OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF CLASS A COMMON STOCK
OF
HUNGRY MINDS, INC.
AT
$6.09 NET PER SHARE
BY
HMI ACQUISITION CORP.
A DIRECT OR INDIRECT WHOLLY OWNED SUBSIDIARY OF
XXXX XXXXX & SONS, INC.
--------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, SEPTEMBER 17, 2001,
UNLESS THE OFFER IS EXTENDED.
--------------------------------------------------------------------------------
THIS OFFER IS BEING MADE IN CONNECTION WITH THE AGREEMENT AND PLAN OF MERGER,
DATED AS OF AUGUST 12, 2001, AMONG XXXX XXXXX & SONS, INC. ("WILEY"), HMI
ACQUISITION CORP. AND HUNGRY MINDS, INC. (THE "COMPANY").
THE OFFER IS BEING MADE FOR ALL OUTSTANDING SHARES OF CLASS A COMMON STOCK OF
THE COMPANY AND IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE OF THE OFFER
THAT NUMBER OF SHARES WHICH, TOGETHER WITH ANY OTHER SHARES THEN OWNED BY WILEY,
HMI ACQUISITION CORP. OR ANY AFFILIATE OF WILEY OR HMI ACQUISITION CORP. ON THE
DATE SUCH SHARES ARE PURCHASED, CONSTITUTES AT LEAST A MAJORITY OF THE TOTAL
OUTSTANDING SHARES OF THE COMPANY, CALCULATED ON A FULLY DILUTED BASIS. THE
OFFER IS ALSO SUBJECT TO THE OTHER CONDITIONS SET FORTH IN THIS OFFER TO
PURCHASE. SEE SECTION 15.
----------
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS DETERMINED THAT THE MERGER
AGREEMENT, THE OFFER, THE MERGER (EACH AS DEFINED HEREIN) AND THE OTHER
TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT ARE ADVISABLE AND FAIR TO AND
IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS; UNANIMOUSLY HAS
APPROVED OF AND ADOPTED THE MERGER AGREEMENT; AND UNANIMOUSLY RECOMMENDS THAT
THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER, TENDER THEIR SHARES OF COMPANY
COMMON STOCK PURSUANT TO THE OFFER AND APPROVE AND ADOPT THE MERGER AGREEMENT
AND THE MERGER.
IMPORTANT
If you wish to tender all or any portion of your Shares, you should either (1)
complete and sign the Letter of Transmittal in accordance with the instructions
in the Letter of Transmittal, have your signature guaranteed if required by
Instruction 1 to the Letter of Transmittal, mail or deliver the Letter of
Transmittal and any other required documents to EquiServe Trust Company, N.A.
(the "Depositary") and either (a) deliver the certificates for such Shares to
the Depositary along with the Letter of Transmittal or (b) deliver such Shares
pursuant to the procedure for book-entry transfer as set forth in Section 3, in
each case prior to the expiration of the Offer, or (2) request your broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for you. If you have Shares registered in the name of a broker,
dealer, commercial bank, trust company or other nominee, you must contact it if
you desire to tender your Shares.
If you wish to tender Shares and your certificates for the Shares are not
immediately available or 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 (as defined herein), your
tender may be effected by following the procedure 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, the Notice of Guaranteed Delivery and other related materials may
be obtained from the Information Agent or from brokers, dealers, commercial
banks, trust companies or other nominees.
August 20, 2001
TABLE OF CONTENTS
PAGE
SUMMARY TERM SHEET ....................................................... i
INTRODUCTION ............................................................. 1
THE OFFER ................................................................ 4
1. Terms of the Offer; Expiration Date ............................... 4
2. Acceptance for Payment and Payment ................................ 6
3. Procedures for Accepting the Offer and Tendering Shares ........... 7
4. Withdrawal Rights ................................................. 10
5. Certain Federal Income Tax Consequences ........................... 10
6. Price Range of the Shares ......................................... 11
7. Effect of the Offer on the Market for the Shares; Nasdaq Listing;
Exchange Act Registration ....................................... 11
8. Information Concerning the Company ................................ 12
9. Information Concerning Purchaser and Wiley ........................ 13
10. Background of the Offer; Contacts with the Company ................ 14
11. Purpose of the Offer; Plans for the Company ....................... 15
12. Description of Merger Agreement, Voting and Tender Agreement
and Confidentiality Agreement; Appraisal Rights and
Related Information ............................................. 16
13. Source and Amount of Funds ........................................ 31
14. Dividends and Distributions ....................................... 31
15. Certain Conditions of the Offer ................................... 31
16. Legal Matters; Required Regulatory Approvals ...................... 33
17. Fees and Expenses ................................................. 34
18. Miscellaneous ..................................................... 35
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF WILEY ............................. I-1
SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER ......................... II-1
SCHEDULE III
DIRECTORS AND EXECUTIVE OFFICERS OF HMI INVESTMENT, INC ............... III-1
SCHEDULE IV
DIRECTORS AND EXECUTIVE OFFICERS OF HMI INVESTMENT, LIMITED ........... IV-1
SUMMARY TERM SHEET
HMI ACQUISITION CORP. IS OFFERING TO PURCHASE ALL OF THE OUTSTANDING SHARES
OF CLASS A COMMON STOCK OF HUNGRY MINDS, INC. ("HUNGRY MINDS") FOR $6.09 PER
SHARE IN CASH. THE FOLLOWING ARE ANSWERS TO SOME OF THE QUESTIONS YOU, AS A
STOCKHOLDER OF HUNGRY MINDS, MAY HAVE ABOUT THE OFFER. WE URGE YOU TO READ THE
REMAINDER OF THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CAREFULLY
BECAUSE THE INFORMATION IN THIS SUMMARY IS NOT COMPLETE. ADDITIONAL IMPORTANT
INFORMATION IS CONTAINED IN THE REMAINDER OF THIS OFFER TO PURCHASE AND THE
LETTER OF TRANSMITTAL.
Q. WHO IS OFFERING TO BUY MY SHARES?
o Our name is HMI Acquisition Corp. We are a Delaware corporation formed
for the purpose of making this tender offer. We are a direct or indirect
wholly owned subsidiary of Xxxx Xxxxx & Sons, Inc., a New York
corporation ("Wiley") and a developer, publisher and seller of products
in print and electronic media for educational, professional, scientific,
technical, medical and consumer markets worldwide. See "Introduction"
and Section 9.
Q. WHAT IS HMI ACQUISITION CORP. SEEKING TO PURCHASE, AT WHAT PRICE, AND DO I
HAVE TO PAY ANY BROKERAGE OR SIMILAR FEES TO TENDER?
o We are offering to purchase all of the outstanding shares of Class A
Common Stock of Hungry Minds. We are offering to pay $6.09 per share,
net to you, in cash and without interest. If you are the record owner of
your shares and you tender your shares to us in the offer, you will not
have to pay any brokerage or similar fees. However, if you own your
shares through a broker or other nominee, your broker or nominee may
charge you a fee to tender. You should consult your broker or nominee to
determine whether any charges will apply. You should also consult your
tax advisor regarding the particular tax consequences to you of
tendering your shares. See "Introduction" and Sections 1 and 5.
Q. DO YOU HAVE THE FINANCIAL RESOURCES TO PAY FOR THE SHARES?
o Wiley, our parent company, will provide us with sufficient funds to
purchase all shares tendered in the offer and any shares to be acquired
in the merger that is expected to follow the successful completion of
the offer. The offer is not conditioned on any financing arrangements.
See Section 13.
Q. IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
o We do not think our financial condition is relevant to your decision
whether to tender shares and accept the offer because:
o the offer is being made for all outstanding shares of Class A
Common Stock solely for cash,
o our obligation to purchase your shares in the offer is not
subject to any financing condition and
o if we complete the offer, we will acquire all remaining shares
for the same cash price in the merger. See "Introduction" and
Sections 1, 11 and 12.
Q. HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
o You will have until at least 12:00 midnight, New York City time, on
Monday, September 17, 2001 to tender your shares in the offer. Under
certain circumstances, we may extend the offer. If the offer is
extended, we will issue a press release announcing the extension on the
first business morning following the date the offer was scheduled to
expire. See Section 1.
i
Q. WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
o The most significant conditions to the offer are that:
o Hungry Minds stockholders validly tender and do not properly
withdraw before the expiration date of the offer that number of
shares which, together with any other shares then owned by Wiley,
HMI Acquisition Corp. or any affiliate of Wiley or HMI Acquisition
Corp. on the date such shares are purchased, constitutes at least a
majority of the total outstanding shares of the Company, calculated
on a fully diluted basis. International Data Group, Inc. and its
wholly owned subsidiary, IDG Enterprises, Inc. (together, we will
refer to them as "IDG"), which own approximately 75% of the
outstanding shares, have agreed with us that IDG will tender its
shares in the offer and, if it does so, this condition will be met
whether or not other stockholders tender their shares;
o no material adverse effect (as defined in the Agreement and Plan of
Merger) on Hungry Minds has occurred since August 12, 2001;
o the applicable waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, has expired or been
terminated; and
o the consolidated funded debt of Hungry Minds and its subsidiaries
as of the expiration date of the Offer is no greater than
$92,500,000.
The offer is also subject to a number of other conditions. See Section
15.
Q. HOW DO I TENDER MY SHARES?
o To tender your shares, you must completely fill out the enclosed letter
of transmittal and deliver it, along with your share certificates, to
the depositary prior to the expiration of the offer. If your shares are
held in street name (i.e., through a broker, dealer or other nominee),
they can be tendered by your nominee through The Depository Trust
Company. If you cannot deliver all necessary documents to The Depository
Trust Company in time, you might be able to complete and deliver to the
depositary, in lieu of the missing documents, the enclosed notice of
guaranteed delivery, provided you are able to fully comply with its
terms. See Section 3.
Q. IF I ACCEPT THE OFFER, WHEN WILL I GET PAID?
o Provided the conditions to the offer are satisfied and we complete the
offer and accept your shares for payment, you will receive a check equal
to the number of shares you tendered multiplied by $6.09, subject to any
required withholding for taxes as promptly as practicable following the
expiration of the offer. See Section 2.
Q. CAN I WITHDRAW MY PREVIOUSLY TENDERED SHARES?
o You may withdraw some or all of your tendered shares by delivering
written or facsimile notice to the depositary prior to the expiration of
the offer. Further, if we have not agreed to accept your shares for
payment by October 18, 2001 (60 days after the commencement date of the
offer), you may withdraw them at any time after that date, unless they
previously have been accepted for payment. Once shares are accepted for
payment, they cannot be withdrawn. Your right to withdraw will not apply
to any subsequent offering period, if one is provided. See Section 4.
Q. HAVE ANY STOCKHOLDERS AGREED TO TENDER THEIR SHARES?
o Yes. IDG, which owns approximately 75% of Hungry Minds' outstanding
shares as of August 12, 2001, has agreed to support the transaction and
tender its Hungry Minds shares pursuant to our offer. IDG owns a
ii
sufficient number of shares so that the tender of its shares will
satisfy the minimum condition contained in the offer.
Q. WHAT DOES THE BOARD OF DIRECTORS OF HUNGRY MINDS THINK OF THIS OFFER?
o We are making this offer pursuant to a merger agreement among us, Wiley
and Hungry Minds. The Hungry Minds board of directors has unanimously
approved the merger agreement, and the transactions contemplated by the
merger agreement, including the offer and the merger. The board of
directors of Hungry Minds has unanimously determined that the offer and
the merger are advisable, fair to, and in the best interests of, Hungry
Minds' stockholders.
The Hungry Minds board of directors unanimously recommends that
stockholders of Hungry Minds accept the offer and tender all of their
shares. See "Introduction."
Q. WHAT WILL HAPPEN TO HUNGRY MINDS?
o If the offer is consummated, HMI Acquisition Corp. thereafter will be
merged with and into Hungry Minds, with Hungry Minds surviving as a
direct or indirect wholly owned subsidiary of Wiley. See "Introduction"
and Section 11.
Q. IF I DO NOT TENDER BUT THE TENDER OFFER IS SUCCESSFUL, WHAT WILL HAPPEN TO
MY SHARES?
o If the merger takes place, stockholders who do not tender in the offer
will receive in the merger the same amount of cash per share that they
would have received had they tendered their shares in the offer, subject
to their right to pursue their appraisal rights under Delaware law.
Therefore, if the merger takes place and you do not perfect your
appraisal rights, the only difference to you between tendering your
shares and not tendering your shares is that you will be paid earlier if
you tender your shares. However, if for any reason the offer is
completed and the merger does not take place, the number of stockholders
and the number of shares of Hungry Minds that are still held by persons
other than Wiley, HMI Acquisition Corp. or their affiliates may be so
small that there may no longer be an active public trading market (or,
possibly, any public trading market) for the shares. Also, Hungry Minds'
shares may no longer be eligible to be traded on the Nasdaq National
Market or any other securities exchange, and Hungry Minds may, if
otherwise permitted to do so, cease making filings with the Securities
and Exchange Commission (the "SEC") or otherwise cease being required to
comply with the SEC's rules relating to publicly held companies. See
Sections 7 and 12.
Q. ARE APPRAISAL RIGHTS AVAILABLE IN EITHER THE OFFER OR THE MERGER?
o Appraisal rights are not available in the offer. However, if you choose
not to tender, and the offer is consummated, appraisal rights will be
available in the merger of HMI Acquisition Corp. and Hungry Minds. If
you choose to exercise your appraisal rights, and you comply with the
applicable legal requirements, you will be entitled to payment for your
shares based on an independent appraisal of the fair value of your
shares. This fair value may be more or less than $6.09 per share. See
Section 12.
Q. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER AND THE MERGER?
o The receipt of cash by you in exchange for your shares pursuant to the
offer, the merger or upon exercise of appraisal rights is a taxable
transaction for federal income tax purposes and may also be a taxable
transaction under applicable state, local or foreign tax laws. In
general, you will recognize capital gain or loss equal to the difference
between your adjusted tax basis in the shares you tender and the amount
of cash
iii
you receive for those shares. You should consult your tax advisor about
the particular tax consequences of tendering your shares. See Section 5.
Q. WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
o On August 10, 2001, the last Nasdaq National Market trading day before
Wiley and Hungry Minds announced that they had signed the merger
agreement, the last sale price of Hungry Minds stock reported on the
Nasdaq National Market was $6.90 per share. On August 16, 2001, the next
to last trading day before we commenced our tender offer, the last sale
price of Hungry Minds stock on the Nasdaq National Market was $6.04 per
share. We advise you to obtain a recent quotation for Hungry Minds stock
before deciding whether or not to tender your shares. See Section 6.
Q. WHO MAY I CALL WITH QUESTIONS?
o You may call X.X. Xxxx & Co., Inc. at 0-000-000-0000 with any questions
you may have. X.X. Xxxx & Co., Inc. is acting as the Information Agent
for our tender offer. See the back cover of this Offer to Purchase.
iv
To: All Holders of Shares of Class A Common Stock of
Hungry Minds, Inc.:
INTRODUCTION
HMI Acquisition Corp., a Delaware corporation ("Purchaser") and a direct or
indirect wholly owned subsidiary of Xxxx Xxxxx & Sons, Inc., a New York
corporation ("Wiley"), is offering to purchase all outstanding shares of Class A
Common Stock, par value $0.001 per share (the "Shares"), of Hungry Minds, Inc.,
a Delaware corporation ("Hungry Minds" or the "Company"), at a purchase price of
$6.09 per Share, net to the seller in cash, without interest thereon (the "Offer
Price"), on the terms and subject to the conditions set forth in this Offer to
Purchase and in the related Letter of Transmittal (which, as amended or
supplemented from time to time, collectively constitute the "Offer").
Tendering stockholders whose Shares are registered in their own names and
who tender directly to the Depositary (as defined below) will not be obligated
to pay brokerage fees or commissions or, except as set forth in Instruction 6 of
the Letter of Transmittal, stock transfer taxes on the purchase of Shares in the
Offer. However, if you do not complete and sign the Substitute Form W-9 that is
included in the Letter of Transmittal, you may be subject to a required backup
U.S. federal income tax withholding at a rate equal to the fourth lowest
ordinary income tax rate applicable to unmarried individuals (currently at a
rate of 30.5%, effective until December 31, 2001). Stockholders who hold their
Shares through a bank or broker should check with such institution as to whether
they charge any service fees. We will pay all fees and expenses of EquiServe
Trust Company, N.A. (the "Depositary"), and X.X. Xxxx & Co., Inc. (the
"Information Agent"), incurred in connection with the Offer. See Section 5.
We are making the Offer pursuant to the Agreement and Plan of Merger, dated
as of August 12, 2001 (the "Merger Agreement"), among Wiley, Purchaser and the
Company. Following the completion of the Offer and the satisfaction or waiver of
certain conditions, Purchaser will merge with and into the Company (the
"Merger"), and the Company will be the surviving corporation in the Merger. In
the Merger, each outstanding Share (other than Shares held by (i) the Company or
any of its subsidiaries, (ii) Wiley, Purchaser or any of Wiley's direct or
indirect wholly owned subsidiaries and (iii) stockholders who are entitled to
and have properly exercised their appraisal rights under the Delaware General
Corporation Law, as amended (the "DGCL")) will be converted into the right to
receive the Offer Price, or any higher price per Share paid in the Offer,
without interest.
