Stock or for twenty percent (20%) or more of the
outstanding shares of any subsidiary of the Company; the purchase, lease or
other acquisition of all or any significant portion of the assets or any
twenty percent (20%) or greater equity interest (or any option, warrant or
security convertible into any twenty percent (20%) or greater equity
interest) of the Company or any of its subsidiaries; or any other
extraordinary transaction involving the Company or any of its subsidiaries
which is voluntarily approved, consented to or undertaken by the Company or
any of its subsidiaries, the consummation of which could reasonably be
expected to materially impede, materially interfere with, prevent or
materially delay the Offer or the Merger. The term "Acquisition Proposal"
means any inquiry, request for information, expression of interest,
indication of a desire to have discussions, or the making of any proposal
by any person concerning an Acquisition.
Notwithstanding the foregoing, the Board of Directors of the Company
may furnish information about the Company to a person making a Superior
Proposal (as defined below) pursuant to a confidentiality agreement in
customary form and participate in discussions and negotiations regarding
such Superior Proposal if the Board of Directors of the Company determines
in good faith, upon the written advice of outside legal counsel, that the
failure to take such action would violate its fiduciary duties to the
Company's shareholders under applicable law. In addition, the Company will
be permitted to take and disclose to the Company's shareholders a position
contemplated by Rules 14d-9 and 14e-2(a) under the Exchange Act with
respect to an Acquisition Proposal by means of a tender offer. The Company
must notify Parent orally and in writing of any Acquisition Proposal within
24 hours from the receipt thereof, specifying all of the material terms and
conditions of such Acquisition Proposal and identifying the person making
such Acquisition Proposal, keep Parent informed of the status and all
material developments and information regarding the Acquisition Proposal,
and give Parent five days' prior notice and an opportunity to negotiate
with the Company before entering into, executing or agreeing to any
Acquisition or Acquisition Proposal.
The term "Superior Proposal" means a written bona fide, unsolicited
Acquisition Proposal by any person (other than Parent) which the Board of
Directors of the Company determines in good faith, and in the exercise of
reasonable judgment (based on the advice of its independent financial
advisors), to be more favorable to the Company and its shareholders than
the Offer and the Merger from a financial point of view, which proposal is
capable of being consummated without undue delay and has the requisite
financing committed to it or, as determined in good faith, and in the
exercise of reasonable judgment (based on the advice of its independent
financial advisors), is reasonably capable of being financed by such
person.
Best Efforts. The Merger Agreement provides that, subject to its terms
and conditions, the Company, Parent and the Purchaser will take all actions
necessary and proper under applicable law to
21
consummate the Merger, including using their best efforts to prevent any
injunction by a government entity relating to consummation of the
transactions contemplated by the Merger Agreement.
Directors And Officers Indemnification And Insurance. Pursuant to the
Merger Agreement, Parent has agreed that for a period ending not sooner
than the fifth anniversary of the Effective Time, the Surviving Corporation
will maintain all rights to indemnification existing on the date of the
Merger Agreement in favor of the present and former directors and officers
of the Company as provided in the Company's Certificate of Incorporation
and Bylaws, in each case as in effect on the date of the Merger Agreement,
and that during such period, the Certificate of Incorporation and Bylaws of
the Surviving Corporation will not be amended or repealed or otherwise
modified in any manner that would adversely affect the rights of indemnity
afforded to the present and former directors and officers of the Company
unless required by law; provided, however, that if any claim is asserted
within such five-year period, all rights to indemnification in respect of
such claim shall continue until disposition of such claim.
Under the Merger Agreement, Parent and the Surviving Corporation will
maintain in effect for not less than five years from the Effective Time the
current directors' and officers' liability insurance policies and fiduciary
insurance policies maintained by the Company and its subsidiaries (provided
that Parent may substitute policies of substantially the same coverage
containing terms and conditions which are no less advantageous to the
Company's present or former directors or officers or other employees
covered by such policies prior to the Effective Time) with respect to
matters occurring at or prior to the Effective Time; provided, however,
that in no event will Parent or the Surviving Corporation be required to
pay an annual premium greater than 200% of the last annual premium paid
prior to the date thereof by the Company for such insurance.
Termination And Termination Fee. The Merger Agreement provides that it
may be terminated and the Merger and the Offer may be abandoned at any time
prior to the Effective Time: (a) by mutual written agreement duly
authorized by the Boards of Directors of Parent, the Purchaser and the
Company, respectively; (b) by Parent or the Company if (i) any court of
competent jurisdiction or any other governmental body or regulatory
authority shall have issued an order, decree or ruling or taken any other
action permanently restraining, enjoining or otherwise prohibiting the
Offer or the Merger and such order, decree, ruling or other action shall
have become final and non-appealable, or (ii) the Purchaser shall not have
purchased Shares pursuant to the Offer on or before February 28, 1998; (c)
by the Company if (i) the Board of Directors of the Company shall have
determined in good faith, upon the written advice of outside legal counsel,
that its fiduciary duties require the termination of this Agreement in
order to pursue a Superior Proposal, or (ii) the Purchaser shall have
failed to commence the Offer within five business days following the date
of the Merger Agreement or terminated the Offer without purchasing Shares
pursuant to the Offer; (d) by the Company if either Parent or the Purchaser
shall have breached in any material respect any of its representations,
warranties, covenants or other agreements contained in the Merger Agreement
which breach is incapable of being cured (or, if curable, shall not have
been cured within thirty (30) days after the giving of written notice to
Parent and the Purchaser); (e) by Parent if the Company shall have breached
or failed to perform any of its obligations, covenants or agreements
contained in the Merger Agreement (except to the extent any such breach
gives rise to the termination rights described in (f)(ii) below), or if the
Company shall have breached any of its representations or warranties set
forth in the Merger Agreement (disregarding all qualifications and
exceptions contained therein relating to knowledge, materiality or Material
Adverse Effect (as defined in Section 14)), and all such breaches and
failures to perform, taken in the aggregate, shall have or shall be
reasonably likely to have a Material Adverse Effect; or (f) by Parent and
the Purchaser, if (i) the Board of Directors of the Company has withdrawn,
or materially modified or changed its favorable recommendation of the
Offer, the Merger or the Merger Agreement, or shall have approved or
recommended any Acquisition Proposal or Acquisition, (ii) the Company shall
have breached its obligations to notify Parent of an Acquisition Proposal
and negotiate with Parent with respect thereto, or its obligations to take
necessary action to render the Rights Agreement inapplicable to the Merger
Agreement, the Merger and the Offer and not to redeem the Rights while the
Offer is continuing, (iii) on a scheduled Expiration Date all conditions to
the Purchaser's obligation to accept for payment and pay for Shares other
than the Minimum Condition have
22
been satisfied or waived and the Purchaser terminates the Offer without
purchasing Shares pursuant to the Offer (provided that the satisfaction or
waiver of all other conditions shall have been publicly disclosed at least
five business days before termination of the Offer), or (iv) the Purchaser
shall have otherwise terminated the Offer in accordance with the Merger
Agreement without purchasing Shares pursuant to the Offer.
In the event of the termination of the Merger Agreement and
abandonment of the Offer, the Merger Agreement provides that all further
obligations of the parties under or pursuant to the Merger Agreement shall
terminate without further liability thereunder on the part of any party
except under the provisions of the Merger Agreement related to fees and
expenses described below and under certain other provisions of the Merger
Agreement which survive termination, provided that each party to the Merger
Agreement will retain any and all remedies which it may have for breach of
contract provided by law.
The Merger Agreement provides that upon the occurrence of a Special
Event (as defined below) the Company will pay $5,000,000 to Parent and will
reimburse Parent for all documented out-of-pocket costs, fees and expenses
incurred by Parent and the Purchaser in connection with the preparation and
negotiation of the Merger Agreement and the transactions contemplated
thereby; provided, however, that in the case of a Special Event described
in clause (a) of the paragraph immediately below the Company will pay
$1,000,000 to Parent and reimburse Parent for all such documented
out-of-pocket costs, fees and expenses and will further pay to Parent an
additional $4,000,000 if a Special Event described in clause (b) of the
paragraph immediately below thereafter occurs. Any such amount due Parent
will be paid in immediately available funds within three business days
following the occurrence of the Special Event. If the Company fails to
timely pay the amount (or any portion thereof) due Parent pursuant to this
provision, the unpaid amount (or portion thereof) will accrue interest at
the rate of ten percent (10%) per annum until paid.
The term "Special Event" means the occurrence of any of the following
events: (a) the Board of Directors of the Company shall have withdrawn or
materially modified or changed its favorable recommendation of the Offer,
or shall have approved or recommended any Acquisition Proposal or
Acquisition, or any person unrelated to Parent shall have entered into an
agreement with the Company or any of its subsidiaries with respect to an
Acquisition; (b) on or before December 31, 1998 any person unrelated to
Parent shall have consummated an Acquisition; (c) Parent and the Purchaser
shall have terminated the Offer due to the existence, on the date of the
Merger Agreement, of the condition set forth in paragraph (b) of Section
14, or due to the existence, after the date of the Merger Agreement, of
such condition as a result of one or more events or circumstances arising
after the date of the Merger Agreement, if any such event or circumstance
was not promptly disclosed to Parent or was caused by the willful and
deliberate act of the Company which the Company cannot or will not cure; or
(d) Parent and the Purchaser shall have terminated the Merger Agreement as
a result of the breach by the Company of its obligations to notify Parent
of an Acquisition Proposal and to negotiate with Parent with respect
thereto, or of its obligations to take all necessary action to render the
Rights Agreement inapplicable to the Merger Agreement, the Offer and the
Merger and not to redeem the Rights while the Offer is continuing.
The Merger Agreement also contains other restrictions as to the
conduct of business by the Company pending the Merger, as well as
representations and warranties of each of the parties customary in
transactions of this kind.
11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY AFTER THE OFFER AND THE
MERGER.
Purpose Of The Offer. The purpose of the Offer and the Merger is to enable
Parent to acquire control of, and the entire equity interest in, the Company.
Parent and the Purchaser have proposed that, following the consummation of the
Offer, the Purchaser would effect the Merger, pursuant to which each then issued
and outstanding Share (excluding Shares owned by the Purchaser, Parent or any
direct or indirect wholly owned subsidiary of Parent or the Company, Shares held
in the treasury of the Company and Shares owned by shareholders who perfect
their dissenters' rights under the DGCL, if any), would be converted into the
right to receive an amount in cash equal to the price per Share paid pursuant to
the Offer, and the Company would
23
become a wholly owned subsidiary of Parent. The Offer, as the first step in the
acquisition of the Company, is intended to facilitate the acquisition of all
outstanding Shares. The Merger, as the second step in the acquisition of the
Company, is intended to facilitate the acquisition of any Shares not acquired by
the Purchaser in the Offer. Consummation of the Merger will require, except as
set forth below, the affirmative vote of the holders of a majority of the
outstanding Shares entitled to vote upon such matter.
Under certain circumstances, the Merger could be consummated without the
approval of the Company's shareholders through a Short-Form Merger (as defined
below). In particular, the DGCL provides that if a corporation holds 90% or more
of the outstanding shares of each class of stock of a subsidiary corporation,
the corporation may merge into the subsidiary upon approval of the corporation's
board of directors and execution, acknowledgment and filing of a certificate of
ownership and merger and upon complying with certain notice requirements, but
without approval of the shareholders of the subsidiary (a "Short-Form Merger").
Accordingly, if the Purchaser owns 90% or more of the outstanding Shares after
consummation of the Offer, a Short-Form Merger could be effected by action of
the Board of Directors of the Purchaser without the approval of the Company's
shareholders. Even if the Purchaser does not own 90% of the outstanding Shares
following consummation of the Offer, Parent and the Purchaser could seek to
purchase additional Shares in the open market or otherwise in order to reach the
90% threshold and effect a Short-Form Merger. The per Share consideration paid
for any Shares so acquired may be greater or less than that paid in the Offer.
Parent and the Purchaser presently intend to effect a Short-Form Merger if
permitted to do so under the DGCL.
Plans For The Company After The Offer And The Merger. In connection with
the Offer, Parent has reviewed, and will continue to review, various possible
business strategies in the event that the Purchaser acquires control of the
Company pursuant to the Offer and the Merger, or otherwise, and will continue to
consider and determine what, if any, changes would be desirable in light of the
circumstances which then exist. Parent intends to undertake a thorough review of
the Company's operations and to study the manner in which operations of the two
companies can best be optimized, and will take such actions as a result of this
review as may be appropriate under the circumstances. In addition to eliminating
the Company's regular quarterly and annual special dividends, actions that may
be taken by Parent include, among other things, changes in the Company's
business, corporate structure, Certificate of Incorporation, Bylaws,
capitalization, or management. In addition, Mr. Mohrhauser has advised Parent
that he intends to resign as Chairman and Chief Executive Officer of the Company
upon consummation of the Offer.
Except as described in this Offer to Purchase, Parent and the Purchaser
have no present plans or proposals that would result in an extraordinary
corporate transaction, such as a merger, consolidation, reorganization,
liquidation or sale or transfer of a material amount of assets, involving the
Company or any of its subsidiaries, or any material changes in the Company's
present capitalization, dividend policy, employee benefit plans, corporate
structure or business or any material changes or reductions in the composition
of its management or personnel. Following further review of the Company's
businesses, financial records, personnel, operations and other matters, it is
possible such plans and intentions of Parent and the Purchaser may change.
Dissenters' Rights. While no dissenters' rights are available in connection
with the Offer, Section 262 of the DGCL ("Section 262") may provide dissenters'
rights to holders of the Shares, subject to the procedures described therein, to
object to the Merger and demand payment of the "fair value" of their Shares in
cash in connection with the consummation of the Merger. If Section 262 is
applicable, dissenting shareholders of the Company who comply with the
applicable statutory procedures will be entitled to receive a judicial
determination of the fair value of their Shares (exclusive of any element of
value arising from the accomplishment or expectation of the Merger) and to
receive payment of such fair value in cash, together with a fair rate of
interest thereon, if any. Any such judicial determination of the fair value of
the Shares could be based upon factors other than, or in addition to, the price
per Share to be paid in the Merger and the market value of the Shares. The value
so determined could be more or less than the price per Share to be paid in the
Merger. If the Merger is effected as a Short-Form Merger, Section 262 will be
applicable.
The foregoing summary of the rights of dissenting shareholders does not
purport to be a complete statement of the procedures to be followed by
shareholders desiring to exercise their dissenters' rights in
24
connection with the Merger. The preservation and exercise of dissenters' rights
are conditioned on strict adherence to the applicable provisions of the DGCL.
12. DIVIDENDS AND DISTRIBUTIONS; STOCK ISSUANCES. If on or after September
2, 1997 the Company should (i) issue any additional Shares (except upon the
exercise of Options) or grant any warrants, Options or other rights to subscribe
for or acquire any additional Shares or any other shares of capital stock of the
Company, (ii) declare or pay any cash or stock dividend (other than the payment
of regular scheduled quarterly cash dividends) on, or directly or indirectly
redeem, purchase or otherwise acquire the Shares, or split, combine or otherwise
change, the Shares or the Company's capitalization, in violation of the Merger
Agreement, then Parent and the Purchaser may terminate the Merger Agreement and
refuse to purchase Shares pursuant to the Offer provided such action has a
Material Adverse Effect on the Company.
13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; NASDAQ LISTING AND
EXCHANGE ACT REGISTRATION. The purchase of Shares by the Purchaser pursuant to
the Offer will reduce the number of Shares that might otherwise trade publicly
and may reduce the number of holders of Shares, which could adversely affect the
liquidity and market value of the remaining Shares held by the public.
The Shares are listed on the Nasdaq NM. According to Nasdaq's published
guidelines the Shares may no longer be included in the Nasdaq NM if, among other
things, the number of publicly-held Shares (excluding Shares held directly or
indirectly by officers, directors and any person who is a beneficial owner of
more than 10% of the Shares) is less than 200,000, the aggregate market value of
publicly-held Shares is less than $1,000,000 or there are fewer than 400 holders
of the Shares or 300 holders in round lots. If these standards are not met,
quotations might continue to be published in the over-the-counter "additional
list" or one of the "local lists" unless, as set forth in Nasdaq's published
guidelines, the number of publicly-held Shares is less than 100,000, or there
are fewer than 300 holders in total. On August 22, 1997, the Commission approved
Nasdaq NM rule changes, to be effective February 22, 1998, increasing the
maintenance requirements for a Nasdaq NM listing. As described below, the
Purchaser intends to cause the Company to terminate its Nasdaq NM listing and
Exchange Act registration if there are fewer than 300 Shares held of record
following consummation of the Offer.
If the Nasdaq NM were to delist the Shares, the market therefor could be
adversely affected. It is possible that the Shares would be traded on other
securities exchanges or in the over-the-counter market, and that price
quotations would be reported by such exchanges, or through the Nasdaq or other
sources. The extent of the public market for the Shares and the availability of
such quotations would, however, depend upon the number of shareholders and/or
the aggregate market value of the Shares remaining at such time, the interest in
maintaining a market in the Shares on the part of securities firms, the possible
termination of registration of the Shares under the Exchange Act and other
factors.
The shares of Common Stock are presently "margin securities" under the
regulations of the Federal Reserve Board, which has the effect, among other
things, of allowing brokers to extend credit on the collateral of such shares of
Common Stock. Depending upon factors similar to those described above regarding
listing and market quotations, the shares of Common Stock might no longer
constitute "margin securities" for the purposes of the Federal Reserve Board's
margin regulations in which event the shares of Common Stock would be ineligible
as collateral for margin loans made by brokers.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated by the Company upon application to the Commission
if the outstanding Shares are not included for trading in the Nasdaq NM and if
there are fewer than 300 holders of record of Shares. Termination of
registration of the Shares under the Exchange Act would reduce the information
required to be furnished by the Company to its shareholders and to the
Commission and would make certain provisions of the Exchange Act, such as the
short-swing profit recovery provisions of Section 16(b) and the requirement of
furnishing a proxy statement in connection with shareholders' meetings pursuant
to Section 14(a) and the related requirement of furnishing an annual report to
shareholders, no longer applicable with respect to the Shares. 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
under the Securities Act of 1933, as amended, may be impaired or eliminated. If
registration of the Shares under the Exchange Act were terminated, the Shares
would no longer be eligible
25
for Nasdaq reporting or for continued inclusion on the Federal Reserve Board's
list of "margin securities." The Purchaser intends to cause the Company to apply
for termination of registration of the Shares as soon as possible after
consummation of the Offer if the requirements for termination of registration
are met.
14. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of
the Offer or the Merger Agreement and provided that the Purchaser shall not be
obligated to accept for payment any Shares until (i) expiration of all
applicable waiting periods under the HSR Act and (ii) the Minimum Condition
shall have been satisfied, the Purchaser shall not be required to accept for
payment or, subject to any applicable rules and regulations of the Commission,
including Rule 14e-1(c) under the Exchange Act (relating to the Purchaser's
obligation to pay for or return tendered Shares after termination or withdrawal
of the Offer), pay for, or may delay the acceptance for payment of or payment
for, any Shares tendered pursuant to the Offer, or may, subject to the terms of
the Merger Agreement, terminate or amend the Offer if at any time on or after
the date of the Merger Agreement, and before the time of payment for any of such
Shares, any of the following conditions exists:
(a) there shall have occurred and be continuing as of the then
scheduled Expiration Date of the Offer (i) any general suspension of, or
limitation on prices for, trading in securities on the New York Stock
Exchange, or the Nasdaq NM, (ii) a declaration of a banking moratorium or
any suspension of payments in respect of banks in the United States, (iii)
a commencement or escalation of a war, armed hostilities or other
international or national calamity directly involving the United States,
(iv) any material limitation (whether or not mandatory) by any governmental
or regulatory authority, agency or commission, domestic or foreign
("Governmental Entity"), on the extension of credit by banks or other
lending institutions in the United States, or (v) in the case of any of the
foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof;
(b) the Company shall have breached or failed to perform any of its
obligations, covenants or agreements under the Merger Agreement, or any
representation or warranty of the Company set forth in the Merger Agreement
(disregarding all qualifications and exceptions contained therein relating
to knowledge, materiality or Material Adverse Effect (as defined below))
shall not have been true and correct as of the date of the Merger Agreement
and as of the then scheduled Expiration Date of the Offer as though made on
and as of the then scheduled Expiration Date of the Offer, provided that
all such breaches, failures to perform and untrue representations or
warranties, taken in the aggregate, shall have or shall be reasonably
likely to have a Material Adverse Effect;
(c) any court or Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive
order, decree, injunction or other order which is in effect and which (i)
restricts (other than restrictions which in the aggregate do not have a
"Material Adverse Effect" (as defined below) on the Company, Parent or the
Purchaser, or which do not materially restrict the ability of Parent and
the Purchaser to consummate the Offer and the Merger as originally
contemplated by Parent and the Purchaser), prevents or prohibits
consummation of the Offer or the Merger, (ii) prohibits or limits (other
than limits which in the aggregate do not have a Material Adverse Effect on
Parent, the Purchaser or the Company or which do not materially limit the
ability of Parent to own and operate all of the business and assets of
Parent and the Company after the consummation of the transactions
contemplated by the Offer and the Merger Agreement) the ownership or
operation by the Company, Parent or any of their subsidiaries of all or any
material portion of the business or assets of the Company and its
subsidiaries taken as a whole, or as a result of the Offer or the Merger
compels the Company, Parent or any of their subsidiaries to dispose of or
hold separate all or any material portion of their respective business or
assets, (iii) imposes limitations on the ability of Parent or any
subsidiary of Parent to exercise effectively full rights of ownership of
any Shares, including, without limitation, the right to vote any Shares
acquired by the Purchaser pursuant to the Offer or otherwise on all matters
properly presented to the Company's shareholders including, without
limitation, the approval and adoption of the Merger Agreement and the
transactions contemplated thereby, (iv) requires divestiture by Parent or
any affiliate of Parent of any Shares or (v) otherwise materially adversely
affects the financial condition, business or results of operations of the
Company and its subsidiaries taken as a whole;
26
(d) all consents, registrations, approvals, permits, authorizations,
notices, reports or other filings required to be obtained or made by the
Company, Parent or the Purchaser with or from any governmental entity in
connection with the execution and delivery of the Merger Agreement, the
Offer and the consummation of the transactions contemplated by the Merger
Agreement shall not have been made or obtained as of the then scheduled
Expiration Date of the Offer (other than the failure to receive any
consent, registration, approval, permit or authorization or to make any
notice, report or other filing that, in the aggregate, is not reasonably
likely to have a Material Adverse Effect on Parent, the Purchaser or the
Company, or would not prevent the consummation of the Offer or the Merger);
(e) there shall have occurred any one or more changes or developments
in the financial condition, properties, business or results of operations
of the Company or any of its subsidiaries which, in the aggregate, has or
is reasonably likely to have a Material Adverse Effect;
(f) the Board of Directors of the Company (or any committee thereof)
shall have withdrawn or amended, or modified in a manner adverse to Parent
and the Purchaser, its recommendation of the Offer or the Merger, or shall
have endorsed, approved or recommended any other Acquisition Proposal, or
the Company shall have entered into any agreement with respect to an
Acquisition, or the Board of Directors (or any committee thereof) shall
have resolved to take any of the foregoing actions; or
(g) the Merger Agreement shall have been terminated by the Company, or
by Parent or the Purchaser, in accordance with its terms, or Parent or the
Purchaser shall have reached an agreement or understanding in writing with
the Company providing for termination or amendment of the Offer or delay in
payment for the Shares;
which, in the reasonable judgment of Parent and the Purchaser, in any such
case, and regardless of the circumstances (including any action or inaction
by Parent and the Purchaser) giving rise to any such conditions, make it
inadvisable to proceed with the Offer and/or with such acceptance for
payment of or payment for the Shares.
"Material Adverse Effect" shall mean a material adverse effect on the
condition, business, assets, results of operations or prospects of the Company
and its subsidiaries, taken as a whole, or of Parent and the Purchaser, taken as
a whole, as the case may be.
The foregoing conditions are for the sole benefit of Parent and the
Purchaser and may be asserted by Parent or the Purchaser regardless of the
circumstances (including any action or inaction by Parent or the Purchaser)
giving rise to such condition or may be waived by Parent or the Purchaser, in
whole or in part at any time and from time to time, in its reasonable business
discretion. The failure by Parent or the Purchaser 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.
A public announcement shall be made of a material change in, or waiver of,
such conditions, and the Offer may, in certain circumstances, be extended in
connection with any such change or waiver. Any determination by the Purchaser
concerning the events described in this Section 14 will be final and binding
upon all parties.
15. CERTAIN REGULATORY AND LEGAL MATTERS.
General. Except as otherwise disclosed herein, based upon an examination of
publicly available information filed by the Company with the Commission and the
disclosures made by the Company pursuant to the Merger Agreement, Parent and the
Purchaser are not aware of any licenses or other regulatory permits which appear
to be material to the business of the Company and which might be adversely
affected by the acquisition of Shares by the Purchaser pursuant to the Offer or
of any approval or other action by any governmental, administrative or
regulatory agency or authority which would be required for the acquisition or
ownership of Shares by the Purchaser pursuant to the Offer. Should any such
approval or other action be required, it is currently contemplated that such
approval or action would be sought or taken. There can be no
27
assurance that any such approval or action, if needed, would be obtained or, if
obtained, that it will be obtained without substantial conditions or that
adverse consequences might not result to the Company's or Parent's business or
that certain parts of the Company's or Parent's business might not have to be
disposed of in the event that such approvals were not obtained or such other
actions were not taken, any of which could cause the Purchaser to elect to
terminate the Offer without the purchase of the Shares thereunder. The
Purchaser's obligation under the Offer to accept for payment and pay for Shares
is subject to certain conditions. See Section 14.
Antitrust Compliance. Under the HSR Act and the rules that have been
promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated unless certain information has
been furnished to the Antitrust Division of the Department of Justice (the
"Antitrust Division") and the FTC and certain waiting period requirements have
been satisfied. The acquisition of Shares by the Purchaser is subject to these
requirements. See Section 2 as to the effect of the HSR Act on the timing of the
Purchaser's obligation to accept Shares for payment.
Pursuant to the HSR Act, Parent expects to file a Notification and Report
Form with respect to the acquisition of Shares pursuant to the Offer with the
Antitrust Division and the FTC on or about September 8, 1997. The Company has
informed Parent that it expects to file its Notification and Report Form under
the HSR Act on or about the same day. Under the provisions of the HSR Act
applicable to the purchase of Shares pursuant to the Offer, such purchases may
not be made until the expiration of a 15-day waiting period following the filing
by Parent, unless a request for early termination of the waiting period is
granted or unless the waiting period is extended by Parent's receipt of a
request for additional information or documentary material prior thereto. If
either the FTC or the Antitrust Division were to issue a request for additional
information or documentary material prior to the expiration of the 15-day
waiting period, the waiting period would be extended to expire at 11:59 p.m.,
Eastern time, on the tenth day after the date of substantial compliance by
Parent with such request. Thereafter, the waiting period could be extended only
by agreement or by court order. If the acquisition of Shares is delayed pursuant
to a request by the FTC or the Antitrust Division for additional information or
documentary material pursuant to the HSR Act, the purchase of and payment for
Shares will be deferred until ten days after the request is substantially
complied with unless the waiting period is sooner terminated by the FTC or the
Antitrust Division. See Section 2. Only one extension of the waiting period
pursuant to a request for additional information is authorized by the rules
promulgated under the HSR Act, although the waiting period may also be extended
by agreement or by court order. Any such extension of the waiting period will
not give rise to any withdrawal rights not otherwise provided for by applicable
law. See Section 4. Although the Company is required to file certain information
and documentary material with the Antitrust Division and the FTC in connection
with the Offer, neither the Company's failure to make such filings nor a request
from the Antitrust Division or the FTC for additional information or documentary
material made to the Company will extend the waiting period.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
the Purchaser pursuant to the Offer and the Merger. At any time before or after
the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could
take such action under the antitrust laws as it deems necessary or desirable in
the public interest, including seeking to enjoin the acquisition of Shares
pursuant to the Offer or seeking divestiture of Shares acquired by the Purchaser
or the divestiture of substantial assets of Parent, the Company or any of their
respective subsidiaries. Private parties and state attorneys general may also
bring legal action under the antitrust laws under certain circumstances. There
can be no assurance that a challenge to the Offer on antitrust grounds will not
be made or, if a challenge is made, what the result will be. See Section 14 for
certain conditions to the Offer that could become applicable in the event of
such a challenge.