Concurrently with the execution of the Merger Agreement, Wiley and
Purchaser entered into a Voting and Tender Agreement, dated as of August 12,
2001 (the "Voting and Tender Agreement"), with International Data Group, Inc.
and its wholly owned subsidiary, IDG Enterprises, Inc. (together, we will refer
to them as "IDG"). IDG has voting and dispositive control over 11,166,949
Shares. As of August 16, 2001, these Shares represent approximately 75% of the
outstanding Shares and approximately 75% of the total voting power of the
outstanding Shares. Pursuant to the Voting and Tender Agreement, IDG has agreed,
among other things, to tender all its Shares pursuant to the Offer and has
agreed to vote its Shares in favor of the Merger. IDG owns a sufficient number
of Shares so that the tender of its Shares in the Offer as contemplated by the
Voting and Tender Agreement will satisfy the Minimum Condition (as defined
below).
The Merger Agreement and the Voting and Tender Agreement are more fully
described in Section 12.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "COMPANY BOARD") HAS UNANIMOUSLY
APPROVED THE MERGER AGREEMENT, THE OFFER, THE MERGER AND THE OTHER TRANSACTIONS
CONTEMPLATED BY THE MERGER AGREEMENT; HAS UNANIMOUSLY DETERMINED THAT THE TERMS
OF THE OFFER AND THE MERGER ARE ADVISABLE, FAIR TO, AND IN THE BEST INTERESTS
OF, THE COMPANY'S STOCKHOLDERS; AND UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
1
XXXXXX XXXXXXX & CO. INCORPORATED ("XXXXXX XXXXXXX"), THE COMPANY'S
FINANCIAL ADVISOR, HAS DELIVERED TO THE COMPANY BOARD ITS WRITTEN OPINION DATED
THE DATE OF THE MERGER AGREEMENT THAT AS OF SUCH DATE AND BASED ON AND SUBJECT
TO CERTAIN MATTERS STATED IN THE OPINION, THE $6.09 PER SHARE CASH CONSIDERATION
TO BE RECEIVED BY THE HOLDERS OF CLASS A COMMON STOCK OF THE COMPANY PURSUANT TO
THE MERGER AGREEMENT WAS FAIR, FROM A FINANCIAL POINT OF VIEW, TO SUCH HOLDERS.
A COPY OF THE OPINION OF XXXXXX XXXXXXX IS ATTACHED TO THE COMPANY'S
SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 (THE "SCHEDULE 14D-9"),
WHICH HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE
"COMMISSION") AND IS BEING MAILED WITH THIS DOCUMENT. STOCKHOLDERS ARE
ENCOURAGED TO READ THE OPINION CAREFULLY AND IN ITS ENTIRETY FOR A DESCRIPTION
OF THE ASSUMPTIONS MADE, PROCEDURES FOLLOWED, MATTERS CONSIDERED AND LIMITATIONS
OF THE REVIEW UNDERTAKEN BY XXXXXX XXXXXXX IN CONNECTION WITH SUCH OPINION.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN
SECTION 1 BELOW) THAT NUMBER OF SHARES WHICH, TOGETHER WITH ANY OTHER SHARES
THEN OWNED BY WILEY, PURCHASER OR ANY AFFILIATE OF WILEY OR PURCHASER ON THE
DATE SUCH SHARES ARE PURCHASED, CONSTITUTES AT LEAST A MAJORITY OF THE TOTAL
OUTSTANDING SHARES OF HUNGRY MINDS, CALCULATED ON A FULLY DILUTED BASIS ON THE
DATE OF PURCHASE (THE "MINIMUM CONDITION"). THE OFFER ALSO IS SUBJECT TO CERTAIN
OTHER CONDITIONS. SEE SECTION 15.
The Company has informed us that, as of August 16, 2001, there were (a)
14,807,784 Shares issued and outstanding, and (b) 2,200,113 Shares reserved for
issuance upon the exercise of outstanding stock options. Each Share is entitled
to one vote. As a result, as of such date, the number of Shares that must be
validly tendered and not properly withdrawn prior to the Expiration Date in
order to satisfy the Minimum Condition is 7,403,893. IDG, which holds 11,166,949
Shares, has agreed in the Voting and Tender Agreement to tender its Shares in
the Offer. Even if no Shares are tendered other than those held by IDG, the
Minimum Condition would be satisfied by the tender by IDG of its Shares in
accordance with the Voting and Tender Agreement.
Certain other conditions to the consummation of the Offer are described in
Section 15. Subject to the terms of the Merger Agreement, we expressly reserve
the right to waive any one or more of the conditions to the Offer. Pursuant to
the Merger Agreement, we have agreed not to waive the Minimum Condition without
the consent of the Company. See Sections 12 and 15.
The Merger Agreement provides that, effective upon the purchase and payment
by us of Shares pursuant to the Offer, we will be entitled to designate such
number of directors, rounded up to the nearest whole number, on the Company
Board as is equal to the product of the total number of directors on the Company
Board (giving effect to the directors to be elected as described in this
sentence) multiplied by the percentage that the aggregate number of votes
represented by Shares beneficially owned by us (including Shares so accepted for
payment) or any of our affiliates bears to the total number of votes represented
by Xxxxxx then outstanding. The Company has agreed to seek and accept the
resignations of incumbent directors in order to enable our designees to be so
elected provided that until the Effective Time of the Merger (the "Effective
Time"), at least two current directors who are not affiliates of Wiley will
remain on the Company Board. See Section 12.
The completion of the Merger is subject to the satisfaction or waiver of a
number of conditions, including, if required, the approval of the Merger by the
requisite vote or consent of the stockholders. In order to approve the Merger,
the Company's Amended and Restated Certificate of Incorporation requires the
affirmative vote of holders of a majority of the total voting power of all
outstanding Shares. As a result, if the Minimum Condition and the other
conditions to the Offer are satisfied and the Offer is consummated, we will own
a sufficient number of Shares to ensure that the Merger will be approved. Under
Delaware law, if after consummation of the Offer we own at least 90% of the
Shares then outstanding, we will be able to cause the Merger to occur without a
vote of the Company's stockholders. See Section 12. If we acquire less than this
amount of Shares, a vote of the Company's stockholders or action by written
consent will be required under Delaware law to approve the Merger, and a
significantly longer period of time will be required to effect the Merger than
if no vote were required.
2
Certain U.S. federal income tax consequences of the sale of Shares in the
Offer and the Merger are described in Section 5.
THE OFFER IS CONDITIONED UPON THE FULFILLMENT OF THE CONDITIONS DESCRIBED
IN SECTION 15 BELOW. THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, SEPTEMBER 17, 2001, UNLESS WE EXTEND IT.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH YOU SHOULD READ CAREFULLY BEFORE YOU MAKE ANY
DECISION WITH RESPECT TO THE OFFER.
3
THE OFFER
1. TERMS OF THE OFFER; EXPIRATION DATE.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), we will purchase all Shares validly tendered and not properly
withdrawn in accordance with the procedures set forth in Section 4 of this Offer
to Purchase on or prior to the Expiration Date. The term "Expiration Date" means
12:00 midnight, New York City time, on Monday, September 17, 2001, unless and
until we, in accordance with the terms of the Offer, extend the period of time
for which the Offer is open, in which event the term "Expiration Date" means the
time and date at which the Offer, as so extended, will expire.
We expressly reserve the right to modify the terms of the Offer. However,
in the Merger Agreement, we have agreed that, without the prior written consent
of the Company, which may be granted or withheld in its sole discretion, we will
not (a) decrease the Offer Price, (b) decrease the number of Shares sought in
the Offer, (c) change the form of consideration payable in the Offer, (d) impose
additional conditions to the Offer, (e) change the Expiration Date of the Offer,
except as provided by the Merger Agreement or required by the Commission, or (f)
otherwise amend or change any term or condition of the Offer in a manner adverse
to the holders of Shares.
Subject to the applicable regulations of the Commission and the terms of
the Merger Agreement, we also reserve the right, in our sole discretion, from
time to time, to: (a) delay purchase of or, regardless of whether we previously
purchased any Shares, payment for any Shares in order to comply with applicable
laws; (b) terminate the Offer (whether or not any Shares have previously been
purchased) if any condition referred to in Section 15 has not been satisfied or
upon the occurrence of any event specified in Section 15, subject to the terms
and conditions described therein; and (c) except as set forth in the Merger
Agreement, waive any condition or otherwise amend the Offer in any respect; in
each case, by giving oral or written notice of the delay, termination, waiver or
amendment to the Depositary and, other than in the case of any waiver, by making
a public announcement thereof. We acknowledge (a) that Rule 14e-1(c) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires us to
pay the consideration offered or return the Shares tendered promptly after the
termination or withdrawal of the Offer and (b) that we may not delay purchase
of, or payment for (except as provided in clause (a) of the preceding sentence),
any Shares upon the occurrence of any event specified in Section 15 without
extending the period of time during which the Offer is open.
The rights we reserve in the preceding paragraph are in addition to our
rights pursuant to Section 15 of this Offer to Purchase. Any extension, delay,
termination or amendment of the Offer will be followed as promptly as
practicable by a public announcement. An announcement, in the case of an
extension, will be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. Without limiting
the manner in which we may choose to make any public announcement, subject to
applicable law (including Rules 14d-4(d) and 14d-6(c) promulgated under the
Exchange Act, which require that material changes be promptly disseminated to
holders of Shares), we will have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by issuing a
release to the Dow Xxxxx News Service.
If we extend the Offer, are delayed in our payment for Shares (after our
acceptance of Shares for payment) or are unable to pay for Shares for any
reason, then, without prejudice to our rights under the Offer, the Depositary
may retain tendered Shares on our behalf and such Shares may not be withdrawn,
except to the extent that tendering stockholders are entitled to withdrawal
rights as described in Section 4 of this Offer to Purchase. Our ability to delay
the payment for Shares that we have accepted for payment is limited, however, by
Rule 14e-1(c) promulgated under the Exchange Act, which requires that we pay the
consideration offered or return the Shares deposited by or on behalf of
stockholders promptly after the termination or withdrawal of the Offer, unless
we include a subsequent offering period under Rule 14d-11 promulgated under the
Exchange Act and pay for Shares tendered during the subsequent offering period
in accordance with that rule and the terms of the Merger Agreement.
If we make a material change in the terms of the Offer, or if we waive a
material condition to the Offer, we will extend the Offer and disseminate
additional tender offer materials to the extent required by Rules 14d-4(d),
4
14d-6(c) and 14e-1 promulgated under the Exchange Act. The minimum period during
which a tender offer must remain open following material changes in the terms of
the offer, other than a change in price or a change in percentage of securities
sought, depends upon the facts and circumstances, including the materiality of
the changes. In the Commission's view, an offer should remain open for a minimum
of five business days from the date the material change is first published, sent
or given to stockholders, and, if material changes are made with respect to
information that approaches the significance of price and the percentage of
securities sought, a minimum of ten business days may be required to allow for
adequate dissemination and investor response. With respect to a change of price,
a minimum ten business day period from the date of the change is generally
required to allow for adequate dissemination to stockholders. Accordingly, if,
prior to the Expiration Date, we decrease the number of Shares being sought, or
increase or decrease the consideration offered pursuant to the Offer, and if the
Offer is scheduled to expire at any time earlier than the period ending on the
tenth business day from the date that notice of the increase or decrease is
first published, sent or given to holders of Shares, we will extend the Offer at
least until the expiration of that period of ten business days. For purposes of
the Offer, a "business day" means any day other than a Saturday, Sunday or a
U.S. federal holiday and consists of the time period from 12:01 a.m. through
12:00 midnight, New York City time.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OF THE
MINIMUM CONDITION. THE MINIMUM CONDITION WILL BE SATISFIED BY THE TENDER BY IDG
OF THE SHARES IT OWNS PURSUANT TO THE VOTING AND TENDER AGREEMENT.
Consummation of the Offer is also conditioned upon expiration or
termination of all waiting periods imposed by the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the regulations thereunder (the "HSR
Act"), and the other conditions set forth in Section 15 below. We reserve the
right (but are not obligated), in accordance with applicable rules and
regulations of the Commission and with the Merger Agreement, to waive any or all
of those conditions. If, by the Expiration Date, any or all of those conditions
have not been satisfied, we may, without the consent of the Company, elect to
(a) waive all of the unsatisfied conditions (other than the Minimum Condition)
and, subject to complying with applicable rules and regulations of the
Commission, accept for payment all Shares so tendered; or (b) subject to the
terms of the Merger Agreement, terminate the Offer and not accept for payment
any Shares and return all tendered Shares to tendering stockholders. In the
event that we waive any condition set forth in Section 15, the Commission may,
if the waiver is deemed to constitute a material change to the information
previously provided to the stockholders, require that the Offer remain open for
an additional period of time and/or that we disseminate information concerning
such waiver.
The Merger Agreement also gives us the right to extend the initial
Expiration Date, without the consent of the Company, in the following events:
(i) from time to time, for up to ten business days from the initial Expiration
Date if, at the initial Expiration Date, one or more conditions to the Offer
(other than the Minimum Condition) have not been satisfied or waived, until such
conditions are satisfied or waived but not beyond 12:00 midnight, New York City
time, on October 18, 2001 (60 days after the commencement of the Offer), (ii) in
order to comply with SEC rules and regulations and applicable laws, or (iii) if
all of the conditions to the Offer are satisfied or waived but the number of
Shares validly tendered and not withdrawn is less than ninety percent (90%) of
the outstanding number of Shares; provided that the Expiration Date of the Offer
may not extend beyond 12:00 midnight, New York City time, on October 18, 2001;
and provided further, that we (i) accept and pay for Shares validly tendered and
not withdrawn, as soon as reasonably practical, prior to the date of such
extension, (ii) waive any condition to the consummation of the Merger other than
the requirement that there be no statute, rule or regulation by any governmental
entity or an injunction by a court of competent jurisdiction which prevents the
consummation of the Merger, and (iii) otherwise satisfy the conditions of Rule
14d-11 under the Exchange Act relating to "subsequent offering periods" (as
listed in the next paragraph). In addition, we have agreed that, if requested by
the Company, we will extend the Offer if, at the Expiration Date, no conditions
to the Offer (other than the conditions relating to suits, actions or
proceedings or applicable statutes, rules, regulations or injunctions) then
excuse performance by us, for up to 10 business days after such previously
scheduled Expiration Date, but in no event later than December 31, 2001. Upon
the satisfaction or waiver of all the conditions to the Offer and subject to the
terms of the Merger Agreement, we will accept for payment, purchase and pay for,
in accordance with the terms of the Offer, all Shares validly tendered and not
withdrawn pursuant to the Offer as soon as
5
reasonably practicable after the expiration of the Offer.
We will also be able to include a subsequent offering period (within the
meaning of Rule 14d-11) if it satisfies the following conditions:
o the Offer was open for a minimum of 20 business days and has expired;
o the Offer is for all outstanding Shares;
o we accept and promptly pay for all Shares tendered during the initial
Offer period;
o we announce the results of the Offer, including the approximate number
and percentage of Shares tendered, no later than 9:00 a.m., New York
City time, on the next business day after the Expiration Date and
immediately begin the subsequent offering period;
o we immediately accept and promptly pay for Shares as they are tendered
during the subsequent offering period; and
o we pay the same form and amount of consideration for all Shares tendered
during the subsequent offering period.
A subsequent offering period, if one is included, is not an extension of
the Offer. A subsequent offering period would be an additional period of time,
following the expiration of the Offer, in which stockholders may tender Shares
not tendered during the Offer.
Pursuant to Rule 14d-7 promulgated under the Exchange Act, no withdrawal
rights will apply to Shares tendered in a subsequent offering period and no
withdrawal rights apply during the subsequent offering period with respect to
Shares tendered in the Offer and accepted for payment. The same consideration,
the Offer Price or any higher price per Share paid in the Offer, will be paid to
stockholders tendering Shares in the Offer or in a subsequent offering period,
if one is included.
The Company has provided us with its stockholder lists and security
position listings for the purpose of disseminating the Offer to holders of
Shares. We will mail this Offer to Purchase, the related Letter of Transmittal
and other relevant materials to record holders of Shares and we will furnish the
materials to brokers, dealers, banks and similar persons whose names, or the
names of whose nominees, appear on the stockholder lists or, if applicable, who
are listed as participants in a clearing agency's security position listing, for
forwarding to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of the Offer as so
extended or amended), we will purchase, by accepting for payment, and will pay
for all Shares validly tendered and not properly withdrawn prior to the
Expiration Date (as permitted by Section 4) promptly after the later to occur of
(i) the Expiration Date and (ii) subject to compliance with the applicable rules
and regulations of the Commission, including Rule 14e-1(c) under the Exchange
Act, the satisfaction or waiver of the conditions to the Offer set forth in
Section 15. In addition, subject to applicable rules of the Commission, we
reserve the right to delay acceptance for payment of, or payment for, Shares
pending receipt of any regulatory or governmental approvals specified in Section
16.
For information with respect to regulatory approvals that we are required
to obtain prior to the completion of the Offer, see Section 16.
In all cases, we will pay for Shares purchased in the Offer only after
timely receipt by the Depositary of (a) certificates representing the Shares
("Share Certificates") or timely confirmation (a "Book-Entry Confirmation") of
the book-entry transfer of the Shares into the Depositary's account at The
Depository Trust Company (the "Book-Entry Transfer Facility"), pursuant to the
procedures set forth in Section 3, (b) the Letter of Transmittal, properly
completed and duly executed, with any required signature guarantees, or an
Agent's Message (as defined below) in connection with a book-entry transfer and
(c) any other documents that the Letter of Transmittal requires.
6
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 the
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 the Book-Entry
Confirmation that the participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that we may enforce that agreement
against the participant.
For purposes of the Offer, we will be deemed to have accepted for payment,
and purchased, Shares validly tendered and not withdrawn if, as, and when we
give oral or written notice to the Depositary of our acceptance of the Shares
for payment pursuant to the Offer. In all cases, upon the terms and subject to
the conditions of the Offer, payment for Shares purchased pursuant to the Offer
will be made by deposit of the purchase price for the Shares with the
Depositary, which will act as agent for tendering stockholders for the purpose
of receiving payment from us and transmitting payment to validly tendering
stockholders.
UNDER NO CIRCUMSTANCES WILL WE PAY INTEREST ON THE PURCHASE PRICE FOR
SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
If we do not purchase any tendered Shares pursuant to the Offer for any
reason, or if you submit Share Certificates representing more Shares than you
wish to tender, we will return Share Certificates representing unpurchased or
untendered Shares, without expense to you (or, in the case of Shares delivered
by book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility pursuant to the procedures set forth in Section 3, the Shares will be
credited to an account maintained within the Book-Entry Transfer Facility), as
promptly as practicable following the expiration, termination or withdrawal of
the Offer.
IF, PRIOR TO THE EXPIRATION DATE, WE INCREASE THE PRICE OFFERED TO HOLDERS
OF SHARES IN THE OFFER, WE WILL PAY THE INCREASED PRICE TO THE HOLDERS OF ALL
SHARES THAT WE PURCHASE IN THE OFFER, WHETHER OR NOT THE SHARES WERE TENDERED
BEFORE THE INCREASE IN PRICE.
We reserve the right to transfer or assign, in whole or from time to time
in part, to Wiley, or any of our affiliates, the right to purchase all or any
portion of the Shares tendered in the Offer, but any such transfer or assignment
will not relieve us of our obligations under the Offer or prejudice your rights
to receive payment for Shares validly tendered and accepted for payment in the
Offer. However, we have no present intention to effect such transfer.
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
VALID TENDER OF SHARES
Except as set forth below, in order for you to tender Shares in the Offer,
the Depositary must receive the Letter of Transmittal, properly completed and
signed, together with any required signature guarantees or an Agent's Message in
connection with a book-entry delivery of Shares and any other documents that the
Letter of Transmittal requires, at one of its addresses set forth on the back
cover of this Offer to Purchase on or prior to the Expiration Date and either
(a) you must deliver Share Certificates representing tendered Shares to the
Depositary or you must cause your Shares to be tendered pursuant to the
procedure for book-entry transfer set forth below and the Depositary must
receive Book-Entry Confirmation, in each case on or prior to the Expiration Date
or (b) you must comply with the guaranteed delivery procedures set forth below.
THE METHOD OF DELIVERY OF CERTIFICATES EVIDENCING THE SHARES ("SHARE
CERTIFICATES"), THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS,
INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT YOUR OPTION
AND SOLE RISK, AND DELIVERY WILL BE CONSIDERED MADE ONLY WHEN THE DEPOSITARY
ACTUALLY RECEIVES THE SHARE CERTIFICATES. IF DELIVERY IS BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL
CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE TIMELY DELIVERY.
BOOK-ENTRY TRANSFER
The Depositary will make a request to 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
7
financial institution that is a participant in the system of the Book-Entry
Transfer Facility may make book-entry delivery of Shares by causing the
Book-Entry Transfer Facility to transfer the Shares into the Depositary's
account at the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures. However, although Shares may be delivered
through book-entry transfer into the Depositary's account at the Book-Entry
Transfer Facility, the Depositary must receive the Letter of Transmittal,
properly completed and signed, with any required signature guarantees, or an
Agent's Message in connection with a book-entry transfer, and any other required
documents at one of its addresses set forth on the back cover of this Offer to
Purchase on or before the Expiration Date, or you must comply with the
guaranteed delivery procedure set forth below.
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.
SIGNATURE GUARANTEES
A bank, broker, dealer, credit union, savings association or other entity
which is a member in good standing of the Securities Transfer Agents Medallion
Program (an "Eligible Institution") must guarantee signatures on all Letters of
Transmittal, unless the Shares tendered are tendered (a) by a registered holder
of Shares who has not completed either the box labeled "Special Payment
Instructions" or the box labeled "Special Delivery Instructions" on the Letter
of Transmittal or (b) for the account of an Eligible Institution. See
Instruction 1 of the Letter of Transmittal.
If the Share Certificates are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made to, or
Share Certificates for unpurchased Shares are to be issued or returned to, a
person other than the registered holder, then the tendered certificates must be
endorsed or accompanied by appropriate stock powers, signed exactly as the name
or names of the registered holder or holders appear on the certificates, with
the signatures on the certificates or stock powers guaranteed by an Eligible
Institution as provided in the Letter of Transmittal. See Instructions 1 and 5
of the Letter of Transmittal.
If the Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal must accompany each
delivery of Share Certificates.
GUARANTEED DELIVERY
If you want to tender Shares in the Offer and your Share Certificates are
not immediately available or time will not permit all required documents to
reach the Depositary on or before the Expiration Date, or the procedures for
book-entry transfer cannot be completed on a timely basis, your Shares may
nevertheless be tendered if you comply with all of the following guaranteed
delivery procedures:
(a) your tender is made by or through an Eligible Institution;
(b) the Depositary receives, as described below, a properly completed
and signed Notice of Guaranteed Delivery, substantially in the form made
available by us, on or before the Expiration Date; and
(c) the Depositary receives the Share Certificates (or a Book-Entry
Confirmation) representing all tendered Shares, in proper form for
transfer, together with a properly completed and duly executed Letter of
Transmittal, with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message) and any other document required by
the Letter of Transmittal, within three (3) trading days after the date of
execution of the Notice of Guaranteed Delivery. A "trading day" is any day
on which Nasdaq is open for business.
You may deliver the Notice of Guaranteed Delivery by hand, mail or
facsimile transmission to the Depositary. The Notice of Guaranteed Delivery must
include a guarantee by an Eligible Institution in the form set forth in the
Notice of Guaranteed Delivery.
Notwithstanding any other provision of the Offer, we will pay for Shares
only after timely receipt by the Depositary of Share Certificates for, or of
Book-Entry Confirmation with respect to, the Shares, a properly
8
completed and duly executed Letter of Transmittal, together with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message), and any other documents required by the Letter of Transmittal.
Accordingly, payment might not be made to all tendering stockholders at the same
time, and will depend upon when the Depositary receives Share Certificates or
Book-Entry Confirmation that the Shares have been transferred into the
Depositary's account at the Book-Entry Transfer Facility.
BACKUP FEDERAL TAX WITHHOLDING
Under the backup federal income tax withholding laws applicable to certain
stockholders (other than certain exempt stockholders, including, among others,
all corporations and certain foreign individuals), the Depositary may be
required to withhold any payments made to those stockholders pursuant to the
Offer at a rate equal to the fourth lowest ordinary income tax rate applicable
to unmarried individuals (currently at a rate of 30.5%, effective until December
31, 2001). To prevent backup federal income tax withholding, you must provide
the Depositary with your correct taxpayer identification number and certify that
you are not subject to backup federal income tax withholding by completing the
Substitute Form W-9 included in the Letter of Transmittal. See Instruction 10 of
the Letter of Transmittal.
APPOINTMENT AS PROXY
By executing the Letter of Transmittal, you irrevocably appoint our
designees, and each of them, as your agents, attorneys-in-fact and proxies, with
full power of substitution, in the manner set forth in the Letter of
Transmittal, to the full extent of your rights with respect to the Shares that
you tender and that we accept for payment and with respect to any and all other
Shares and other securities or rights issued or issuable in respect of such
Shares on or after the date of this Offer to Purchase. All such powers of
attorney and proxies will be considered irrevocable and coupled with an interest
in the tendered Shares. This appointment will be effective when we accept your
Shares for payment in accordance with the terms of the Offer. Upon such
acceptance for payment, all other powers of attorney and proxies given by you
with respect to your Shares and such other securities or rights granted prior to
such payment will be revoked, without further action, and no subsequent powers
of attorney and proxies may be given by you (and, if given, will not be deemed
effective). Our designees will, with respect to the Shares and such other
securities and rights for which the appointment is effective, be empowered to
exercise all your voting and other rights as they in their sole discretion may
deem proper at any annual or special meeting of the Company's stockholders, or
any adjournment or postponement thereof, or by consent in lieu of any such
meeting. In order for Shares to be deemed validly tendered, immediately upon the
acceptance for payment of such Shares, we or our designee must be able to
exercise full voting, consent and other rights with respect to such Shares and
other securities, including voting at any meeting of stockholders.
DETERMINATION OF VALIDITY
All questions as to the form of documents and the validity, eligibility
(including time of receipt) and acceptance for payment of any tender of Shares
will be determined by us, in our sole discretion, which determination will be
final and binding on all parties. We reserve the absolute right to reject any or
all tenders determined by us not to be in proper form or the acceptance of or
payment for which may, in the opinion of our counsel, be unlawful. We also
reserve the absolute right to waive any of the conditions of the Offer or any
defect or irregularity in any tender of Shares of any particular stockholder
whether or not similar defects or irregularities are waived in the case of other
stockholders.
Our interpretation of the terms and conditions of the Offer will be final
and binding. No tender of Shares will be deemed to have been validly made until
all defects and irregularities with respect to the tender have been waived by us
or cured. None of Wiley, Purchaser or any of their respective affiliates or
assigns, if any, the Depositary, the Information Agent or any other person or
entity will be under any duty to give any notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification.
Our acceptance for payment of Shares tendered pursuant to any of the
procedures described above will constitute a binding agreement between us and
you upon the terms and subject to the conditions of the Offer.
9
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares made in
the Offer are irrevocable. You may withdraw Shares that you have previously
tendered in the Offer at any time on or before the Expiration Date and, unless
theretofore accepted for payment as provided herein, such Shares may also be
withdrawn at any time after October 18, 2001.
If, for any reason, acceptance for payment of any Shares tendered in the
Offer is delayed, or we are unable to accept for payment or pay for Shares
tendered in the Offer, then, without prejudice to our rights set forth in this
document, the Depositary may, nevertheless, on our behalf, retain Shares that
you have tendered, and you may not withdraw your Shares except to the extent
that you are entitled to and duly exercise withdrawal rights as described in
this Section 4. Any such delay will be by an extension of the Offer to the
extent required by law.
In order for your withdrawal to be effective, you must deliver a written or
facsimile transmission notice of withdrawal to the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase. Any such notice
of withdrawal must specify your name, the number of Shares that you want to
withdraw and (if Share Certificates have been tendered) the name of the
registered holder of the Shares as shown on the Share Certificate, if different
from your name. If Share Certificates have been delivered or otherwise
identified to the Depositary, then prior to the physical release of such
certificates, you must submit the serial numbers shown on the particular
certificates evidencing the Shares to be withdrawn and an Eligible Institution
must guarantee the signature on the notice of withdrawal except in the case of
Shares tendered for the account of an Eligible Institution. If Shares have been
tendered pursuant to the procedures for book-entry transfer set forth in Section
3, the notice of withdrawal must also specify the name and number of the account
at the Book-Entry Transfer Facility to be credited with the withdrawn Shares, in
which case a notice of withdrawal will be effective if delivered to the
Depositary by any method of delivery described in the first sentence of this
paragraph.
You may not rescind a withdrawal of Shares. Any Shares that you withdraw
will be considered not validly tendered for purposes of the Offer, but you may
tender your Shares again at any time before the Expiration Date by following any
of the procedures described in Section 3.
No withdrawal rights will apply to Shares tendered during any subsequent
offering period and no withdrawal rights apply during any such subsequent
offering period with respect to Shares tendered in the Offer and accepted for
payment.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by us, in our sole discretion, which
determination will be final and binding. None of Wiley, Purchaser or any of
their respective affiliates or assigns, if any, the Depositary, the Information
Agent or any other person or entity will be under any duty to give any
notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
Your receipt of cash in exchange for Shares pursuant to the Offer, the
Merger or upon the exercise of appraisal rights will be taxable for federal
income tax purposes and may also be taxable under applicable state, local or
foreign tax laws. Upon your receipt of cash, you will generally recognize gain
or loss for federal income tax purposes in an amount equal to the difference, if
any, between the amount of cash received and your adjusted tax basis in the
Shares that you sold or exchanged. Gain or loss must be determined separately
for each block of Shares exchanged (for example, Shares acquired at the same
cost in a single transaction). Such gain or loss will be capital gain or loss
(provided that you hold your Shares as a capital asset) and any such capital
gain or loss will be long term if, as of the date of the sale or exchange, you
have held the Shares for more than one year.
The foregoing discussion may not be applicable to certain types of
stockholders, including stockholders who acquired Shares pursuant to the
exercise of options or otherwise as compensation, individuals who are not
citizens or residents of the United States and foreign corporations, Shares held
as part of a straddle, hedge, constructive sale, conversion transaction,
synthetic security or other integrated investment, or entities that are
otherwise subject to special tax treatment under the Internal Revenue Code of
1986, as amended (such as dealers in securities or
10
foreign currency, traders in securities that elect to apply a mark-to-market
method of accounting, insurance companies, regulated investment companies,
tax-exempt entities, financial institutions, foreign persons and investors in
pass-through entities).
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY. YOU ARE URGED TO CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE
PARTICULAR TAX CONSEQUENCES TO YOU OF THE OFFER AND THE MERGER, INCLUDING
FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES.
6. PRICE RANGE OF THE SHARES.
According to the Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 2000 (the "2000 Annual Report"), the Shares are listed and
traded on Nasdaq under the symbol "HMIN". The following table sets forth, for
the periods indicated, the high and low closing sales prices for the Shares as
reported by Bloomberg:
HIGH LOW
-------- -------
Fiscal Year Ending September 29, 2001
Fourth Quarter (through August 16) .............. $ 7.50 $ 6.04
Third Quarter ................................... 7.81 6.41
Second Quarter .................................. 7.875 5.50
First Quarter ................................... 9.5625 4.625
HIGH LOW
-------- -------
Fiscal Year Ended September 30, 2000
Fourth Quarter .................................. $ 9.625 $ 7.375
Third Quarter ................................... 13.50 8.00
Second Quarter .................................. 16.00 9.00
First Quarter ................................... 17.875 12.25
HIGH LOW
-------- -------
Fiscal Year Ended September 25, 1999
Fourth Quarter .................................. $20.50 $14.75
Third Quarter ................................... 24.9375 17.125
Second Quarter .................................. 19.625 11.75
First Quarter ................................... 17.00 6.75
On August 10, 2001, the last full day of trading prior to the public
announcement of the execution of the Merger Agreement by the Company, Wiley and
Xxxxxxxxx, according to published sources, the closing price as reported by
Bloomberg for the Shares was $6.90 per Share. On August 16, 2001, the next to
last full day of trading prior to the commencement of the Offer, the closing
price as reported by Bloomberg for the Shares was $6.04 per Share. STOCKHOLDERS
ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE CLASS A COMMON STOCK.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; NASDAQ LISTING;
EXCHANGE ACT REGISTRATION.
EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and could adversely affect the
liquidity and market value of the remaining Shares held by the public. The
purchase of Shares pursuant to the Offer also can be expected to reduce the
number of holders of Shares. We cannot predict whether the reduction in the
number of Shares that might otherwise trade publicly would have an adverse or
beneficial effect on the market price for or marketability of the Shares or
whether it would cause future market prices to be greater or less than the Offer
Price.
NASDAQ LISTING
Depending upon the number of Shares acquired pursuant to the Offer, the
Shares may no longer meet the requirements for continued listing on Nasdaq.
According to Nasdaq's published guidelines, Nasdaq would consider
11
delisting an issuer's shares if, among other things: (a) the number of the
issuer's outstanding shares (with certain exclusions) falls below 750,000, (b)
the market value of such shares publicly held falls below $5,000,000, (c) the
issuer has stockholder equity of less than $10,000,000, (d) there are fewer than
400 holders of round lots of the issuer's shares, and (e) the minimum bid price
falls below $1.00 per share. If, as a result of the purchase of Shares pursuant
to the Offer or otherwise, the Shares no longer meet the requirements of Nasdaq
for continued listing and/or trading and such trading of the Shares were
discontinued, the market for the Shares could be adversely affected.