Delaware Business Combination Law. Section 203 of the DGCL ("Section 203")
provides that a Delaware corporation such as the Company may not engage in any
"Business Combination" (defined to include a variety of transactions, including
a merger) with any "Interested Stockholder" (defined generally as any person
that, directly or indirectly, beneficially owns 15% or more of the outstanding
voting stock of the corporation), or any affiliate of an Interested Stockholder,
for three years after the date on which the Interested Stockholder became an
Interested Stockholder. The three-year prohibition on Business Combinations with
Interested
28
Stockholders (the "Business Combination Prohibition") does not apply if certain
conditions, described below, are satisfied. Section 203 provides that a
beneficial owner of voting stock includes any person who, individually or
together with any of its affiliates or associates, has (i) the right to acquire
voting stock (whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or understanding or upon
the exercise of conversion rights, exchange rights, warrants or options or
otherwise, (ii) the right to vote such stock pursuant to any agreement,
arrangement or understanding, or (iii) any agreement, arrangement or
understanding for the purposes of acquiring, holding, voting or disposing of
such stock with any other person that beneficially owns, directly or indirectly,
such stock.
The Business Combination Prohibition does not apply to a particular
Business Combination between a corporation and a particular Interested
Stockholder if (i) prior to the date such Interested Stockholder became an
Interested Stockholder, the board of directors of such corporation approves
either the Business Combination or the transaction which resulted in the
stockholder becoming an Interested Stockholder, or (ii) upon consummation of the
transaction which resulted in the stockholder becoming an Interested
Stockholder, the Interested Stockholder owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction commenced, excluding
for purposes of determining the number of shares outstanding those shares owned
by (x) persons who are directors and also officers and (y) employee stock plans
in which employee participants do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or exchange
offer, or (iii) on or subsequent to the date the stockholder becomes an
Interested Stockholder, the Business Combination is approved by the board of
directors of such corporation and authorized at an annual or special meeting of
stockholders, and not by written consent, by the affirmative vote of at least
66 2/3% of the outstanding voting stock which is not owned by the Interested
Stockholder.
The Board of Directors of the Company has unanimously approved the Offer
and the Merger. As a result, Section 203 will not apply to the Purchaser's
acquisition of Shares pursuant to the Offer or the consummation of the Merger
thereafter.
Wisconsin Corporate Take-Over Law. Although the Company is organized under
the laws of the State of Delaware, since the Company's executive offices and
principal place of business are located in the State of Wisconsin, the Offer
could be subject to Chapter 552 of the Wisconsin Statutes, the Wisconsin
Corporate Take-Over Law ("Chapter 552"). Chapter 552 makes it unlawful, under
certain circumstances, for any person to make a "take-over offer" involving a
"target company" in Wisconsin which meets certain criteria, or to acquire any
equity securities of such a target company pursuant to the take-over offer,
unless a registration statement has been filed with the Wisconsin Division of
Securities (the "Division") ten days prior to the commencement of the take-over
offer and has become effective or such take-over offer is exempted by rule or
order of the Division. The Company has represented to Parent and the Purchaser
in the Merger Agreement that it does not meet the requirements for a target
company for purposes of the registration provisions of Chapter 552 and,
consequently, such provisions of Chapter 552 should be inapplicable to the Offer
and the Merger. However, Chapter 552 also imposes certain reporting and filing
requirements on persons making a take-over offer and makes unlawful certain
fraudulent and deceptive practices in connection with a take-over offer, all of
which provisions are not contingent on the Company's status as a target company
for purposes of the registration provisions and may be applicable to the Offer.
Parent and the Purchaser intend to comply with such requirements and
prohibitions to the extent required by Chapter 552.
The foregoing description of Chapter 552 is not necessarily complete and is
qualified by reference to the provisions of Chapter 552 and the rules and
regulations promulgated thereunder.
Other State Laws. A number of other states have adopted laws and
regulations applicable to attempts to acquire securities of corporations which
are incorporated, or have substantial assets, shareholders, principal executive
offices or principal places of business, or whose business operations otherwise
have substantial economic effects, in such states. In 1982, in Edgar v. 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 take-overs of corporations meeting certain requirements
more difficult. However, in 1987, in CTS Corp. v. Dynamics Corp. of America, the
Supreme Court held that the Indiana Control Share
29
Acquisition Act was constitutional. Such Act, by its terms, is applicable only
to corporations that have a substantial number of shareholders in Indiana and
are incorporated there. Subsequently, a number of federal courts have ruled that
various state take-over statutes are unconstitutional insofar as they apply to
corporations incorporated outside the state of enactment.
The Purchaser does not know whether any of these laws will, by their terms,
apply to the Offer, and the Purchaser has not attempted to comply with any state
take-over statutes in connection with the Offer or the Merger, except as set
forth above with respect to Section 203 and Chapter 552. The Purchaser reserves
the right to challenge the validity or applicability of any state law allegedly
applicable to the Offer or the Merger, and nothing in this Offer to Purchase nor
any action taken in connection herewith is intended as a waiver of that right.
In the event that an assertion is made that one or more take-over statutes apply
to the Offer or the Merger, and an appropriate court does not determine that
such statute or statutes do not apply or are invalid as applied to the Offer or
the Merger, as applicable, the Purchaser may be required to file certain
documents with, or receive approvals from, the relevant state authorities, and
the Purchaser might be unable to accept for payment or purchase Shares tendered
pursuant to the Offer or be delayed in continuing or consummating the Offer. In
any such case, the Purchaser may not be obligated to accept for payment or
purchase any Shares tendered. See Section 14.
"Going Private" Transactions. The Commission has adopted Rule 13e-3 under
the Exchange Act which is applicable to certain "going private" transactions and
which may under certain circumstances be applicable to a transaction such as the
Merger. However, Rule 13e-3 would be inapplicable if (i) the Shares are
deregistered under the Exchange Act prior to the Merger or (ii) the Merger is
consummated within one year after the purchase of the Shares pursuant to the
Offer and the amount paid per Share in the Merger is at least equal to the
amount paid per Share in the Offer, as the Merger Agreement provides. If
applicable, Rule 13e-3 requires, among other things, that certain financial
information concerning the fairness of the proposed transaction and the
consideration offered to minority shareholders in such transaction be filed with
the Commission and disclosed to shareholders prior to the consummation of the
transaction. The securities regulations of the State of Wisconsin (Wisconsin
Administrative Code Section DFI-Sec 6.05) contain provisions that under certain
circumstances may require a filing and certain disclosures in connection with
the fairness of certain "going private" transactions. The Purchaser and Parent
believe such provisions are not applicable to the Offer or the Merger.
Certificate of Incorporation. Article ELEVENTH.A of the Company's
Certificate of Incorporation provides that, in addition to the vote or consent
of the Company's shareholders otherwise required by law, by agreement or by the
Certificate of Incorporation, any Business Transaction (as defined below)
requires the affirmative vote of the holders of that number of outstanding
shares of all classes of stock of the Company entitled to vote in elections of
directors, voting as one class, which equals the sum of (a) the number of
outstanding shares of such voting stock beneficially owned by any Interested
Related Party (as defined below) plus (b) eighty percent (80%) of the remaining
number of outstanding shares of such voting stock that are not beneficially
owned by any Interested Related Party.
For purposes of Article ELEVENTH, the term "Business Transaction" means:
(a) any merger or consolidation of the Company or any of its subsidiaries with
or into any Related Party (as defined below) or any affiliate or associate of a
Related Party; (b) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition of any assets of the Company or any of its subsidiaries to or
with any Related Party or any affiliate or associate of a Related Party if such
assets have a book value in access of ten percent (10%) of the book value of the
total consolidated assets of the Company at the end of its most recent fiscal
period ending prior to the time that the determination is made for which
financial information is available; (c) any issuance, sale, exchange, transfer
or disposition by the Company or any of its subsidiaries of any securities of
the Company or any of its subsidiaries to or with any Related Party or any
affiliate or associate of a Related Party; or (d) any recapitalization of the
Company or any subsidiary, or merger or consolidation of the Company with any
subsidiary, which has the effect, directly or indirectly, of increasing the
proportionate interest of any Related Party or any affiliate or associate of a
Related Party in the outstanding stock of any class of the Company or any
subsidiary.
30
The term "Related Party" means any person which is the beneficial owner,
directly or indirectly, of twenty percent (20%) or more of the outstanding
shares of stock of the Company entitled to vote in elections of directors,
voting as one class. The term "Interested Related Party" means a Related Party
that is a party to a Business Transaction or is an affiliate or associate of a
party to a Business Transaction or will experience an increase in its
proportionate interest in the outstanding stock of any class of the Company as a
result of a Business Transaction.
Article ELEVENTH is not applicable to a Business Transaction if such
Business Transaction is approved by a resolution adopted by not less than
three-fourths of those members of the Company's Board of Directors holding
office at the time such resolution is adopted who are not Related Party
Directors (as defined below). The term "Related Party Director" means each
director of the Company who is himself or herself a Related Party or an
affiliate or associate of a Related Party or an officer, director or employee of
a Related Party or of an affiliate or associate of a Related Party. Article
ELEVENTH is also not applicable to any Business Transaction if certain
conditions have been met which relate to the fairness of the consideration to be
received by Company shareholders in the Business Transaction.
The Company's Board of Directors unanimously approved the Offer, the Merger
and the other transactions contemplated by the Merger Agreement on September 2,
1997. As a result of such approval, the provisions of Article ELEVENTH of the
Company's Certificate of Incorporation are not applicable to the Offer, the
Merger or any other transaction contemplated by the Merger Agreement.
In addition, Article ELEVENTH.C of the Company's Certificate of
Incorporation provides that any direct or indirect purchase by the Company of
any shares of its stock owned by any Related Party who has beneficially owned
such shares for less than three years preceding the date of such proposed
acquisition requires the affirmative vote or consent of the holders of that
number of outstanding shares of all classes of stock of the Company entitled to
vote in elections of directors, voting as one class, which equals the sum of (a)
the number of outstanding shares proposed to be purchased from such Related
Party plus (b) eighty percent (80%) of the remaining number of outstanding
shares of such voting stock. Article ELEVENTH.C does not apply to (i) any offer
to purchase made by the Company which is made on the same terms and conditions
to the holders of all shares of stock of the Company, (ii) any purchase by the
Company of shares owned by a Related Party occurring after the end of three
years following the date of the last acquisition by such Related Party of stock
of the Company, (iii) any transaction which may be deemed to be a purchase by
the Company of shares of its stock which is made in accordance with the terms of
any stock option or other employee benefit plan now or hereafter maintained by
the Company, or (iv) any purchase by the Company of shares of its stock at
prevailing market prices pursuant to a stock repurchase program.
16. FEES AND EXPENSES. Except as set forth below, neither Parent nor the
Purchaser will pay any fees or commissions to any broker, dealer or other person
for soliciting tenders of Shares pursuant to the Offer.
The Purchaser and Parent have retained Georgeson & Company Inc. to act as
the Information Agent and ChaseMellon Shareholder Services, L.L.C. to serve as
the Depositary in connection with the Offer. The Information Agent may contact
holders of Shares by mail, telephone, telex, telegraph, the internet and
personal interview, and may request brokers, dealers and other nominee
shareholders to forward material relating to the Offer to beneficial owners of
Shares. The Information Agent and the Depositary each will receive reasonable
and customary compensation for their services, be reimbursed for certain
reasonable out-of-pocket expenses and be indemnified against certain liabilities
in connection therewith, including certain liabilities under the Federal
securities laws.
Neither the Purchaser nor Parent will pay any fees or commissions to any
broker or dealer or other person (other than the Information Agent) in
connection with the solicitation of tenders of Shares pursuant to the Offer.
Brokers, dealers, banks, trust companies and other nominees will be reimbursed
by the Purchaser upon request for customary mailing and handling expenses
incurred by them in forwarding material to their customers.
17. MISCELLANEOUS. The Offer is not being made to (nor will tenders be
accepted from or on behalf of) holders of Shares in any jurisdiction in which
the making of the Offer or the acceptance thereof would not be
31
in compliance with the laws of such jurisdiction. Neither the Purchaser nor
Parent is aware of any jurisdiction in which the making of the Offer or the
acceptance thereof would not be in compliance with the laws of such
jurisdiction. The Purchaser may, however, in its discretion, take such action as
it may deem necessary to make the Offer in any jurisdiction and extend the Offer
to holders of Shares in such jurisdiction. In any jurisdiction the securities,
blue sky or other laws of which require the Offer to be made by a licensed
broker or dealer, the Offer will be made on behalf of the Purchaser 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 THE PURCHASER OR PARENT NOT CONTAINED HEREIN OR IN
THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
The Purchaser and Parent have filed with the Commission the Schedule 14D-1
pursuant to Rule 14d-3 under the Exchange Act, together with exhibits,
furnishing certain additional information with respect to the Offer, and may
file amendments thereto. Such Schedule 14D-1 and any amendments thereto,
including exhibits, should be available for inspection and copies should be
obtainable in the manner set forth in Section 7 (except that such material will
not be available at the regional offices of the Commission) and is also
available on-line through the Commission's EDGAR electronic filing and retrieval
system.
TVPA CORP.
September 5, 1997
32
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF PARENT AND THE PURCHASER
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The following table sets forth
the name, business or residence address, principal occupation or employment at
the present time and during the last five years, and the name, principal
business and address of any corporation or other organization in which such
employment is conducted or was conducted for each of the directors and executive
officers of Parent. All directors and executive officers listed below are
citizens of the United States except for Mr. Boel, who is a citizen of the
Netherlands. The business address of Parent is 13000 West Silver Spring Drive,
Butler, Wisconsin 53007 and its principal business is described in Section 8 of
the Offer to Purchase. Unless otherwise indicated, all directors and executive
officers of Parent have been in the principal occupations indicated for the last
five years and the business address of each such person is the address of
Parent.
PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME, BUSINESS OR RESIDENCE ADDRESS AGE MATERIAL OCCUPATIONS FOR PAST FIVE YEARS
----------------------------------- --- ----------------------------------------
H. Richard Crowther....................... 65 Retired; Vice Chairman, Illinois Tool Works Inc.,
P.O. Box 274 manufacturer of engineered components and systems,
Oley, Pennsylvania 19547 prior to 1995 (located at 3600 W. Lake Avenue,
Director since: 1995 Glenview, Illinois 60025).
Jack L. Heckel............................ 66 Retired; President and Chief Operating Officer,
27390 Oak Knoll Drive GenCorp. Inc., manufacturer of aerospace and
Bonita Springs, Florida 34134 defense, polymer and automotive products, prior to
Director since: 1993 1993 (located at 175 Ghent Road, Fairlawn, Ohio
44333).
Richard A. Kashnow........................ 55 Chairman of the Board, President and Chief
Raychem Corporation Executive Officer, Raychem Corporation, global
300 Constitution Drive manufacturer of materials science-based products
Menlo Park, California 94025 for electronics, telecommunications and industrial
Director since: 1993 applications.
L. Dennis Kozlowski....................... 50 Chairman of the Board, President and Chief
Tyco International Ltd. Executive Officer, Tyco International Ltd.,
1 Tyco Park manufacturer of disposable and specialty products,
Exeter, New Hampshire 03837 fire and safety services, flow control, and
Director since: 1994 electrical and electronic components.
John J. McDonough......................... 61 President and Chief Executive Officer of McDonough
McDonough Capital Company LLC Capital Company LLC, venture capital investment
717 Forest Avenue firm; also Chairman and Chief Executive Officer of
Lake Forest, Illinois 60045 SoftNet Systems, Inc., electronic information and
Director since: 1996 document management, prior to 1997.
Richard G. Sim............................ 52 Chairman of the Board, President and Chief
Director since: 1985 Executive Officer of Parent.
William J. Albrecht....................... 46 Senior Vice President of Parent's Engineered
Solutions segment since 1994; Vice President and
President of Power-Packer and APITECH, both
subsidiaries of Parent, prior to 1994.
Robert C. Arzbaecher...................... 37 Vice President and Chief Financial Officer of
Parent since 1994; Vice President, Finance of the
Distributed Products division of Parent from 1993
to 1994; Corporate Controller of Parent prior to
1993.
I-1
PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME, BUSINESS OR RESIDENCE ADDRESS AGE MATERIAL OCCUPATIONS FOR PAST FIVE YEARS
- ------------------------------------------ --- ---------------------------------------------------------------
Gustav H.P. Boel.......................... 52 Vice President of Parent and President of Parent's Enerpac
division since 1995; Managing Director of Power- Packer Europe,
a subsidiary of Parent, prior to 1995.
Theodore M. Lecher........................ 45 Vice President of Parent and President of GB Electrical, Inc.,
a subsidiary of Parent.
Philip T. Burkart......................... 40 Vice President of Parent since 1995; President, Wright Line
Inc., a subsidiary of Parent, since 1994; President of Parent's
Technical Environments and Enclosures segment since 1996;
various positions with Wright Line Inc., including General
Manager, Vice President, Marketing and Operations and Director
of Marketing, prior to 1994.
Douglas R. Dorszynski..................... 45 Vice President, Tax and Treasurer of Parent since 1994;
Director, Tax and Special Project Planning of Parent prior to
1994.
Richard D. Carroll........................ 34 Corporate Controller of Parent since 1996; Vice President/
Controller for Northwest Indiana Water Company, a privately
owned water utility, during 1995 (located at Gary, Indiana);
Controller for Nypro Chicago, a precision plastic injection
company, from 1993 to 1995 (located at Gurnee, Illinois);
Controller at Roquette America, Inc., manufacturer of chemicals
and starches, prior to 1993 (located at Gurnee, Illinois).
Anthony W. Asmuth III..................... 55 Partner in the law firm of Quarles & Brady (which firm provides
Quarles & Brady legal services to Parent); Secretary of Parent.
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. Each director and
executive officer of the Purchaser was elected or appointed in August 1997.
Richard G. Sim, Robert C. Arzbaecher and Douglas R. Dorszynski are each
directors and are the President, Vice President, and Vice President and
Treasurer, respectively, of the Purchaser. Anthony W. Asmuth III is Secretary
and Richard D. Carroll is Assistant Secretary of the Purchaser. Information
about all of the directors and executive officers of the Purchaser is set forth
above.
I-2
SCHEDULE II
PARENT AND THE PURCHASER PURCHASES OF SHARES
The following Shares were purchased for cash in open market transactions by
the Applied Power Foundation. Parent disclaims beneficial ownership of such
Shares for purposes hereof.
TRANSACTION DATE SHARES PURCHASED/SOLD TRANSACTION PRICE PER SHARE*
---------------- --------------------- ----------------------------
6/10/97...................... 500 Shares purchased $14.875
7/10/97...................... 50 Shares sold $14.75
On January 20, 1997, Richard G. Sim, Chairman and Chief Executive Officer
of Parent, purchased 100 Shares in an open market transaction at a price of
$13.00 per Share.*
- -------------------------
* Prices are exclusive of commissions.
II-1
Facsimiles of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates evidencing
Shares and any other required documents should be sent or delivered by each
shareholder or his or her broker, dealer, commercial bank, trust company or
other nominee to the Depositary at one of its addresses set forth below.
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
BY MAIL: BY OVERNIGHT DELIVERY: BY HAND DELIVERY:
ChaseMellon Shareholder ChaseMellon Shareholder ChaseMellon Shareholder
Services, L.L.C. Services, L.L.C. Services, L.L.C.
Reorganization Department Reorganization Department Reorganization Department
P.O. Box 3305 85 Challenger Road 120 Broadway
South Hackensack, Mail Drop - Reorg 13th Floor
New Jersey 07606 Ridgefield Park, New York, New York 10271
New Jersey 07660
BY FACSIMILE TRANSMISSION:
(For Eligible Institutions only)
(201) 329-8936
CONFIRM BY TELEPHONE:
(201) 296-4860
------------------------
Any questions and requests for assistance may be directed to the
Information Agent at its address and telephone number listed below. Additional
copies of this Offer to Purchase, the Letter of Transmittal and the Notice of
Guaranteed Delivery may also be obtained from the Information Agent. A
shareholder may also contact brokers, dealers, commercial banks or trust
companies for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
(LOGO)
Wall Street Plaza
New York, NY 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
EXHIBIT (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK)
OF
VERSA TECHNOLOGIES, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED SEPTEMBER 5, 1997
BY
TVPA CORP.
A WHOLLY-OWNED SUBSIDIARY
OF
APPLIED POWER INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., EASTERN TIME,
ON FRIDAY, OCTOBER 3, 1997, UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By Mail: By Overnight Courier: By Hand:
Reorganization Department Reorganization Department Reorganization Department
P.O. Box 3305 85 Challenger Road 120 Broadway, 13th Floor
South Hackensack, NJ 07606 Mail Drop-Reorg New York, NY 10271
Ridgefield Park, NJ 07660
Facsimile Transmission
For Eligible Institutions Only:
(201) 329-8936
Confirm By Telephone:
(201) 296-4860
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates for Shares
(as such term is defined below) are to be forwarded herewith or, unless an
Agent's Message (as defined in the Offer to Purchase) is used in lieu of this
Letter of Transmittal, if delivery of Shares is to be made by book-entry
transfer to an account maintained by the Depositary at a Book-Entry Transfer
Facility as defined in and pursuant to the procedures set forth in Sections 2
and 3 of the Offer to Purchase. Shareholders who deliver Shares by book-entry
transfer are referred to herein as "Book-Entry Shareholders" and other
shareholders are referred to herein as "Certificate Shareholders." DELIVERY OF
DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY
TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Shareholders who desire to tender Shares pursuant to the Offer and whose
certificates for Shares are not immediately available or who cannot comply with
the procedure for book-entry transfer on a timely basis, or who cannot deliver
all required documents to the Depositary prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase) may tender such Shares by
following all of the guaranteed delivery procedures set forth in Section 3 of
the Offer to Purchase. See Instruction 2.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY
TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution
---------------------------------------------------
If delivered by Book-Entry Transfer, The Depository Trust Company must be used;
provide Account Number and Transaction Code Number in the space below:
Account Number Transaction Code Number
------------------ ----------------------
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY (PLEASE INCLUDE A
PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY) AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s)
--------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
------------------------------
Name of Institution that Guaranteed Delivery
------------------------------------
If delivered by Book-Entry Transfer, The Depository Trust Company must be used;
provide Account Number and Transaction Code Number in the space below:
Account Number Transaction Code Number
-------------------- ---------------------
DESCRIPTION OF SHARES TENDERED
NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ON
CERTIFICATE(S) AND SHARES TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY))
TOTAL NUMBER OF SHARES REPRESENTED BY CERTIFICATE(S)*
---------------------------
NUMBER OF SHARES TENDERED**
-----------------------------------------------------
CERTIFICATE NUMBER(S)*
----------------------------------------------------------
* Need not be completed by Book-Entry Shareholders.
** Unless otherwise indicated, it will be assumed that all Shares described
above are being tendered. See Instruction 4.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to TVPA Corp., a Delaware corporation (the
"Purchaser") and a wholly-owned subsidiary of Applied Power Inc., a Wisconsin
corporation, the above-described shares of
common stock, par value $.01 per share (the "Common Stock"), including the
associated rights to purchase shares of Series A Junior Participating Preferred
Stock (the "Rights" and, together with the Common Stock, the "Shares"), of Versa
Technologies, Inc., a Delaware corporation (the "Company"), upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated September 5,
1997 (the "Offer to Purchase"), and in this Letter of Transmittal (which,
together with any amendments or supplements thereto or hereto, collectively
constitute the "Offer"), receipt of which is hereby acknowledged.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of such extension or
amendment), and subject to, and effective upon, acceptance for payment of, and
payment for, the Shares tendered herewith in accordance with the terms of the
Offer, the undersigned hereby sells, assigns and transfers to, or upon the order
of, the Purchaser all right, title and interest in and to all the Shares that
are being tendered hereby (and any and all other Shares or other securities or
rights issued or issuable in respect thereof on or after September 5, 1997), and
irrevocably appoints Richard G. Sim and Anthony W. Asmuth III, or either of
them, the true and lawful agent and attorney-in-fact of the undersigned, with
full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest), to the full extent of the
undersigned's rights with respect to such Shares (and any such other Shares or
securities or rights), (a) to deliver certificates for such Shares (and any such
other Shares or securities or rights) or transfer ownership of such Shares (and
any such other Shares or securities or rights) on the account books maintained
by a Book-Entry Transfer Facility together, in any such case, with all
accompanying evidences of transfer and authenticity to, or upon the order of,
the Purchaser, (b) to present such Shares (and any such other Shares or
securities or rights) for transfer on the Company's books and (c) to receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Shares (and any such other Shares or securities or rights), all in accordance
with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the tendered
Shares (and any and all other Shares or other securities or rights issued or
issuable in respect of such Shares on or after September 5, 1997) and, if and
when the same are accepted for payment by the Purchaser, the Purchaser will
acquire good title thereto, free and clear of all liens, restrictions, claims
and encumbrances, and the same will not be subject to any adverse claim. The
undersigned will, upon request, execute any additional documents deemed by the
Depositary or the Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the tendered Shares (and any and all other Shares or
other securities or rights issued or issuable in respect thereof on or after
September 5, 1997).
All authority conferred or agreed to be conferred pursuant to this Letter
of Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable. See
Section 4 of the Offer to Purchase.
The undersigned hereby irrevocably appoints Richard G. Sim and Anthony W.
Asmuth III, and each of them, and any other designees of the Purchaser the
attorneys-in-fact and proxies of the undersigned, each with full power of
substitution, to vote at any annual, special or adjourned meeting of the
Company's shareholders or otherwise in such manner as each such attorney-in-fact
and proxy or his substitute shall in his sole discretion deem proper with
respect to, to execute any written consent concerning any matter as each such
attorney-in-fact and proxy or his substitute shall in his sole discretion deem
proper with respect to, and to otherwise act as each such attorney-in-fact and
proxy or his substitute shall in his sole discretion deem proper with respect
to, the Shares tendered hereby that have been accepted for payment by the
Purchaser prior to the time any such action is taken and with respect to which
the undersigned is entitled to vote (and any and all other Shares or other
securities or rights issued or issuable in respect of such Shares on or after
September 5, 1997). This appointment is effective when, and only to the extent
that, the Purchaser accepts for payment such Shares as provided in the Offer to
Purchase. This power of attorney and proxy are irrevocable, are granted in
consideration of the acceptance for payment of such Shares in accordance with
the terms of the Offer and shall be considered coupled with an interest in the
Shares. Upon such acceptance for payment, all prior powers of attorney, proxies
and consents given by the undersigned with respect to such Shares or other
securities or rights will, without further action, be revoked and no subsequent
powers of attorney, proxies, consents or revocations may be given (and, if
given, will not be deemed effective) by the undersigned.
The undersigned understands that the valid tender of Shares pursuant to any
of the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer.
Without limiting the foregoing, if the price to be paid in the Offer is amended
in accordance with the Offer, the price to be paid to the undersigned will be
the amended price.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any certificates for
Shares not tendered or accepted for payment in the name(s) of the registered
holder(s) appearing under "Description of Shares Tendered." Similarly, unless
otherwise indicated under "Special Delivery Instructions," please mail the check
for the purchase price and/or return any certificates for Shares not tendered or
accepted for payment (and accompanying documents, as appropriate) to the
address(es) of the registered holder(s) appearing under "Description of Shares
Tendered." In the event that both the Special Delivery Instructions and the
Special Payment Instructions are completed, please issue the check for the
purchase price and/or return any certificates for Shares not tendered or
accepted for payment (and any accompanying documents, as appropriate) in the
name of, and deliver such check and/or return such certificates (and any
accompanying documents, as appropriate) to, the person or persons so indicated.
Unless otherwise indicated herein under "Special Payment Instructions," please
credit any Shares tendered herewith by book-entry transfer that are not accepted
for payment by crediting the account at the Book-Entry Transfer Facility
designated above. The undersigned recognizes that the Purchaser has no
obligation pursuant to the Special Payment Instructions to transfer any Shares
from the name of the registered holder thereof if the Purchaser does not accept
for payment any of the Shares so tendered.
IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE BEEN LOST,
DESTROYED OR STOLEN SEE INSTRUCTION 11.
Number of Shares represented by the lost, destroyed or stolen
certificates ______________________________
===============================================================
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if
certificates for Shares not tendered
or not accepted for payment and/or the
check for the purchase price of Shares
accepted for payment are to be issued
in the name of someone other than the
undersigned.
Issue:
[ ] Check to:
[ ] Certificates to:
Names(s):
-------------------------------
(PLEASE PRINT)
Address:
--------------------------------------
--------------------------------------
--------------------------------------
(ZIP CODE)
--------------------------------------
TAXPAYER IDENTIFICATION OR SOCIAL
SECURITY NUMBER
===============================================================
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if
certificates for Shares not tendered
or not accepted for payment and/or
the check for the purchase price of
Shares accepted for payment are to be
sent to someone other than the
undersigned, or to the undersigned at
an address other than that above.
Mail:
[ ] Check to:
[ ] Certificates to:
Names(s):
---------------------------------
(PLEASE PRINT)
Address:
--------------------------------------
--------------------------------------
--------------------------------------
(ZIP CODE)
IMPORTANT
SHAREHOLDER(S): SIGN HERE
(AND COMPLETE SUBSTITUTE FORM W-9 BELOW)
X
----------------------------------------------------------------------------
X
----------------------------------------------------------------------------
Signature(s) of Holder(s)
Dated:
--------------------------------
(Must be signed by registered holder(s) as name(s) appear(s) on the
certificate(s) for the Shares or on a security position listing or by a
person(s) authorized to become a registered holder(s) by certificate(s) and
documents transmitted herewith. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or other
person acting in a fiduciary or representative capacity, please provide the
following information and see Instruction 5.)
Name(s):
----------------------------------------------------------------------
(Please Print)
Capacity (full title):
--------------------------------------------------------
Address:
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number:
------------------------------------------------
Taxpayer Identification or Social Security Number:
-----------------------------
SIGNATURE GUARANTEE
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:
----------------------------------------------------------
Name and Title:
----------------------------------------------------------------
(Please Print)
Name of Firm:
------------------------------------------------------------------
Address:
----------------------------------------------------------------------
-------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number:
-----------------------------------------------
Dated:
-------------------------------------------------------------------------
FOR USE BY FINANCIAL INSTITUTIONS ONLY.
PLACE MEDALLION GUARANTEE OVER ABOVE INFORMATION.
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this Section, includes any
participant in the Book-Entry Transfer Facility's system whose name appears on a
security position listing as the owner of the Shares) of Shares tendered
herewith and such registered holder(s) has completed neither the box entitled
"Special Payment Instructions" nor the box entitled "Special Delivery
Instructions" on their Letter of Transmittal or (b) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each an "Eligible Institution"). In all other cases, all signatures on this
Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instruction 5.
2. Requirements of Tender. This Letter of Transmittal is to be completed by
a tendering shareholder either if certificates for Shares are to be forwarded
herewith or, unless an Agent's Message (as defined below) is used in lieu of
this Letter of Transmittal, if delivery of Shares is to be made by book-entry
transfer to an account maintained by the Depositary at a Book-Entry Transfer
Facility pursuant to the procedures set forth in Section 3 of the Offer to
Purchase. For a shareholder validly to tender Shares pursuant to the Offer,
either (a) a properly completed and duly executed Letter of Transmittal (or a
manually executed facsimile thereof) in accordance with these instructions, with
any required signature guarantees, or, in the case of a book-entry transfer, an
Agent's Message in lieu of a Letter of Transmittal, and any other required
documents, must be received by the Depositary at one of its addresses set forth
herein prior to the Expiration Date and either certificates for tendered Shares
must be received by the Depositary at one of such addresses or such Shares must
be delivered pursuant to the procedures for book-entry transfer set forth herein
(and a Book-Entry Confirmation received by the Depositary), in each case prior
to the Expiration Date, or (b) the tendering shareholder must comply with the
guaranteed delivery procedures set forth below and in Section 3 of the Offer to
Purchase.
A shareholder who desires to tender Shares pursuant to the Offer and whose
certificates for Shares are not immediately available or who cannot comply with
the procedure for book-entry transfer on a timely basis, or who cannot deliver
all required documents to the Depositary prior to the Expiration Date, may
tender such Shares by properly completing and duly executing the Notice of
Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in
Section 3 of the Offer to Purchase. Pursuant to such procedure, (a) such tender
must be made by or through an Eligible Institution, (b) a properly completed and
duly executed Notice of Guaranteed Delivery, substantially in the form provided
by the Purchaser, must be received by the Depositary, as provided below, prior
to the Expiration Date and (c) the certificates for all tendered Shares, in
proper form for transfer (or a Book-Entry Confirmation with respect to all such
Shares) together with a properly completed and duly executed Letter of
Transmittal (or a manually executed facsimile thereof) with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message in lieu of a Letter of Transmittal), and any other required documents,
are received by the Depositary within three trading days after the date of
execution of such Notice of Guaranteed Delivery. A "trading day" is any day on
which the New York Stock Exchange, Inc. is open for business.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
The signatures on this Letter of Transmittal cover the Shares tendered
hereby.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering shareholders, by execution of
this Letter of Transmittal (or a manually executed facsimile thereof), waive any
right to receive any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. Partial Tenders (Applicable to Certificate Shareholders Only). If fewer
than all the Shares evidenced by any certificate submitted are to be tendered,
fill in the number of Shares that are to be tendered in the box entitled "Number
of Shares Tendered." In any such case, new certificate(s) for the remainder of
the Shares that were evidenced by the old certificate(s) will be sent to the
registered holder, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as soon as practicable after the acceptance for payment
of, and payment for, the Shares tendered herewith. All Shares represented by
certificates delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificate(s) without any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment or certificates for Shares not
tendered or accepted for payment are to be issued to a person other than the
registered owner(s). Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the certificates listed, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
certificates. Signatures on such certificates or stock powers must be guaranteed
by an Eligible Institution.
6. Stock Transfer Taxes. The Purchaser will pay any stock transfer taxes
with respect to the transfer and sale of Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or if
certificates for Shares not tendered or accepted for payment are to be
registered in the name of, any person(s) other than the registered holder(s), or
if tendered certificates are registered in the name(s) of any person(s) other
than the person(s) signing this Letter of Transmittal, the amount of any stock
transfer taxes (whether imposed on the registered holder(s) or such person(s))
payable on account of the transfer to such person(s) will be deducted from the
purchase price unless satisfactory evidence of the payment of such taxes
or exemption therefrom is submitted. Except as provided in this Instruction 6,
it will not be necessary for transfer tax stamps to be affixed to the
certificates listed in this Letter of Transmittal.
7. Special Payment and Delivery Instructions. If a check is to be issued in
the name of, and/or certificates for Shares not accepted for payment are to be
returned to, a person other than the signer of this Letter of Transmittal or if
a check is to be sent and/or such certificates are to be returned to a person
other than the signer of this Letter of Transmittal or to an address other than
that shown above, the appropriate boxes on this Letter of Transmittal should be
completed.
8 Waiver of Conditions. The Purchaser reserves the absolute right in its
sole discretion to waive any of the specified conditions of the Offer, in whole
or in part, in the case of any Shares tendered.
9. 31% Backup Withholding. In order to avoid "backup withholding" of
Federal income tax on payments of cash pursuant to the Offer, a shareholder
surrendering Shares in the Offer must, unless an exemption applies, provide the
Depositary with such shareholder's correct Taxpayer Identification Number
("TIN") on Substitute Form W-9 in this Letter of Transmittal and certify under
penalties of perjury that such TIN is correct and that such shareholder is not
subject to backup withholding. If a shareholder does not provide such
shareholder's correct TIN or fails to provide the certifications described
above, the Internal Revenue Service (the "IRS") may impose a penalty on such
shareholder and payment of cash to such shareholder pursuant to the Offer may be
subject to backup withholding of 31%.
Backup withholding is not an additional income tax. Rather, the amount of
the backup withholding can be credited against the Federal income tax liability
of the person subject to the backup withholding, provided that the required
information is given to the IRS. If backup withholding results in an overpayment
of tax, a refund can be obtained by the shareholder upon filing an income tax
return.
The shareholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares. If the Shares are held in more than one name or are not in the name of
the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering shareholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the shareholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% on all payments made prior to the time a properly certified TIN is
provided to the Depositary. However, such amounts will be refunded to such
shareholder if a TIN is provided to the Depositary within 60 days.
Certain shareholders (including, among others, corporations and certain
foreign individuals and entities) may not be subject to backup withholding. If
you are exempt from backup withholding, you should still complete the Substitute
Form W-9 to avoid possible erroneous backup withholding. Enter your correct TIN
in Part I, write "Exempt" on the face of the form, and sign and date the form.
Noncorporate foreign shareholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Information Agent, in order to avoid backup withholding. See
the enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for more instructions.
10. Requests for Assistance or Additional Copies. Questions and requests
for assistance or additional copies of the Offer to Purchase, the Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Information Agent at its address set forth below.
11. Lost, Destroyed or Stolen Certificates. If any certificate representing
Shares has been lost, destroyed or stolen, the shareholder should contact the
Information Agent (at the number shown at the bottom of this document) who will
then instruct the shareholder as to the steps that must be taken in order to
replace the
certificate. This Letter of Transmittal and related documents for lost,
destroyed, or stolen certificates cannot be processed until the procedures for
replacing lost, destroyed or stolen certificates have been followed.
IMPORTANT: This Letter of Transmittal (or manually executed facsimile
thereof), together with any required signature guarantees, or, in the case of a
Book-Entry Transfer, an Agent's Message in lieu of this Letter of Transmittal,
and any other required documents, must be received by the Depositary prior to
the Expiration Date and either Certificates for Tendered Shares must be received
by the Depositary or Shares must be delivered pursuant to the procedures for
Book-Entry Transfer, in each case prior to the Expiration Date, or the tendering
shareholder must comply with the procedures for guaranteed delivery.
PAYOR'S NAME: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
- ----------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND Social Security Number
FORM W-9 CERTIFY BY SIGNING AND DATING BELOW. OR
------------------------
DEPARTMENT OF THE TREASURY Employer Identification
INTERNAL REVENUE SERVICE Number
---------------------------------------------------------------------------------------
PART 2--CERTIFICATION--UNDER PENALTIES OF PERJURY, I CERTIFY THAT
(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER (OR I
PAYORS REQUEST FOR AM WAITING FOR A NUMBER TO BE ISSUED TO ME) AND
TAXPAYER IDENTIFICATION (2) I AM NOT SUBJECT TO BACKUP WITHHOLDING EITHER BECAUSE: (A) I AM EXEMPT FROM
NUMBER (TIN) BACKUP WITHHOLDING, OR (B) I HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE
(THE "IRS") THAT I AM SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO
REPORT
ALL INTEREST OR DIVIDENDS, OR (C) THE IRS HAS NOTIFIED ME THAT I AM NO LONGER
SUBJECT TO BACKUP WITHHOLDING.
---------------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS -- YOU MUST CROSS OUT ITEM (2) PART 3
ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE
CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF
UNDERREPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN.
HOWEVER, IF AFTER BEING NOTIFIED BY THE IRS THAT YOU ARE
SUBJECT TO BACKUP WITHHOLDING, YOU RECEIVED ANOTHER
NOTIFICATION FROM THE IRS THAT YOU ARE NO LONGER SUBJECT
TO BACKUP WITHHOLDING, DO NOT CROSS OUT SUCH ITEM (2).
SIGNATURE ------------------------------------ AWAITING TIN
DATE --------------------------------------- [ ]
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 3 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (b) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the time of payment, 31% of all
reportable payments made to me will be withheld; but that such amounts will be
refunded to me if I then provide a Taxpayer Identification Number within sixty
(60) days.
SIGNATURE DATE
--------------------------------------------- --------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INFORMATION.
The Information Agent for the Offer is:
GEORGESON & COMPANY INC. LOGO
Wall Street Plaza
New York, New York 10005
Banks and Brokers call collect:
(212) 440-9800
All Others Call Toll-Free:
1-800-223-2064
September 5, 1997
EXHIBIT (a)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK)
OF
VERSA TECHNOLOGIES, INC.
PURSUANT TO THE OFFER TO PURCHASE DATED SEPTEMBER 5, 1997
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
As set forth in Section 3 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereof must be used to accept the Offer (as
defined below) if certificates for common stock, par value $.01 per share (the
"Common Stock"), including the associated rights to purchase Series A Junior
Participating Preferred Stock (the "Rights" and, together with the Common Stock,
the "Shares"), of Versa Technologies, Inc., a Delaware corporation (the
"Company"), are not immediately available (including if the procedure for
book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach the Depositary prior to the Expiration
Date). The term "Expiration Date" means 5:00 p.m., Eastern Time, on Friday,
October 3, 1997, unless and until TVPA Corp., a Delaware corporation and a
wholly-owned subsidiary of Applied Power Inc., a Wisconsin corporation, in its
sole discretion, shall have extended the period of time during which the Offer
is open, in which event the "Expiration Date" shall mean the latest time and
date at which the Offer, as so extended, will expire. This form may be delivered
by hand to the Depositary or transmitted by telegram, facsimile transmission or
mail to the Depositary and must include a guarantee by an Eligible Institution
(as defined below) in the form set forth herein. See Section 3 of the Offer to
Purchase.
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By Mail: By Overnight Courier: By Hand:
Reorganization Department Reorganization Department Reorganization Department
PO Box 3305 85 Challenger Road, Mail Drop-Reorg 120 Broadway, 13th Floor
South Hackensack, NJ 07606 Ridgefield Park, NJ 07660 New York, NY 10271
Facsimile Transmission:
(For Eligible Institutions Only)
(201) 329-8936
Confirm by Telephone:
(201) 296-4860
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION
(AS DEFINED BELOW) UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST
APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF
TRANSMITTAL.
Ladies and Gentlemen:
The undersigned hereby tenders to TVPA Corp., a Delaware corporation (the
"Purchaser"), which is a wholly-owned subsidiary of Applied Power Inc., a
Wisconsin corporation, upon the terms and subject to the conditions set forth in
the Offer to Purchase dated September 5, 1997 (the "Offer to Purchase") and the
related Letter of Transmittal (such Offer to Purchase and related Letter of
Transmittal, together with any amendments or supplements thereto, the "Offer"),
receipt of which is hereby acknowledged, the number of Shares set forth below,
all pursuant to the guaranteed delivery procedures set forth in the Section 3 of
the Offer to Purchase.
- --------------------------------------------------------------------------------
(Please type or print)
Certificate Numbers (if available):
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Names(s)
--------------------------------------------------------------------------
Address(es)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Area Code(s) and Telephone Numbers
SIGN HERE
--------------------------------------------------------------------------
Signature(s)
--------------------------------------------------------------------------
Dated:
If Shares will be tendered by book-entry transfer, fill in the applicable
account number of The Depository Trust Company, below:
Account Number:
--------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Securities Transfer Agent's Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program (an "Eligible Institution"), hereby
guarantees to deliver to the Depositary either the certificates representing the
Shares tendered hereby, in proper form for transfer, or a Book-Entry
Confirmation with respect to such Shares, together with a properly completed and
duly executed Letter of Transmittal (or manually executed facsimile thereof),
with any required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message, as defined in the Letter of Transmittal, in lieu
of a Letter of Transmittal), and any other required documents within three
trading days after the date hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
All terms used herein have the meaning set forth in the Offer to Purchase.
Authorized Signature:
- --------------------------------------------------------------------------------
Name:
---------------------------------------------------------------------------
(Please Print)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Title:
--------------------------------------------------------------------------
Name of Firm:
-------------------------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Including Zip Code)
Area Code and Telephone Number:
-------------------------------------------------
Date: , 1997
------------------------------
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. SHARE
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
EXHIBIT (a)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK)
OF
VERSA TECHNOLOGIES, INC.
AT
$24.625 NET PER SHARE
BY
TVPA CORP.
A WHOLLY-OWNED SUBSIDIARY OF
APPLIED POWER INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., EASTERN TIME, ON
FRIDAY, OCTOBER 3, 1997, UNLESS THE OFFER IS EXTENDED.
September 5, 1997
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
TVPA Corp., a Delaware corporation (the "Purchaser") and a wholly-owned
subsidiary of Applied Power Inc., a Wisconsin corporation ("Applied Power"), has
appointed us to act as Information Agent in connection with its offer to
purchase all outstanding shares of common stock, par value $.01 per share (the
"Common Stock"), including the associated rights to purchase shares of Series A
Junior Participating Preferred Stock (the "Rights" and, together with the Common
Stock, the "Shares"), of Versa Technologies, Inc., a Delaware corporation (the
"Company"), upon the terms and subject to the conditions set forth in the Offer
to Purchase dated September 5, 1997 (the "Offer to Purchase"), and in the
related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer"), at $24.625 per Share,
net to the seller in cash, without interest thereon. Please furnish copies of
the enclosed materials to those of your clients for whom you hold Shares
registered in your name or in the name of a nominee.
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn prior to the Expiration Date (as defined below) a
number of Shares that would represent at least a majority of all outstanding
Shares on a fully diluted basis on the date of purchase and (ii) the expiration
or termination of all waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, all as described in the Offer to Purchase.
Enclosed herewith are copies of the following documents:
1. Offer to Purchase, dated September 5, 1997;
2. Letter of Transmittal to be used by shareholders of the Company in
accepting the Offer and tendering Shares;
3. A printed form of letter that may be sent to your clients for whose
account you hold Shares in your name or in the name of a nominee,
with space provided for obtaining such clients' instructions with
regard to the Offer;
4. Notice of Guaranteed Delivery;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelope addressed to ChaseMellon Shareholder Services,
L.L.C., the Depositary.
The term "Expiration Date" means 5:00 p.m., Eastern Time, on Friday,
October 3, 1997, unless and until the Purchaser, in its sole discretion, shall
have extended the period of time during which the Offer is open, in which event
the "Expiration Date" shall mean the latest time and date at which the Offer, as
so extended by the Purchaser, will expire.
We urge you to contact your clients promptly. Please note that the Offer
and withdrawal rights expire at 5:00 p.m., Eastern Time, on Friday, October 3,
1997, unless the Offer is extended by the Purchaser.
Neither the Purchaser nor Applied Power will pay any fees or commissions to
any broker or dealer or other person (other than the Depositary and the
Information Agent as described in the Offer to Purchase) in connection with the
solicitation of tenders of Shares pursuant to the Offer. You will be reimbursed
upon request for customary mailing and handling expenses incurred by you in
forwarding the enclosed offering materials to your customers.
Any inquiries you may have with respect to the Offer should be addressed to
the undersigned and additional copies of the enclosed material may be obtained
by contacting the undersigned at telephone numbers 212-440-9800 or 800-223-2064
(toll free).
Very truly yours,
GEORGESON & COMPANY INC.
------------------------------
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF THE PURCHASER, APPLIED POWER, THE DEPOSITARY OR
THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF ANY
OF THEM WITH RESPECT TO THE OFFER NOT CONTAINED IN THE OFFER TO PURCHASE OR THE
LETTER OF TRANSMITTAL.
EXHIBIT (a)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK)
OF
VERSA TECHNOLOGIES, INC.
AT
$24.625 NET PER SHARE
BY
TVPA CORP.
A WHOLLY-OWNED SUBSIDIARY OF
APPLIED POWER INC.
THE OFFER AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 5:00 P.M., EASTERN TIME, ON
FRIDAY, OCTOBER 3, 1997, UNLESS THE OFFER IS EXTENDED.
September 5, 1997
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated September
5, 1997 (the "Offer to Purchase") and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer") relating to the offer by TVPA Corp., a Delaware corporation (the
"Purchaser") and a wholly-owned subsidiary of Applied Power Inc., a Wisconsin
corporation ("Applied Power"), to purchase for cash all outstanding shares of
common stock, par value $.01 per share (the "Common Stock"), including the
associated rights to purchase shares of Series A Junior Participating Preferred
Stock (the "Rights" and, together with the Common Stock, the "Shares"), of Versa
Technologies, Inc., a Delaware corporation (the "Company"), at $24.625 per
Share, net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions of the Offer.
The enclosed material is being sent to you as the beneficial owner of
Shares held by us for your account but not registered in your name. We are the
holder of record of Shares held by us for your account. A TENDER OF SUCH SHARES
CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR
INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION
ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to tender any or all of the
Shares held by us for your account, pursuant to the terms and conditions set
forth in the Offer.
Your attention is directed to the following:
1. The tender offer price is $24.625 per Share, net to the seller in
cash, without interest thereon, upon the terms and subject to the
conditions of the Offer.
2. The Offer is being made for all of the outstanding Shares.
3. The Offer and withdrawal rights will expire at 5:00 p.m., Eastern
Time, on Friday, October 3, 1997, unless the Offer is extended by
the Purchaser.
4. The Board of Directors of the Company unanimously has determined
that each of the Offer and the related Merger (as defined in the
Offer to Purchase) is fair to, and in the best interests of, the
shareholders of the Company, and recommends that shareholders tender
their Shares pursuant to the Offer.
5. The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn prior to the Expiration Date (as
defined below) a number of Shares that would represent at least a
majority of all outstanding Shares on a fully diluted basis on the
date of purchase and (ii) the expiration or termination of all
waiting periods under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, all as described in the Offer to Purchase.
6. The term "Expiration Date" means 5:00 p.m., Eastern Time, on
Friday, October 3, 1997, unless and until the Purchaser, in its
sole discretion, shall have extended the period of time during
which the Offer is open, in which event the "Expiration Date" shall
mean the latest time and date at which the Offer, as so extended by
the Purchaser, will expire.
7. Any stock transfer taxes applicable to a sale of Shares to the
Purchaser will be borne by the Purchaser, except as otherwise
provided in Instruction 6 of the Letter of Transmittal. Backup tax
withholding at a 31% rate may be required, however, unless the
required tax identification information is provided. See
Instruction 6 of the Letter of Transmittal.
Your instruction to us should be forwarded promptly to permit us to submit
a tender on your behalf prior to the expiration of the Offer.
If you wish to have us tender any of or all of your Shares held by us for
your account, please so instruct us by completing, executing, detaching and
returning to us the instruction form on the detachable part hereof. An envelope
to return your instructions to us is enclosed. If you authorize the tender of
your Shares, all such Shares will be tendered unless otherwise specified on the
detachable part hereof. PLEASE FORWARD YOUR INSTRUCTIONS TO US IN AMPLE TIME TO
PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE
OFFER.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by ChaseMellon Shareholder Services,
L.L.C. (the "Depositary"), of (a) certificates for (or a timely Book-Entry
Confirmation (as defined in the Offer to Purchase) with respect to) such Shares,
(b) a Letter of Transmittal (or a manually executed facsimile thereof), 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 in the Letter of
Transmittal) in lieu of a Letter of Transmittal) and (c) any other documents
required by the Letter of Transmittal. Accordingly, tendering shareholders may
be paid at different times depending upon when certificates for Shares or
Book-Entry Confirmations with respect to Shares are actually received by the
Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE
OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE
OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
The Offer is not being made to, nor will tenders be accepted from, or on
behalf of, holders of Shares in any jurisdiction in which the making or
acceptance of the Offer would not be in compliance with the laws of such
jurisdiction.
INSTRUCTIONS
WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF VERSA TECHNOLOGIES, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated September 5, 1997 (the "Offer to Purchase") and the
related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer") relating to the offer
by TVPA Corp., a Delaware corporation (the "Purchaser") and a wholly-owned
subsidiary of Applied Power Inc., a Wisconsin corporation ("Applied Power"), to
purchase for cash all outstanding shares of common stock, par value $.01 per
share (the "Common Stock"), including the associated rights to purchase shares
of Series A Junior Participating Preferred Stock (the "Rights" and, together
with the Common Stock, the "Shares"), of Versa Technologies, Inc., a Delaware
corporation (the "Company"), at $24.625 per Share, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions of the
Offer.
This will instruct you to tender to the Purchaser on my behalf the number
of Shares indicated below (or if no number is indicated in either appropriate
space below, all Shares) held by you (or your nominee) for the account of the
undersigned, upon the terms and subject to the conditions set forth in the
Offer.
- --------------------------------------------------------------------------------
Account Number:
--------------------------------------------------------
NUMBER OF SHARES TO BE TENDERED (CHECK ONE BOX):
[ ] All Shares [ ] Shares
--------
(Unless otherwise indicated, it will be assumed that all the
Shares held for your account are to be tendered.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGN HERE
X
-------------------------------------------------------------
X
-------------------------------------------------------------
Signature(s)
--------------------------------------------------------------
Name(s) (Please Print)
-------------------------- ----------------------------------
(Area Code) Telephone Tax Identification or
Number Social Security Number(s)
Dated:
-------------------------
- --------------------------------------------------------------------------------
EXHIBIT (a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
- --------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE
SOCIAL SECURITY
NUMBER OF--
- --------------------------------------------------------
1. Individual The individual
2. Two or more The actual owner of the
individuals account or, if combined
(joint account) funds, the first
individual on the
account(1)
3. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
4. a. The usual revocable The grantor-trustee(1)
savings trust
account (grantor is
also trustee)
b. So-called trust The actual owner(1)
account that is not
a legal or valid
trust under state
law
5. Sole proprietorship The owner(3)
account
6. Sole proprietorship The owner(3)
7. A valid trust, estate, The legal entity(4)
or pension trust
- --------------------------------------------------------
8. Corporate The corporation
9. Association, club, The organization
religious, charitable,
educational, or other
tax-exempt organization
10 Partnership The partnership
11. A broker or registered The broker or nominee
nominee
12. Account with the The public entity
Department of
Agriculture in the name
of a public entity
(such as a State or
local government,
school district, or
prison) that receives
agricultural program
payments
- --------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a social security number, that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your social security number or
your employer identification number (if you have one).
(4) List first and circle the name of the legal trust, estate, or pension
trust. (Do not furnish the taxpayer identification number of the personal
representative or trustee unless the legal entity itself is not designated
in the account title.)
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding include the following:
- An organization exempt from tax under section 501(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), an individual retirement
account or a custodial account under section 403(b)(7), if the account
satisfies the requirements of section 401(f)(2).
- The United States or any agency or instrumentality thereof.
- A state, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- A foreign government or any political subdivision, agency or
instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
Other payees that may be exempt from backup withholding include:
- A corporation.
- A financial institution.
- A dealer in securities or commodities registered in the U.S., the District
of Columbia or a possession of the U.S.
- A futures commission merchant registered with the Commodity Futures
Trading Commission.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An entity registered at all times during the tax year under the Investment
Company Act of 1940.
- A foreign central bank of issue.
- A middleman known in the investment community as a nominee or who is
listed in the most recent publication of the American Society of Corporate
Secretaries, Inc. Nominee List.
- A trust exempt from tax under section 664 as described in section 4947.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident alien partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Section 404(k) payments made by an ESOP.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals.
Note: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Mortgage interest paid to you.
Exempt payees described above should file Substitute Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" IN PART II OF THE FORM, SIGN
AND DATE THE FORM, AND RETURN IT TO THE PAYER.
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding.
PRIVACY ACT NOTICE
Section 6109 of the Code requires most recipients of dividend, interest, or
other payments to give taxpayer identification numbers to payers who must report
the payments to IRS. The IRS uses the numbers for identification purposes and to
help verify the accuracy of your tax return. The IRS may also provide this
information to the Department of Justice for civil and criminal litigation and
to cities, states, and the District of Columbia to carry out their tax laws. You
must provide your taxpayer identification number whether or not you are required
to file tax returns. Payers must generally withhold 31% of taxable interest,
dividend, and certain other payments to a payee who does not furnish a taxpayer
identification number to a payer. Certain penalties may also apply.
PENALTIES
PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
EXHIBIT (a)(7)
FROM: APPLIED POWER INC., P.O. BOX 325, MILWAUKEE, WI 53201
DATE: SEPTEMBER 3, 1997
FOR RELEASE: IMMEDIATE
FOR FURTHER INFORMATION CONTACT: ROBERT C. ARZBAECHER
APPLIED POWER SIGNS DEFINITIVE AGREEMENT
TO PURCHASE VERSA TECHNOLOGIES, INC.
MILWAUKEE, September 3, 1997 --- Applied Power Inc. (APW - NYSE) and
Versa Technologies, Inc. (VRSA - NASDAQ) announced today the signing of a
definitive agreement to purchase all the outstanding stock of Versa/Tek for
$24.625 per share in cash. Under the terms of the agreement, a subsidiary of
Applied Power will commence a tender offer for all of Versa/Tek's shares within
5 days. The tender offer is contingent on antitrust approval and tender of at
least a majority of the shares outstanding. The total purchase price including
Versa/Tek stock options is approximately $140 million, which will be funded
with expanded borrowings from existing lenders.
The Board of Directors of Versa/Tek has unanimously approved the tender
offer and recommended that Versa/Tek shareholders accept the offer and tender
their shares. James E. Mohrhauser, Chairman and CEO of Versa Technologies,
Inc.,
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APPLIED POWER - 2
commented, "Versa/Tek's Board of Directors agreed that the offer is a fair
offer for our shareholders. The combined efforts of these businesses will
undoubtedly result in stronger products and programs for all the customers we
serve."
Commenting on the acquisition, Richard G. Sim, Chairman and CEO of
Applied Power, stated: "We are excited about the Versa/Tek acquisition. For
many years we have thought the combination of Applied Power and Versa/Tek
would have a synergistic impact for both companies. The recent repositioning
of Versa/Tek, the disposition of the plastic businesses and the acquisition of
Eder electronics business make the fit stronger."