In the event that the Shares were no longer listed or traded on Nasdaq, it
is possible that the Shares would trade in the over-the-counter market and that
price quotations would be reported through Nasdaq or other sources. Such trading
and the availability of such quotations would, however, depend upon the number
of stockholders 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 as described below and other factors.
EXCHANGE ACT REGISTRATION
The Shares are currently registered under the Exchange Act. The purchase of
the Shares pursuant to the Offer may result in the Shares becoming eligible for
deregistration under the Exchange Act. Registration of the Shares may be
terminated upon application by the Company to the Commission if the Shares are
not listed on a "national securities exchange" and there are fewer than 300
record holders of Shares. Termination of registration of the Shares under the
Exchange Act would substantially reduce the information required to be furnished
by the Company to its stockholders and the Commission and would make certain
provisions of the Exchange Act, such as the short-swing profit recovery
provisions of Section 16(b) and the requirements of furnishing a proxy statement
in connection with stockholders' meetings pursuant to Section 14(a), no longer
applicable to the Company. If the Shares are no longer registered under the
Exchange Act, the requirements of Rule 13e-3 under the Exchange Act with respect
to "going private" transactions would no longer be applicable to the Company.
Furthermore, the ability of "affiliates" of the Company and persons holding
"restricted securities" of the Company to dispose of such securities pursuant to
Rule 144 promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), may be impaired or eliminated. If, as a result of the
purchase of Shares pursuant to the Offer or the proposed Merger, the Company is
no longer required to maintain registration of the Shares under the Exchange
Act, we intend to cause the Company to apply for termination of such
registration.
If registration of the Shares is not terminated prior to the Merger, then
the Shares will be delisted from all stock exchanges and the registration of the
Shares under the Exchange Act will be terminated following the consummation of
the Merger.
8. INFORMATION CONCERNING THE COMPANY.
The Company was founded in 1990 as a wholly owned subsidiary of
International Data Group, Inc., and was called IDG Books Worldwide, Inc. until
November 13, 2000. On March 24, 1998, the Company was reincorporated in
Delaware. On July 27, 1998, the Company consummated its initial public offering.
The principal executive offices of the Company are located at 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, and its telephone number is (000) 000-0000.
According to its 2000 Annual Report, the Company is a leading publisher of
technology, consumer and general how-to books designed to make learning
accessible, engaging and useful. The Company publishes and markets its books
under well-known brand names, led by flagship brands For Dummies(R),
CliffsNotes(TM), and Frommer's(R). The Company has more than 3,000 active
titles. The Company has over 150 million books in print, with translations in 39
languages, and its products are available in many parts of the world.
The Company files annual, quarterly and special reports, proxy statements
and other information with the Commission. You may read and copy any reports,
statements or other information at the public reference facilities maintained by
the Commission at 000 Xxxxx Xxxxxx, X.X., Xxxx 0000, Xxxxxxxxxx, X.X. 00000, and
at the Commission's regional offices located at Seven World Trade Xxxxxx, Xxxxx
0000, Xxx Xxxx, Xxx Xxxx 00000 and
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Citicorp Center, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000.
Information regarding the public reference facilities may be obtained from the
Commission by telephoning 1-800-SEC-0330. The Company's filings are also
available to the public on the Commission's Internet site (xxxx://xxx.xxx.xxx).
Copies of such materials may also be obtained by mail from the Public Reference
Section of the Commission at 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000 at
prescribed rates.
Although we have no knowledge that any such information is untrue, we take
no responsibility for the accuracy or completeness of information contained in
this Offer to Purchase with respect to the Company or any of its subsidiaries or
affiliates 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.
The Company has advised Purchaser and Wiley that it has not recently made
public any projections as to future performance or earnings, and the projections
set forth below are included in this Offer to Purchase only because this
information was provided to Wiley. The projections were not prepared with a view
to public disclosure or compliance with the published guidelines of the
Commission or the guidelines established by the American Institute of Certified
Public Accountants regarding projections or forecasts. The projections do not
purport to present operations in accordance with generally accepted accounting
principles, and the Company's independent auditors have not examined or compiled
the projections and accordingly assume no responsibility for them. The Company
has advised Purchaser and Wiley that its internal financial forecasts (upon
which the projections provided to Wiley and Purchaser were based in part) are,
in general, prepared solely for internal use and capital budgeting and other
management decisions and are subjective in many respects and thus susceptible to
interpretations and periodic revision based on actual experience and business
developments. The projections also reflect numerous assumptions made by
management of the Company, with respect to industry performance (including
expectations with respect to the pricing environment in the financial services
industry), general business, economic, market and financial conditions and other
matters, including effective tax rates consistent with historical levels for the
Company and expected debt payments, all of which are difficult to predict, many
of which are beyond the Company's control, and none of which were subject to
approval by Wiley or Purchaser. Accordingly, there can be no assurance that the
assumptions made in preparing the projections will prove accurate. It is
expected that there will be differences between actual and projected results,
and actual results may be materially greater or less than those contained in the
projections. The inclusion of the projections herein should not be regarded as
an indication that any of Wiley, Purchaser, the Company or their respective
affiliates or representatives considered or consider the projections to be a
reliable prediction of future events, and the projections should not be relied
upon as such.
For the fiscal year ending September 29, 2001, the Company initially
furnished Wiley with projections of (i) net revenue of $197.6 million, which was
later revised to $184.5 million, and (ii) EBITDA of $18.8 million, which was
later revised to $6.8 million. For the fiscal year ending September 28, 2002,
the Company furnished Wiley with projections of (i) net revenue of $190.7
million as a base amount, with an upside amount of $201.6 million, and (ii)
EBITDA of $32 million as a base amount, with an upside amount of $37.7 million.
None of Wiley, Purchaser, the Company or any of their respective affiliates
or representatives has made or makes any representation to any person regarding
the ultimate performance of the Company compared to the information contained in
the projections, and none of them intends to update or otherwise revise the
projections to reflect circumstances existing after the date when made or to
reflect the occurrence of future events even in the event that any or all of the
assumptions underlying the projections are shown to be in error.
9. INFORMATION CONCERNING PURCHASER AND WILEY.
Wiley, founded in 1807, is a worldwide developer, publisher and seller of
content and services in print and electronic media. Its core businesses include
scientific, technical and medical journals, encyclopedias, books and online
products and services; professional and consumer books and subscription
services; and educational materials for undergraduate and graduate students and
lifelong learners. Wiley has publishing, marketing and distribution centers in
the United States, Canada, Europe, Asia and Australia. Wiley's two classes of
common stock are listed on the New York Stock Exchange under the symbols JWa and
JWb, respectively.
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Purchaser was formed by Wiley for the specific purpose of being a party to
the Merger Agreement and making the Offer. Purchaser has not conducted any other
business to date. On the date of the Offer, Purchaser is a wholly owned
subsidiary of Wiley. It is contemplated that prior to the purchase of Shares
pursuant to the Offer, Purchaser will become a wholly owned subsidiary of HMI
Investment, Inc., a newly formed Delaware corporation. A majority of the equity
of HMI Investment, Inc., will be owned by Wiley, and the balance will be owned
by HMI Investment, Limited, a newly formed wholly owned U.K. subsidiary
corporation of Wiley. Accordingly, no later than the consummation of the Offer,
Purchaser will become an indirect wholly owned subsidiary of Wiley and, after
the Merger, the Company will be an indirect wholly owned subsidiary of Wiley.
The principal executive offices of Wiley, Purchaser and HMI Investment,
Inc. are located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0012 and the
telephone number is (000) 000-0000. The principal executive offices of HMI
Investment, Limited are located at Baffins Lane, Chichester, West Sussex, XX 000
XX, Xxxxxx Xxxxxxx and the telephone number is (00)0000-000000.
The names, business addresses, citizenship, present principal occupations
and employment history of each of the directors and executive officers of Wiley,
Purchaser, HMI Investment, Inc. and HMIInvestment, Limited are set forth in
Schedules I, II, III and IV of this Offer to Purchase.
Wiley is subject to the information and reporting requirements of the
Exchange Act and is required to file periodic reports and other information with
the Commission relating to its business, financial condition and other matters.
Certain information, as of particular dates, concerning Wiley's business,
principal physical properties, capital structure, material pending legal
proceedings, operating results, financial condition and certain other matters is
required to be disclosed in annual and quarterly reports filed with the
Commission. You may inspect a copy of these reports and other information at the
Commission's public reference facilities in the same manner as set forth with
respect to the Company in Section 8.
Except as set forth elsewhere in this Offer to Purchase and Schedule V
hereto: (i) neither Purchaser, Wiley nor, to the best of our knowledge, any of
the persons listed in Schedules I, II, III and IV hereto or any associate or
majority-owned subsidiary of Purchaser or Wiley or any of the persons so listed,
beneficially owns or has a right to acquire any Shares or any other equity
securities of the Company; (ii) neither Purchaser, Wiley nor, to our knowledge,
any of the persons or entities referred to in clause (i) above or any of their
executive officers, directors or subsidiaries has effected any transaction in
the Shares or any other equity securities of the Company during the past 60
days; (iii) neither Purchaser, Wiley nor, to our knowledge, any of the persons
listed in Schedules I, II, III and IV hereto, has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the Company, including, but not limited to, the transfer or voting
thereof, joint ventures, loan or option arrangements, puts or calls, guarantees
of loans, guarantees against loss or the giving or withholding of proxies,
consents or authorizations; (iv) during the two years prior to the date of this
Offer to Purchase, there have been no transactions that would require reporting
under the rules and regulations of the Commission between Purchaser, Wiley or
any of their respective subsidiaries or, to our knowledge, any of the persons
listed in Schedules I, II, III and IV hereto, on the one hand, and the Company
or any of its executive officers, directors or affiliates, on the other hand;
and (v) during the two years prior to the date of this Offer to Purchase, there
have been no contracts, negotiations or transactions between Purchaser, Wiley or
any of their respective subsidiaries or, to the best of our knowledge, any of
the persons listed in Schedules I, II, III and IV hereto, on the one hand, and
the Company or its subsidiaries or affiliates, on the other hand, concerning a
merger, consolidation or acquisition, tender offer or other acquisition of
securities, an election of directors or a sale or other transfer of a material
amount of assets of the Company.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
In 1999, Wiley and the Company's senior management worked together on a
joint bid for Macmillan General Reference USA Inc., divested by Xxxxxxx Plc.,
which was ultimately purchased solely by the Company (then IDG Books Worldwide,
Inc.). Following that acquisition, the Company divested several assets, one of
which was the X.X. Xxxxxx Tax Guides business which was acquired by Wiley in
November 1999.
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On April 26, 2001, it was announced in the press that the Company planned
to put itself up for sale, confirmed by a Form 8-K filed by the Company on May
10, 2001. Upon reading an article in the WALL STREET JOURNAL, Wiley contacted
the financial advisor to the Company, Xxxxxx Xxxxxxx, to request an offering
memorandum with respect to the Company (the "Offering Memorandum").
In May 2001, Wiley received the Offering Memorandum and an initial
indication of interest was submitted by Wiley on June 28, 2001. Due diligence
began on July 9 and 10, 2001, as did executive management meetings between Wiley
and the Company.
On July 31, 2001, the Board of Directors of Wiley (the "Wiley Board") met
telephonically to consider the acquisition of the Company by Wiley. Following
the discussion, the Wiley Board approved the proposed transaction and authorized
Xxxxx'x executive management to submit a binding offer on behalf of Wiley.
On August 3, 2001, a binding offer of $94,000,000 in cash, plus assumption
of indebtedness of the Company up to $92,500,000, was submitted to Xxxxxx
Xxxxxxx, along with copies of the Agreement and Plan of Merger, Disclosure
Memorandum and Voting and Tender Agreement (the "Transaction Documents") marked
to show the changes requested by Wiley. On August 6, 2001 through August 8,
2001, the legal representatives of the Company and Wiley met to discuss the
Transaction Documents. On August 8, 2001, in light of negotiated revisions to
the Transaction Documents, which eliminated certain conditions proposed by Wiley
that the Company resisted on the grounds they might delay or otherwise affect
the likelihood of the consummation of the Offer, Wiley submitted a revised offer
to the Company of $90,000,000 in cash, plus assumption of the indebtedness of
the Company up to $92,500,000. On August 8, 2001, a committee of the Company
Board met to consider Wiley's revised offer and approved Wiley as the preferred
bidder for the Company. On August 9 and 10, 2001, the legal representatives of
Wiley and the Company continued negotiations to finalize the terms of the
Transaction Documents.
On August 10, 2001, Wiley and the Company, through their legal
representatives, finalized the terms of, and all outstanding due diligence
issues relating to, the Transaction Documents. On August 10, 2001, final forms
of the Transaction Documents, along with a final proposal by Wiley to purchase
all of the fully diluted equity of the Company for $90,000,000, and to pay or
assume up to $92,500,000 of the Company's indebtedness, was submitted to the
Company. On Sunday, August 12, 2001, the Company Board met and unanimously
approved the Transaction Documents and the transactions contemplated thereby,
and the Transaction Documents were executed.
On Monday, August 13, 2001, prior to the opening of the U.S. financial
markets, Wiley and the Company each announced Wiley's intention to commence of a
tender offer to acquire all of the outstanding Shares and to merge the Company
with and into a direct or indirect wholly owned subsidiary of Wiley, HMI
Acquisition Corp., as promptly as practicable following the consummation of the
Offer.
11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY.
The purpose of the Offer is to enable Wiley to acquire control of, and the
entire equity interest in, the Company. The Offer is being made pursuant to the
Merger Agreement and is intended to increase the likelihood that the Merger will
be effected. The purpose of the Merger is to acquire all of the outstanding
Shares not purchased pursuant to the Offer. Pursuant to the terms of the Merger
Agreement, Wiley currently intends, promptly after consummation of the Offer, to
exercise its right under the Merger Agreement to designate a majority of
directors to the Company Board to reflect its total voting power of Shares then
outstanding. Wiley and Purchaser intend to consummate the Merger as soon as
possible following the consummation of the Offer. Effective with consummation of
the Offer, Wiley is obligated under the Merger Agreement to lend to the Company
a sum equal to all amounts due and owing under certain of its credit facilities
(see "Pay-off of Credit Facilities" discussed below in Section 12).
Except as otherwise provided in this Offer to Purchase, it is expected
that, initially following the Merger, the business and operations of the Company
will be continued substantially as they are currently being conducted. Wiley
will continue to evaluate the business and operations of the Company during the
pendency of the Offer and after the consummation of the Offer and the Merger and
will take such actions as it deems appropriate under the circumstances then
existing. In addition, Wiley will continue to seek additional information about
the Company during such time periods. Thereafter, Wiley intends to review such
additional information as part of a
15
comprehensive review of the Company's business, operations, capitalization and
management with a view to optimizing development of the Company's potential in
conjunction with Wiley's businesses.
Stockholders of the Company who tender and sell their Shares in the Offer
will cease to have any equity interest in the Company and any right to
participate in its earnings and future growth. If the Merger is consummated,
non-tendering stockholders will no longer have an equity interest in the Company
and instead will have only the right to receive cash consideration pursuant to
the Merger Agreement or to exercise statutory appraisal rights under Section 262
of the DGCL. Similarly, after selling their Shares in the Offer or the
subsequent Merger, stockholders of the Company will not bear the risk of any
decrease in the value of the Company.
Under Section 253 of the DGCL, if a corporation owns at least 90% of the
outstanding shares of each class of voting securities of a subsidiary
corporation, the corporation holding such stock may merge such subsidiary into
itself, or itself into such subsidiary pursuant to a short-form merger, without
any action or vote on the part of the board of directors or the stockholders of
such other corporation. In the event that we acquire in the aggregate at least
90% of the Shares then outstanding pursuant to the Offer or otherwise, then, at
the election of Wiley, a short-form merger of us with and into the Company could
be effected without any further approval of the Company Board or the
stockholders of the Company. Even if we do not own 90% of the Shares outstanding
following consummation of the Offer, Wiley could seek to purchase additional
Shares in the open market or otherwise in order to reach the applicable 90%
threshold and employ such a short-form merger. The per share consideration paid
for any Shares so acquired in open market purchases may be greater or less than
the Offer Price. Wiley presently intends to effect a short-form merger, if
permitted to do so under the DGCL, pursuant to which Purchaser will be merged
with and into the Company.
Except as described above or elsewhere in this Offer to Purchase, Purchaser
and Wiley have no present plans that would relate to or result in an
extraordinary corporate transaction involving the Company or any of their
respective subsidiaries (such as a merger, reorganization, liquidation,
relocation of any operations or sale or other transfer of a material amount of
assets), any sale or transfer of a material amount of assets of the Company or
any of its subsidiaries, any change in the Company Board or management, any
material change in the Company's capitalization or dividend policy or any other
material change in the Company's corporate structure or business.
12. DESCRIPTION OF MERGER AGREEMENT, VOTING AND TENDER AGREEMENT AND
CONFIDENTIALITY AGREEMENT; APPRAISAL RIGHTS AND RELATED INFORMATION.