Versa/Tek, with annual sales of approximately $100 million (including
the full year impact of the Eder acquisition), is comprised of five businesses.
Power Gear, located in Beaver Dam WI, serves the recreational vehicle and truck
markets. Milwaukee Cylinder, located in Cudahy WI, specializes in hydraulic
cylinders to a variety of industrial markets. Eder, located in Oak Creek WI,
designs and manufactures electronic and electrical systems to a variety of
OEM customers. Moxness Products, located in several WI locations, produces
industrial silicone products to a wide variety of end user markets. Mox-Med,
located in Portage WI, specializes in silicone related products to the medical
industry.
On the similarities of these markets with APW, Sim commented: "the
Versa/Tek end user markets match very well with Applied Power's. Our
Engineered
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APPLIED POWER - 3
Solutions segment serves the same or similar end user OEM customers as Power
Gear, Moxness Products, and Mox-Med particularly the Truck and RV markets of
Power Gear. The combination of our Enerpac hydraulic tool business with the
Milwaukee Cylinder business is a natural fit in terms of distribution and
manufacturing. The Eder electronics business fits both our Engineered
Solutions and our Technical Environments and Enclosures businesses."
Sim continued: "three areas make the acquisition of Versa/Tek right for
Applied Power. The first is that Versa/Tek management has done a nice job of
repositioning the business away from the commodity type of business to more
value added products, which over the last 2 quarters has led to improved
profitability. The second is that the natural fit of the end user products and
channels should lead to higher sales penetration to both companies. The third
is the geographic presence of the two companies in southeast Wisconsin should
lead to some natural cost synergies between the two businesses. Taking all
three of these into account, our sense is that the acquisition should be
accretive to EPS in our fiscal year ending August 1998."
The above paragraph contains forward looking statements made pursuant
to the provisions of the Private Securities Litigation Reform Act of 1995.
Applied Power management cautions that these projections are based on current
understanding of the Versa Technologies business, and are highly dependent upon
a variety of factors which could cause actual results to differ from these
estimates. These include without
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APPLIED POWER - 4
limitation, general economic conditions, market conditions in relevant
markets, market acceptance of existing and new products and successful
integration of Versa/Tek with Applied Power.
Applied Power, headquartered in Wisconsin, is a global company
comprised of three business segments. Technical Environments and Enclosures
expertise is in configuring technical equipment for end users and in providing
enclosures for electronic equipment. Engineered Solutions supplies components
and systems based on hydraulic and vibration control technologies to a diverse
group of OEM customers. Distributed Products provides industrial and
electrical tools and accessories through various distributor and retail
channels worldwide.
Versa Technologies, Inc., headquartered in Racine, Wisconsin,
comprises three business segments. The Electronics segment designs and
manufactures customer electronic and electrical systems for a broad range of
applications. The Engineered Materials segment fabricates customer engineered
elastomeric components for industrial and medical applications. The Fluid
Power segment manufactures custom engineered cylinders and hydraulic and
electromechanical actuation systems for a broad range of markets including the
transportation, recreational vehicle, and construction equipment markets.
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APPLIED POWER - 5
For further information contact:
Applied Power Inc.
Robert C. Arzbaecher
Vice President and Chief Financial Officer
414-781-6600
To receive a faxed copy of this or other recent Applied Power communications,
please call the Company's "News on Demand" service at 1-800-549-0679.
(end)
EXHIBIT (a)(8)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer is made solely by the Offer to Purchase, dated
September 5, 1997, and the related Letter of Transmittal, and is not being made
to (nor will tenders be accepted from or on behalf of) holders of Shares in any
jurisdiction in which the making of the Offer or the acceptance thereof would
not be in compliance with the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK)
OF
VERSA TECHNOLOGIES, INC.
AT
$24.625 NET PER SHARE
BY
TVPA CORP.
A WHOLLY-OWNED SUBSIDIARY
OF
APPLIED POWER INC.
TVPA Corp., a Delaware corporation (the "Purchaser") and a
wholly-owned subsidiary of Applied Power Inc., a Wisconsin corporation
("Applied Power"), hereby offers to purchase all outstanding shares of Common
Stock, par value $.01 per share (the "Common Stock"), including the associated
rights to purchase Series A Junior Participating Preferred Stock (the "Rights"
and, together with the Common Stock, the "Shares"), of Versa Technologies,
Inc., a Delaware corporation (the "Company"), at a price of $24.625 per Share
net to the seller in cash, without interest thereon (the "Offer Price"), upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated September 5, 1997 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"). Following the Offer, the Purchaser
intends to effect the Merger described below.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
EASTERN TIME, ON FRIDAY, OCTOBER 3, 1997, UNLESS THE OFFER IS
EXTENDED.
The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn prior to the Expiration Date (as defined
below) a number of Shares that would represent at least a majority of all
outstanding Shares on a fully diluted basis on the date of purchase and (ii)
the expiration or termination of all waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, all as
described in the Offer to Purchase.
The term "Expiration Date" means 5:00 p.m., Eastern Time, on Friday,
October 3, 1997, unless and until the Purchaser, in its sole discretion,
extends the period of time during which the Offer
is open, in which event the term "Expiration Date" shall mean the latest time
and date at which the Offer, as so extended by the Purchaser, will expire.
The Offer is being made pursuant to an Agreement and Plan of Merger
dated as of September 2, 1997 (the "Agreement") among Applied Power, the
Purchaser and the Company. The Agreement provides that, among other things, as
soon as practicable after the purchase of Shares pursuant to the Offer and the
satisfaction of the other conditions set forth in the Agreement and in
accordance with relevant provisions of the General Corporation Law of the State
of Delaware ("Delaware Law"), the Purchaser will be merged with and into the
Company (the "Merger"). Following consummation of the Merger, the Company will
continue as the surviving corporation (the "Surviving Corporation") and will
become a wholly-owned subsidiary of Applied Power. At the effective time of
the Merger (the "Effective Time"), each Share issued and outstanding
immediately prior to the Effective Time (other than Shares held in the treasury
of the Company and any Shares owned by the Purchaser, Applied Power or any
direct or indirect wholly-owned subsidiary of Applied Power or of the Company,
and other than Shares held by shareholders who shall have demanded and
perfected appraisal rights, if any, under the Delaware Law) will be canceled
and converted automatically into the right to receive $24.625 in cash, without
interest.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT
EACH OF THE OFFER AND THE MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF, THE
SHAREHOLDERS OF THE COMPANY, AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
For purposes of the Offer, the Purchaser will be deemed to have
accepted for payment, and thereby purchased, Shares validly tendered to the
Purchaser and not withdrawn as, if and when the Purchaser gives oral or written
notice to ChaseMellon Shareholder Services, L.L.C. (the "Depositary") of the
Purchaser's acceptance for payment of such Shares. Payment for Shares accepted
for payment pursuant to the Offer will be made by deposit of the purchase price
therefor with the Depositary, which will act as agent for tendering
Shareholders for the purpose of receiving payment from the Purchaser and
transmitting payment to tendering Shareholders. Under no circumstances will
interest be paid on the purchase price of the Shares to be paid by the
Purchaser, regardless of any extension of the Offer or any delay in making such
payment.
In all cases, payment for Shares accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of (a)
certificates for (or a timely Book-Entry Confirmation (as defined in the Offer
to Purchase) with respect to) such Shares, (b) a Letter of Transmittal (or a
manually executed facsimile thereof), 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 in the Offer to Purchase) in lieu of a
Letter of Transmittal) and (c) any other documents required by the Letter of
Transmittal. The per Share consideration paid to any shareholder pursuant to
the Offer will be the highest per Share consideration paid to any other
shareholder pursuant to the Offer.
Except as otherwise provided in the Offer to Purchase, tenders of
Shares are irrevocable. Shares tendered pursuant to the Offer may be withdrawn
pursuant to the procedures set forth in the Offer to Purchase at any time prior
to the Expiration Date and, unless theretofore accepted for
-2-
payment and paid for by the Purchaser pursuant to the Offer, may also be
withdrawn at any time after November 3, 1997.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of the Offer to Purchase and
must specify the name of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn and the name of the registered holder of
the Shares to be withdrawn, if different from the name of the person who
tendered the Shares. If certificates for Shares have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
such certificates, the serial numbers shown on such certificates must be
submitted to the Depositary and, unless such Shares have been tendered by an
Eligible Institution (as defined in Section 3 of the Offer to Purchase), the
signatures on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Shares have been delivered pursuant to the procedures for
book-entry transfer as set forth in Section 3 of the Offer to Purchase, any
notice of withdrawal must also specify the name and number of the account at
the appropriate Book-Entry Transfer Facility (as defined in the Offer to
Purchase) to be credited with the withdrawn Shares and otherwise comply with
such Book-Entry Transfer Facility's procedures. Withdrawals of tenders of
Shares may not be rescinded, and any Shares properly withdrawn will thereafter
be deemed not validly tendered for purposes of the Offer. However, withdrawn
Shares may be retendered by again following one of the procedures described in
Section 3 of the Offer to Purchase at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt)
of notices of withdrawal will be determined by the Purchaser in its sole
discretion, which determination will be final and binding. None of the
Purchaser, Applied Power, 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 such notification.
Subject to the applicable rules and regulations of the Securities and
Exchange Commission and the limitations contained in the Agreement, the
Purchaser reserves the right, in its sole discretion, at any time or from time
to time, and regardless of whether or not any of the events set forth in the
Offer to Purchase shall have occurred, (a) to extend the period of time during
which the Offer is open, and thereby delay acceptance for payment of and the
payment for any Shares, by giving oral or written notice of such
extension to the Depositary and (b) to amend the Offer in any other respect by
giving oral or written notice of such amendment to the Depositary.
The information required to be disclosed by paragraph (e)(l)(vii) of
Rule 14d-6 under the Securities Exchange Act of 1934, as amended, is
incorporated herein by reference from the Offer to Purchase. In the
Agreement, the Company has agreed to furnish the Purchaser with the Company's
shareholder lists and security position listings for the purpose of
disseminating the Offer to holders of Shares. The Offer to Purchase, the
related Letter of Transmittal and the other relevant materials will be mailed
to record holders of Shares, and will be furnished to brokers, dealers, banks,
trust companies and similar persons whose names, or the names of whose
nominees, appear on the shareholder lists, or, if applicable, who are listed as
participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of Shares, by the Purchaser following receipt
of such lists or listings from the Company.
-3-
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
Questions and requests for assistance, or for additional copies of the
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery
or other Offer documents may be directed to the Information Agent at the
telephone number and address listed below. Holders of Shares may also contact
brokers, dealers, commercial banks and trust companies or other nominees for
assistance concerning the Offer. Copies of the foregoing will be furnished at
the Purchaser's expense. No fees or commissions will be payable to brokers,
dealers or other persons other than the Information Agent for soliciting
tenders of Shares pursuant to the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
GEORGESON
& COMPANY INC.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: 1-800-223-2064
September 5, 1997
-4-
EXHIBIT (a)(9)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK)
OF
VERSA TECHNOLOGIES, INC.
AT
$24.625 NET PER SHARE
BY
TVPA CORP.
A WHOLLY-OWNED SUBSIDIARY OF
APPLIED POWER INC.
Dear Participant in the Versa Technologies, Inc.
Stock Purchase and Dividend Reinvestment Plan:
Enclosed for your consideration are the Offer to Purchase dated September
5, 1997 (the "Offer to Purchase") and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer") relating to the offer by TVPA Corp., a Delaware corporation (the
"Purchaser") and a wholly-owned subsidiary of Applied Power Inc., a Wisconsin
corporation ("Applied Power"), to purchase for cash all outstanding shares of
common stock, par value $.01 per share (the "Common Stock"), including the
associated rights to purchase shares of Series A Junior Participating Preferred
Stock (the "Rights" and, together with the Common Stock, the "Shares"), of Versa
Technologies, Inc., a Delaware corporation (the "Company"), at $24.625 per
Share, net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions of the Offer.
The enclosed material is being sent to you as the beneficial owner of
Shares held by us for your account in the Versa Technologies, Inc. Stock
Purchase and Dividend Reinvestment Plan (the "Plan"). Firstar Trust Company, as
the Plan's administrator (the "Plan Administrator"), or a nominee is the holder
of record of Shares held for your account.
A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD FOR
THE PLAN AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS
FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER
SHARES HELD BY US FOR YOUR ACCOUNT IN THE PLAN.
We request instructions as to whether you wish to tender any or all of the
Shares held by us for your account in the Plan, pursuant to the terms and
conditions set forth in the Offer.
Your attention is directed to the following:
1. The tender offer price is $24.625 per Share, net to the seller in
cash, without interest thereon, upon the terms and subject to the
conditions of the Offer.
2. The Offer is being made for all of the outstanding Shares.
3. The Offer and withdrawal rights will expire at 5:00 p.m., Eastern
Time, on Friday, October 3, 1997, unless the Offer is extended by the
Purchaser.
4. The Board of Directors of the Company unanimously has determined
that each of the Offer and the related Merger (as defined in the Offer to
Purchase) is fair to, and in the best interests of, the
shareholders of the Company, and recommends that shareholders tender their
Shares pursuant to the Offer.
5. The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn prior to the Expiration Date (as defined
below) a number of Shares that would represent at least a majority of all
outstanding Shares on a fully diluted basis on the date of purchase and
(ii) the expiration or termination of all waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, all as
described in the Offer to Purchase.
6. The term "Expiration Date" means 5:00 p.m., Eastern Time, on
Friday, October 3, 1997, unless and until the Purchaser shall have extended
the period of time during which the Offer is open, in which event the
"Expiration Date" shall mean the latest time and date at which the Offer,
as so extended by the Purchaser, will expire.
7. Any stock transfer taxes applicable to a sale of Shares to the
Purchaser will be borne by the Purchaser, except as otherwise provided in
Instruction 6 of the Letter of Transmittal. Backup tax withholding at a 31%
rate may be required, however, unless the required tax identification
information is provided. See Instruction 6 of the Letter of Transmittal.
Your instruction to us should be forwarded promptly to permit us to submit
a tender on your behalf prior to the expiration of the Offer.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing, detaching and returning to us the instruction form
contained at the end of this letter. An envelope to return your instruction to
us is enclosed. If you authorize tender of your Shares in the Plan, all such
Shares will be tendered unless otherwise indicated in such instruction form. If
you sign, date and return an instruction form but do not check any box on the
instruction form, Firstar Trust Company, as the Plan Administrator, will treat
your instruction form as an election to tender all of your shares of Company
Stock credited to your account in the Plan.
In order to be assured that your instruction to the Plan Administrator will
be followed, your instruction form must be completed, signed, dated and received
by the Plan Administrator no later than 1:00 p.m. Eastern Time (Noon Central
Time) on October 3, 1997. This time is four hours prior to the expiration of the
Offer, which is scheduled to expire on 5:00 p.m., Eastern Time (4:00 p.m.
Central Time), on October 3, 1997. If the expiration of the Offer is extended
beyond its scheduled expiration time, the time by which the Plan Administrator
must receive your instruction will be extended automatically to four hours prior
to such extended expiration time. Please remember to return your instruction
form to the Plan Administrator in the enclosed envelope, rather than to
tendering the Company, Applied Power and TVPA Corp. or any other party.
THIS FORM IS ONLY TO BE USED FOR SHARES HELD IN THE PLAN.
To withdraw any instruction, you should send a statement to the Plan
Administrator that you are withdrawing your prior instruction. You must sign the
form and print your name and social security number under your signature. The
statement may be sent by mail or express mail to the address below.
By Mail:
Firstar Trust Company
Box 2077
Milwaukee, WI 53201
By Hand:
Firstar Trust Company
1555 North RiverCenter Drive
Suite 301
Milwaukee, WI 53212
By Overnight Courier:
Firstar Trust Company
1555 North RiverCenter Drive
Suite 301
Milwaukee, WI 53212
-2-
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and any supplements or amendments thereto. The Offer is not being
made to, nor will tenders be accepted from or on behalf of, holders of Shares
residing in any jurisdiction in which the making of the Offer or acceptance
thereof would not be in compliance with the securities laws of such
jurisdiction.
If the Plan Administrator receives more than one instruction form from you
relating to Shares allocated to your account under the Plan, each valid and
timely instruction form received by the Plan Administrator will revoke and
supersede any previous instruction form it received.
If you have any questions about the instruction form, please contact the
Firstar Trust Company between the hours of 9:00 a.m. and 5:00 p.m. Central Time
at 1-800-637-7549 (toll-free) or Georgeson & Company Inc., the Information
Agent, at 1-800-223-2064.
Firstar Trust Company
As Plan Administrator under the
Versa Technologies, Inc. Stock
Purchase and Dividend Reinvestment
Plan
September 5, 1997
IMPORTANT:
Instruction Form On Back Page To Be Completed By
Participant To Tender Shares
-3-
INSTRUCTIONS
WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF VERSA TECHNOLOGIES, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated September 5, 1997 (the "Offer to Purchase") and the
related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer") relating to the offer
by TVPA Corp., a Delaware corporation (the "Purchaser") and a wholly-owned
subsidiary of Applied Power Inc., a Wisconsin corporation ("Applied Power"), to
purchase for cash all outstanding shares of common stock, par value $.01 per
share (the "Common Stock"), including the associated rights to purchase shares
of Series A Junior Participating Preferred Stock (the "Rights" and, together
with the Common Stock, the "Shares"), of Versa Technologies, Inc., a Delaware
corporation (the "Company"), at $24.625 per Share, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions of the
Offer.
This will instruct you to tender to the Purchaser on my behalf the number
of Shares indicated below (or if no number is indicated in either appropriate
space below, all Shares) held by you for the account of the undersigned in the
Versa Technologies, Inc. Stock Purchase and Dividend Reinvestment Plan (the
"Plan"), upon the terms and subject to the conditions set forth in the Offer.
- --------------------------------------------------------------------------------
Plan Account Number:
--------------------------------------------------------------
NUMBER OF SHARES TO BE TENDERED (CHECK ONE BOX):
[ ] All Shares [ ] ________ Shares
(Unless otherwise indicated, it will be assumed that all the
Shares held for your account are to be tendered.)
- --------------------------------------------------------------------------------
SIGN HERE
X
--------------------------------------------------------------
X
--------------------------------------------------------------
Signature(s)
--------------------------------------------------------------
Name(s) (Please Print)
==============================================================
(Area Code) Telephone Number Tax
Identification or Social Security Number(s)
Dated:
-----------------------------------------------------
EXHIBIT (b)(1)
August 29, 1997
CONFIDENTIAL
Applied Power Inc.
13000 West Silver Spring Drive
Butler, Wisconsin 53007-1093
Ladies and Gentlemen:
BancAmerica Securities, Inc. ("BASI") is pleased to confirm its offer to act as
Arranger, and Bank of America National Trust and Savings Association ("Bank of
America") is pleased to confirm its offer to act as Agent for the Lenders, in
connection with the $140 million 364-day senior credit facility (the
"Facility") to be made available to Applied Power Inc. ("Applied Power" or the
"Company"). The Facility will be used by the Company to finance the
acquisition of Versa Technologies, Inc. and for other general corporate
purposes.
This letter constitutes the "Fee Letter" referred to in the commitment letter
of even date herewith attached hereto, and sets forth the fees payable to BASI
and PNC Bank, National Association ("PNC") in connection with the Facility. All
terms defined in the commitment letter shall have the same meanings when used
herein.
The total closing fees for the Facility payable by the Company to BASI and PNC
solely for their own accounts, and with such fees payable based upon their
respective pro-rata commitments to the Facility are: (i) .050% of the Facility
to be paid upon execution and return of this letter, (ii) .025% of the Facility
to be paid at Closing, (iii) .025% of the Facility to be paid 30 days after
Closing of the Facility if the Facility has not been terminated by this time
and (iv) .050% of the Facility to be paid 60 days after Closing of the Facility
if the Facility has not been terminated by this time.
Please indicate your acceptance of this Fee Letter by signing and returning the
duplicate copy hereof, whereupon this Fee Letter will constitute a binding
agreement between the Company, on the one hand,
and BASI, Bank of America and PNC on the other. This Fee Letter may be signed
in one or more counterparts, and shall not be deemed to be superseded by any
other letter or documentation, including ultimate loan documentation, unless
such other letter or documentation is executed by you and us; expressly makes
reference to this Fee Letter, and states that this Fee Letter is superseded
thereby. The fees described above shall be non-refundable for any reason
whatsoever and shall be in addition to and not creditable against any other
fee, cost or expense payable under the credit documentation.
We look forward to working with Applied Power toward the successful completion
of this financing.
Very truly yours,
BANCAMERICA SECURITIES, INC.
By: /s/ Margaret H. Claggett
---------------------------------
Title: Vice President
---------------------------------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS CORPORATION
By: /s/ Thomas M. Brown
---------------------------------
Title: Vice President
---------------------------------
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Richard T. Jander
---------------------------------
Title: Vice President
---------------------------------
ACCEPTED AND AGREED TO:
this 29th day of August, 1997
APPLIED POWER INC.
By: /s/ Robert C. Arzbaecher
---------------------------------
Title: Vice President and Chief Financial Officer
---------------------------------
Date: August 29, 1997
---------------------------------
August 29, 1997
CONFIDENTIAL
Applied Power Inc.
13000 West Silver Spring Drive
Butler, Wisconsin 53007-1093
Ladies and Gentlemen:
Bank of America National Trust and Savings Association ("Bank of America") and
PNC Bank, National Association ("PNC") are pleased to advise you that they are
willing, subject to the terms and conditions contained in this letter and in
the attached Summary of Terms and Conditions (the "Term Sheet"), to each commit
to $70 million towards a $140 million 364-day senior revolving credit facility
(the "Facility") for Applied Power Inc. (the "Company"). BancAmerica
Securities, Inc. ("BASI"), in its sole discretion, will act as arranger (the
"Arranger") and may endeavor to assemble a syndicate of lenders (together with
Bank of America and PNC, the "Lenders") to commit to a portion of the Facility.
Bank of America will serve as agent (the "Agent") for the Facility.
BASI is a wholly-owned, direct subsidiary of BankAmerica Corporation, the
parent company of Bank of America, and is a registered broker-dealer. Please
refer to the attached "Disclosure Statement" for important additional
information on this relationship.
The fees payable to the Arranger and PNC in connection with the Facility are
set forth in a separate letter of even date herewith (the "Fee Letter").
It is agreed that Bank of America will act as the sole and exclusive Agent for
the Facility, and that BASI will act as the sole and exclusive Arranger for the
Facility. You agree that no other agents, co-agents or arrangers will be
appointed, no other titles will be awarded and no compensation (other than that
expressly contemplated by the Fee Letter) will be paid in connection with the
Facility unless you and we shall so agree.
You hereby authorize BASI to commence syndication efforts at any time in the
future and agree upon commencement of such syndication efforts to actively
assist BASI in achieving a syndication that is satisfactory to BASI, Bank of
America and the Company. Upon commencement of syndication efforts, and to
assist BASI in such efforts, (i) you agree to promptly prepare and
provide to BASI and Bank of America all information which we may
reasonably request, including all financial information and projections, (ii)
you understand that in arranging and syndicating the Facility we may use and
rely upon the information and projections without independent verification
thereof, (iii) you agree to use commercially reasonable efforts to ensure that
the syndications efforts benefit materially from your existing lending
relationships, (iv) you agree, if deemed necessary by BASI, to host with BASI
one or more meetings with prospective Lenders and you agree to make senior
management available for these meetings, and (v) you agree to assist in the
preparation of a Confidential Information Memorandum and other marketing
materials to be used in connection with the syndication. BASI, as Arranger,
will manage all aspects of the syndication and reserves the right in
consultation with the Company to allocate the commitments from and fees offered
to the Lenders (other than fees payable to PNC under the Fee Letter).
In addition to the conditions to funding or closing set forth in the Term
Sheet, Bank of America and PNC's commitments to provide financing hereunder are
subject to, among other conditions, (i) the negotiation and execution of a
definitive credit agreement and other related documentation satisfactory to
Bank of America and PNC, (ii) there being no material adverse change in the
reasonable opinion of BASI, Bank of America and PNC in the financial condition,
business, operations, properties or prospects of the Company or the Company and
its consolidated subsidiaries, and Versa Technologies, Inc. and its
subsidiaries from the date of the audited financial statements most recently
provided prior to the date hereof, (iii) the non-occurrence of any material
adverse change in loan syndication or capital market conditions after the date
of this letter, generally, which in the reasonable opinion of BASI, would
affect our syndication efforts in respect of any portion of the Facility, and
(iv) until the earlier of November 14, 1997 or notification by BASI of the
completion of the syndication of the Facility, there be no competing offering,
placement, or arrangement of any debt securities or bank financing by or on
behalf of the Company, other than the contemplated amendment and restatement to
the Company's existing revolving credit agreement and asset securitization
agreement, as well as, certain financing in connection with the Company's Irish
subsidiaries.
Whether or not the transactions contemplated hereby are consummated, the
Company hereby agrees to indemnify and hold harmless each of Bank of America,
BASI, PNC and their respective directors, officers, employees and affiliates
(each, an "indemnified person") from and against any and all losses, claims,
damages, liabilities (or actions or other proceedings commenced or threatened
in respect thereof) and expenses that arise out of, result from or in any way
relate to this commitment letter, or the providing or syndication of the
Facility, and to reimburse each indemnified person, upon its demand, for any
reasonable legal or other expenses (including the allocated cost of in-house
counsel) incurred in connection with investigating, defending or participating
in any such loss, claim,
damage, liability or action or other proceeding (whether or not such
indemnified person is a party to any action or proceeding out of which any such
expenses arise), other than any of the foregoing claimed by any indemnified
person to the extent incurred by reason of the gross negligence or willful
misconduct of such person. Neither Bank of America, BASI, PNC, nor any of
their affiliates, shall be responsible or liable to the Company or any other
person for any consequential damages which may be alleged. The obligations
contained in this paragraph will survive the closing of the Facility.
In addition, the Company hereby agrees to reimburse Bank of America and BASI
from time to time upon demand for their reasonable out-of-pocket costs and
expenses (including the allocated cost of in-house counsel) incurred by Bank of
America or BASI in connection with the negotiation and preparation of documents
for the Facility, regardless of whether the credit agreement is executed or the
Facility closes. The obligations contained in this paragraph shall remain in
effect until the closing of the Facility, and thereafter, these obligations
will be superseded by the expense reimbursement obligations contained in the
definitive documentation.
The terms contained in this letter and the Term Sheet are confidential and,
except for disclosure to your or our board of directors, officers and
employees, to professional advisors retained by you or us in connection with
this transaction, or as may be required by law, may not be disclosed in whole
or in part to any other person or entity without our prior written consent (in
the case of disclosure by you ) or your prior written consent (in the case of
disclosure by us). We hereby consent to your disclosure of a copy of the Term
Sheet and this letter (but not the Fee Letter), to Versa Technologies, Inc. and
their professional advisors, provided that the copy of the Term Sheet is
redacted to omit information relating to pricing, fees and expenses and that no
such disclosure may be made prior to your acceptance of this letter and the Fee
Letter and payment of the initial installment of the closing fees. No such
consent shall create any third-party beneficiary as to our commitment.
No modification or waiver of any of the terms and conditions contained in this
letter or the Term Sheet will be valid and binding unless agreed to in writing
by all of the undersigned.
Upon your delivery to us of a signed copy of this letter and the Fee Letter and
payment of the initial installment of the Closing fees, this letter agreement
shall become a binding agreement under Illinois law as of the date so accepted.
Bank of America's and PNC's commitment hereunder shall remain in effect until
5:00 p.m. Chicago time, on August 29, 1997 when, if not so accepted, Bank of
America's and PNC's commitment hereunder will terminate. This commitment will
expire on November 14, 1997 if the Facility has not closed on or before that
date.
We are pleased to have the opportunity to work with you on this important
financing.
Very truly yours,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS CORPORATION
By: /s/ Margaret H. Claggett
-----------------------------------
Title: Vice President
--------------------------------
BANCAMERICA SECURITIES, INC.
By: /s/ Thomas M. Brown
-----------------------------------
Title: Vice President
--------------------------------
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Richard T. Jander
-----------------------------------
Title: Vice President
--------------------------------
ACCEPTED AND AGREED TO:
this 29th day of August, 1997
APPLIED POWER INC.
By: /s/ Robert C. Arzbaecher
-----------------------------------
Title: Vice President and
--------------------------------
Chief Financial Officer
--------------------------------
BANCAMERICA SECURITIES, INC.