THE FOLLOWING IS A SUMMARY OF MATERIAL PROVISIONS OF THE MERGER AGREEMENT,
VOTING AND TENDER AGREEMENT AND RELATED CONFIDENTIALITY AGREEMENT. THIS SUMMARY
IS NOT A COMPLETE DESCRIPTION OF THE TERMS AND CONDITIONS OF SUCH AGREEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF SUCH AGREEMENTS
FILED WITH THE COMMISSION AS EXHIBITS TO THE SCHEDULE TO AND IS INCORPORATED
HEREIN BY REFERENCE. CAPITALIZED TERMS NOT OTHERWISE DEFINED BELOW WILL HAVE THE
MEANINGS SET FORTH IN THE MERGER AGREEMENT. THE MERGER AGREEMENT, VOTING AND
TENDER AGREEMENT AND CONFIDENTIALITY AGREEMENT MAY BE EXAMINED, AND COPIES
OBTAINED, AS SET FORTH IN SECTION 8 OF THIS OFFER TO PURCHASE.
MERGER AGREEMENT
THE OFFER. The Merger Agreement provides for the commencement of the Offer
with an initial expiration date of September 17, 2001. Purchaser's obligation to
accept for payment, purchase and pay for Shares validly tendered and not
withdrawn pursuant to the Offer is subject to the satisfaction of each of the
conditions of the Offer including the condition that at least a majority of the
Shares outstanding on a fully diluted basis have been validly tendered and not
withdrawn prior to the expiration of the Offer and certain other conditions
described in Section 15 below. Purchaser expressly reserves the right to modify
the terms of the Offer. However, Purchaser may not, without the Company's prior
written consent, which may be granted or withheld at its sole discretion, make
any changes in the terms and conditions of the offer that (i) decrease the price
per Share payable in the Offer, (ii) reduce the number of Shares to be purchased
in the Offer, (iii) change the form of consideration to be paid for the Shares
in the Offer, (iv) impose conditions to the Offer in addition to those set forth
in the Merger Agreement, (v) change the Expiration Date of the Offer, except as
set forth in the Merger Agreement or required by the
16
Commission or (vi) otherwise amend or change any term or condition of the Offer
in a manner adverse to the holders of Shares. Upon the applicable Expiration
Date of the Offer, Purchaser may extend the initial Expiration Date, without the
consent of the Company, in the following events: (i) from time to time, for up
to ten business days from the initial Expiration Date, if, at the initial
Expiration Date, one or more conditions to the Offer (other than the Minimum
Condition) have not been satisfied or waived until such conditions are satisfied
or waived but not beyond 12:00 midnight, New York City time, on October 18, 2001
(60 days after the commencement of the Offer), (ii) in order to comply with SEC
rules and regulations and applicable laws, or (iii) if all of the conditions to
the Offer are satisfied or waived but the number of Shares validly tendered and
not withdrawn is less than ninety percent (90%) of the outstanding number of
Shares; provided that the Expiration Date of the Offer may not extend beyond
12:00 midnight, New York City time, on October 18, 2001; and provided further,
that Purchaser (i) accepts and pays for Shares validly tendered and not
withdrawn, as soon as reasonably practical, prior to the date of such extension,
(ii) waives any condition to the consummation of the Merger other than the
requirement that there be no statute, rule or regulation by any governmental
entity or an injunction by any court of competent jurisdiction which prevents
the consummation of the Merger, and (iii) otherwise satisfies the following
conditions of Rule 14d-11 under the Exchange Act relating to "subsequent
offering periods" summarized above in Section 1.
In addition, Purchaser will, if requested by the Company, extend the Offer
if, at the Expiration Date, no conditions to the Offer (other than the
conditions relating to suits, actions, proceedings, statutes rules or
regulations) then excuse performance by Purchaser, for up to ten business days
after such previously scheduled Expiration Date, but in no event later than
December 31, 2001. Upon the satisfaction and waiver of all the conditions to the
Offer and subject to the terms of the Merger Agreement, Purchaser will accept
for payment, purchase and pay for, in accordance with the terms of the Offer,
all Shares validly tendered and not withdrawn pursuant to the Offer as soon as
reasonably practicable after the expiration of the Offer.
RECOMMENDATION. The Company has represented to Purchaser in the Merger
Agreement that the Company Board has (a) unanimously determined that the Merger
Agreement and the Transactions contemplated thereby, including each of the
Offer, the Merger and the purchase of Shares of Company Common Stock
contemplated by the Offer (collectively, the "Transactions"), are advisable and
fair to, and in the best interest of, the Company and the Company's
stockholders, (b) unanimously approved of and adopted the Merger Agreement and
the Transactions in accordance with the requirements of the DGCL, and (c)
resolved to recommend that the holders of Shares accept the Offer, tender their
Shares pursuant to the Offer, and approve and adopt the Merger Agreement and the
Merger. However, such recommendation may be withdrawn, modified or amended to
the extent that the Company receives an Acquisition Proposal (as defined below)
which the Company Board determines in good faith, after receiving the advice of
a nationally recognized financial advisor, constitutes a Superior Proposal (as
defined below) and the Company Board determines in good faith, after
consultation with its outside legal counsel, that failure to take such action
could reasonably be deemed to constitute a breach of the Company Board's
fiduciary obligations under applicable law. The Company further represented that
Xxxxxx Xxxxxxx delivered to the Company Board its opinion stating that, as of
the date of such opinion, the cash consideration to be received by the holders
of Class ACommon Stock of the Company pursuant to the Merger Agreement is fair
to such holders from a financial point of view.
THE MERGER. The Merger Agreement provides that, at the Effective Time and
upon the terms and subject to the conditions of the Merger Agreement, Purchaser
will be merged with and into the Company. Following the Merger, the Company will
continue as the surviving corporation (the "Surviving Corporation") and will be
a subsidiary of Wiley. The Company has agreed that if approval of the Company's
stockholders is required by applicable law to consummate the Merger, the Company
will cause a meeting of its stockholders (the "Company Stockholder Meeting") to
be duly called and held as soon as practicable following the date on which
Purchaser completes the purchase of Shares pursuant to the Offer, for the
purpose of voting on the approval and adoption of the Merger Agreement and the
Merger. The Company has also agreed, if required and at Xxxxx'x request, as soon
as practicable following the expiration of the Offer, to, among other things,
prepare and file a preliminary proxy statement with the SEC.
PAY-OFF OF CREDIT FACILITIES. Simultaneously with its purchase of and
payment for Shares pursuant to the Offer, Purchaser will, and Wiley will cause
Purchaser to, lend to the Company on customary market terms a sum
17
equal to all amounts which are then due and owing pursuant to (i) the Company's
Credit Agreement (as defined in the Merger Agreement), dated as of July 30,
1999, as amended, and (ii) the Subordinated Loan Agreement (the "Subordinated
Loan Agreement"), dated as of May 7, 2001, by and between the Company and
International Data Group, Inc. As of August 16, 2001, the aggregate principal
amount of indebtedness under these facilities was $94,500,000. The Company has
advised the Purchaser that it intends to repay $2,000,000 of principal of such
indebtedness in September 2001 (but, in any event, not later than the date of
consummation of the Offer).
CERTIFICATE OF INCORPORATION AND BYLAWS. The Merger Agreement provides that
the Certificate of Incorporation and the Bylaws of Purchaser, as in effect
immediately prior to the Effective Time, will be the Certificate of
Incorporation and the Bylaws of the Surviving Corporation.
DIRECTORS AND OFFICERS. Pursuant to the Merger Agreement, and subject to
applicable law, the directors of Purchaser immediately prior to the Effective
Time will be the initial directors of the Surviving Corporation, and the
officers of the Company immediately prior to the Effective Time will be the
initial officers of the Surviving Corporation. However, upon the request of
Wiley or Purchaser, the Company will cause any officers of the Company to be
removed at the Effective Time.
CONVERSION OF SECURITIES. Pursuant to the Merger Agreement, (x) each Share
issued and outstanding immediately prior to the Effective Time (other than
Shares held by (i) the Company or any of its subsidiaries, (ii) Wiley, Purchaser
or any of Wiley's direct or indirect wholly owned subsidiaries and (iii)
stockholders who are entitled to and have properly exercised their appraisal
rights under the DGCL) will be converted automatically into the right to receive
an amount equal to the Offer Price (the "Merger Consideration"), payable in
cash, without interest thereon; (y) each share of common stock of Purchaser
outstanding immediately prior to the Effective Time will be converted into and
become a number of shares of the Surviving Corporation equal to one plus the
number of shares that would be subject to any stock options or warrants
(together, "Options") that remain outstanding after the Effective Time, if any,
and such shares will be the only outstanding Shares of capital stock of the
Surviving Corporation; and (z) each Share that is held by the Company in its
treasury and all Shares that are owned, directly or indirectly, by Wiley or the
Company or any of their respective subsidiaries will automatically be canceled
and cease to exist and will not be converted into the right to receive the
Merger Consideration or any other consideration.
OPTION PLANS. The Merger Agreement provides that at the Effective Time each
outstanding Option, whether granted under the 1998 Stock Plan or otherwise and
whether or not then vested or exercisable, will be converted (to the extent such
Option is convertible by the Company under its terms) into the right to receive
from the Company an amount of cash equal to the product of (i) the number of
Shares subject to the Option and (ii) the excess, if any, of the Merger
Consideration over the exercise price per Share of such Option, less any income
or employment tax or other tax withholding required. All Options, whether or not
such Options are converted into cash according to the formula described above,
will be canceled and/or terminated by the Company (to the extent such Options
are terminable by the Company under their terms).
REPRESENTATIONS AND WARRANTIES. Pursuant to the Merger Agreement, the
Company has made customary representations and warranties to Wiley and Purchaser
with respect to, among other matters, its organization and qualification,
subsidiaries, capitalization, corporate authorization, governmental
authorization, non-contravention, required filings with the Commission,
information to be included in the Offer documents, the proxy statement or the
other documents required to be filed with the Commission or any other
governmental authority relating to the Offer and the Merger, absence of certain
changes or events, litigation, compliance with law, taxes, employee benefit
plans, environmental matters, intellectual property, title and condition of
properties, insurance, certain contracts, employment matters, finders' fees,
opinion of financial advisors, voting requirements, inventories, and receivables
and payables. Wiley and Purchaser have made customary representations and
warranties to the Company with respect to, among other matters, their
organization, corporate authorization, governmental authorization,
non-contravention, information to be included in the Offer documents, the proxy
statement or the other documents required to be filed with the Commission or any
other governmental authority relating to the Offer and the Merger, litigation
and finders' fees.
COVENANTS. The Merger Agreement obligates the Company and its subsidiaries,
from the date of the Merger Agreement and continuing until the earlier of the
termination of the Merger Agreement or the Effective Time, and
18
unless Wiley otherwise agrees in writing, to: (a) conduct their business in the
ordinary course consistent with past practice and (b) use commercially
reasonable efforts to preserve intact their business organizations, good will
and relationships with third parties, to keep available the services of their
officers and employees and to maintain existing relations with customers,
suppliers, officers, employees and creditors.
The Merger Agreement also contains specific covenants as to certain
activities of the Company during the period from the date of the Merger
Agreement and continuing until the earlier of the termination of the Merger
Agreement or the Effective Time, which provide that the Company will not (and
will not permit any of its subsidiaries to) take certain actions without the
prior written consent of Wiley or as previously disclosed to Wiley in the
Company Disclosure Memorandum delivered with the Merger Agreement, including,
among other things:
(i) make, declare, set aside or pay any dividend or other
distribution with respect to any Shares of its capital stock, other than
distributions and other dividends paid by any subsidiary to the Company or
any wholly owned subsidiary;
(ii) adjust, split, combine or reclassify any of its capital stock
or issue or authorize the issuance of any other securities in respect of,
in lieu of or in substitution for shares of its capital stock;
(iii) directly or indirectly repurchase, redeem or otherwise acquire
any shares of capital stock or other securities of, or other ownership
interests in, the Company or any of its subsidiaries;
(iv) issue, deliver or sell any shares of any class or series of
its capital stock (including Company Common Stock) or securities
convertible into or exerciseable or exchangeable for shares of any class or
series of its capital stock (including Company Common Stock, or any rights,
warrants or options to acquire any shares of Company Common Stock), other
than issuances pursuant to stock-based awards or Options that are
outstanding on the date of the Merger Agreement and pursuant to the
Company's 1998 Employee Stock Purchase Plan;
(v) amend its certificate of incorporation, bylaws or comparable
organizational documents or adopt any plan of consolidation, merger or
reorganization or amend the terms of its outstanding securities;
(vi) acquire or agree to acquire by merging or consolidating with,
or by purchasing a substantial portion of the assets of, or by any other
manner, any business or division thereof or purchase any assets for more
than $250,000, except purchases of inventory in the ordinary course of
business consistent with past practice;
(vii) transfer, sell, lease, license, mortgage or otherwise encumber
or subject to any lien or otherwise dispose of any of its properties or
assets, except sales of assets for not more than $250,000, except for sales
of inventory in the ordinary course;
(viii) make or agree to make any new capital expenditure or
expenditures except for items currently contracted for by the Company or
contemplated by the Company's capital expenditure budget made available to
Wiley;
(ix) incur any indebtedness for borrowed money (whether or not
available under a credit line or agreement in effect on the date of the
Merger Agreement, including but not limited to, the Subordinated Loan
Agreement), including issuing debt securities, or guarantee any such
indebtedness, except for the endorsement of checks in the normal course of
business and the extension of credit in the normal course of business, or
make any loans, advances or capital contributions to, or investments other
than to any direct or indirect wholly owned subsidiary;
(x) enter into any new employee plans, or amend or renew any such
existing plans, or any collective bargaining agreement, other than as
required by law;
(xi) except to the extent required by the terms of written
employment agreements as in effect on the date of the Merger Agreement,
increase the compensation payable to or to become payable to, or pension or
other fringe benefits or perquisites to its present or former directors,
employees, officers or consultants, except for increases already committed
to or increases in salary consistent with the Company's past practices (of
no more than 10%) made in connection with an employee's annual review;
19
(xii) enter into any contracts of employment (other than contracts
terminable by the Company without liability immediately following the
closing) or any severance, retention or similar agreement except for
agreements with new employees entered into in the ordinary course of
business consistent with past practice and providing for a term of less
than one year and annual base and bonus compensation not to exceed
$100,000;
(xiii) pay, agree to pay or award any employee bonuses other than
those paid or awarded consistent with past practice and up to a maximum of
$25,000 per employee, or forgive any officer or employee loan;
(xiv) adopt any change, other than as required by the Commission,
changes in U.S. generally accepted accounting principles or applicable law,
in its accounting policies, procedures or practices;
(xv) (a) make any tax election or (b) settle or compromise any
material income tax liability;
(xvi) pay, discharge, settle or satisfy any claims, litigation,
arbitration, liabilities or other controversies (absolute, accrued,
asserted or unasserted, contingent or otherwise), including the payment,
discharge, settlement or satisfaction of any claims, litigation,
arbitration, liabilities or controversies of any nature relating to the
Transactions contemplated by the Merger Agreement, other than the payment,
discharge or satisfaction, in the ordinary course of business consistent
with past practice or in accordance with their terms, of liabilities
reflected or reserved against in, or contemplated by, the most recent
consolidated financial statements (or the notes thereto) included in the
Company's public filings with the Commission or incurred in the ordinary
course of business consistent with past practice, or waive any material
benefits of, or agree to modify in any material respect, any
confidentiality, standstill or similar agreements to which the Company or
any of its subsidiaries is a party;
(xvii) cancel or terminate any material insurance policy naming the
Company or any subsidiary as a beneficiary or loss payable payee;
(xviii) revalue in any material respect any of its assets, including,
without limitation, writing down the value of inventory or writing-off
notes or accounts receivable other than in the ordinary and usual course of
business consistent with past practice or as required by generally accepted
accounting principles;
(xix) (i) enter into any contract or agreement, other than in the
ordinary and usual course of business consistent with past practice, or
amend in any material respect any of the Company's material contracts or
agreements; or (ii) enter into any contract, agreement, commitment or
arrangement providing for, or amend any contract, agreement, commitment or
arrangement to provide for, the taking of any action that would be
prohibited under the Merger Agreement;
(xx) enter into any agreement or arrangement that limits or
otherwise restricts the Company or any of its subsidiaries or any successor
thereto or that could, after the Effective Time, limit or restrict the
Surviving Corporation and its affiliates (including Wiley) or any successor
thereto, from engaging or competing in any line of business or in any
geographic area;
(xxi) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its subsidiaries (other than the
Merger);
(xxii) alter through merger, liquidation, reorganization,
restructuring or in any other fashion the corporate structure or ownership
of any subsidiary;
(xxiii) make or agree to make (whether or not in the ordinary course
of business consistent with past practice) any commitment or investment or
enter into any contract which obligates the Company or any of its
Subsidiaries to make payments exceeding $300,000;
(xxiv) renew or terminate any significant agreement relating to the
distribution, packaging or manufacture of the Company's intellectual
property outside the United States; or
(xxv) enter into, or agree or commit to enter into, any agreement,
contract, commitment or arrangement that if completed would be in
contravention of any of the foregoing.