DISCLOSURE STATEMENT
BancAmerica Securities, Inc. ("BASI") is a wholly-owned, direct subsidiary of
BankAmerica Corporation, the parent company of Bank of America National Trust
and Savings Association ("Bank of America"). BASI is a broker-dealer
registered with the Securities and Exchange Commission, and is a member of the
National Association of Securities Dealers, Inc. and the Securities Investor
Protection Corporation.
BASI is not a bank. The securities and financial instruments sold, offered or
recommended by BASI are not bank deposits, are not guaranteed by, and are not
otherwise obligations of, any bank, thrift or other subsidiary of BankAmerica
Corporation, and are not insured by the Federal Deposit Insurance Corporation
or any other governmental agency.
From time to time, Bank of America's affiliates may lend to one or more issuers
whose securities are underwritten, dealt in, or placed by BASI. You are
referred to the relevant prospectus, offering statement or other disclosure
document for material information relating to any such lending relationship,
and whether the proceeds of an issue will be used to repay any such loans.
Furthermore, the obligations of BASI are not those of any affiliated bank or
thrift, and no such affiliated bank or thrift is responsible for securities
underwritten, dealt in, or placed by BASI.
In order for Bank of America and its affiliates to better serve you, they
intend to share credit and other information about you with each other and with
BASI. BASI also may share credit and other information regarding you with Bank
of America and its affiliates. You will be deemed to consent to such sharing
of information unless you object in writing.
BASI also may participate from time to time in a primary or secondary
distribution of securities offered or sold to you by it. Further, BASI may act
as an investment adviser to issuers whose securities may be offered or sold to
you by it.
Confidential Applied Power Inc.
SUMMARY OF TERMS AND CONDITIONS
$140,000,000 364-DAY SENIOR REVOLVING CREDIT FACILITY
AUGUST 29, 1997
BORROWER: Applied Power Inc. ("Applied Power" or
"Company").
ARRANGER: BancAmerica Securities, Inc.
AGENT: Bank of America National Trust and Savings
Association ("Bank of America" or "BofA").
FACILITY DESCRIPTION
AND AMOUNT: A $140 million revolving credit facility
(the "Revolver") available for committed
advances maturing 364 days from execution of
definitive loan documentation ("Closing").
LENDERS: Bank of America, PNC National Association
and potentially a syndicate of lenders
acceptable to the Arranger and reasonably
acceptable to the Company (the "Lenders").
PURPOSE: To finance the tender offer to acquire the
outstanding stock of Versa Technologies,
Inc. ("Versa") and for other general
corporate purposes.
BORROWING OPTIONS: IBOR (U.S. Dollar) Loans and Alternate
Reference Rate Loans (together referred to
as "Loans").
INTEREST PERIODS: IBOR Loans - 1, 2, 3 or 6 months.
INTEREST PAYMENTS: Accrued interest on each Alternate Reference
Rate Loan shall be payable on the last day
of each fiscal quarter.
Page 1 August 29, 1997
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Confidential Applied Power Inc.
Accrued interest on each IBOR Loan shall be
payable at maturity or quarterly, if earlier.
INTEREST RATES: Loans will bear interest as shown in the
attached pricing grid.
ALTERNATE REFERENCE RATE is defined as
the higher of (i) the rate of interest
publicly announced from time to time
by the Agent as its Reference Rate, and
(ii) 0.5% per annum above the Federal
Funds Rate in effect on such date. Any
change in the Reference Rate shall take
effect at the opening of business on
the date specified in the public
announcement of such change, or on a
daily basis in the case of (ii) above.
Interest is to accrue based on a
360-day year and actual days elapsed
and is to be paid in arrears.
IBOR RATE is defined as the rate of
interest per annum determined by the
Agent as the rate at which U.S. Dollar
(or other Available Currency as
requested) deposits in the
approximate amount of Bank of America's
Offshore Rate Loan for such Interest
Period would be offered by Bank of
America's Grand Cayman Branch, Grand
Cayman B.W.I. (or other such office as
may be designated for such purpose by
Bank of America) to major banks in the
offshore U.S. Dollar (or other
Available Currency as requested)
interbank market at their request at
approximately 11:00 a.m. (New York City
time) two Business Days prior to the
commencement of such Interest Period.
Interest is to accrue based on a
360-day year and actual days elapsed
and is to be paid in arrears.
Please note in the attached pricing grid
that six months after Closing the IBOR
Margin will step up by 10 basis points
at each Level.
Page 2 August 29, 1997
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Confidential Applied Power Inc.
NON-USE FEE: A per annum fee, as determined by the
attached pricing grid, on the average daily
amount of the unused commitment calculated
on a 360 day basis, payable on the last day
of each fiscal quarter in arrears.
DRAWDOWNS: Minimum amounts of $1,000,000 with
additional increments of $500,000.
Drawdowns are at the Borrower's option with
(i) same day notice (by 10:30 a.m. Chicago
time) for Alternate Reference Rate Loans,
(ii) two business days advance notice (by
10:30 a.m. Chicago time) for IBOR Loans.
VOLUNTARY
PREPAYMENTS: Alternate Reference Rate Loans may be
prepaid at any time with same day notice (by
10:30 a.m. Chicago time). IBOR Loans may be
prepaid at any time with at least two
business days advance notice (by 10:30 a.m.
Chicago time), subject to compensating the
Lenders for any funding losses and related
expenses. Each partial prepayment of Loans
shall be in an aggregate principal dollar
amount of at least $5,000,000 and an
integral multiple of $1,000,000.
TERMINATION OR
REDUCTION OF THE REVOLVER: The Company may irrevocably reduce the
Revolver in amounts of at least $5,000,000
or a higher integral multiple of $1,000,000
at any time on five business days' notice,
subject to compensating the Lenders for any
funding losses and related expenses.
REPRESENTATIONS
AND WARRANTIES: Consistent with the Company's existing
revolving credit agreement, including but
not limited to:
Corporate existence.
Corporate and governmental
authorization; no
Page 3 August 29, 1997
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Confidential Applied Power Inc.
contravention; binding effect.
Compliance with laws, including ERISA
and environmental regulations.
Payment of taxes.
No Material Adverse Change; solvency.
No material litigation.
Books, insurance and liens.
Financial condition.
Patents, Trademarks.
Ownership of shares.
Disclosure of Subsidiaries.
CONDITIONS
PRECEDENT: Usual and customary for a credit agreement
of this type, including but not limited to:
The acquisition of Versa on terms and
conditions acceptable to the Lenders.
Proforma balance sheet and compliance
certificate (for initial pricing
purposes and proforma covenant
compliance purposes).
Corporate authorizations.
Receipt of satisfactory closing
documentation, including opinions of
counsel.
All representations and warranties are
true and complete.
CONDITIONS OF
EACH BORROWING: Consistent with the Company's existing
revolving credit agreement, including but
not limited to:
Page 4 August 29, 1997
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Confidential Applied Power Inc.
Absence of default or event of default.
Accuracy of representations and
warranties (excluding material
litigation and disclosure of
subsidiaries).
COVENANTS: Consistent with the Company's existing
revolving credit agreement, including but
not limited to:
Information.
Maintenance of books and records.
Maintenance of property; insurance.
Conduct of business; maintenance of
existence.
Compliance with laws, including ERISA
and environmental regulations.
Payment of taxes and obligations.
Liens.
Additional indebtedness.
Use of proceeds.
Business activities.
Asset Sales to include language to
allow (1) the sale of accounts
receivable of up to $75 million, and
also (2) the sale of up to 15% of
tangible assets per fiscal year.
FINANCIAL COVENANTS: Consistent with the Company's existing
revolving credit agreement, including but
not limited to:
(i) Minimum Consolidated
Shareholders' Equity. Not
permit Shareholders' Equity at
any time be less than $91.0
million plus 25% of Net Income
reported for any fiscal quarter
on or after February 28, 1995.
Shareholders' Equity means, at
any date of
Page 5 August 29, 1997
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Confidential Applied Power Inc.
determination, all amounts which
would be included under
shareholders' equity on a
consolidated balance sheet of
the Company.
(ii) Minimum Fixed Charge Coverage
Ratio. Maintain a minimum
Fixed Charge Coverage Ratio
(defined as Consolidated Net
Income plus Interest Expense
plus Income Tax Expense plus
Lease Expense on operating
leases to Interest Expense plus
Lease Expense on operating
leases) on a rolling four
quarter basis of 1.5:1.0.
(iii) Maximum Total Funded
Indebtedness/Capitalization.
Not permit the ratio of Funded
Debt (defined as all obligations
for borrowed money and all
capital lease obligations and
excludes any debt associated
with the sale of the Company's
accounts receivable) to Total
Capitalization (defined as Total
Funded Debt plus Deferred Taxes
plus Shareholders' Equity) to
exceed 58%.
EVENTS OF DEFAULT: Consistent with the Company's
existing revolving credit agreement,
including but not limited to:
Non-payment of interest, principal or
fees payable under the Credit
Agreement.
Non-performance of certain covenants.
Cross default to other material debt of
the Company and its subsidiaries.
Bankruptcy, insolvency.
Materially inaccurate or false
representations or warranties.
ERISA.
Change in control or ownership.
Page 6 August 29, 1997
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Confidential Applied Power Inc.
INCREASED COSTS/
CHANGE OF CIRCUMSTANCES: The Credit Agreement will contain customary
provisions protecting the Lenders in the
event of unavailability of funding,
increased costs, increased capital adequacy
requirements and funding losses. The Credit
Agreement will also provide for the general
indemnification by the Company of the Agent,
Arranger and their affiliates as well as the
Lenders.
TRANSFERS AND
PARTICIPATIONS: Each Lender will have the right to sell
participations in its Loans and commitments
with the transferability of voting rights
limited to reductions in principal amount,
interest rate or fees and increases in term.
Assignments to financial institutions
meeting the criteria of an "Eligible
Assignee", in minimum amounts of $5,000,000,
will be permitted with the consent of the
Company (which shall not be unreasonably
withheld) and the Agent.
EXPENSES: Reasonable costs and expenses, including
attorney's fees (including costs and
expenses of outside counsel and allocated
cost of in-house legal services), incurred
at any time by the Agent and the Arranger in
the negotiation, syndication, documentation
and the closing of the Revolver, as well as
the ongoing administration of the Revolver,
shall be paid by the Company regardless of
whether the Revolver closes. The Company
shall pay all reasonable costs and expenses,
including legal costs, incurred by the Agent
and any Lender in enforcing any loan
document.
REQUIRED BANKS: Lenders having at least 55% of the
commitments.
DOCUMENTATION: The Revolver will be subject to a credit
agreement ("the Credit Agreement") and other
documentation, which shall contain suitable
conditions and covenants mutually acceptable
to the Company, the Agent and the Lenders,
but not limited to those described above.
Page 7 August 29, 1997
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Confidential Applied Power Inc.
GOVERNING LAW: State of Illinois.
MISCELLANEOUS: Waiver of jury trial; consent to
jurisdiction in Illinois.
This Summary of Terms and Conditions is not, nor should it be construed as, an
attempt to describe all of the terms and conditions of the documentation
involved in a transaction contemplated hereby, nor to suggest the specific
phrasing of documentation clauses. It is intended only to outline certain
basic points of business understanding around which such documentation may be
structured.
Page 8 August 29, 1997
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Confidential Applied Power Inc.
Page 9 August 29, 1997
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Confidential Applied Power Inc.
PRICING GRID
APPLIED POWER INC.
$140,000,000
364-DAY REVOLVING CREDIT FACILITY
(IN BASIS POINTS)
RATIO OF TOTAL FUNDED LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V LEVEL VI
DEBT TO CAPITALIZATION* ------- -------- --------- -------- ------- --------
EQUAL TO EQUAL TO EQUAL TO EQUAL TO EQUAL TO
OR GREATER THAN OR GREATER THAN OR GREATER THAN OR GREATER THAN OR GREATER THAN
< 30% 30% AND 40% AND 45% AND 50% AND 55%
LESS THAN LESS THAN LESS THAN LESS THAN
40% 45% 50% 55%
IBOR MARGIN** 30.00 37.50 45.00 50.00 55.00 70.00
REFERENCE RATE 0 0 0 0 0 0
NON-USE FEE 12.50 13.75 17.50 20.00 20.00 25.00
* To be calculated quarterly, based on the covenant definition.
** Six months after Closing, the stated IBOR Margin will step up by 10
basis points at each Level.
Page 10 August 29, 1997
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EXHIBIT (c)(1)
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
APPLIED POWER INC.,
TVPA CORP.
AND
VERSA TECHNOLOGIES, INC.
Dated as of September 2, 1997
TABLE OF CONTENTS
PAGE
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RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Acquisition and Acquisition Proposal . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.4 Blair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 CERCLA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Certificate of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.9 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.10 Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.11 Company Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.12 Company Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.13 Company SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.14 Company Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.15 Company Special Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.16 Confidentiality Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.17 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.18 DGCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.19 Disclosure Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.20 Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.21 Effective Time of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.22 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.23 Environmental Claim, Environmental Hazardous Materials, Environmental
Laws, Environmental Permits and Environmental Release . . . . . . . . . . . . . . . . 3
1.24 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.25 Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.26 Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.27 Exchange Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.28 Existing Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.29 Existing Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.30 Existing Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.31 Existing Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.32 HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.33 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.34 Indemnified Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.35 Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ToC-i
PAGE
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1.36 Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.37 Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.38 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.39 Merger Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.40 Minimum Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.41 Newco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.42 Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.43 Offer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.44 Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.45 Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.46 Per Share Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.47 Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.48 Product Liability Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.49 Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.50 Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.51 Representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.52 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.53 Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.54 Schedule 14D-9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.55 SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.56 Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.57 Special Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.58 Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.59 Superior Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.60 Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 The Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Company Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.2 Effect of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.3 Effective Time of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.4 Conversion of Company Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.5 Newco Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.6 Exchange of Company Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7 Stock Transfer Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.8 Shareholders' Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.9 Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ToC-ii
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3.10 Rights Agreement; Certificate of Incorporation Provision . . . . . . . . . . . . . . . 13
3.11 Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE IV OTHER AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.1 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.2 Disclosure Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.3 Duties Concerning Representations and Covenants . . . . . . . . . . . . . . . . . . . 15
4.4 Deliveries of Information; Consultation . . . . . . . . . . . . . . . . . . . . . . . 16
4.5 Acquisition Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.6 Legal Conditions to Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.7 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.8 Indemnification of Company Directors and Officers; Directors
and Officers Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.9 Company Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.10 Deferred Compensation Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . . . . . . . 21
5.1 Organization; Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.3 Authorization; Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.4 No Violation or Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.5 Title to Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.6 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.7 Company SEC Reports and Books and Records . . . . . . . . . . . . . . . . . . . . . . 23
5.8 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.9 Contingent and Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . 24
5.10 Existing Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.11 Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.12 No Violation of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.13 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.14 Patents, Trademarks and Like Assets . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.15 Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.16 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.17 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.18 Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.19 No Pending Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.20 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.21 Information Supplied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.22 Opinion of Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.23 Takeover Statutes; Certificate of Incorporation Provision . . . . . . . . . . . . . . 31
5.24 Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ToC-iii
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5.25 Environmental Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.26 Certain Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.27 Product Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.28 Representations Complete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PARENT AND NEWCO . . . . . . . . . . . . . . . . . . 34
6.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.2 Authorization; Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.3 No Violation or Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.4 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.5 Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.6 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.7 Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.8 Offer Documents; Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.9 Representations Complete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE VII CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER . . . . . . . . . . . . . . . . 36
7.1 Carry on in Regular Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.2 Use of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.3 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.4 Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.5 Employment Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.6 Contracts and Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.7 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.8 Preservation of Relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.9 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.11 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.12 Dividends; Redemptions; Issuance of Stock . . . . . . . . . . . . . . . . . . . . . . 37
7.13 No Dispositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.14 Dissolution; Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.15 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE VIII CONDITIONS TO CONSUMMATION OF THE MERGER . . . . . . . . . . . . . . . . . . . . . . . 38
8.1 Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.2 Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.3 The Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.4 Approval of Company Shareholders; Certificate of Merger . . . . . . . . . . . . . . . 38
ToC-iv
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ARTICLE IX TERMINATION; MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.2 Rights on Termination; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.3 Survival of Representations, Warranties and Covenants . . . . . . . . . . . . . . . . 40
9.4 Entire Agreement; Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
9.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
9.7 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
9.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
9.9 Counterparts; Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.10 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.12 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.13 No Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.14 Disclosure Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ToC-v
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made as of this 2nd day of
September, 1997 by and among APPLIED POWER INC., a Wisconsin corporation
("Parent"), TVPA CORP., a Delaware corporation ("Newco"), and VERSA
TECHNOLOGIES, INC., a Delaware corporation (the "Company").
RECITALS
WHEREAS, the respective Boards of Directors of Parent, Newco and the
Company have each determined that it is advisable and in the best interests of
each such respective entity and their shareholders for Newco to commence a cash
tender offer to purchase all outstanding shares of Company Common Stock (as
defined below), together with the corresponding Rights (as defined below), at a
price of $24.625 per share (the "Offer") and, following the consummation of the
Offer, to merge Newco with and into the Company (the "Merger"); and
WHEREAS, the Board of Directors of the Company has unanimously (i)
approved the Offer and the Merger, (ii) determined that the Offer and the
Merger are in the best interests of the Company Shareholders, and (iii)
approved and adopted this Agreement and the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
When used in this Agreement, the following terms shall have the
meanings specified:
1.1 "Acquisition" and "Acquisition Proposal" shall have the
meanings specified in Section 4.5(a) of this Agreement.
1.2 "Affiliates" shall mean all Persons who are affiliates of the
Company, Purchaser or Newco, as the case may be, including all directors,
executive officers and 5% or more shareholders.
1.3 "Agreement" shall mean this Agreement and Plan of Merger,
together with the Exhibits and the Disclosure Schedule attached hereto, as the
same may be amended from time to time in accordance with the terms hereof.
1
1.4 "Blair" shall mean William Blair & Co., L.L.C.
1.5 "Buildings" shall mean all buildings, fixtures, structures and
improvements used by the Company and the Subsidiaries and located on the Real
Estate.
1.6 "CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C.A. Section 9601,
et seq., and the rules, regulations and orders promulgated thereunder.
1.7 "Certificate of Merger" shall mean the appropriate Certificate
of Merger to be filed with the Delaware Secretary of State in connection with
the Merger.
1.8 "Closing Date" shall mean:
(a) That date following consummation of the Offer which
is the first business day after satisfaction (or waiver) of all of the
conditions set forth in Article VIII; or
(b) Such other date as the parties may mutually agree to
in writing.
1.9 "Code" shall mean the Internal Revenue Code of 1986, as
amended, and the regulations promulgated thereunder, as the same may be in
effect from time to time.
1.10 "Company" shall mean Versa Technologies, Inc., a Delaware
corporation.
1.11 "Company Certificates" shall have the meaning specified in
Section 3.6(b)(i).
1.12 "Company Common Stock" shall mean all of the issued and
outstanding shares of common stock, $.01 par value per share, of the Company.
1.13 "Company SEC Reports" shall mean: (a) Annual Reports on Form
10-K for the years ended March 31, 1994, 1995, 1996 and 1997 (including any
amendments thereto) and related Annual Reports to Shareholders; (b) Quarterly
Reports on Form 10-Q for the quarters ended June 30, 1994, September 30, 1994,
December 31, 1994, June 30, 1995, September 30, 1995, December 31, 1995, June
30, 1996, September 30, 1996, December 31, 1996, and June 30, 1997; (c) Proxy
Statements dated June 19, 1995, June 17, 1996 and June 16, 1997; (d) the
Current Report on Form 8-K dated January 8, 1997; (e) two registration
statements on Form S-8, each filed on December 2, 1996; (f) the registration
statement on Form S-3 filed on November 18, 1994 and the related prospectus for
the Company's Stock Purchase and Dividend Reinvestment Plan dated January 27,
1995; and (g) all documents filed by the Company with the SEC after the date of
this Agreement and prior to the Effective Time of Merger.
1.14 "Company Shareholders" shall mean all Persons owning shares of
Company Common Stock on the relevant date.
2
1.15 "Company Special Meeting" shall mean a special meeting of the
Company Shareholders for the purpose of considering the Merger, this Agreement
and the transactions contemplated hereby and for such other purposes as may be
necessary or desirable.
1.16 "Confidentiality Agreement" shall mean the non-disclosure
agreement between Parent and the Company dated June 9, 1997.
1.17 "Contracts" shall mean all of the material contracts,
agreements, leases and commitments, written or oral, to which the Company or
any Subsidiary is a party or by which the Company or any Subsidiary is bound,
including but not limited to those Contracts listed and described on the
Disclosure Schedule.
1.18 "DGCL" shall mean the Delaware General Corporation law, as the
same may be in effect from time to time.
1.19 "Disclosure Schedule" shall mean the Disclosure Schedule,
dated the date of this Agreement, delivered by the Company to Parent
contemporaneously with the execution and delivery of this Agreement.
1.20 "Dissenting Shares" shall have the meaning specified in
Section 3.9.
1.21 "Effective Time of Merger" shall have the meaning specified in
Section 3.3 of this Agreement.
1.22 "Employee Benefit Plans" shall mean any pension plan, profit
sharing plan, bonus plan, incentive compensation plan, stock ownership plan,
stock purchase plan, stock option plan, stock appreciation plan, employee
benefit or welfare plan, retirement plan, deferred compensation plan, fringe
benefit program, insurance plan, severance plan, disability plan, health care
plan, sick leave plan, death benefit plan, defined contribution plan or any
other plan or program to provide retirement income, fringe benefits or other
benefits to former or current employees of the Company or the Subsidiaries.
1.23 "Environmental Claim," "Environmental Hazardous Materials,"
"Environmental Laws," "Environmental Permits" and "Environmental Release" shall
have the meanings specified in Section 5.25 of this Agreement.
1.24 "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may be in effect from time to time.
1.25 "Exchange Act" shall mean the Securities Exchange Act of 1934,
as the same may be in effect from time to time.
1.26 "Exchange Agent" shall have the meaning specified in Section
3.6(a).
3
1.27 "Exchange Fund" shall have the meaning specified in Section
3.6(a).
1.28 "Existing Contracts" shall mean those Contracts which are
listed and briefly described on the Disclosure Schedule.
1.29 "Existing Liens" shall mean all Liens affecting a material
amount of the assets or properties of the Company or any Subsidiary on the date
of this Agreement, all of which are listed and briefly described on the
Disclosure Schedule.
1.30 "Existing Litigation" shall mean all pending or threatened
suits, audit inquiries, workers compensation claims, product warranty claims,
litigation, arbitrations, proceedings, governmental investigations, labor
grievances, citations and actions of any kind against the Company or any
Subsidiary, all of which are listed and briefly described on the Disclosure
Schedule.
1.31 "Existing Plans" shall mean all Employee Benefit Plans of the
Company and the Subsidiaries, all of which are listed and briefly described on
the Disclosure Schedule.
1.32 "HSR Act" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as the same may be in effect from time to time.
1.33 "Indebtedness" shall mean all liabilities or obligations of
the Company or any Subsidiary, whether primary or secondary or absolute or
contingent, all of which are set forth on the Disclosure Schedule: (a) for
borrowed money; (b) evidenced by notes, bonds, debentures or similar
instruments; or (c) secured by Liens on any assets of the Company
1.34 "Indemnified Parties" shall have the meaning specified in
Section 4.8(b).
1.35 "Insurance Policies" shall mean all of the insurance policies
currently in effect and owned by the Company, all of which are listed and
briefly described on the Disclosure Schedule.
1.36 "Lien" shall mean, with respect to any material amount of
assets: (a) any mortgage, pledge, lien, charge, claim, restriction,
reservation, condition, easement, covenant, lease, encroachment, title defect,
imposition, security interest or other encumbrance of any kind; and (b) the
interest of a vendor or lessor under any conditional sale agreement, financing
lease or other title retention agreement relating to such assets.
1.37 "Material Adverse Effect" shall mean a material adverse effect
on the condition, business, assets, results of operations or prospects of the
Company and the Subsidiaries, taken as a whole, or of Parent and Newco, taken
as a whole, as the case may be.
1.38 "Merger" shall mean the merger of Newco with and into the
Company pursuant to this Agreement and the Certificate of Merger.
4
1.39 "Merger Consideration" shall have the meaning in Section
3.4(a).
1.40 "Minimum Condition" shall have the meaning in Section 2.1(a)
of this Agreement.
1.41 "Newco" shall mean TVPA Corp., a Delaware corporation and
wholly-owned subsidiary of Parent.
1.42 "Offer" shall have the meaning in Section 2.1(a) of this
Agreement.
1.43 "Offer Documents" shall have the meaning in Section 2.1(c) of
this Agreement.
1.44 "Parent" shall mean Applied Power Inc., a Wisconsin
corporation.
1.45 "Permits" shall mean all licenses, permits, approvals,
franchises, qualifications, certificates, permissions, agreements and other
orders and governmental or regulatory authorizations required for the conduct
of the business of, and material to, the Company and the Subsidiaries. All
such Permits are listed and briefly described on the Disclosure Schedule.
1.46 "Per Share Amount" shall have the meaning specified in Section
2.1(a).
1.47 "Person" shall mean a natural person, corporation, trust,
partnership, governmental entity, agency or branch or a department thereof, or
any other legal entity.
1.48 "Product Liability Matters" shall mean any and all product
recalls, and liabilities or obligations or damages of any kind for death,
disease, or injury to Persons, businesses or property relating to the products
designed, produced, distributed, sold or shipped by the Company or the
Subsidiaries.
1.49 "Proxy Statement" shall mean the proxy statement (if any) to
be filed by the Company with the SEC and to be distributed to the Company
Shareholders in connection with the Company Special Meeting and the approval of
the Merger by the Company Shareholders.
1.50 "Real Estate" shall mean the parcels of real property owned or
leased by the Company or the Subsidiaries, all of which are identified in the
Disclosure Schedule.
1.51 "Representatives" shall have the meaning specified in Section
4.1(a).
1.52 "Rights" shall have the meaning in the Rights Agreement.
5
1.53 "Rights Agreement" shall mean the Rights Agreement dated as of
December 13, 1988, as amended, between the Company and Firstar Trust Company,
as Rights Agent.
1.54 "Schedule 14D-9" shall have the meaning in Section 2.2(b).
1.55 "SEC" shall mean the Securities and Exchange Commission.
1.56 "Securities Act" shall mean the Securities Act of 1933, as the
same may be in effect from time to time.
1.57 "Special Event" shall have the meaning specified in Section
4.5(a).
1.58 "Subsidiary" shall mean any corporation or other entity, at
least a majority of the outstanding capital stock or other equity interests of
which shall at the time be owned by the Company directly or through one or more
corporations or other entities which are themselves Subsidiaries.
1.59 "Superior Proposal" shall have the meaning specified in
Section 4.5(a).
1.60 "Surviving Corporation" shall have the meaning specified in
Section 3.1.
ARTICLE II
THE OFFER
2.1 The Offer.
(a) Provided that this Agreement shall not have been
terminated in accordance with Section 9.1 hereof and none of the conditions set
forth in paragraphs (a) through (g) of Annex A hereto shall have occurred or be
existing, as promptly as reasonably practicable (but in any event within five
business days from the initial public announcement of the execution of this
Agreement), Parent shall cause Newco to commence an offer to purchase all
outstanding shares of Company Common Stock, together with the corresponding
Rights, at a price of $24.625 per share net to the seller in cash, without
interest thereon (the "Per Share Amount"), which shall remain open for at least
twenty (20) business days (the "Offer") and, subject to the conditions of the
Offer, shall use its best efforts to consummate the Offer. Newco shall accept
for payment shares of Company Common Stock which have been validly tendered and
not withdrawn pursuant to the Offer at the earliest time following expiration
of the Offer as provided in Section 2.1(b) hereof. The obligations of Newco to
consummate the Offer, to accept for payment and to pay for any shares of
Company Common Stock tendered shall be subject only to those conditions set
forth in Annex A hereto, in addition to the condition that there be validly
tendered and not properly withdrawn prior to the expiration of the Offer a
number of shares of Company Common
6
Stock which constitutes at least a majority of the then outstanding shares of
Company Common Stock entitled to vote, measured on a fully diluted basis (the
"Minimum Condition").
(b) Parent and Newco expressly reserve the right to waive
any condition set forth in Annex A hereto (except the Minimum Condition)
without the consent of the Company, and to make any other changes in the terms
and conditions of the Offer; provided, however, that neither Parent nor Newco
will, without the prior written consent of the Board of Directors of the
Company, decrease the amount or change the form of the consideration payable in
the Offer, decrease the number of shares of Company Common Stock sought
pursuant to the Offer, change the conditions to the Offer, impose additional
conditions or terms to the Offer, amend or waive the Minimum Condition or amend
any term of the Offer in any manner adverse to the Company Shareholders.