20
NO SOLICITATION. The Merger Agreement provides that the Company will not,
and will not permit any of its subsidiaries to, and will use its best efforts to
ensure that its officers, directors, employees, investment bankers, consultants,
financial advisors, accountants, agents or other representatives retained by it
or any of its subsidiaries, do not solicit, initiate or encourage the submission
of any Acquisition Proposal (as defined below) or engage in discussions or
negotiations or furnish to any "Person" (e.g., any individual, corporation,
partnership, trust, limited liability company, association, unincorporated
organization, joint venture, other entity, group, labor union or governmental
entity) any information with respect to an Acquisition Proposal or knowingly
facilitate any effort or attempt to make an Acquisition Proposal. Nothing
contained in the Merger Agreement prevents the Company Board from complying with
Rule 14d-9 or Rule 14e-2 under the Exchange Act with respect to any Acquisition
Proposal (as defined below) or making any disclosure to the Company's
stockholders if, in the good faith judgment of the majority of the members of
the Company Board, after consultation with and advice from outside legal
counsel, failure to so disclose would reasonably be deemed to constitute a
breach of the fiduciary duties of the Company Board under applicable law.
The Company may, however, negotiate or otherwise engage in substantive
discussions with, and furnish nonpublic information, in response to an
unsolicited Acquisition Proposal by such Person if (i) a majority of the Company
Board determines in good faith, after receiving the advice of a nationally
recognized financial advisor, that such Acquisition Proposal would reasonably be
expected to result in a Superior Proposal (as defined below) and, after
consultation with and advice from outside legal counsel, that the failure to
take such action would reasonably be deemed to constitute a breach of its
fiduciary duties under applicable law, and (ii) such Person executes a
confidentiality agreement in a form no less favorable to the Company than the
confidentiality agreement between the Company and Wiley (including the
standstill provisions).
Prior to providing any information to or entering into discussions or
negotiations with any Person in connection with an Acquisition Proposal, the
Company will promptly inform Wiley of such Acquisition Proposal, including
providing information as to the material terms and conditions of the proposal,
and the identity of the Person making it, and will provide Wiley with a copy of
any written Acquisition Proposal or amendments or supplements thereto, and will
promptly inform Wiley of the status of any discussions or negotiations and any
material changes to the terms and conditions of the Acquisition Proposal, and
will promptly give Wiley a copy of any information delivered to such Person
which has not previously been reviewed by Wiley.
Except as permitted above, neither the Company Board nor any committee
thereof will, (i) withdraw or modify, or publicly propose to withdraw or modify,
in a manner adverse to Wiley, its recommendation discussed above, or take any
action not explicitly permitted by the Merger Agreement that would be
inconsistent with, its approval of the Offer and the Merger, (ii) approve or
recommend, or publicly propose to approve or recommend, any Acquisition Proposal
or (iii) cause the Company to enter into any letter of intent, agreement in
principle, acquisition agreement, commitment or similar agreement related to any
Acquisition Proposal. Notwithstanding the foregoing, until receipt of the vote
of the holders of a majority of the outstanding Shares, the Company Board will
be permitted (i) not to recommend to its stockholders acceptance of the Offer
and/or approval and adoption of the Merger Agreement and the Merger, (ii) to
withdraw, or modify in a manner adverse to Wiley, its recommendation to its
stockholders discussed above, (iii) to approve or recommend any Superior
Proposal or (iv) to terminate the Merger Agreement in accordance with its terms
and in connection therewith enter into an agreement with respect to such
Superior Proposal, but only if (y) the Company has received an Acquisition
Proposal which the board of directors determines in good faith, after receiving
the advice of a nationally recognized financial advisor, constitutes a Superior
Proposal and (z) the Company Board determines in good faith, after consultation
with and advice from outside legal counsel, that the failure to take such action
could reasonably be deemed to constitute a breach of its fiduciary duties under
applicable law. For the purposes of the "no solicitation" provision of the
Merger Agreement, the parties have agreed that the scope of the fiduciary duty
of the Company Board will not be deemed to be limited or constrained by virtue
of the fact that certain stockholders of the Company have agreed in the Voting
and Tender Agreement to tender their Shares to Purchaser and to vote in favor of
the Merger, and in considering whether its failure to take any action specified
above would reasonably be deemed to be a breach of its fiduciary duties to the
stockholders of the Company under applicable law, the Company Board will be
entitled to assume that the Voting and Tender Agreement has been terminated.
21
Under the Merger Agreement, "Acquisition Proposal" means any bona fide
offer, inquiry or proposal for (i) a merger, reorganization, consolidation,
share exchange, business combination, or other similar transaction involving the
Company or any of its subsidiaries, (ii) any proposal or tender offer or
exchange offer to acquire, directly or indirectly, securities representing more
than 15% of the voting power of the Company or the filing of a registration
statement under the Securities Act in connection therewith or (iii) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole, other than the Offer and the Merger contemplated by the Merger Agreement.
Under the Merger Agreement, "Superior Proposal" means any bona fide written
Acquisition Proposal, which was not solicited by the Company or any affiliate or
agent of the Company at the explicit or implicit direction of the Company and
which does not include any financing condition, with respect to which the
Company Board determines in good faith (after receiving the advice of a
nationally recognized financial advisor and taking into account all the terms
and conditions of the Acquisition Proposal, which terms and conditions must
include all legal, financial and regulatory aspects of the proposal, the Person
making such Acquisition Proposal, and the strategic benefits to be derived from
the Offer and the Merger and the long-term prospects of the Company and its
Subsidiaries) is more favorable to the Company's stockholders (in their
capacities as stockholders) from a financial point of view than the Offer and
Merger.
OTHER ACTIONS. The Merger Agreement provides that the Company, Wiley, and
Purchaser, will not take any action:
o that would or could reasonably be expected to make any of their
respective representations and warranties set forth in the Merger
Agreement that are qualified as to materiality to become untrue or
incorrect in any material respect,
o that would or could reasonably be expected to make any such
representations and warranties that are not so qualified to become
untrue or incorrect in any material respect so as to have a Material
Adverse Effect (as defined below),
o that would result in any of the conditions to the Offer not being
satisfied (subject to the Company Board's fiduciary obligations as
described above), or
o cause any of the conditions to the Offer (as described in Section 15
hereof) to not be satisfied (subject to the Company's right to take
action with respect to any Superior Proposals, as discussed above).
COMPANY STOCKHOLDER MEETING. Pursuant to the Merger Agreement, if required
by applicable law in order to consummate the Merger, the Company, acting through
the Company Board, will call and hold the Company Stockholder Meeting as
promptly as practicable following consummation of the Offer for the purpose of
considering and taking action on the Merger Agreement and the Merger (the
"Company Stockholder Meeting"). At the Company Stockholder Meeting, Wiley and
Purchaser will cause all Shares then owned by them and their subsidiaries to be
voted in favor of the adoption of the Merger Agreement. If Purchaser acquires at
least 90% of the outstanding Shares, however, the parties will take all
necessary and appropriate action to cause the Merger to become effective, in
accordance with Section 253 of the DGCL, without a meeting of the stockholders
of the Company.
COMPANY BOARD REPRESENTATION. The Merger Agreement provides that upon
purchase by Purchaser of Shares pursuant to the Offer, Purchaser is entitled to
designate for election as directors of the Company such number of directors,
rounded up to the next whole number, as is equal to the product of (i) the total
number of directors of the Company constituting the whole Company Board (giving
effect to any increase in the number of directors in order to comply with this
provision) and (ii) the percentage that the voting power of Shares of Company
Common Stock beneficially owned by Wiley and Purchaser (including Shares of
Company Common Stock paid for pursuant to the Offer), upon such payment, bears
to the total voting power of Shares of Company Common Stock then outstanding,
and the Company will take all action within its power to cause Purchaser's
designees to be elected or appointed to the Company Board, including, without
limitation, increasing the number of directors, and seeking and accepting
resignations of incumbent directors. At such time, the Company will also, upon
the request of Wiley or Purchaser, use its reasonable best efforts to cause
individual directors designated by Purchaser to constitute the number of
members, rounded up to the next whole number, on (i) each committee of
22
the Board of Directors other than any such committee of the Company Board
established to take action under the Merger Agreement and (ii) the board of
directors of each significant subsidiary of the Company, and each committee
thereof, that represents the same percentage as Purchaser's designees represent
on the Company Board. Notwithstanding the foregoing, in the event that
Purchaser's designees are appointed or elected to the Company Board, the Company
Board will at all times until the Effective Time have at least two directors who
are directors on the date of the Merger Agreement or otherwise not affiliates of
Wiley (the "Continuing Directors"); provided that in the event that the number
of Continuing Directors is reduced below two for any reason whatsoever, the
Company Board will cause the person designated by the remaining Continuing
Director to fill such vacancy and such person will be deemed to be a Continuing
Director for all purposes of the Merger Agreement or, if no Continuing Directors
then remain, the other directors of the Company then in office will designate
two persons to fill such vacancies who are not officers, directors, employees or
affiliates of the Company or Wiley or any of their respective subsidiaries and
such persons will be deemed to be Continuing Directors for all purposes of this
Agreement.
Following the election or appointment of Purchaser's designees and until
the Effective Time, the approval of the Continuing Directors will be required to
authorize (and such authorization will constitute the authorization of the
Company Board and no other action on the part of the Company, including any
action by any other directors of the Company, will be required to authorize) any
termination or amendment of the Merger Agreement by the Company, any amendment
of the certificate of incorporation or bylaws of the Company inconsistent with
the Merger Agreement, any extension of time for performance of any obligation or
action under the Merger Agreement by Wiley or Purchaser, any waiver of any
condition to Wiley's or Purchaser's obligations under the Merger Agreement or
any of the Company's rights thereunder, or any material transaction with Wiley,
Purchaser or any affiliate thereof (other than the pay-off of the Company's
credit facilities).
ACCESS TO INFORMATION. The Merger Agreement provides that, during the
period after the execution of the Merger Agreement and prior to the Effective
Time, the Company will, and will cause its subsidiaries to:
o afford to Wiley and its counsel, financial advisors, auditors, and other
authorized representatives reasonable access, during normal business
hours, to the offices, properties, books and records and contracts and
agreements of the Company and its subsidiaries,
o furnish to Wiley, its officers, employees and its counsel, financial
advisors, auditors and other authorized representatives, such financial
and operating data and other information as it may reasonably request,
and
o instruct the employees and its counsel, financial advisors, auditors and
other authorized representatives of the Company and its subsidiaries to
cooperate with Wiley in its investigation of the Company and its
subsidiaries.
The Merger Agreement provides that between the date of the Merger Agreement
and the Effective Time, the Company will furnish to Wiley and Purchaser (i)
within five business days after the delivery thereof to management, such monthly
financial statements and data as are regularly prepared for distribution to the
Company management and (ii) at the earliest time they are available, such
quarterly and annual financial statements as are prepared for the Company's
filings with the Commission, which (in the case of clause (ii)) must be in
accordance with the books and records of the Company.
Pursuant to the terms of the Merger Agreement, except as required by
applicable law, Wiley will hold, and will cause its officers, directors,
employees, accountants, counsel, consultants, advisors and agents to hold in
confidence, all documents and information concerning the Company or any of its
Subsidiaries furnished to Wiley or its affiliates in connection with the
Transactions in accordance with the terms of the Confidentiality Letter
agreement dated May 29, 2001 between the Company and Wiley.
EFFORTS. Subject to the terms and conditions provided in the Merger
Agreement, Wiley, Purchaser and the Company have agreed to use commercially
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other parties in doing,
all things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the Offer and the Merger and the
Transactions. The parties have agreed to comply with all legal requirements that
may be imposed
23
on them with respect to the Offer or the Merger and the Transactions, including
(i) obtaining all necessary waivers, consents and approvals of or filings with
any governmental entity and the making of all necessary registrations and
filings (including filings with governmental entities, if any), (ii) obtaining
all material consents, approvals or waivers from third parties, (iii) defending
any lawsuits or other legal proceedings (whether judicial or administrative,
challenging the Merger Agreement or the consummation of the Transactions
including, without limitation, seeking to have any stay or temporary restraining
order entered by any court or other governmental entity vacated or reversed),
and (iv) executing and delivering any necessary additional instruments.
In connection with and without limiting the foregoing, the Company and the
Company Board, if any state takeover statute or similar statute or regulation is
or becomes applicable to the Offer, the Merger, the Merger Agreement or the
Transactions contemplated by the Merger Agreement, use their commercially
reasonable efforts to ensure that the Offer, the Merger and the Transactions may
be consummated as promptly as practicable on the terms contemplated by the
Merger Agreement and otherwise minimize the effect of such statute or regulation
on the Offer, the Merger and the Transactions contemplated by the Merger
Agreement. This provision does not limit or affect the Company's taking actions
specifically permitted by the "No Solicitation" section of the Merger Agreement,
as described above.
In connection with the preceding paragraph, each of the Company and Wiley
will, as promptly as practicable following the execution and delivery of the
Merger Agreement, (i) file with the appropriate United States antitrust
authorities the notification and report required by applicable law (but in no
event later than five business days after the date of the Merger Agreement) and,
if so requested by the other such party, request early termination of the
waiting period thereunder and (ii) file with the relevant governmental entities
in other jurisdictions all other antitrust filings, if any, required for
consummation of the Transactions under any applicable law. The parties also
agree that neither party will be required to take any action including, without
limitation, the proposing, negotiating, committing to and effecting, by consent
decree, hold separate order or otherwise, the sale, divestiture or disposition
of assets or businesses of Wiley (or any of its subsidiaries) or otherwise
taking or committing to take actions that after the Effective Time would limit
Wiley or its subsidiaries' freedom of action with respect to, or its ability to
retain, one or more of its subsidiaries' businesses, product lines or assets.
Notwithstanding the foregoing, Wiley agrees that, if necessary to eliminate an
impediment under any antitrust law that may be asserted by a U.S. governmental
antitrust authority to the Transactions, Wiley will consent to the reasonable
sale or disposition of one or more of the Company's copyrighted works published
or under contract to be published ("Titles"); provided, however, that (a) Wiley
will not be required to consent to the divestiture of any of its or its
affiliates' pre-closing assets, (b) the divestiture of Titles that produced
aggregate net revenues for the 12-month period ended June 30, 2001 of up to $2.0
million will be deemed reasonable within the meaning of this provision, and the
divestiture of Titles in excess of such amount will not be required, and (c)
Wiley will not be required to consent to any divestiture that must be
consummated prior to the Effective Time.
Subject to the terms and conditions of the Merger Agreement, in furtherance
and not in limitation of the covenants of the parties contained therein, if any
administrative or judicial action or proceeding, including any proceeding by a
governmental entity or a private party, is instituted (or threatened to be
instituted) challenging any Transactions as violative of any applicable law,
each of the parties will cooperate in all respects with each other and use its
respective commercially reasonable efforts in order to contest and resist any
such action or proceeding and to have vacated, lifted, reversed or overturned
any decree, judgment, injunction or other order, whether temporary, preliminary
or permanent, that is in effect and that prohibits, prevents or restricts
consummation of the Transactions contemplated by the Merger Agreement.
INDEMNIFICATION AND INSURANCE. Pursuant to the Merger Agreement, the
Company will, to the fullest extent permitted by the DGCL, regardless of whether
the Merger becomes effective, and after the Effective Time, Wiley and the
Surviving Corporation will, jointly and severally, to the fullest extent
permitted by the DGCL, indemnify (including reasonable attorneys' fees, but not
including settlements not consented to), defend and hold harmless any person who
was at any time prior to and including the Effective Time (i) a director or
officer of the Company, or (ii) a director, officer, trustee, employee or agent
of any other enterprise, serving as such at the request of the Company, or the
legal representatives of such persons ("Indemnified Parties"), against all
losses, liabilities,
24
expenses (including attorney's fees), claims, fines, penalties or damages
incurred in connection with any civil, criminal or arbitrative suit, action,
proceeding or investigation by reason of his or her being or having been such a
director, officer, employee or agent prior to and including the Effective Time,
for a period of six years following the Effective Time, or until the final
disposition of any claim or proceeding which commenced with such six-year
period.
The indemnification rights of the Indemnified Parties in the certificate of
incorporation and bylaws of the Company and its subsidiaries on the date of the
Merger Agreement will survive the Merger with respect to matters occurring prior
to the Effective Time, and will continue for a period of not less than the
relevant statutes of limitations. The certificate of incorporation and bylaws of
the Surviving Corporation will contain indemnification provisions for the
Indemnified Parties no less favorable than those provisions contained in the
Company's certificate of incorporation and bylaws as in effect immediately prior
to the date of the Merger Agreement, and may not be amended, modified or
otherwise repealed for a period of six years from the Effective Time in any
manner that would adversely affect the rights of the Indemnified Parties
thereunder, without such persons' written consent.
In addition, for six years after the Effective Time, Wiley will provide, or
cause the Surviving Corporation to provide, with respect to matters occurring
prior to the Effective Time, policies of directors and officers' liability
insurance comparable to those currently maintained by the Company for the
benefit of persons currently covered by the Company's directors' and officers'
liability insurance policies (except to the extent any provisions in such
insurance are no longer generally available in the market), provided that in no
event will the Surviving Corporation be required to expend in any one year for
such insurance an amount in excess of 200% of the aggregate annual premiums
currently paid by the Company, but in such case will purchase as much of such
coverage as possible for that amount.