Assuming the prior satisfaction or waiver of the conditions to the Offer,
Parent and Newco covenant and agree to accept for payment and pay for, in
accordance with the terms of the Offer, shares of Company Common Stock tendered
pursuant to the Offer as soon as permitted to do so under applicable law.
Notwithstanding the foregoing, Parent and Newco shall have the right to (i)
extend the Offer, if at the then scheduled expiration date of the Offer any of
the conditions to Newco's obligation to accept for payment and pay for the
shares of Company Common Stock shall not be satisfied or waived, until such
time as such conditions are satisfied or waived, (ii) extend the Offer for any
period required by any rule, regulation, interpretation or position of the SEC
or its staff applicable to the Offer, and (iii) extend the Offer for any reason
on one or more occasions for an aggregate period of not more than 30 business
days (for all such extensions) beyond the latest expiration date that would
otherwise be permitted under clause (i) or (ii) of this sentence.
(c) As soon as reasonably practicable on the date of
commencement of the Offer, Parent and Newco shall file with the SEC a
Tender Offer Statement on Schedule 14D-1 with respect to the Offer which will
contain the offer to purchase and form of the related letter of transmittal
(together with any supplements or amendments thereto, the "Offer Documents").
The Offer Documents will comply in all material respects with the provisions of
applicable federal securities laws. Each of Parent, Newco and the Company
agrees promptly to correct any information provided by it for use in the Offer
Documents if and to the extent that it shall have become false or misleading in
any material respect, and Parent and Newco each further agrees to take all
steps necessary to cause the Offer Documents as so corrected to be filed with
the SEC and, if necessary or appropriate, disseminated to the Company
Shareholders, in each case as and to the extent required by applicable federal
securities laws. The Company and its counsel shall be given a reasonable
opportunity to review and comment on the Offer Documents and any amendments
thereto prior to the filing thereof with the SEC.
7
2.2 Company Actions.
(a) The Company hereby approves of and consents to the
Offer and represents that the Board of Directors of the Company, at a meeting
duly called and held, has unanimously (i) determined that the Offer and the
Merger, taken together, are fair to and in the best interests of the Company
Shareholders, (ii) approved and adopted this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, and that such approval
constitutes the requisite approval of the Offer, this Agreement and the Merger
for purposes of Section 203(a)(1) of the DGCL and for purposes of rendering
Article ELEVENTH.A of the Company's Certificate of Incorporation inapplicable
to the Offer and the Merger, and (iii) resolved to recommend that the Company
Shareholders accept the Offer, tender their shares of Company Common Stock
thereunder to Newco and approve and adopt this Agreement and the Merger;
provided that such recommendation may be withdrawn, modified or amended if the
Company reasonably determines in good faith, based on the written advice of
outside legal counsel to the Company, that such action is necessary in order
for the Board of Directors of the Company to comply with its fiduciary duties
under applicable law. The Company consents to the inclusion of such
recommendation and approval in the Offer Documents. The Company further
represents that Blair has rendered its opinion to the Company's Board of
Directors in writing that the consideration to be received by the Company
Shareholders in the Offer and the Merger, taken together, is fair to such
shareholders from a financial point of view. The Company has been advised by
each of its directors and executive officers that such Person intends to tender
all shares of Company Common Stock owned by such Person pursuant to the Offer.
(b) The Company hereby agrees to file with the SEC as
soon as reasonably practicable on the date of commencement of the Offer a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with any
amendments or supplements thereto, the "Schedule 14D-9") containing the
recommendations described in Section 2.2(a). The Schedule 14D-9 will comply in
all material respects with the provisions of applicable federal securities
laws. The Company, Parent and Newco each agrees promptly to correct any
information provided by it for use in the Schedule 14D-9 if and to the extent
that it shall have become false or misleading in any material respect, and the
Company further agrees to take all steps necessary to cause the Schedule 14D-9
as so corrected to be filed with the SEC and disseminated to the Company
Shareholders, in each case as and to the extent required by applicable federal
securities laws. Notwithstanding anything to the contrary in this Agreement,
the Board of Directors of the Company may withdraw, modify or amend its
recommendation if the Company reasonably determines in good faith, based on the
written advice of outside legal counsel to the Company, that such action is
necessary in order for the Board of Directors of the Company to comply with its
fiduciary duties under applicable law. Parent and its counsel shall be given a
reasonable opportunity to review and comment on the Schedule 14D-9 and any
amendments thereto prior to the filing thereof with the SEC.
(c) In connection with the Offer, the Company will
promptly furnish Parent and Newco with mailing labels, security position
listings and any available listing or
8
computer file containing the names and addresses of the record holders of the
Company Common Stock as of a recent date and will furnish the Parent and Newco
with such information and assistance (including without limitation updated
lists of Company Shareholders, mailing labels and lists of securities
positions) as Parent, Newco or their agents may reasonably request in
communicating the Offer to the Company Shareholders. Subject to the
requirements of applicable law, and except for such steps as are necessary to
disseminate the documents constituting the Offer and any other documents
necessary to consummate the Merger, Parent and Newco and each of their
affiliates, associates and advisers shall use such information only in
connection with the Offer and the Merger and, if this Agreement is terminated,
will deliver to the Company all such information (and copies thereof) then in
their possession.
ARTICLE III
THE MERGER
3.1 The Merger. Subject to the terms and conditions of this
Agreement, as of the Effective Time of Merger, Newco and the Company shall
consummate the Merger in which (a) Newco will be merged with and into the
Company and the separate corporate existence of Newco shall thereupon cease;
(b) the Company shall be the successor or surviving corporation in the Merger
and shall continue to be governed by the laws of the State of Delaware; and (c)
the separate corporate existence of the Company with all its rights,
privileges, immunities, powers and franchises shall continue unaffected and
unimpaired by the Merger. The corporation surviving the Merger is sometimes
hereinafter referred to as the "Surviving Corporation." The Merger shall be
pursuant to the provisions of, and shall be with the effect provided in, the
applicable provisions of the DGCL.
3.2 Effect of the Merger.
(a) The Certificate of Incorporation of Newco, as in
effect immediately prior to the Effective Time of Merger, shall be the
Certificate of Incorporation of the Surviving Corporation until amended in
accordance with law.
(b) The Bylaws of Newco, as in effect immediately prior
to the Effective Time of Merger, shall be the Bylaws of the Surviving
Corporation until amended in accordance with law.
(c) The directors of Newco at the Effective Time of
Merger shall, from and after the Effective Time of Merger, be the initial
directors of the Surviving Corporation until their successors have been duly
elected or appointed and qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's Certificate of
Incorporation and Bylaws then in effect.
9
(d) The officers of the Company at the Effective Time of
Merger shall, from and after the Effective Time of Merger, be the initial
officers of the Surviving Corporation until their successors have been duly
elected or appointed and qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's Certificate of
Incorporation and Bylaws.
3.3 Effective Time of Merger. The parties hereto will cause the
Certificate of Merger to be executed and filed on the Closing Date as provided
in the DGCL. The Merger shall become effective on the date of the filing of
the Certificate of Merger with the Delaware Secretary of State, or such other
date as is agreed upon by the parties and specified in the Certificate of
Merger. The date and time on which the Merger shall become effective is
referred to in this Agreement as the "Effective Time of Merger."
3.4 Conversion of Company Common Stock. At the Effective Time of
Merger, and without any action on the part of the holders thereof:
(a) Each share of Company Common Stock issued and
outstanding at the Effective Time of Merger, together with the corresponding
Right (other than shares and Rights owned by Parent, Newco, any wholly-owned
subsidiaries of either of them or any wholly-owned subsidiary of the Company,
or held in the treasury of the Company, or Dissenting Shares), shall be
converted into the right to receive the Per Share Amount in cash (the "Merger
Consideration"), payable to the holder thereof, without interest thereon, less
any required withholding of taxes, upon surrender of the certificate formerly
representing such share, and thereupon such share of Company Common Stock shall
be canceled and retired and cease to exist.
(b) Any shares of capital stock of the Company that are
held by the Company as treasury stock and any shares of Company Common Stock
owned by Parent, Newco or any wholly-owned subsidiaries of either of them or by
any wholly-owned subsidiary of the Company at the Effective Time of Merger
shall be canceled and retired and cease to exist.
3.5 Newco Stock. Each outstanding share of capital stock of Newco
issued and outstanding at the Effective Time of Merger shall, by virtue of the
Merger and without any action on the part of the holders thereof, be converted
into one validly issued, fully paid and non- assessable share of common stock
of the Surviving Corporation.
3.6 Exchange of Company Certificates.
(a) Exchange Agent. As of the Effective Time of Merger,
Parent shall deposit, or shall cause to be deposited, with such bank or trust
company as may be designated by Parent (the "Exchange Agent") for the benefit
of the holders of shares of Company Common Stock, the funds necessary to make
the payments pursuant to Section 3.4 hereof (the "Exchange Fund"), and to make
the appropriate payments, if any, to holders
10
of Dissenting Shares. The Exchange Agent shall, pursuant to irrevocable
instructions, make the payments provided for in the preceding sentence out of
the Exchange Fund. The Exchange Agent shall invest portions of the Exchange
Fund as the Parent directs, provided that all such investments shall be in
obligations of or guaranteed by the United States of America, in commercial
paper obligations receiving the highest rating from either Moody's Investor's
Service Inc. or Standard & Poor's, or in certificates of deposit, bank
repurchase agreements or banker's acceptances of commercial banks with capital
exceeding $100 million (or in a money market mutual fund comprised of the
foregoing). The Exchange Fund shall not be used for any other purpose, except
as provided in this Agreement.
(b) Exchange Procedures.
(i) As soon as reasonably practicable after the
Effective Time of Merger, the Exchange Agent shall mail to each holder of
record of a certificate or certificates which immediately prior to the
Effective Time of Merger represented outstanding shares of Company Common Stock
(the "Company Certificates"): (A) a letter of transmittal which shall specify
that delivery shall be effected, and risk of loss and title to the Company
Certificates shall pass, only upon delivery of the Company Certificates to the
Exchange Agent and which shall be in such form and have such other provisions
as Parent may reasonably specify; and (B) instructions to effect the surrender
of the Company Certificates for payment therefor.
(ii) Upon surrender of a Company Certificate for
cancellation to the Exchange Agent together with such letter of transmittal,
duly executed, and with such other documents as the Exchange Agent may
reasonably require, the holder of such Company Certificate shall be entitled to
receive in exchange therefor cash in an amount equal to the Merger
Consideration multiplied by the number of shares of Company Common Stock
formerly represented by such Company Certificate, and such Company Certificate
shall forthwith be canceled. No interest will be paid or accrued on the cash
payable upon the surrender of the Company Certificates. If payment is to be
made to a Person other than the Person in whose name the Company Certificate
surrendered is registered, it shall be a condition of payment that the Company
Certificate so surrendered shall be properly endorsed or otherwise in proper
form for transfer and that the Person requesting such payment shall pay any
transfer or other taxes required by reason of the payment to a Person other
than the registered holder of the Company Certificate surrendered (or establish
to the satisfaction of Parent that such tax has been paid or is not
applicable), and the Company Certificate so surrendered shall forthwith be
canceled.
(iii) Until surrendered as contemplated by this
Section 3.6, each Company Certificate shall be deemed at all times after the
Effective Time of Merger to represent only the right to receive the Merger
Consideration in cash multiplied by the number of shares of Company Common
Stock evidenced by the Company Certificate, without any interest thereon.
11
(c) Termination of Exchange Fund. Any portion of the
Exchange Fund which remains undistributed to the Company Shareholders as of a
date which is six (6) months after the Effective Time of Merger shall be
delivered to Parent, upon demand, and any Company Shareholders who have not
theretofore complied with this Article III shall thereafter look only to Parent
for payment of their claim for the Merger Consideration.
(d) No Liability. Neither the Exchange Agent nor any
party to this Agreement shall be liable to any Company Shareholder for any
shares of Company Common Stock or cash delivered to a public official pursuant
to any abandoned property, escheat or similar law.
(e) Withholding Rights. Parent shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant to this
Agreement to any Company Shareholder such amounts as Parent is required to
deduct and withhold with respect to the making of such payment under the Code,
or any provision of state, local or foreign tax law. To the extent that
amounts are so withheld by Parent, such withheld amounts shall be treated for
all purposes of this Agreement as having been paid to the Company Shareholder
in respect of which such deduction and withholding is made by Parent.
3.7 Stock Transfer Books. At the Effective Time of Merger, the
stock transfer books of the Company shall be closed and there shall be no
further registration of transfers of shares of Company Common Stock thereafter
on the records of the Company. From and after the Effective Time of Merger,
the holders of Company Certificates representing shares outstanding immediately
prior to the Effective Time of Merger shall cease to have any rights with
respect to the shares of Company Common Stock represented thereby except as
otherwise provided in this Agreement or by law.
3.8 Shareholders' Meeting. If approval by the Company
Shareholders is required by applicable law in order to consummate the Merger,
the Company, acting through its Board of Directors, shall, in accordance with
applicable law:
(a) Duly call, give notice of, convene and hold the
Company Special Meeting as soon as reasonably practicable following the
consummation of the Offer for the purpose of considering and taking action on
this Agreement;
(b) Include in the Proxy Statement the recommendation of
the Board of Directors that the Company Shareholders vote in favor of the
approval and adoption of this Agreement and the transactions contemplated
hereby, unless the Company reasonably determines in good faith, based on the
written advice of outside legal counsel to the Company, that excluding such
recommendation is necessary in order for the Board of Directors of the Company
to comply with its fiduciary duties under applicable law; and
12
(c) Use its best efforts to (i) obtain and furnish the
information required to be included by it in the Proxy Statement, and, after
consultation with Parent, respond promptly to any comments made by the SEC with
respect to the Proxy Statement and any preliminary version thereof and cause
the Proxy Statement to be mailed to the Company Shareholders at the earliest
practicable time following the consummation of the Offer, and (ii) obtain the
necessary approvals of the Merger and this Agreement by the Company
Shareholders unless the Company reasonably determines in good faith, based on
the advice of outside legal counsel to the Company, that not taking any such
action is necessary in order for the Board of Directors of the Company to
comply with its fiduciary duties under applicable law. Parent agrees that, at
the Company Special Meeting, all of the shares of Company Common Stock acquired
pursuant to the Offer or otherwise by the Parent, Newco or any other
majority-owned subsidiary of Parent will be voted in favor of the Merger and
this Agreement.
(d) Notwithstanding the foregoing, if, following the
completion of the Offer, the Merger may be consummated under the DGCL without a
vote of the Company Shareholders by virtue of the fact that Newco shall have
acquired at least 90% of the then outstanding shares of Company Common Stock,
the parties hereto agree to take all necessary and appropriate action to cause
the Merger to become effective as soon as reasonably practicable after the
acquisition of shares of Company Common Stock pursuant to the Offer without the
holding of the Company Special Meeting.
3.9 Dissenting Shares. Notwithstanding anything in this Agreement
to the contrary, in the event that appraisal rights are available in connection
with the Merger pursuant to the DGCL, shares of Company Common Stock which are
issued and outstanding immediately prior to the Effective Time of Merger and
which are held by Company Shareholders who did not vote in favor of the Merger
and who comply with all of the relevant provisions of Section 262 of the DGCL
(the "Dissenting Shares") shall not be converted into the right to receive the
Merger Consideration, unless and until such holders shall have failed to
perfect or shall have effectively withdrawn or lost their rights to appraisal
under the DGCL. If any such holder shall have failed to perfect or shall have
effectively withdrawn or lost such right, such holder's shares of Company
Common Stock shall thereupon be deemed to have been converted into the right to
receive as of the Effective Time of Merger the Merger Consideration without any
interest thereon.
3.10 Rights Agreement; Certificate of Incorporation Provision. The
Company has taken and will continue to take all necessary action to ensure that
neither the execution or delivery of this Agreement nor the consummation of the
transactions contemplated hereby will cause any of the Rights to become subject
to an adjustment or exercisable pursuant to the terms of the Rights Agreement,
or to cause such Rights to separate from the Company Common Stock. The Company
also has taken and will continue to take all necessary action to ensure that
Article ELEVENTH.A of the Company's Certificate of Incorporation and Section
203 of the DGCL are inapplicable to this Agreement, the Offer and the Merger.
The Company shall provide evidence satisfactory to Parent that it has taken all
such actions.
13
3.11 Stock Options.
(a) From and after the date and time that the Company
executes this Agreement, the Company shall not grant any options or other
rights to acquire shares of Company Common Stock.
(b) As promptly as practicable following the execution of
this Agreement by the parties hereto, the Company shall offer to repurchase
each outstanding stock option, whether or not such stock option is then
exercisable, for a cash purchase price (subject to withholding taxes) equal to
the product of (i) the number of shares of Company Common stock under such
option and (ii) the excess of the Per Share Amount over the exercise price
applicable to such option. Each such offer to repurchase outstanding stock
options shall be subject to the prior acceptance for payment by Newco of shares
of Company Common Stock in the Offer and shall provide for the payment of the
cash purchase price (described above) for such option immediately after the
acceptance for payment by Newco of shares of Company Common Stock.
(c) The Company shall take such action as is necessary to
terminate, as of the Effective Time of Merger, the 1982 Employee Incentive
Stock Option Plan, the 1992 Employee Incentive Stock Option Plan, the Directors
and Officers Stock Option Plan, the 1996 Employee Stock Purchase and Payroll
Savings Plan and all outstanding stock options which, as of the Effective Time
of Merger, have not been exercised or repurchased by the Company as provided in
Section 3.11(b).
(d) The Company represents and warrants to Parent and
Newco that there are no outstanding stock options to acquire shares of Company
Common Stock as to which the exercise price per share exceeds the Per Share
Amount.
ARTICLE IV
OTHER AGREEMENTS
4.1 Access.
(a) Upon reasonable notice, the Company shall (and shall
cause each of its Subsidiaries to) afford to the officers, employees,
accountants, legal counsel and other representatives of Parent
("Representatives") full access, during normal business hours, to all of its
and the Subsidiaries' properties, personnel, books, contracts, commitments and
records. Such access shall also include permitting Parent and its
environmental consultants to conduct phase-one environmental assessments at the
Real Estate and facilities of the Company and the Subsidiaries and, if deemed
appropriate by Parent based on the advice of its environmental consultants,
phase-two environmental investigations and other follow-up work on the Real
Estate and at such facilities.
14
(b) The Company, Parent and Newco agree that the
provisions of the Confidentiality Agreement shall remain in full force and
effect; provided that, at the Effective Time of Merger, the Confidentiality
Agreement shall be deemed to have terminated without further action by the
parties.
4.2 Disclosure Schedule.
(a) Disclosure Schedule. Contemporaneously with the
execution and delivery of this Agreement, the Company is delivering to Parent
the Disclosure Schedule. The Disclosure Schedule is deemed to constitute an
integral part of this Agreement and to modify the representations, warranties,
covenants or agreements of the Company contained in this Agreement but only to
the extent that such representations, warranties, covenants or agreements
expressly refer to the Disclosure Schedule.
(b) Updates. Prior to the Closing Date, the Company
shall update the Disclosure Schedule by written notice to Parent regularly
according to such schedule as Parent may reasonably request, to reflect any
matters which have occurred from and after the date of this Agreement which, if
existing on the date of this Agreement, would have been required to be
described in the Disclosure Schedule. If requested by Parent, the Company
shall meet and discuss with Parent any change in the Disclosure Schedule made
by the Company which is, in the reasonable judgment of Parent, materially
adverse to the Merger, Parent or the Company. No update of the Disclosure
Schedule shall have the effect of curing any prior breach of a representation
or warranty made by the Company pursuant to this Agreement.
4.3 Duties Concerning Representations and Covenants. Each party
to this Agreement shall: (a) to the extent within its control, use best
efforts to cause all of its representations and warranties contained in this
Agreement to be true and correct in all respects at the Effective Time of
Merger with the same force and effect as if such representations and warranties
had been made on and as of the Effective Time of Merger; (b) use best efforts
to obtain any governmental or third party consents or approvals required by
this Agreement, to prevent any preliminary or permanent injunction or other
order by a court of competent jurisdiction or governmental entity relating to
the transactions contemplated by this Agreement and to cause all of the
conditions precedent set forth in Article VIII of this Agreement to be
satisfied; and (c) use best efforts to take, or cause to be taken, all action,
and to do, or cause to be done, all other things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including without limitation, the
Offer and the Merger. Each party shall promptly inform the other parties after
it becomes aware that any condition precedent set forth in Article VIII hereof
or any condition in Annex A hereto will not, or is not reasonably likely to, be
satisfied.
15
4.4 Deliveries of Information; Consultation.
(a) Deliveries. Prior to the Effective Time of Merger,
the Company shall furnish promptly to Parent: (i) a copy of each report,
schedule and other document filed by it or received by it pursuant to the
requirements of federal or state securities laws or any other applicable laws
promptly after such documents are available; (ii) the monthly consolidated
financial statements of the Company and consolidating financial statements by
unit or business segment (as prepared in accordance with its normal accounting
procedures) promptly after such financial statements are available; (iii) a
summary of any action taken by the Board of Directors, or any committee
thereof, of the Company; and (iv) all other information concerning the
business, properties and personnel of the Company as Parent may reasonably
request.
(b) Consultation. Prior to the Effective Time of Merger,
the Company shall confer and consult with representatives of Parent on a
regular and frequent basis to report on operational matters and the general
status of ongoing business operations of the Company.
(c) Franchises, etc. Prior to the Effective Time of
Merger, the Company shall use all reasonable efforts to maintain in effect all
Existing Permits. The Company shall notify Parent promptly in the event that
it becomes aware of any problem, complaint or proceeding which could result in
the termination or non-renewal of any such permit.
4.5 Acquisition Proposals.
(a) Definitions. As used in this Agreement, the
following terms shall have the meanings specified:
(i) "Acquisition" shall mean any or all of the
following, other than the Offer and the Merger: (A) a merger, share exchange,
consolidation, reorganization, combination or similar transaction involving the
Company or any Subsidiary; or (B) a purchase, exchange or tender offer for 20%
or more of the outstanding shares of the Company Common Stock or for 20% or
more of the outstanding shares of any Subsidiary; or (C) a purchase, lease or
other acquisition of all or any significant portion of the assets or any 20% or
greater equity interest (or any option, warrant or security convertible into
any such 20% or greater equity interest), of the Company or any Subsidiary; or
(D) any other extraordinary transaction involving the Company or any Subsidiary
which is voluntarily approved, consented to or undertaken by the Company or any
Subsidiary, the consummation of which could reasonably be expected to
materially impede, materially interfere with, prevent or materially delay the
Offer or the Merger.
(ii) "Acquisition Proposal" shall mean any
inquiry, request for information, expression of interest, indication of a
desire to have discussions, or the making of any proposal, by any Person
concerning an Acquisition.
16
(iii) "Special Event" shall mean the occurrence of
any of the following events: (A) the Board of Directors of the Company shall
have withdrawn or materially modified or changed its favorable recommendation
of the Offer, or shall have approved or recommended any Acquisition Proposal or
Acquisition, or any Person unrelated to Parent shall have entered into an
agreement with the Company or any Subsidiary with respect to an Acquisition;
(B) on or before December 31, 1998 any Person unrelated to Parent shall have
consummated an Acquisition; (C) Parent and Newco shall have terminated the
Offer due to the existence, on the date of this Agreement, of the condition set
forth in paragraph (b) of Annex A, or due to the existence, after the date of
this Agreement, of such condition as a result of one or more events or
circumstances arising after the date of this Agreement, if any such event or
circumstance (i) was not promptly disclosed to Parent or (ii) was caused by the
wilful and deliberate act of the Company which the Company cannot or will not
cure; or (D) Parent and Newco shall have terminated this Agreement as provided
in Section 9.1(b)(ii) of this Agreement.
(iv) "Superior Proposal" shall mean a written bona
fide, unsolicited Acquisition Proposal by any Person (other than Parent) which
the Board of Directors determines in good faith, and in the exercise of
reasonable judgment (based on the advice of its independent financial
advisers), to be more favorable to the Company and the Company Shareholders
than the Offer and the Merger from a financial point of view, which proposal is
capable of being consummated without undue delay and has the requisite
financing committed to it or, as determined in good faith, and in the exercise
of reasonable judgment (based on the advice of its independent financial
advisers), is reasonably capable of being financed by such Person.
(b) Acquisition Proposals. The Company shall not, and
shall cause all of its officers, directors, employees, agents and
representatives (including, without limitation, any investment banker,
financial adviser, attorney or accountant retained or engaged by the Company)
to not, directly or indirectly: (i) initiate, solicit or encourage any
inquiries concerning an Acquisition or an Acquisition Proposal; (ii) engage in
any negotiations concerning, or provide any confidential information or data
to, or have any discussions with, any Person relating to an Acquisition or an
Acquisition Proposal; (iii) facilitate any effort or attempt to make or
implement an Acquisition Proposal; or (iv) consummate, agree or commit to
consummate any Acquisition or Acquisition Proposal. The Company shall
immediately cease or cause to be terminated any existing activities,
discussions or negotiations with any Person with respect to any of the
foregoing activities. Notwithstanding the foregoing, the Board of Directors of
the Company may furnish information about the Company to the Person making a
Superior Proposal pursuant to a confidentiality agreement in customary form and
participate in discussions and negotiations regarding such Superior Proposal if
the Board of Directors of the Company determines in good faith, upon the
written advice of outside legal counsel, that the failure to take such action
would violate its fiduciary duties to the Company Shareholders under applicable
law. In addition, the Company will be permitted to take and disclose to the
Company Shareholders a position contemplated by Rules 14d-9 and 14e-2(a) under
the Exchange Act with respect to an Acquisition Proposal
17
by means of a tender offer. The Company shall notify Parent orally and in
writing of any Acquisition Proposal, within 24 hours from the receipt thereof,
specifying all of the material terms and conditions of such Acquisition
Proposal and identifying the Person making such Acquisition Proposal, shall
keep Parent informed of the status and all material developments and
information regarding the Acquisition Proposal, and shall give Parent five (5)
calendar days' prior notice and an opportunity to negotiate with the Company
before entering into, executing or agreeing to any Acquisition or Acquisition
Proposal.
(c) Special Fee. In order to induce Parent to enter into
this Agreement and to compensate Parent for the time and expenses incurred in
connection with this Agreement and the transactions contemplated by this
Agreement and the losses suffered by Parent from foregone opportunities, upon
the occurrence of a Special Event the Company shall pay $5,000,000 to Parent
and shall reimburse Parent for all documented out-of-pocket costs, fees and
expenses incurred by Parent and Newco in connection with the preparation and
negotiation of this Agreement and the transactions contemplated hereby;
provided, however, that in the case of a Special Event described in Section
4.5(a)(iii)(A) hereof the Company shall pay $1,000,000 to Parent and reimburse
Parent for all such documented out-of-pocket costs, fees and expenses and shall
further pay to Parent an additional $4,000,000 if a Special Event described in
Section 4.5(a)(iii)(B) thereafter occurs. Any such amount due Parent shall be
paid in immediately available funds within three (3) business days following
the occurrence of the Special Event. If the Company fails to timely pay the
amount (or any portion thereof) due Parent pursuant to this Section 4.5, the
unpaid amount (or portion thereof) shall accrue interest at the rate of ten
percent (10%) per annum until paid.
4.6 Legal Conditions to Merger. Each of the Company and Parent
will: (a) take all reasonable actions necessary to comply promptly with all
legal requirements which may be imposed on it with respect to the Offer and the
Merger (including furnishing all information required in connection with
approvals of or filings with any governmental entity as described in Sections
8.2 of this Agreement); (b) promptly cooperate with and furnish information to
each other in connection with any such requirements imposed upon any of them in
connection with the Offer and the Merger; and (c) take all reasonable actions
necessary to obtain (and cooperate with each other in obtaining) any consent,
authorization, order or approval of, or any exemption by, any governmental
entity or other public or private Person, required to be obtained or made by
the Company and Parent in connection with the Offer, the Merger or the taking
of any action contemplated thereby or by this Agreement.
4.7 Public Announcements. The Company and Parent will cooperate
with each other in the development and distribution of all news releases and
other public information disclosures with respect to this Agreement or any of
the transactions contemplated hereby and, except to the extent required by law
or any securities exchange, based on the written advice of counsel, shall not
issue any public announcement or statement prior to consultation with the other
parties.
18
4.8 Indemnification of Company Directors and Officers; Directors
and Officers Liability Insurance.
(a) The Certificate of Incorporation and Bylaws of the
Surviving Corporation shall contain provisions with respect to indemnification
substantially as set forth in the Certificate of Incorporation and Bylaws of
the Company on the date of this Agreement, which provisions shall not be
amended, repealed or otherwise modified for a period of five years after the
Effective Time of Merger in any manner that would adversely affect the rights
thereunder of individuals who at any time prior to the Effective Time of Merger
were directors or officers of the Company in respect of actions or omissions
occurring at or prior to the Effective Time of Merger, unless such modification
is required by law; provided, that in the event any claim or claims are
asserted or made within such five-year period, all rights to indemnification in
respect of any such claim or claims shall continue until disposition of any and
all such claims.