In the event of any suit, action, proceeding or investigation referred to
above, (a) the Company or the Surviving Corporation, as applicable, will pay the
reasonable fees and expenses of counsel selected by the Indemnified Parties,
which counsel will be reasonably satisfactory to the Company or the Surviving
Corporation; provided, however, that neither the Company nor the Surviving
Corporation will be obligated pursuant to this paragraph to pay the fees and
disbursements of more than one counsel for all Indemnified Parties in any single
action except to the extent that, in the opinion of counsel for the Indemnified
Parties, two or more of such Indemnified Parties have conflicting interests in
the outcome of such action, and (b) the Company and the Surviving Corporation
will cooperate in the defense of any such matter; and provided, however, that
neither the Company nor the Surviving Corporation will be liable for any
settlement effected without its written consent (which consent will not be
unreasonably withheld).
The indemnification and insurance provisions will survive the consummation
of the Merger at the Effective Time, and will be binding on all successors and
assigns of Wiley and the Surviving Corporation. Proper provisions must be made
in the case of transfers of all or substantially all of the assets of Wiley, the
Surviving Corporation or their successors and assigns, so that these
indemnification and insurance obligations are assumed by such successors and
assigns.
NOTIFICATION OF CERTAIN MATTERS. Wiley and the Company have agreed to
promptly notify each other of:
(i) any representation or warranty made by it contained in the Merger
Agreement that is qualified as to materiality and becomes untrue or
inaccurate in any respect, or any representation or warranty that is not so
qualified becomes untrue or inaccurate in any material respect, at or prior
to the Effective Time;
(ii) the failure by it to perform, or comply with, in any material
respect, any of its obligations, covenants, or agreements contained in the
Merger Agreement, which failure, individually or in the aggregate, has had
or would reasonably be expected to have a Material Adverse Effect (as
defined below);
(iii) the Company or Wiley obtaining knowledge of a material breach by
the other party, of their respective representations, warranties or
covenants under the Merger Agreement, of which the breaching party has not
already given notice pursuant to clauses (i) or (ii) above;
25
(iv) any notice or other communication from any third party alleging
that the consent of such third party is or may be required in connection
with the Transactions;
(v) any notice or other communication from any governmental entity in
connection with the Transactions;
(vi) any actions, suits, or proceedings commenced or, to its
knowledge, threatened against, relating to or involving or otherwise
affecting the Company, Wiley or any of their respective subsidiaries that
relate to the consummation of the Transactions; or
(vii) the occurrence of any other event which would reasonably be
likely to have a Material Adverse Effect on the Company or cause any of the
Merger Conditions (as defined below) to be unsatisfied in any material
respect at any time prior to consummation of the Offer.
As used in the Merger Agreement, "Material Adverse Effect" means, with
respect to any Person, any change, result, effect, event, occurrence or state of
facts (or any development that has had or is reasonably likely to have any
change or effect) that, individually or in the aggregate with any such other
change, result, effect, event, occurrence or state of facts, is or would
reasonably be expected to be, materially adverse (even if not (i) foreseeable or
known as of August 12, 2001 or (ii) constituting a breach of a representation,
warranty or covenant set forth in the Merger Agreement) to the business,
condition (financial or otherwise), assets, liabilities, results of operations
or prospects (including EBITDA) of such Person and its subsidiaries, taken as a
whole, or which is or would reasonably be expected to be materially adverse to
the ability of such Person to perform on a timely basis any of its material
obligations under the Merger Agreement or to consummate the Transactions.
However, none of the following will be deemed in themselves, either alone or in
combination, to constitute, and none of the following are to be taken into
account in determining whether there has been, a Material Adverse Effect: (i)
any change in the market price or trading volume of capital stock of such
Person, (ii) changes, events or occurrences in the U.S. securities markets that
are not specific to such Person, (iii) any adverse changes relating to general
business or economic conditions which are not specific to such Person and its
subsidiaries, (iv) any adverse change, result, event, development, state of
facts or effect attributable to the announcement or pendancy of the Offer, the
Merger and the Transactions (including any cancellations of or delays in
customer agreements, any reduction in sales, any disruption in supplier,
distributor, partner or similar relationships or any loss of employees), or
resulting from or relating to compliance with the terms of, or the taking of any
action required by the Merger Agreement and (v) any adverse change, result,
event, development or effect arising from or relating to any change in U.S.
generally accepted accounting principles.
PUBLIC ANNOUNCEMENTS. The Merger Agreement provides that Wiley and the
Company will consult with each other before issuing any press release or making
any public statement (including any broadly issued statement or announcement to
employees) with respect to the Merger Agreement or the Transactions and, except
as may be required by applicable law or any listing agreement with any national
securities exchange, will not issue any such press release or make any such
public statement without the prior consent of the other (which consent must not
be unreasonably withheld).
CERTAIN EMPLOYEE BENEFITS. The Merger Agreement provides that for one year
after the Effective Time, Wiley will provide or cause to be provided to the
employees of the Company and its subsidiaries immediately prior to the Effective
Time (the "Company Employees"), compensation and benefits comparable to the
compensation opportunities (consisting of base pay, commissions and bonus
opportunities) and benefits (exclusive of any such compensation and benefits
consisting of or based on any equity securities) provided by the Company and its
subsidiaries immediately prior to the Effective Time. The preceding sentence
will not preclude Wiley or the Surviving Corporation or its subsidiaries at any
time following the Effective Time from terminating the employment of any Company
Employee and such compensation opportunities will, subject to the provisions of
any Employee Plan, be required to be provided to any such Company Employee only
during his or her period of employment, so long as any such terminated employee
receives severance and other termination benefits upon or in connection with
such termination in an amount which is at least equal to the severance and other
termination benefits which would have been provided to such employee under the
terms of the severance or other applicable agreements or arrangements of the
Company or a subsidiary in effect immediately prior to the Effective Time.
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Nothing contained in the Merger Agreement will be construed to limit the rights
and obligations of the Company, any subsidiary of the Company and any current or
former employee or other personnel (and where applicable, the dependents and
beneficiaries of any such employees or other personnel) under each Employee
Plan. Further, nothing in the Merger Agreement will be construed to prohibit the
Surviving Corporation from amending or terminating any contracts, agreements,
arrangements, policies, plans and commitments with respect to any Employee Plan
in accordance with the terms thereof and with applicable Law.
The Merger Agreement provides further that each Company Employee be given
full credit for all service with the Company and its subsidiaries and their
respective predecessors under any plans or arrangements providing vacation, sick
pay, severance, retirement, pension or retiree welfare benefits maintained by
Wiley or the Surviving Corporation or any of their respective affiliates for
purposes of vesting, eligibility and seniority. Prior service will not be
credited for benefit accrual under any pension plan or retiree welfare plan.
In the event of any change in the welfare benefits provided to Company
Employees following the Effective Time that become effective in the plan year
that includes the Effective Time, Wiley will or will cause the Surviving
Corporation to waive all limitations as to pre-existing conditions, exclusions
and waiting periods with respect to participation and coverage requirements
applicable to the Company Employees under any such welfare benefits to the
extent that such conditions, exclusions or waiting periods would not apply in
the absence of such change and credit each Company Employee with any co-payments
and deductibles paid prior to any such change in satisfying any applicable
deductible or out-of-pocket requirements after such change for the relevant plan
year.
From and after the Effective Time, Wiley will waive or will cause the
Surviving Corporation to waive any pre-existing conditions or limitations and
eligibility waiting periods under any welfare benefit plans of Wiley or the
Surviving Corporation with respect to Company Employees and their eligible
dependents and will give each Company Employee credit for the plan year in which
the Effective Time occurs towards applicable deductibles and annual
out-of-pocket limits for expenses incurred prior to the Effective Time.
CONDITIONS TO CONSUMMATION OF THE MERGER. Pursuant to the Merger Agreement,
the respective obligations of Wiley, Purchaser and the Company to complete the
Merger are subject to the satisfaction or waiver, at or before the Effective
Time, of each of the following conditions (collectively, the "Merger
Conditions"):
o Purchaser must have purchased the Shares pursuant to the Offer (this
condition will be deemed to be satisfied for Wiley and Purchaser if
Purchaser fails to accept for payment or pay for Shares validly tendered
and not withdrawn pursuant to the Offer in violation of the terms of the
Offer or the Merger Agreement);
o if required by applicable law, the Merger Agreement must have been
approved and adopted by the required vote of the stockholders of the
Company in accordance with the DGCL; and
o there must not be any statute, rule or regulation enacted, promulgated or
deemed applicable to the Merger by any governmental entity preventing the
consummation of the Merger or making the consummation thereof unlawful,
and there must not be in effect any temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction preventing the consummation of the Merger;
provided, however, that each of the parties must have used commercially
reasonable efforts to prevent the entry of any such injunction or other
order and to appeal as promptly as possible any injunction or other order
that may be entered.
TERMINATION. Pursuant to its terms, the Merger Agreement may be terminated,
and the Merger may be abandoned, at any time prior to the Effective Time,
whether before or after approval of the Merger by the stockholders of the
Company:
(i) by mutual written consent of Wiley, Purchaser and the Company;
(ii) by either the Company (by action of the Continuing Directors only
following the purchase of Shares pursuant to the Offer) or Wiley:
27
o if any court or governmental entity has restrained, enjoined,
prohibited or otherwise made illegal the Merger by an order (other
than a temporary restraining order), decree, ruling or other action
which has become final and nonappealable; or
o if (x) the Offer has expired without any Shares being purchased or
(y) Wiley or Purchaser has not accepted for payment all Shares
tendered pursuant to the Offer by December 31, 2001 (this right to
terminate will not be available to any party whose failure to
fulfill any obligation under the Merger Agreement has been the cause
of, or resulted in, the failure of Wiley or Purchaser to purchase
the Shares pursuant to the Offer);
(iii) by the Company:
o if Wiley or Purchaser fails to commence the Offer pursuant to the
Merger Agreement (this right to terminate will not be available if
the Company is in breach of its obligations under the Merger
Agreement such as to (x) cause a Material Adverse Effect on the
Company or (y) prevent or materially hinder or delay the purchase of
the Shares pursuant to the Offer or the Merger);
o in connection with entering into a definitive agreement with respect
to a Superior Proposal, pursuant to the terms of the Merger
Agreement, if (x) the Company provides written notice to Wiley and
Purchaser of the material terms and conditions of the Acquisition
Proposal, which the Company Board determines in good faith, after
consultation with and advice from a nationally recognized financial
advisor and its outside legal counsel, constitutes a Superior
Proposal, attaching the most current version of such Acquisition
Proposal with respect thereto and identifying the Person making such
Acquisition Proposal, (y) after five business days immediately
following delivery of such written notice, the Company Board
reasonably determines, based upon the advice of a nationally
recognized financial advisor, that any proposal made by Wiley and
Purchaser supplementing the terms and conditions of the Offer, is
not at least as favorable to the Company and the Company's
stockholders as the terms and conditions of such Acquisition
Proposal, and (z) upon entering into a definitive agreement with
respect to a Superior Proposal, the Board of Directors causes the
Company simultaneously to pay Wiley the Termination Fee and Expenses
(as defined below);
o if Wiley or Purchaser have made a material misrepresentation or have
breached in any material respect any of their respective
representations, warranties, covenants or other agreements contained
in the Merger Agreement, which breach cannot be or has not been
cured, in all material respects, within 15 days after the giving of
written notice to Wiley or Purchaser, as applicable;
(iv) by Wiley:
o if, due to an occurrence, not resulting from a breach by Wiley or
Purchaser of their obligations under the Merger Agreement, which
makes it impossible to satisfy any one or more of the Offer
Conditions, Wiley or Purchaser has failed to commence the Offer on
or prior to five business days following the date of the initial
public announcement of the Offer;
o if, prior to the purchase of the Shares pursuant to the Offer, the
Company has breached any representation, warranty, covenant or other
agreement contained in the Merger Agreement which (x) would give
rise to the failure of a condition set forth in paragraph (iv) or
(v) of the Offer Conditions described in Section 15 and (y) cannot
be or has not been cured, in all material respects, within 15 days
after the giving of written notice to the Company;
o if, whether or not permitted to do so, (x) the Company Board
withdraws or modifies in a manner adverse to Wiley or Purchaser (or
fails, at the request of Wiley, to reaffirm) its approval or
recommendation of the Offer, the Merger or the Agreement, or
approves or recommends any Acquisition Proposal or (y) the Company
has entered into any agreement with respect to any Acquisition
Proposal, including a Superior Proposal entered into pursuant to the
Merger Agreement.
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FEES AND EXPENSES. Except as provided in the Merger Agreement, whether or
not the Offer or the Merger is consummated, all costs and expenses incurred in
connection with the Merger Agreement and the Transactions will be paid by the
party incurring those expenses. The Merger Agreement further provides that in
the event that (1) the Merger Agreement is terminated by Wiley pursuant to the
third bullet point in paragraph (iv) described above under "TERMINATION," or (2)
the Merger Agreement is terminated by the Company pursuant to the second bullet
point under paragraph (iii) described above under "TERMINATION," then the
Company will pay Wiley a termination fee of $4,000,000 plus an amount equal to
Wiley's actual and resonably documented out of pocket expenses up to an
aggregate of $2,000,000 in connection with the Offer, the Merger, the Merger
Agreement and the consummation of the Transactions. In addition, if the Merger
Agreement is terminated by Wiley prior to consummation of the Offer, by reason
of the non-fulfillment of Offer Conditions (iv), (v) and (vi) discussed below in
Section 15 and, at the time of such termination Wiley and Purchaser are not in
material breach of their respective obligations under the Merger Agreement, then
the Company will pay to Wiley the Expenses, and, if within 18 months after such
termination, the Company announces its intention to enter into an agreement with
respect to an Acquisition Proposal and the Company subsequently consummates such
transaction, then the Company will pay the Termination Fee at the time of such
consummation.
The Merger Agreement also provides that the Company will pay all taxes
incident to preparing for, entering into and carrying out the Merger Agreement
and the consummation of the Offer and the Merger (including, without limitation,
transfer, stamp and documentary taxes or fees, and sales, use, gains, real
property transfer and other or similar taxes or fees).
In the Merger Agreement, the Company acknowledged that the agreements
contained under "Fees and Expenses" are an integral part of the Transactions
contemplated by the Merger Agreement, and that, without these agreements, Wiley
would not have entered into the Merger Agreement; accordingly if the Company
fails to promptly pay the amounts due as described above, and Wiley commences a
suit which results in the payment of such fees, then the Company will also pay
to Wiley its costs and expenses in connection with such amounts plus interest.
AMENDMENT. Subject to its terms, the Merger Agreement may be amended by the
parties at any time before or after any required approval of the Merger by the
stockholders of the Company (subject to further approval by the Company
stockholders if required by law), provided, however, that in the event that
Purchaser's designees are appointed or elected to the Board of Directors of the
Company as provided in the Merger Agreement, after the acceptance for payment of
Shares pursuant to the Offer and prior to the Effective Time, the affirmative
vote of a majority of the Continuing Directors will be required to amend or
terminate the Merger Agreement by the Company, or exercise, or waive any of the
Company's rights or remedies under the Merger Agreement, extend the time for
performance of Wiley's and Purchaser's obligations, take any action to amend or
otherwise modify the Company's Amended and Restated Certificate of Incorporation
or bylaws or take any action that would adversely affect the rights of the
stockholders of the Company or the holders of Options with respect to the
Transactions.
WAIVER. At any time prior to the Effective Time, the parties may (i) extend
the time for the performance of any of the obligations of the other parties,
(ii) waive any inaccuracies in any representations and warranties on the part of
the other parties or (iii) waive compliance with any of the agreements or
conditions therein (subject to further approval by the Company stockholders if
required by law).
VOTING AND TENDER AGREEMENT
Pursuant to the Voting and Tender Agreement, IDG has agreed to tender its
Shares in the Offer not later than one business day prior to the Expiration Date
and not to withdraw such Shares once tendered. IDG has also agreed to vote its
Shares (a) in favor of the Merger, the Merger Agreement and the Transactions,
(b) against any action or agreement that would result in any breach in any
material respect of any covenant, representation, warranty or any other
obligation of the Company under the Merger Agreement not being fulfilled, and
(c) against any action or agreement that would materially impede, interfere with
or attempt to discourage the Offer or the Merger. In addition, under the Voting
and Tender Agreement (so long as it remains in effect), IDG has granted an
irrevocable proxy to and appointed Wiley as IDG's proxy and attorney-in-fact to
vote, act by written consent or grant a consent, proxy or approval in respect of
all Shares held by IDG with respect to such vote or action by written
29
consent, solely for the purposes of voting in favor of the Merger, the Merger
Agreement (as may be amended from time to time, except for an amendment that
would result in a termination of the Voting and Tender Agreement according to
the terms thereof) and any of the Transactions contemplated by the Merger
Agreement.