(b) Parent shall cause to be maintained in effect for the
Indemnified Parties (as defined below) for not less than five years the current
policies of directors and officers liability insurance and fiduciary liability
insurance maintained by the Company and the Subsidiaries with respect to
matters occurring at or prior to the Effective Time of Merger; provided, that
Parent may substitute therefor policies of substantially the same coverage
containing terms and conditions which are no less advantageous to the Company's
present or former directors or officers or other employees covered by such
insurance policies prior to the Effective Time of Merger (the "Indemnified
Parties"). Notwithstanding the foregoing, in no case shall Parent or the
Surviving Corporation be required to pay an annual premium for such insurance
greater than 200% of the last annual premium paid prior to the date hereof.
Should payment of the maximum amount of premium provided for in the previous
sentence not allow the purchase of an amount of such insurance equal to the
amount provided under the current policies, Parent shall purchase the maximum
amount of insurance available for 200% of the last annual premium.
4.9 Company Board.
(a) Promptly upon the purchase by Newco of a majority of
the outstanding shares of Company Common Stock pursuant to the Offer, either
(i) a majority of the members of the Board of Directors of the Company shall
resign and the remaining members of the Board of Directors of the Company shall
fill all of the Board positions so vacated with individuals designated by
Parent or (ii) the size of the Board of Directors of the Company shall be
expanded and the vacant seats filled with individuals designated by Parent so
that Parent's designees shall constitute a majority of the members of the Board
of Directors of the Company. In any case, at all times thereafter through the
Effective Time of Merger a majority of the Board of Directors of the Company
shall be individuals designated by Parent.
(b) The Company's obligation to appoint designees to the
Board of Directors of the Company shall be subject to Section 14(f) of the
Exchange Act and Rule 14f-
19
1 promulgated thereunder. The Company shall promptly take all actions required
pursuant to such Section and Rule in order to fulfill its obligations under
this Section 4.9 and shall include in the Schedule 14D-9 such information with
respect to the Company and its officers and directors as is required under
Section 14(f) and Rule 14f-1 to fulfill such obligations. Parent shall supply
to the Company and be solely responsible for any information with respect to it
and its nominees, officers, directors and affiliates required by Section 14(f)
and Rule 14f- 1.
(c) From and after the time, if any, that any of Parent's
designees are appointed to the Company's Board of Directors pursuant to this
Section 4.9, any amendment of this Agreement, any termination of this Agreement
by the Company, any extension of time for performance of any of the obligations
of Parent or Newco hereunder, or any waiver of any condition to the obligations
of the Company or any of the Company's rights hereunder may be effected only by
the action of a majority of the directors of the Company then in office who
were directors of the Company on the date hereof (or their successors
designated as set forth below), which action shall be deemed to constitute the
action of the full Board of Directors of the Company; provided, however, that
in no event may the Company, Parent or Newco amend Section 4.8 hereof;
provided further, however, that if there shall be no such directors, such
actions may be effected by majority vote of the entire Board of Directors of
the Company. Notwithstanding the foregoing, until the Effective Time of
Merger, the Company shall use reasonable efforts to retain as members of its
Board of Directors at least two directors who are directors of the Company as
of the date hereof ("Company Designees"); in the event of the resignation of
any or all of the Company Designees, the remaining Company Designees (or, if no
other Company Designees shall remain on the Board, the last resigning Company
Designee) shall have the right to appoint a successor or successors to serve as
Company Designees. Parent and Newco shall cause each such appointment to
become effective. Nothing in this Section 4.9(c) shall prohibit, or be
construed to prohibit, any of Parent's designees to the Company's Board of
Directors from voting on any matter described in Section 9.1 hereof.
4.10 Deferred Compensation Plans. On or prior to the Effective
Time of Merger, the Company shall distribute in lump sum payments all amounts
in each participant's deferred compensation account in accordance with the
Company's Deferred Compensation Plan for Executives and Deferred Compensation
Plan for Directors, and shall terminate such plans.
20
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the relevant section of the Disclosure
Schedule, the Company hereby represents and warrants to Parent and Newco that:
5.1 Organization; Business. Each of the Company and the
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation and is
qualified and in good standing as a foreign corporation in each jurisdiction
where the properties owned, leased or operated, or the business conducted, by
it requires such qualification. Each of the Company and the Subsidiaries has
all requisite power and authority (corporate or otherwise) to own its
properties and to carry on its business as it is now being conducted. The
Company has heretofore made available to Parent complete and correct copies of
its Certificate of Incorporation and Bylaws (and the articles or certificate of
incorporation and bylaws of each of the Subsidiaries). Set forth in the
Disclosure Schedule is a list of all Subsidiaries of the Company, the share
ownership of such Subsidiaries, their jurisdictions of incorporation and the
jurisdictions in which the Company and the Subsidiaries are qualified or
otherwise authorized to do business.
5.2 Capitalization. The entire authorized capital stock of the
Company consists of 10,000,000 shares of Common Stock, $.01 par value per
share, of which 5,596,083 shares are issued and outstanding, and 1,000,000
shares of Preferred Stock, $.01 par value per share, none of which is issued or
outstanding. All of the issued and outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable. As of the date of this Agreement, 318,525 shares were reserved
for issuance upon exercise of outstanding options pursuant to the Company's
1982 Employee Incentive Stock Option Plan and 1992 Employee Incentive Stock
Option Plan, 30,216 shares were reserved for issuance upon exercise of
outstanding options pursuant to the Company's 1996 Employee Stock Purchase and
Payroll Savings Plan and 30,000 shares were reserved for issuance upon exercise
of outstanding options pursuant to the Company's Directors and Officers Stock
Option Plan. The Disclosure Schedule lists all outstanding options and other
rights to acquire shares of the Company's capital stock, which lists include
the holder's name, number of shares underlying the options or other rights, the
exercise price, grant date and applicable vesting provisions. Except as set
forth on the Disclosure Schedule, all outstanding shares of capital stock of
the Subsidiaries are owned by the Company or a direct wholly-owned Subsidiary
of the Company, free and clear of all Liens. Except as set forth on the
Disclosure Schedule, there are no outstanding or authorized options, warrants,
calls, rights (including preemptive rights), commitments or any other
agreements of any character which the Company or any of the Subsidiaries is a
party to, or may be bound by, requiring it to issue, transfer, sell, purchase,
redeem or acquire any shares of capital stock or any securities or rights
convertible into, exchangeable for, or evidencing the right to subscribe for,
any shares of capital stock of the Company or any of its subsidiaries.
21
5.3 Authorization; Enforceability. The Company has all requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by unanimous vote of
the Board of Directors of the Company and no other corporate proceedings on the
part of the Company are necessary to authorize this Agreement or to consummate
the transactions contemplated hereby (other than, with respect to the Merger,
if required, the approval and adoption of this Agreement by the Company
Shareholders). The Board of Directors has unanimously determined that the
Offer and the Merger are fair to and in the best interests of the Company
Shareholders and has unanimously determined to recommend that the Company
Shareholders approve the Merger and this Agreement. This Agreement is, and the
other documents and instruments required by this Agreement to be executed and
delivered by the Company will be, when executed and delivered by the Company,
the valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, except as the enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws generally affecting the rights of creditors and
subject to general equity principles.
5.4 No Violation or Conflict. The execution, delivery and
performance of this Agreement by the Company do not and will not: (a) conflict
with or violate any law or order, writ, injunction or decree applicable to the
Company or any Subsidiary or any of their respective assets; (b) conflict with
or violate the Certificate of Incorporation or Bylaws of the Company or the
articles of incorporation or bylaws of any Subsidiary; or (c) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration or Lien) under any Contract, except for such violations,
breaches or defaults which, in the aggregate, are not be reasonably likely to
have a Material Adverse Effect. The execution, delivery and performance of
this Agreement by the Company do not and will not require any consent,
approval, authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, except (i) in connection with the
applicable requirements of the HSR Act, (ii) pursuant to the applicable
requirements of the Exchange Act, (iii) the filing of the Certificate of Merger
pursuant to the DGCL, (iv) as may be required by any applicable state
securities or "blue sky" laws or state takeover laws, (v) such filings and
consents as may be required under any environmental, health or safety law or
regulation pertaining to any notification, disclosure or required approval
triggered by the Merger or the transactions contemplated by this Agreement,
(vi) where the failure to obtain such consent, approval, authorization or
permit, or to make such filing or notification, would not be reasonably likely
to, in the aggregate, have a Material Adverse Effect or prevent, materially
delay or materially impair the ability of the Company to consummate the
transactions contemplated by this Agreement, or (vii) as set forth in the
Disclosure Schedule.
22
5.5 Title to Assets. Each of the Company and the Subsidiaries
owns good and valid title to the assets and properties which it owns or
purports to own, free and clear of any and all Liens, except the Existing
Liens.
5.6 Litigation. Except for the Existing Litigation: (a) there is
no litigation, arbitration, proceeding, governmental investigation, citation or
action of any kind pending or, to the knowledge of the Company, proposed or
threatened, against or relating to the Company or any Subsidiary, nor is there
any basis known to the Company for any such action; and (b) there are no
actions, suits or proceedings pending or, to the knowledge of the Company,
proposed or threatened, against the Company or any Subsidiary by any Person
which question the legality, validity or propriety of the transactions
contemplated by this Agreement.
5.7 Company SEC Reports and Books and Records.
(a) The Company SEC Reports:
(i) Include all reports, registration statements,
definitive proxy statements, prospectuses and amendments thereto filed or
required to be filed by the Company with the SEC since March 31, 1994; did not
or will not, as the case may be, contain as of their respective dates any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; and otherwise
complied or will comply, as the case may be, in all material respects with the
then applicable requirements of the Exchange Act and the Securities Act, as the
case may be, and the then applicable rules and regulations of the SEC
thereunder.
(b) The audited financial statements and unaudited
interim financial statements of the Company included in the Company SEC Reports
have been or will be, as the case may be, prepared in accordance with generally
accepted accounting principles applied on a consistent basis (except as may be
indicated therein or in the notes thereto) and fairly present the financial
position of the Company as of the dates thereof and the results of its
operations and changes in financial position for the periods then ended,
subject, in the case of the unaudited interim financial statements, to normal
year-end and audit adjustments and any other adjustments described therein.
5.8 Absence of Certain Changes. Except as disclosed in the
Company SEC Reports or in the Disclosure Schedule, since March 31, 1997:
(a) There has not been any change with respect to the
Company or any of the Subsidiaries which has had or is reasonably likely to
have a Material Adverse Effect;
23
(b) There has not been any damage, destruction or loss
(whether or not covered by insurance) to the properties or assets of the
Company or any of the Subsidiaries which has had or is reasonably likely to
have a Material Adverse Effect;
(c) There has not been any transaction or commitment by
the Company or any of the Subsidiaries outside the ordinary course of business,
except for the transactions contemplated by this Agreement or as set forth in
the Disclosure Schedule;
(d) The business of the Company and each of the
Subsidiaries has been carried on only in the ordinary course and in the manner
consistent with past practice;
(e) Neither the Company nor any of the Subsidiaries has
incurred any material Liens, Indebtedness or liabilities (direct, absolute,
contingent or otherwise);
(f) There has not been any increase in the compensation
(including bonuses) payable or to become payable by the Company or the
Subsidiaries to any of their respective officers, or any significant increase
in the compensation payable to other employees or agents of the Company or any
of the Subsidiaries (other than in the ordinary course of business consistent
with past practice) or any adoption or amendment of any bonus, pension,
retirement, profit sharing or stock option plan, arrangement or agreement made
to or with any of such officers or employees;
(g) There has not been any declaration or payment or
setting aside the payment of any dividend or any distribution in respect of the
capital stock of the Company or any direct or indirect redemption, purchase or
other acquisition of any such stock by the Company, except as set forth in the
Disclosure Schedule; and
(h) The Company has not made any change to its or any
Subsidiary's accounting practices or methods, and has not made any tax
elections.
5.9 Contingent and Undisclosed Liabilities. Neither the Company
nor any Subsidiary has guaranteed or become a surety nor is it otherwise
contingently liable for the obligations of any other Person. The Company has
no liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) except for those which: (a) are disclosed in the
Company SEC Reports, the Disclosure Schedule or this Agreement; or (b) arose in
the ordinary course of business since March 31, 1997 and which have not had or
could not reasonably be expected to have a Material Adverse Effect.
5.10 Existing Contracts. The Existing Contracts are the only
Contracts which constitute:
(a) A lease of, or agreement to purchase or sell, any
capital assets, Real Estate or Buildings, other than agreements in the ordinary
course of business which have not had or are not reasonably likely to have a
Material Adverse Effect;
24
(b) Any collective bargaining or union labor contracts;
(c) Any Employee Benefit Plan; or any management,
consulting, employment, personal service, agency or other contractor contracts
providing for employment or rendition of services which: (i) are in writing;
or (ii) create other than an at will employment relationship; or (iii) provide
for any profit sharing, retirement, severance or termination compensation; or
(iv) provide for any material commission, bonus, incentive, consulting or
additional compensation;
(d) Any agreements or notes evidencing any Indebtedness;
(e) Any agreement with a material customer or supplier of
the Company or any Subsidiary, other than regular invoices, sales confirmations
and purchase orders;
(f) An agreement for the storage, transportation,
treatment or disposal of any Environmental Hazardous Material;
(g) A power of attorney (revocable or irrevocable) given
to any Person by the Company or any Subsidiary that is in force;
(h) An agreement by the Company or any of the
Subsidiaries not to engage or compete in any business or in any geographical
area;
(i) An agreement restricting the right of the Company or
any Subsidiary to use or disclose any information in its possession;
(j) A partnership, joint venture or similar arrangement;
(k) Any agreement for the sale of substantially all of
the stock or assets of any Subsidiary;
(l) All licenses, royalty agreements, distributor
agreements and manufacturer's or sales representative agreements;
(m) All Contracts with any officer, director, employee or
shareholder of the Company or any Subsidiary;
(n) Any agreement or arrangement with any Affiliate; or
(o) Any other agreement which (i) involves an amount in
excess of $100,000; or (ii) any other material contract or commitment which is
not in the ordinary course of business of the Company or any Subsidiary or
which is not cancelable on 60 days or less notice to the other parties thereto.
True and complete copies of the Existing Contracts have been delivered to
Parent, and the Company and the Subsidiaries have fully
25
performed each term, covenant and condition of each Existing Contract which is
to be performed by it or them at or before the date hereof, except where the
failure to perform such Existing Contract would not have a Material Adverse
Effect. Each of the Existing Contracts is in full force and effect and
constitutes a legal and binding obligation of the Company (and the
Subsidiaries, if applicable) and, to the knowledge of the Company, constitutes
the legal and binding obligation of the other parties thereto.
5.11 Insurance Policies. All real and personal property owned or
leased by the Company or the Subsidiaries has been and is being insured
against, and the Company and the Subsidiaries maintain liability insurance
against, such insurable risks and in such amounts as are set forth in the
Insurance Policies. The Insurance Policies constitute all insurance coverage
owned by the Company and the Subsidiaries and are in full force and effect, and
neither the Company nor any Subsidiary has received notice of or is otherwise
aware of any cancellation or threat of cancellation of such insurance. Except
as described in the Disclosure Schedule, no property damage, personal injury or
liability claims have been made, or are pending or threatened, against the
Company or any Subsidiary that are not covered by insurance. Within the past
three (3) years, no insurance company has canceled any insurance (of any type)
maintained by the Company or the Subsidiaries. To the knowledge of the
Company, the cost of any insurance currently maintained by the Company or the
Subsidiaries will not increase upon renewal other than increases consistent
with the general upward trend and the cost of obtaining insurance.
5.12 No Violation of Law. Except as set forth in the Disclosure
Schedule, neither the Company nor any of the Subsidiaries (nor any of the
assets of the Company or any of the Subsidiaries) violates or conflicts in any
material respect with any law, or any decree, judgment or order.
5.13 Brokers. Except for fees to Blair pursuant to the agreement
set forth in the Disclosure Schedule, the Company has not incurred any
brokers', finders', investment banking, advisory or any similar fee in
connection with the transactions contemplated by this Agreement.
5.14 Patents, Trademarks and Like Assets. All trademarks, trade
names, registered copyrights and patents and applications therefor owned by or
used by the Company or any of the Subsidiaries in its business are listed and
briefly described in the Disclosure Schedule. No proceedings have been
instituted or are pending or, to the knowledge of the Company proposed or
threatened, which challenge the validity or the ownership of such trademarks,
trade names, copyrights, patents and applications except as set forth in the
Disclosure Schedule. The Company has no knowledge of the use or infringement
of any such trademarks, trade names, copyrights, patents and applications by
any other Person except as set forth in the Disclosure Schedule. Neither the
Company nor any of the Subsidiaries has entered into any patent or trademark
license, technology transfer, non-disclosure or non-competition agreement
relating to its business except as set forth in the Disclosure Schedule. The
Company and the Subsidiaries own (or possess adequate and enforceable license
or
26
other rights to use) all trademarks, trade names, copyrights, patents,
inventions and processes used in the conduct of their business, and no such use
or any other practice with respect to the business of the Company and the
Subsidiaries conflicts or has conflicted with the rights of others except as
set forth in the Disclosure Schedule. The Company and the Subsidiaries have
taken reasonable and necessary steps to protect their rights in all trademarks,
trade names, copyrights, patents, inventions and processes used in the conduct
of their business and, to the knowledge of the Company, no such rights have
been lost or are in jeopardy of being lost through failure to act by the
Company or any of the Subsidiaries.
5.15 Permits. The Permits listed on the Disclosure Schedule
constitute all material licenses, permits, approvals, franchises,
qualifications, permissions, agreements and other authorizations which the
Company and the Subsidiaries currently have and need for the conduct of their
respective business. Each such Permit is in full force and effect, the Company
and the Subsidiaries are in compliance with all material obligations,
restrictions or requirements thereof, and no facts or circumstances exist which
are reasonably likely to cause any of such Permits to be terminated, suspended
or further qualified or restricted.
5.16 Employee Benefit Plans.
(a) Except for the Existing Plans, neither the Company
nor any Subsidiary maintains, or is bound by, any Employee Benefit Plan. Each
Existing Plan that is an "employee benefit plan" as defined in ERISA is in
compliance in all material respects with ERISA. All of the Existing Plans
which are intended to meet the requirements of Section 401(a) of the Code have
been determined by the Internal Revenue Service to be "qualified" within the
meaning of the Code, and there are no facts which would adversely affect the
qualified status of any of the Existing Plans. Each Existing Plan has been
administered in accordance with its terms and is in material compliance with
all applicable laws. Any past Employee Benefit Plan that has been terminated
was done so in material compliance with all applicable laws, and there is no
basis for further liability or obligation of the Company or any Subsidiary
pursuant to any past Employee Benefit Plan. There is no litigation, action or
proceeding pending or, to the knowledge of the Company, threatened or proposed,
relating to any Employee Benefit Plan.
(b) There is no accumulated funding deficiency, within
the meaning of ERISA or the Code, in connection with the Existing Plans, and
all material contributions required to be made by the Company or any Subsidiary
to any Existing Plan have been made on or before their due dates and a
reasonable amount has been accrued for contributions to each Existing Plan for
its current plan year. No reportable event, as defined in ERISA, has occurred
in connection with the Existing Plans. The Existing Plans have not, nor has
any trustee or administrator of the Existing Plans, engaged in any prohibited
transaction as defined in ERISA or the Code.
27
(c) Except as set forth on the Disclosure Schedule,
neither the Company nor any Existing Plan provides or has any obligation to
provide (or contribute to the cost of) post-retirement (or post-termination of
service) welfare benefits with respect to current or former employees of the
Company or the Subsidiaries, including without limitation post-retirement
medical, dental, life insurance, severance or any similar benefit, whether
provided on an insured or self-insured basis.
(d) Except as set forth on the Disclosure Schedule,
neither the Company nor any Subsidiary is required to contribute to any
multi-employer plan, as defined in ERISA. Neither the Company nor any of the
Subsidiaries has withdrawn from a multi-employer plan in which such withdrawal
has resulted or would result in any "withdrawal liability" within the meaning
of ERISA that has not been fully paid.
(e) Each Existing Plan that is an "employee welfare
benefit plan" as defined in ERISA may be amended or terminated at any time
after the Effective Time of Merger without liability to the Company or the
Subsidiaries.
(f) With respect to each Existing Plan, the Company and
the Subsidiaries have complied with the applicable health care continuation and
notice provisions of the Consolidation Omnibus Budget Reconciliation Act of
1985 and the proposed regulations thereunder, and the applicable requirements
of the Family Leave Act of 1993 and the regulations thereunder.
(g) The Offer, the Merger and the consummation of the
transactions contemplated by this Agreement will not entitle any current or
former employee of the Company or any Subsidiary to severance benefits or any
other payment, except as set forth in the Disclosure Schedule, or accelerate
the time of payment or vesting, or increase the amount of compensation due any
such employee.
(h) Correct and complete copies of all Existing Plans,
together with recent summary plan descriptions, IRS determination letters,
Forms 5500 and actuarial reports (if applicable), have been delivered to
Parent.
5.17 Labor Matters.
(a) All collective bargaining or other labor union
contracts or agreements to which the Company or any of the Subsidiaries is a
party are listed in the Disclosure Schedule and correct and complete copies
thereof have been delivered to Parent. There is no pending or threatened labor
dispute, strike or work stoppage against the Company or any of the Subsidiaries
which may interfere with the respective business activities of the Company or
the Subsidiaries.
(b) There is no pending or threatened charge or complaint
against the Company or the Subsidiaries by or before the National Labor
Relations Board or any
28
representative thereof, or any comparable state agency or authorities. There
is no present or former employee of the Company or any Subsidiary who has any
material claim against the Company or any Subsidiary (whether under law, any
employment agreement or otherwise) on account of or for: (i) overtime pay,
other than overtime pay for the current payroll period; (ii) wages or salaries,
other than wages or salaries for the current payroll period; or (iii)
vacations, sick leave, time off or pay in lieu of vacation, sick leave or time
off, other than vacation, sick leave or time off (or pay in lieu thereof)
earned in the 12-month period immediately preceding the date of this Agreement
or incurred in the ordinary course of business and appearing as a liability on
the most recent financial statements included in the Company SEC Reports.
(c) There are no pending and unresolved claims by any
Person against the Company or any of the Subsidiaries arising out of any
statute, ordinance or regulation relating to discrimination to employees or
employee practices or occupational or safety and health standards.
5.18 Real Estate. The Real Estate: (a) constitutes all real
property and improvements leased or owned by the Company or the Subsidiaries;
(b) is not subject to any leases or tenancies of any kind; (c) is not in the
possession of any adverse possessors; (d) has direct access to and from a
public road or street; (e) is used in a manner which is consistent with
applicable law; (f) is, and has been since the date of possession thereof by
the Company or the Subsidiaries, in the peaceful possession of the Company or
the Subsidiaries; and (g) is served by all water, sewer, electrical, telephone,
drainage and other utilities required for the normal operations of the
Buildings and Real Estate. The Company will deliver to Parent prior to the
Effective Time of the Merger correct and complete copies of all title insurance
policies or commitments maintained by the Company with respect to the Real
Estate.
5.19 No Pending Acquisitions. Except for this Agreement, the
Company is not a party to or bound by any agreement, undertaking or commitment
with respect to an Acquisition.
5.20 Taxes.
(a) The Company and the Subsidiaries have timely and
properly filed all federal, state, local and foreign tax returns which were
required to be filed. The Company has paid or made adequate provision, in
reserves reflected in its financial statements included in the Company SEC
Reports in accordance with generally accepted accounting principles, for the
payment of all taxes (including interest and penalties) and withholding amounts
owed by it or assessable against it. No tax deficiencies have been proposed or
assessed against the Company or any of the Subsidiaries, and there is no basis
in fact for the assessment of any tax or penalty tax against the Company or any
of the Subsidiaries. No issue has been raised in any prior tax audit which, by
application of the same or similar principles, could reasonably be expected
upon a future tax audit to result in a proposed deficiency for any period.
29
(b) No tax return of the Company or any of the
Subsidiaries is under audit or examination by any taxing authority, and no
written or unwritten notice of such an audit or examination has been received
by the Company or any of the Subsidiaries. Each deficiency (if any) resulting
from any audit or examination relating to taxes by any taxing authority has
been paid, except for deficiencies being contested in good faith. The income
tax returns of the Company and the Subsidiaries have been closed by audit by
the Internal Revenue Service or by operation of the applicable statute of
limitations for all fiscal years through and including March 31, 1993, and the
state income, sales and use or in gross proceeds tax returns of the Company and
the Subsidiaries have been closed by audit by the State of Wisconsin or by
operation of the applicable statute of limitations for all fiscal years through
and including March 31, 1992. Neither the Company nor any of the Subsidiaries
has consented to any extension of the statute of limitations with respect to
any open tax returns. The Company has not made any elections under Section
341(f) of the Code.
(c) There are no tax Liens upon any property or assets of
the Company or any of the Subsidiaries except for Liens for current taxes not
yet due and payable.
(d) Except as set forth on the Disclosure Schedule,
neither the Company nor any of the Subsidiaries is a party to or is bound by
any tax sharing agreement, tax indemnity obligation or similar agreement,
arrangement or practice with respect to taxes. All elections with respect to
taxes affecting the Company or any of the Subsidiaries as of the date hereof
are set forth on the Disclosure Schedule.
(e) The disallowance of a deduction under Section 162(m)
of the Code for employee remuneration will not apply to any amount paid or
payable by the Company or any of the Subsidiaries under any Contract, company
stock or option plan, Employee Benefit Plan, program, arrangement or
understanding currently in effect.
(f) Any amount or any entitlement that could be received
(whether in cash or property or the vesting of property) as a result of any of
the transaction contemplated by this Agreement by any employee, officer or
director of the Company or any of the Subsidiaries who is a "disqualified
individual" (as such term is defined in proposed Treasury Regulation Section
1.280G-1) under any employment, severance or termination agreement, other
compensation arrangement or Employee Benefit Plan currently in effect would not
be characterized as an "excess parachute payment" (as such term is defined in
Section 280G(b)(1) of the Code).
(g) The Company has delivered, or will deliver as soon as
practicable after the date of this Agreement, to Parent correct and complete
copies of all tax returns and reports of the Company and the Subsidiaries filed
for all periods not barred by the applicable statute of limitations.
5.21 Information Supplied. The Schedule 14D-9 and, if required for
the consummation of the Merger under applicable law, the Proxy Statement will
comply in all
30
material respects with the applicable federal securities laws, except that no
representation is made by the Company with respect to information supplied by
Parent, Newco or any of their Affiliates in writing for inclusion in the
Schedule 14D-9 or the Proxy Statement or any amendments or supplements thereto.
The Schedule 14D-9 will not, at the time it is filed with the SEC and when it
is first published or sent or given to the Company Shareholders, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
that no representation is made by the Company with respect to information
supplied by Parent or Newco in writing for inclusion in the Schedule 14D-9.
None of the information supplied or to be supplied by the Company for inclusion
in the Offer Documents or the Proxy Statement will, at the respective times
such documents are filed with the SEC and are first published or sent or given
to the Company Shareholders, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they are
made, not misleading.
5.22 Opinion of Financial Adviser. The Company has received the
written opinion of Blair, dated the date of this Agreement, to the effect that
the consideration to be received by the Company Shareholders in the Offer and
the Merger, taken together, is fair to the Company Shareholders from a
financial point of view, and a copy of such opinion has been delivered to
Parent and shall be filed with the Schedule 14D-9.
5.23 Takeover Statutes; Certificate of Incorporation Provision.
The Board of Directors of the Company has taken all actions required to render
the provisions of Section 203 of the DGCL and Article ELEVENTH.A of the
Company's Certificate of Incorporation inapplicable to the transactions
contemplated by this Agreement, including the Offer and the Merger. Section
552.05 of the Wisconsin Statutes is not applicable to the Agreement, the Offer
or the Merger because the Company is not a target company that meets the
requirements of Section 552.05(7) of the Wisconsin Statutes, but the Company is
a "target company" within the meaning of Section 552.01(6) of the Wisconsin
Statutes.
5.24 Rights Agreement. The Board of Directors of the Company has
amended or otherwise taken action with respect to the Rights Agreement to
provide that certificates with respect to the Rights will not be distributed
and that the Rights will not become subject to an adjustment, be exercisable or
separate from the Company Common Stock as a result of the execution of this
Agreement or the commencement or consummation of the Offer or the Merger.
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5.25 Environmental Protection.
(a) As used in this Section 5.25 of this Agreement:
(i) "Environmental Claim" shall mean any and all
administrative, regulatory or judicial actions, suits, demands, demand letters,
directives, claims, Liens, investigations, proceedings or notices of
noncompliance or violation (written or oral) by any Person alleging potential
liability (including, without limitation, potential liability for enforcement,
investigatory costs, cleanup costs, governmental response costs, removal costs,
remedial costs, natural resources damages, property damages, personal injuries,
or penalties) arising out of, based on or resulting from: (A) the presence, or
release into the environment, of any Environmental Hazardous Materials at any
location, whether or not owned by the Company or any of the Subsidiaries; or
(B) circumstances forming the basis of any violation or alleged violation, of
any Environmental law; or (C) any and all claims by any Person seeking damages,
contribution, indemnification, cost, recovery, compensation or injunctive
relief resulting from the presence or Environmental Release of any
Environmental Hazardous Materials.
(ii) "Environmental Laws" shall mean all laws or
policies relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata), including, without limitation, laws and
regulations relating to Environmental Releases or threatened Environmental
Releases of Environmental Hazardous Materials, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Environmental Hazardous Materials.
(iii) "Environmental Hazardous Materials" shall
mean: (A) any petroleum or petroleum products, radioactive materials, asbestos
in any form that is or could become friable, urea formaldehyde foam insulation,
and transformers or other equipment that contain dielectric fluid containing
polychlorinated biphenyls (PCBs) and radon gas; (B) any chemicals, materials or
substances which are now defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
wastes," "restricted hazardous wastes," "toxic substances," "toxic pollutants,"
or words of similar import, under any Environmental law; and (C) any other
chemical, material, substance or waste, exposure to which is now prohibited,
limited or regulated by any governmental authority.
(iv) "Environmental Release" shall mean any
release, spill, emission, leaking, injection, deposit, disposal, discharge,
dispersal, leaching or mitigation into the atmosphere, soil, surface water,
groundwater or property.
(b) Except as set forth in the Disclosure Schedule, each
of the Company and the Subsidiaries: (i) to the knowledge of the Company, is
in compliance in all material respects with all applicable Environmental laws;
and (ii) has not received any
32
communication (written or oral), from a governmental authority, that alleges
that the Company or any of the Subsidiaries is not in compliance with
applicable Environmental laws.
(c) Except as set forth in the Disclosure Schedule, each
of the Company and the Subsidiaries has obtained all material environmental,
health and safety permits and governmental authorizations (collectively, the
"Environmental Permits") necessary for its operations, and all such permits are
in good standing and each of the Company and the Subsidiaries is in material
compliance with all terms and conditions of the Environmental Permits.
(d) Except as set forth in the Disclosure Schedule, there
is no Environmental Claim pending or, to the knowledge of the Company,
threatened against the Company or any of the Subsidiaries or against any Person
whose liability for any Environmental Claim the Company or any of the
Subsidiaries has or may have retained or assumed either contractually or by
operation of law, or against any real or personal property or operations which
the Company or any of the Subsidiaries owns, leases or manages.
(e) Except as set forth in the Disclosure Schedule, there
have been no Environmental Releases of any Environmental Hazardous Material by
the Company or any of the Subsidiaries or, to the Company's knowledge, by any
other Person on real property owned, used, leased or operated by the Company or
any of the Subsidiaries.
(f) No real property at any time owned, operated, used or
controlled by the Company or any of the Subsidiaries is currently listed on the
National Priorities List or the Comprehensive Environmental Response,
Compensation and Liability Information System, both promulgated under CERCLA,
or on any comparable state list, and neither the Company nor any Subsidiary has
received any written notice from any Person under or relating to CERCLA or any
comparable state or local law.
(g) To the knowledge of the Company, no off-site location
at which the Company or any of the Subsidiaries has disposed or arranged for
the disposal of any waste is listed on the National Priorities List or on any
comparable state list and neither the Company nor any of the Subsidiaries has
received any written notice from any Person with respect to any off-site
location, of potential or actual liability or a written request for information
from any Person under or relating to CERCLA or any comparable state or local
law.
(h) The Disclosure Schedule includes an estimate by the
Company of future costs to the Company of compliance with, and environmental
cleanup and response under, Environmental laws.
5.26 Certain Transactions. Except as set forth in the Disclosure
Schedule, neither the Company nor any of the Subsidiaries is party to any
material transaction or agreement
33
with any of its directors, officers, employees or Affiliates (or affiliates
thereof). No officer, director, employee of the Company or any Subsidiary nor
any of their affiliates, owns or has any significant ownership interest in any
corporation or other entity which is in competition with the Company or any
Subsidiary or which is engaged in a related or similar business to that of the
Company or any Subsidiary.
5.27 Product Matters. All instances of Product Liability Matters
that have occurred and for which notice has been received by the Company or any
Subsidiary within the past three (3) years are listed on the Disclosure
Schedule, including without limitation any product recall, re-work or post-sale
warning or similar action conducted with respect to the Company's products,
excluding any Product Liability Matter that did not or will not have a Material
Adverse Effect.
5.28 Representations Complete. None of the representations or
warranties made by the Company herein or in the Disclosure Schedule, in any
certificate furnished by the Company pursuant to this Agreement or in the
Company SEC Reports, when all such documents are read together in their
entirety, contains or will contain at the Effective Time of Merger any untrue
statement of a material fact, or omits or will omit at the Effective Time of
Merger to state any material fact necessary in order to the statements
contained herein or therein, in light of the circumstances under which they are
made, not misleading.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND NEWCO
Parent and Newco hereby represent and warrant to the Company that:
6.1 Organization.
(a) Parent is a corporation duly and validly organized
and existing under the laws of the State of Wisconsin. Newco is a corporation
duly and validly organized and existing under the laws of the State of
Delaware, and is a direct, wholly-owned subsidiary of Parent recently formed
for the purpose of engaging in the transactions described in the Agreement and
has no operating history.
(b) Each of Parent and Newco has full corporate power and
authority and all material franchises, permits, licenses, approvals,
authorizations, registrations, certificates, grants and orders necessary to
carry on its business as it is now conducted and to own, lease and operate its
assets and properties.
6.2 Authorization; Enforceability. The execution, delivery and
performance of this Agreement by Parent and Newco and all of the documents and
instruments required by this Agreement to be executed and delivered by Parent
and Newco are within the corporate power of Parent and Newco and have been duly
authorized by all necessary corporate
34
action by Parent and Newco. This Agreement is, and the other documents and
instruments required by this Agreement to be executed and delivered by Parent
and Newco will be, when executed and delivered by Parent and Newco, the valid
and binding obligations of Parent and Newco, enforceable against Parent and
Newco in accordance with their respective terms, except as the enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws generally affecting the rights of creditors and
subject to general equity principles.
6.3 No Violation or Conflict. The execution, delivery and
performance of this Agreement by Parent and Newco do not and will not conflict
with or violate any law, the Articles of Incorporation or Bylaws of Parent, the
Certificate of Incorporation or Bylaws of Newco or any material contract or
agreement to which Parent or Newco is a party or by which either of them is
bound.
6.4 Litigation. To the knowledge of Parent, there are no actions,
suits or proceedings against Parent or Newco, or both, by any Person which
question the validity, legality or propriety of the transactions contemplated
by this Agreement.
6.5 Financing. Parent and Newco have or will have at the time
required sufficient funds available to consummate the Offer and the Merger and
the other transactions contemplated hereby, including the payment of related
fees and expenses.
6.6 Brokers. Neither Parent nor Newco has incurred any brokers',
finders', investment banking, advisory or any similar fee in connection with
the transactions contemplated by this Agreement.
6.7 Governmental Approvals. No permission, approval,
determination, consent or waiver by, or any declaration, filing or registration
with, any governmental or regulatory authority is required in connection with
the execution, delivery and performance of this Agreement by Parent and Newco
except (i) in connection with the applicable requirements of the HSR Act; (ii)
pursuant to the applicable requirements of the Exchange Act; (iii) the filing
of the Certificate of Merger pursuant to the DGCL, (iv) as may be required by
any applicable state securities or "blue sky" laws or state takeover laws, (v)
such filings and consents as may be required under any environmental, health or
safety law or regulation pertaining to any notification, disclosure or required
approval triggered by the Merger or the transactions contemplated by this
Agreement or (vi) where the failure to obtain such consent, approval,
permission, or waiver by, or to make such declaration, filing or registration,
would not in the aggregate have a Material Adverse Effect on Parent or Newco or
materially affect their respective abilities to consummate the transactions
contemplated by this Agreement.
6.8 Offer Documents; Proxy Statement. The Offer Documents will
comply in all material respects with applicable federal securities laws, except
that no representation is made by Parent or Newco with respect to information
supplied by the Company in writing
35
for inclusion in the Offer Documents or any amendments or supplements thereto.
None of the information supplied by Parent, Newco or their Affiliates in
writing for inclusion in the Proxy Statement or any amendments or supplements
thereto will, at the respective times the Proxy Statement or any amendments or
supplements thereto are filed with the SEC, at the time the Proxy Statement or
any amendments or supplements thereto are mailed to the Company Shareholders,
or at the time of the Company Special Meeting or at the Effective Time of
Merger, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
6.9 Representations Complete. None of the representations or
warranties made by Parent herein, in any certificate furnished by Parent
pursuant to this Agreement or in the Offer Documents, when all such documents
are read together in their entirety, contains or will contain at the Effective
Time of Merger any untrue statement of a material fact, or omits or will omit
at the Effective Time of Merger to state any material fact necessary in order
to make the statements contained herein or therein, in light of the
circumstances under which they are made, not misleading.
ARTICLE VII
CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER
Except as otherwise may have been approved and agreed to by Parent,
from and after the date of this Agreement and until the Effective Time of
Merger, the Company shall, and shall cause each of the Subsidiaries to:
7.1 Carry on in Regular Course. Diligently carry on its business
in the regular course and substantially in the same manner as heretofore and
shall not make or institute any unusual or novel methods of purchase, sale,
lease, management, accounting or operation.
7.2 Use of Assets. Use, operate, maintain and repair all of its
assets and properties in a normal business manner.
7.3 Contracts. Not modify or amend any Existing Contract; not do
any act or omit to do any act, or permit any act or omission to act, which will
cause a breach or termination of any of the Contracts.
7.4 Insurance Policies. Use reasonable efforts to maintain all of
the Insurance Policies in full force and effect.
7.5 Employment Matters. Not: (a) except as described in the
Disclosure Schedule, grant any increase in the rate of pay of any of its
employees, directors or officers; (b)
36
institute or amend any Employee Benefit Plan; or (c) enter into or modify any
written employment, severance, bonus, benefit, termination or related
arrangement with any Person.
7.6 Contracts and Commitments. Not enter into any material
contract or commitment or engage in any transaction not in the usual and
ordinary course of business and consistent with its normal business practices,
and not purchase, lease, sell or dispose of any capital assets, other than
within the limits set forth in the Company's Capital Expenditures Plan approved
by the Board of Directors of the Company and delivered to Parent as a part of
the Disclosure Schedule.
7.7 Indebtedness. Not, except in the ordinary course of business,
create, incur or assume any Indebtedness in excess of $6,000,000, from which
$6,000,000 amount the repurchase of stock options (to purchase shares of
Company Common Stock) by the Company and the lump sum payments respecting the
Company's Deferred Compensation Plans (both of which are provided for in this
Agreement) shall be made, or permit the imposition of any Lien.
7.8 Preservation of Relationships. Use its best efforts to
preserve its business organization intact, to retain the services of its
present officers and key employees and to preserve the goodwill of suppliers,
customers, creditors and others having business relationships with the Company
and/or the Subsidiaries.
7.9 Compliance with Laws. Comply materially with all applicable
laws.
7.10 Taxes. Timely and properly file all federal, state, local and
foreign tax returns which are required to be filed, and pay or make provision
for the payment of all taxes owed by it.
7.11 Amendments. Not amend its Certificate or Articles of
Incorporation or Bylaws.
7.12 Dividends; Redemptions; Issuance of Stock. Not: (a) issue any
additional shares of stock of any class (except for the issuance of shares upon
exercise of options outstanding as of the date of this Agreement) or grant any
warrants, options or rights to subscribe for or acquire any additional shares
of stock of any class; (b) declare or pay any dividend or make any capital or
surplus distributions of any nature (including special dividends), except for
regularly scheduled quarterly dividends of $.11 made by the Company or
dividends by a Subsidiary to the Company; or (c) directly or indirectly redeem,
purchase or otherwise acquire, split, combine, recapitalize or reclassify any
of its capital stock or liquidate in whole or in part.
7.13 No Dispositions. Not sell, lease, license, encumber or
otherwise dispose of, or agree to sell, lease, license, encumber or otherwise
dispose of, any of its assets, except in the ordinary course of business
consistent with past practice.
37
7.14 Dissolution; Reorganization. Not adopt a plan of complete or
partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of the Company or any of the
Subsidiaries.
7.15 Litigation. Not settle or compromise any material claims,
litigation or governmental or administrative proceedings.
ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE MERGER
The respective obligations of each party to effect the Merger are
subject to the satisfaction or waiver, where permissible, at or prior to the
Effective Time of Merger of the following conditions:
8.1 Injunction. There shall not be in effect any statute, rule,
regulation, executive order, decree, ruling or injunction or other order of a
court or governmental or regulatory agency of competent jurisdiction directing
that the transactions contemplated herein not be consummated; provided,
however, that prior to invoking this condition each party shall use its best
efforts to have any such decree, ruling, injunction or order vacated.
8.2 Governmental Approvals.
(a) All governmental consents, orders and approvals
legally required for the consummation of the Merger and the transactions
contemplated hereby shall have been obtained and be in effect at the Effective
Time of Merger.
(b) All necessary requirements of the HSR Act shall have
been complied with and any "waiting periods" applicable to the Merger and to
the transactions described in this Agreement, including any secondary
acquisitions, which are imposed by the HSR Act shall have expired prior to the
Closing Date or shall have been terminated by the appropriate agency.
8.3 The Offer. Newco shall have purchased in accordance with the
terms of the Offer all shares of Company Common Stock validly tendered and not
withdrawn pursuant to the Offer.
8.4 Approval of Company Shareholders; Certificate of Merger. To
the extent required by applicable law, this Agreement, the Merger and the
transactions contemplated by this Agreement shall have received the requisite
approval and authorization of the Company Shareholders; provided that Parent,
Newco and their respective subsidiaries shall vote all of their shares of
Company Common Stock in favor of the Merger.
38
ARTICLE IX
TERMINATION; MISCELLANEOUS
9.1 Termination. This Agreement may be terminated and the Offer
and the Merger may be abandoned at any time prior to the Effective Time of
Merger as follows:
(a) By mutual written agreement duly authorized by the
Boards of Directors of Parent, Newco and the Company;
(b) By Parent and Newco if (i) the Board of Directors of
the Company shall have withdrawn or materially modified or changed its
favorable recommendation of the Offer, the Merger or this Agreement or shall
have approved or recommended any Acquisition Proposal or Acquisition; (ii) the
Company shall have breached Section 3.10 or 4.5(b) of this Agreement; (iii) on
a scheduled expiration date all conditions to Newco's obligation to accept for
payment and pay for shares of Company Common Stock pursuant to the Offer shall
have been satisfied or waived other than the Minimum Condition and Newco shall
have terminated the Offer without purchasing shares of Company Common Stock
pursuant to the Offer, provided that the satisfaction or waiver of all other
conditions shall have been publicly disclosed at least five business days
before termination of the Offer; or (iv) Newco shall have otherwise terminated
the Offer in accordance with the terms of this Agreement, including Annex A,
without purchasing shares of Company Common Stock pursuant to the Offer;
(c) By the Company if (i) the Board of Directors of the
Company shall have determined in good faith, upon the written advice of outside
legal counsel, that its fiduciary duties require the termination of this
Agreement in order to pursue a Superior Proposal; or (ii) Newco shall have (x)
failed to commence the Offer within five business days following the date of
this Agreement or (y) terminated the Offer without purchasing shares of Company
Common Stock pursuant to the Offer;
(d) By the Company if either Parent or Newco shall have
breached in any material respect any of its representations, warranties,
covenants or other agreements contained in this Agreement, which breach is
incapable of being cured or shall not have been cured within 30 days after the
giving of written notice to Parent and Newco;
(e) By Parent (including Newco) if the Company shall have
breached or failed to perform any of its obligations, covenants or agreements
set forth in this Agreement (other than a breach by the Company of Section 3.10
or 4.5(b) hereof, in which case Parent and Newco shall have the right to
terminate this Agreement as provided in Section 9.1(b)(ii) above), or if the
Company shall have breached any of its representations or warranties set forth
in this Agreement (disregarding all qualifications and exceptions contained
therein relating to knowledge, materiality or Material Adverse Effect), and all
such breaches and failures to perform, taken in the aggregate, shall have or
shall be reasonably likely to have a Material Adverse Effect; or
39
(f) By either Parent (including Newco) or the Company (i)
if Newco shall not have purchased shares of Company Common Stock pursuant to
the Offer on or before February 28, 1998 (provided, however, that the right to
terminate this Agreement under this Section 9.1(f) shall not be available to
any party whose action or failure to act has been the cause of or resulted in
such failure to purchase); or (ii) if any court of competent jurisdiction or
any other governmental body or regulatory authority shall have issued an order,
decree or ruling or taken any other action permanently restraining, enjoining
or otherwise prohibiting the Offer or the Merger and such order, decree, ruling
or other action shall have become final and non-appealable.
9.2 Rights on Termination; Waiver. If this Agreement is
terminated pursuant to Section 9.1 of this Agreement, all further obligations
of the parties under or pursuant to this Agreement shall terminate without
further liability of any party to the others, provided that: (a) the
obligations of Parent and Newco contained in Sections 4.1(b), 4.7, 9.2 and 9.5
of this Agreement shall survive any such termination; (b) the obligations of
the Company contained in Sections 4.5(c), 4.7, 9.2 and 9.5 of this Agreement
shall survive any such termination; and (c) each party to this Agreement shall
retain any and all remedies which it may have for breach of contract provided
by law.
9.3 Survival of Representations, Warranties and Covenants. All
representations and warranties of the parties contained in this Agreement or
made pursuant to this Agreement shall terminate and be of no further force and
effect beyond the Effective Time of Merger. This Section 9.3 shall not limit
any covenant or agreement of the parties hereto which by its terms contemplates
performance after the Effective Time of Merger or the purchase of shares of
Company Common Stock by Newco pursuant to the Offer.
9.4 Entire Agreement; Amendment. This Agreement and the documents
referred to in this Agreement and required to be delivered pursuant to this
Agreement constitute the entire agreement among the parties pertaining to the
subject matter of this Agreement, and supersede all prior and contemporaneous
agreements, understandings, negotiations and discussions of the parties,
whether oral or written, and there are no warranties, representations or other
agreements between the parties in connection with the subject matter of this
Agreement, except as specifically set forth in this Agreement. This Agreement
may be amended by the parties hereto, by action taken or authorized by their
respective boards of directors, at any time before or after approval of the
terms of this Agreement by the Company Shareholders (if required by law), but,
after any such approval, no amendment shall be made which by law requires
further approval by such shareholders without such further approval. No
amendment, supplement, modification, waiver or termination of this Agreement
shall be binding unless executed in writing by the parties to be bound thereby.
No waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision of this Agreement, whether or not
similar, nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
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9.5 Expenses. Except as provided in Section 4.5(c) hereof, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated by this Agreement shall be paid by the party
incurring such expenses, whether or not the Offer and the Merger are
consummated.
9.6 Governing Law. This Agreement shall be construed and
interpreted according to the laws of the State of Wisconsin without regard to
applicable conflicts of law, except to the extent the DGCL shall be held to
govern the terms of the Merger.
9.7 Assignment. Prior to the Effective Time of Merger, this
Agreement shall not be assigned by the Company.
9.8 Notices. All communications or notices required or permitted
by this Agreement shall be in writing and shall be deemed to have been given at
the earlier of the date when actually delivered to an officer of a party by
personal delivery or telephonic facsimile transmission or when deposited in the
United States mail, certified or registered mail, postage prepaid, return
receipt requested, and addressed as follows, unless and until any of such
parties notifies the others in accordance with this Section of a change of
address:
If to Parent or Newco: Applied Power Inc.
Attention: Richard G. Sim
13000 West Silver Spring Drive
Butler, WI 53007-1093
Fax No.: 414-783-9790
with a copy to: Quarles & Brady
Attention: Anthony W. Asmuth III
411 East Wisconsin Avenue
Milwaukee, WI 53202
Fax No.: 414-271-3552
If to the Company: Versa Technologies, Inc.
Attention: James E. Mohrhauser
9301 Washington Avenue
Racine, WI 53406-5012
Fax No.: 414-886-4614
with a copy to: Schiff Hardin & Waite
Attention: Lawrence Block
7200 Sears Tower
Chicago, IL 60606
Fax No.: 312-258-5600
41
9.9 Counterparts; Headings. This Agreement may be executed in
several counterparts, each of which shall be deemed an original, but such
counterparts shall together constitute but one and the same Agreement. The
Table of Contents and Article and Section headings in this Agreement are
inserted for convenience of reference only and shall not constitute a part
hereof.
9.10 Interpretation. Unless the context requires otherwise, all
words used in this Agreement in the singular number shall extend to and include
the plural, all words in the plural number shall extend to and include the
singular, and all words in any gender shall extend to and include all genders.
9.11 Severability. If any provision, clause, or part of this
Agreement, or the application thereof under certain circumstances, is held
invalid, the remainder of this Agreement, or the application of such provision,
clause or part under other circumstances, shall not be affected thereby unless
such invalidity materially impairs the ability of the parties to consummate the
transactions contemplated by this Agreement.
9.12 Specific Performance. The parties agree that the assets and
business of the Company as a going concern constitute unique property. There
is no adequate remedy at law for the damage which any party might sustain for
failure of the other parties to consummate the Offer and the Merger and the
transactions contemplated by this Agreement, and accordingly, each party shall
be entitled, at its option, to the remedy of specific performance to enforce
the Offer and the Merger pursuant to this Agreement.
9.13 No Reliance. Except for the parties to this Agreement and any
permitted assignees, no Person is entitled to rely on any of the
representations, warranties and agreements of the parties contained in this
Agreement, and the parties assume no liability to any Person because of any
reliance on the representations, warranties and agreements of the parties
contained in this Agreement.
9.14 Disclosure Schedule. If a document or matter is disclosed in
the Disclosure Schedule, it shall be deemed to be disclosed for all purposes of
this Agreement without the necessity of specific repetition or cross-reference.
All capitalized terms used in the Disclosure Schedule shall have the
definitions specified in this Agreement.
[the remainder of this page is intentionally blank]
42
IN WITNESS WHEREOF, the parties have caused this Agreement and Plan of
Merger to be duly executed as of the date first above written.
APPLIED POWER INC.
By: /s/ Richard G. Sim
-----------------------------------
President and Chief
Executive Officer
TVPA CORP.
By: /s/ Richard G. Sim
-----------------------------------
President
VERSA TECHNOLOGIES, INC.
By: /s/ James E. Mohrhauser
-----------------------------------
Chairman and Chief Executive
Officer
43
ANNEX A
CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision
of the Offer or the Agreement and provided that Newco shall not be obligated to
accept for payment any shares of Company Common Stock until (i) expiration of
all applicable waiting periods under the HSR Act and (ii) the Minimum Condition
shall have been satisfied, Newco 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 Newco's obligation to pay for or
return tendered shares after the termination or withdrawal of the Offer), pay
for, or may delay the acceptance for payment of or payment for, any shares of
Company Common Stock tendered pursuant to the Offer, or may, subject to the
terms of the Agreement, terminate or amend the Offer if at any time on or after
the date of the Agreement, and before the time of payment for any of such
shares, any of the following conditions exists:
(a) There shall have occurred and be continuing as of the
then scheduled expiration date of the Offer (i) any general suspension of, or
limitation on prices for, trading in securities on the New York Stock Exchange
or the Nasdaq National Market, (ii) a declaration of a banking moratorium or
any suspension of payments in respect of banks in the United States, (iii) a
commencement or escalation of a war, armed hostilities or other international
or national calamity directly involving the United States, (iv) any material
limitation (whether or not mandatory) by any governmental or regulatory
authority, agency or commission, domestic or foreign ("Governmental Entity"),
on the extension of credit by banks or other lending institutions in the United
States, (v) or in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof;
(b) The Company shall have breached or failed to perform
any of its obligations, covenants or agreements under the Agreement, or any
representation or warranty of the Company as set forth in the Agreement
(disregarding all qualifications and exceptions contained therein relating to
knowledge, materiality or Material Adverse Effect) shall not have been true and
correct as of the date of the Agreement and as of the then scheduled expiration
date of the Offer as though made on and as of the then scheduled expiration
date of the Offer, provided that all such breaches, failures to perform and
untrue representations or warranties, taken in the aggregate, shall have or
shall be reasonably likely to have a Material Adverse Effect;
(c) Any court or Governmental Entity shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order which is in effect and which
(i) restricts (other than restrictions which in the aggregate do not have a
Material Adverse Effect on Parent, Newco or the Company or which do not
materially restrict the ability of Parent and Newco to consummate the Offer and
the Merger as originally contemplated by Parent and Newco), prevents or
prohibits consummation of the Offer or the Merger, (ii) prohibits or limits
(other than limits
A-1
which in the aggregate do not have a Material Adverse Effect on Parent, Newco
or the Company or which do not materially limit the ability of Parent to own
and operate all of the business and assets of Parent and the Company after the
consummation of the transactions contemplated by the Offer and the Agreement)
the ownership or operation by the Company, Parent or any of their subsidiaries
of all or any material portion of the business or assets of the Company and the
Subsidiaries taken as a whole, or as a result of the Offer or Merger compels
the Company, Parent or any of their subsidiaries to dispose of or hold separate
all or any material portion of their respective business or assets, (iii)
imposes limitations on the ability of Parent or any subsidiary of Parent to
exercise effectively full rights of ownership of any shares of Company Common
Stock, including, without limitation, the right to vote any shares of Company
Common Stock acquired by Newco pursuant to the Offer or otherwise on all
matters properly presented to the Company Shareholders including, without
limitation, the approval and adoption of the Agreement and the transactions
contemplated thereby, (iv) requires divestiture by Parent or any Affiliate of
Parent of any shares of Company Common Stock, or (v) otherwise materially
adversely affects the financial condition, business or results of operations of
the Company and the Subsidiaries taken as a whole;
(d) All consents, registrations, approvals, permits,
authorizations, notices, reports or other filings required to be obtained or
made by the Company, Parent or Newco with or from any governmental entity in
connection with the execution and delivery of the Agreement, the Offer and the
consummation of the transactions contemplated by this Agreement shall not have
been made or obtained as of the then scheduled expiration date of the Offer
(other than the failure to receive any consent, registration, approval, permit
or authorization or to make any notice, report or other filing that, in the
aggregate, is not reasonably likely to have a Material Adverse Effect on
Parent, Newco or the Company, or would not prevent the consummation of the
Offer or the Merger);
(e) There shall have occurred any one or more changes or
developments in the financial condition, properties, business or results of
operations of the Company or any of the Subsidiaries which, in the aggregate,
has or is reasonably likely to have a Material Adverse Effect;
(f) The Board of Directors of the Company (or any
committee thereof) shall have withdrawn or amended, or modified in a manner
adverse to Parent and Newco its recommendation of the Offer or the Merger, or
shall have endorsed, approved or recommended any other Acquisition Proposal, or
the Company shall have entered into any agreement with respect to an
Acquisition, or the Board of Directors of the Company (or any committee
thereof) shall have resolved to take any of the foregoing actions; or
A-2
(g) The Agreement shall have been terminated by the
Company, or by Parent or Newco, in accordance with its terms, or Parent or
Newco shall have reached an agreement or understanding in writing with the
Company providing for termination or amendment of the Offer or delay in payment
for the shares of Company Common Stock;
which, in the reasonable judgment of Parent and Newco, in any such case, and
regardless of the circumstances (including any action or inaction by Parent or
Newco) giving rise to any such conditions, make it inadvisable to proceed with
the Offer and/or with such acceptance for payment of or payment for shares of
Company Common Stock.
The foregoing conditions are for the sole benefit of Parent and Newco
and may be asserted by Parent or Newco regardless of the circumstances
(including any action or inaction by Parent or Newco) giving rise to such
condition or may be waived by Parent or Newco, in whole or in part at any time
and from time to time in its sole discretion. The failure by Parent or Newco
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.
A-3