The agreements contained in the Voting and Tender Agreement may be
terminated by any party to that agreement at any time after the earliest of (a)
an amendment or modification to or waiver under the Merger Agreement, including
any reduction of the Offer Price, that would be economically adverse to IDG, (b)
the termination of the Merger Agreement, (c) the completion of the Merger, or
(d) December 31, 2001.
CONFIDENTIALITY AGREEMENT
Pursuant to the Confidentiality Agreement, Wiley has agreed, among other
things, to keep confidential certain information concerning the Company
furnished to it and its representatives by or on behalf of the Company or its
representatives ("Evaluation Material"), and to use the Evaluation Material
solely for the purpose of evaluating a possible transaction with the Company.
Wiley has further agreed to maintain the confidentiality of any discussions or
negotiations with the Company and, upon request, to redeliver or destroy all the
Evaluation Material. Wiley also agreed that, unless specifically invited in
writing by the Company, it will not, directly or indirectly, effect or seek,
offer or propose to effect certain transactions involving the Company, including
any acquisition of securities or assets of the Company or any of its
subsidiaries or any tender or exchange offer, merger or other business
combination involving the Company or any of its subsidiaries for a period of one
year from the date of the Confidentiality Agreement. For a period of eighteen
months from the date of the Confidentiality Agreement, neither Wiley, nor any of
its affiliates will directly or indirectly solicit to employ certain of the
current officers or employees of the Company.
APPRAISAL RIGHTS
Holders of Shares do not have appraisal rights in connection with the
Offer. However, if the Merger is consummated, holders of Shares at the Effective
Time will have certain rights pursuant to the provisions of Section 262 of the
DGCL, including the right to dissent and demand appraisal of, and to receive
payment in cash of the fair value of, their Shares. Under Section 262 of the
DGCL, dissenting stockholders 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 or 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. THE FOREGOING SUMMARY
OF THE RIGHTS OF DISSENTING STOCKHOLDERS UNDER THE DGCL DOES NOT PURPORT TO BE A
COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY STOCKHOLDERS DESIRING TO
EXERCISE ANY APPRAISAL RIGHTS AVAILABLE UNDER THE DGCL. THE PRESERVATION AND
EXERCISE OF APPRAISAL RIGHTS REQUIRE STRICT ADHERENCE TO THE APPLICABLE
PROVISIONS OF THE DGCL.
RULE 13e-3
The Commission has adopted Rule 13e-3 under the Exchange Act, which is
applicable to certain "going private" transactions and which may under certain
circumstances be applicable to the Merger or another business combination
following the purchase of Shares pursuant to the Offer in which we seek to
acquire the remaining Shares not held by us. We believe, however, that Rule
13e-3 will not be applicable to the Merger because it is anticipated that the
Merger would be effected within one year following consummation of the Offer and
in the Merger, stockholders would receive the same price per Share as paid in
the Offer. If Rule 13e-3 were applicable to the Merger, it would require, among
other things, that certain financial information concerning the Company, and
certain information relating to the fairness of the proposed Transactions and
the consideration offered to minority stockholders in such a transaction, be
filed with the Commission and disclosed to minority stockholders prior to
consummation of the Transactions.
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13. SOURCE AND AMOUNT OF FUNDS.
We estimate that the total amount of funds required to purchase all Shares
pursuant to the Offer and Merger and to repay up to $92,500,000 of the Company's
indebtedness (see "Pay-off of Credit Facilities" in Section 12) will be
approximately $182,500,000. Wiley will ensure that sufficient funds are
available to acquire all of the outstanding Shares pursuant to the Offer and the
Merger, and is currently negotiating new bank financing in the form of a
$200,000,000 five-year term loan. It is anticipated that such financing will be
on customary terms for borrowers of such types. In the event that such financing
is unavailable, Wiley will arrange alternate financing. The Offer is not
conditioned upon Wiley's or Purchaser's ability to finance the purchase of
Shares pursuant to the Offer.
14. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that the Company will not, and will not
permit any of its subsidiaries to, between the date of the Merger Agreement and
the Effective Time without the prior consent of Wiley, declare, set aside, make
or pay any dividend or other distribution (whether in cash, stock or property or
any combination thereof) in respect of any of its capital stock (other than
dividends and other distributions paid by any subsidiary of the Company to the
Company or any wholly owned subsidiary of the Company).
15. CERTAIN CONDITIONS OF THE OFFER.
For the purposes of this Section 15, capitalized terms used but not defined
herein will have the meanings set forth in the Merger Agreement. Notwithstanding
any other provisions of the Offer, we will 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, pay for any tendered Shares, and may delay
the acceptance for payment of or the payment for any tendered Shares, and under
certain circumstances, terminate or amend the Offer as to any Shares not then
paid for, if: (i) the Minimum Condition has not been satisfied; (ii) any
applicable waiting period under the HSR Act has not expired or been terminated;
or (iii) at any time on or after the date of the Merger Agreement and prior to
the Expiration Date, any of the following conditions exist (collectively, the
"Offer Conditions"):
(a) there is threatened or pending any suit, action or proceeding (i)
seeking to prohibit or impose any material limitations on Wiley's or
Purchaser's ownership or operation (or that of any of their respective
subsidiaries or affiliates) of all or a material portion of their or the
Company's businesses or assets, (ii) seeking to compel Wiley or Purchaser
or their respective subsidiaries and affiliates to dispose of or hold
separate any material portion of the business or assets of the Company or
Wiley and their respective subsidiaries, in each case taken as a whole,
(iii) challenging the acquisition by Wiley or Purchaser of any Shares
pursuant to the Offer or the Merger, (iv) seeking to restrain or prohibit
the making or consummation of the Offer or the Merger or the performance of
the Transactions, (v) seeking to obtain from the Company any damages that
would be reasonably likely to have a Material Adverse Effect on the
Company, (vi) seeking to impose material limitations on the ability of
Purchaser, or rendering Purchaser unable, to accept for payment, pay for or
purchase some or all of the pursuant to the Offer and the Merger, (vii)
seeking to impose material limitations on the ability of Purchaser or Wiley
effectively to exercise full rights of ownership of the Shares including,
without limitation, the right to vote the Shares purchased by it on all
matters properly presented to the Company's stockholders, or (viii) which
would be reasonably likely to have a Material Adverse Effect on Wiley or
Purchaser; provided that any such suit, action or proceeding involving a
non-governmental entity has a reasonable likelihood of success on the
merits; or
(b) there has been any statute, rule, regulation, injunction, order or
decree enacted, enforced, promulgated, issued or deemed applicable to the
Offer or the Merger by any governmental entity that results in any of the
consequences in paragraph 15(a) above; or
(c) the Merger Agreement has been terminated in accordance with its
terms or any event has occurred which gives Wiley or Purchaser the right to
terminate the Merger Agreement or not consummate the Merger; or
(d) any representation or warranty of the Company contained in the
Merger Agreement is not true and correct in all respects as of the date of
consummation of the Offer (disregarding qualifications therein relating
31
to materiality), and the failure of such representation or warranty to be
true and correct would reasonably be expected to have a Material Adverse
Effect on the Company, provided that such breach is incapable of being
cured or has not been cured prior to the Expiration Date (or such later
date upon which the Offer will expire in accordance with the Merger
Agreement); or
(e) the Company has failed to perform or comply with any of its
obligations, covenants or agreements to be performed or complied with by it
under the Merger Agreement, and such failure would reasonably be expected
to have a Material Adverse Effect on the Company, provided that such
failure to perform or comply with is incapable of being cured or has not
been cured prior to the Expiration Date (or such later date upon which the
Offer will expire in accordance with the Merger Agreement); or
(f) there has occurred and is continuing (i) any general suspension of
trading in or limitation on prices for securities on any national
securities exchange or in the over-the-counter market in the United States
(other than a shortening of trading hours or any coordinated trading halt
triggered solely as a result of a specified increase or decrease in a
market index), (ii) a declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States whether or not
mandatory, (iii) any limitation (whether or not mandatory) by any
governmental entity on, or other event that materially and adversely
affects, the extension of credit by banks or other lending institutions,
(iv) a commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United States,
(v) any change in the general financial bank or capital market conditions
which has a material adverse effect on the ability of financial
institutions in the United States to extend credit or syndicate loans, or
(vi) in the case of any of the foregoing existing at the time of the
execution of the Merger Agreement, a material acceleration or worsening
thereof; or
(g) the Company Board or any committee thereof (i) has withdrawn or
modified in a manner adverse to Wiley or Purchaser (including by amendment
of the Schedule 14D-9) its approval or recommendation of the Offer, the
Merger or the Merger Agreement or recommended or approved any Acquisition
Proposal, (ii) upon request of Purchaser, has failed to reaffirm its
approval recommendation of the Offer, the Merger Agreement, or the Merger;
or (iii) has resolved to do any of the foregoing; or
(h) a Material Adverse Effect on the Company has occurred after August
12, 2001; or
(i) Wiley and the Company have agreed that Purchaser will terminate
the Offer or postpone the acceptance for payment of or payment for Shares
under the Offer; or
(j) the consent of the lenders under the Company's Credit Agreement
with respect to Xxxxx'x pay-off of the credit facility of the Company (as
discussed in Section 12 above) has not been obtained as of the close of
business on the day prior to the date the Offer is consummated; or
(k) the consolidated funded debt (including all amounts borrowed under
the Company's Credit Agreement, the Subordinated Loan Agreement, any
agreement for the factoring of the Company's accounts receivable, and any
other outstanding long-term, short-term or subordinated consolidated debt)
of the Company and its Subsidiaries, computed in accordance with U.S.
generally accepted accounting principles applied on a consistent basis and
in accordance with the Company's past practice, is greater than $92,500,000
in the aggregate as of the close of business on the date the Offer is
consummated;
which in the good faith judgment of Wiley or Purchaser, in any such case, and
regardless of the circumstances giving rise to such condition, and provided that
Purchaser and Wiley have performed all of their respective obligations to use
their commercially reasonable efforts to do all things necessary to consummate
the Offer and the Merger, makes it inadvisable to proceed with the Offer or the
acceptance for payment or payment for the Company Common Stock.
A public announcement may 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. See Section 1.
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16. LEGAL MATTERS; REQUIRED REGULATORY APPROVALS.
Except as set forth in this Offer to Purchase, we are not aware of any
licenses or regulatory permits that appear to be material to the business of the
Company and its subsidiaries, taken as a whole, and that might be adversely
affected by our acquisition of Shares (and the indirect acquisition of the stock
of the Company's subsidiaries) in the Offer, or any filings, approvals or other
actions by or with any domestic, foreign or supranational governmental authority
or administrative or regulatory agency that would be required prior to our
acquisition or ownership of the Shares (or the indirect acquisition of the stock
of the Company's subsidiaries). Should any such approval or other action be
required, there can be no assurance that any such additional approval or action,
if needed, would be obtained without substantial conditions or that adverse
consequences might not result to the Company's or its subsidiaries' business, or
that certain parts of the Company's or Wiley's or any of their respective
subsidiaries' business might not have to be disposed of or held separate or
other substantial conditions complied with in order to obtain such approval or
action or in the event that such approvals were not obtained or such actions
were not taken. Purchaser's obligation to purchase and pay for Shares is subject
to certain conditions, including conditions with respect to governmental
actions. See the Introduction and Section 15 for a description of certain
conditions to the Offer, including with respect to litigation and governmental
actions.
STATE TAKEOVER LAWS. A number of states (including Delaware, where the
Company is incorporated) have adopted takeover laws and regulations which
purport, to varying degrees, to be applicable to attempts to acquire securities
of corporations which are incorporated in those states or that have substantial
assets, securityholders, principal executive offices or principal places of
business in those states. To the extent that these state takeover statutes
purport to apply to the Offer, we believe that such laws conflict with federal
law and constitute an unconstitutional burden on interstate commerce. In 1982,
the Supreme Court of the United States, in XXXXX X. MITE CORP., invalidated on
constitutional grounds the Illinois Business Takeover Statute, which as a matter
of state securities law made takeovers of corporations meeting certain
requirements more difficult. The reasoning in that decision is likely to apply
to certain other state takeover statutes. In 1987, however, in CTS CORP. V.
DYNAMICS CORP. OF AMERICA, the Supreme Court of the United States held that the
State of Indiana could as a matter of corporate law and, in particular, those
aspects of corporate law concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without the prior approval of the remaining stockholders, as long as
those laws were applicable only under certain conditions. Subsequently, in TLX
ACQUISITION CORP. V. TELEX CORP., a federal district court in Oklahoma ruled
that the Oklahoma statutes were unconstitutional insofar as they apply to
corporations incorporated outside Oklahoma, because they would subject those
corporations to inconsistent regulations. Similarly, in TYSON FOODS, INC. X.
XXXXXXXXXX, a federal district court in Tennessee ruled that four Tennessee
takeover statutes were unconstitutional as applied to corporations incorporated
outside Tennessee. This decision was affirmed by the United States Court of
Appeals for the Sixth Circuit. In December 1988, a federal district court in
Florida held, in GRAND METROPOLITAN PLC X. XXXXXXXXXXX, that the provisions of
the Florida Affiliated Transactions Act and Florida Control Share Acquisition
Act were unconstitutional as applied to corporations incorporated outside of
Florida.
Except as described herein, we have not attempted to comply with any state
takeover statutes in connection with the Offer or the Merger. We reserve the
right to challenge the validity or applicability of any state law allegedly
applicable to the Offer or the Merger and nothing in this Offer to Purchase nor
any action taken in connection with the Offer or the Merger is intended as a
waiver of that right. In the event that any state takeover statute is found
applicable to the Offer or the Merger, and it is not determined by an
appropriate court that the statutes in question do not apply or are invalid as
applied to the Offer, we may be required to file certain documents with, or
receive approvals from, the relevant state authorities, and we may be unable to
accept for payment or purchase Shares tendered in the Offer or be delayed in
continuing or consummating the Offer. In that case, we may not be obligated to
accept for purchase, or pay for, any Shares tendered. See Section 15.
ANTITRUST. Under the HSR Act, and the rules and regulations that have been
issued by the Federal Trade Commission (the "FTC"), certain acquisition
transactions may not be consummated until certain information and documentary
material has been furnished for review by the Antitrust Division of the U.S.
Department of Justice (the "Antitrust Division") and the FTC and certain waiting
period requirements have been satisfied. The
33
acquisition of Shares pursuant to the Offer is, and the proposed Merger may be,
subject to these requirements. Purchaser intends to file a Premerger
Notification and Report Form with the Antitrust Division and the FTC in
connection with the purchase of Shares pursuant to the Offer.
Under the HSR Act, the purchase of Shares in the Offer may not be completed
until the expiration of a 15-calendar-day waiting period following the filing of
certain information and documentary material concerning the Offer with the FTC
and Antitrust Division, unless the waiting period is earlier terminated by the
FTC and the Antitrust Division or we receive a Request for Additional
Information and Documentary Material from the Antitrust Division or the FTC
prior to that time. If either the FTC or the Antitrust Division were to issue a
Request for Additional Information and Documentary Material to us, the waiting
period with respect to the Offer would expire at 11:59 p.m., New York City time,
on the tenth calendar day after the date of our substantial compliance with that
request. Thereafter, the waiting period could be extended only by court order or
with our consent. The additional 10-calendar-day waiting period may be
terminated sooner by the FTC and the Antitrust Division. 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 those filings nor the issuance to the Company by the FTC or the
Antitrust Division of a Request for Additional Information and Documentary
Material will extend the waiting period with respect to the Offer.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions, such as our acquisition of Shares in the
Offer and the proposed Merger. At any time before or after our purchase of
Shares, the Antitrust Division or the FTC could take such action under the
antitrust laws that either deems necessary or desirable in the public interest,
including seeking to enjoin the purchase of Shares in the Offer, the divestiture
of Shares purchased pursuant to the Offer or the divestiture of substantial
assets of the Company or Wiley or any of their respective subsidiaries. Private
parties as well as state attorneys general may also bring legal actions under
the antitrust laws under certain circumstances. See Section 15.
State antitrust authorities and private parties in certain circumstances
may bring legal action under the antitrust laws seeking to enjoin the Offer or
the Merger or to impose conditions on the Offer or the Merger. See "Efforts"
discussed above in Section 12.
Wiley and the Company each conduct operations in a number of foreign
jurisdictions other than the U.S. and filings may have to be made with foreign
governments under their respective pre-merger notification statutes. Where
necessary, the parties intend to make such filings.
In addition, Wiley and the Company conduct operations in a number of other
countries where regulatory filings or approvals may be required in connection
with the consummation of the Merger.
17. FEES AND EXPENSES.
We have retained X.X. Xxxx & Co., Inc. as Information Agent in connection
with the Offer. The Information Agent may contact holders of Shares by mail,
telephone, telex, telegraph and personal interview and may request brokers,
dealers and other nominee stockholders to forward material relating to the Offer
to beneficial owners. Customary compensation will be paid for all such services
in addition to reimbursement of reasonable out-of-pocket expenses. We have
agreed to indemnify the Information Agent against certain liabilities and
expenses, including liabilities under the federal securities laws.
In addition, we have retained EquiServe Trust Company, N.A. as the
Depositary. The Depositary has not been retained to make solicitations or
recommendations in its role as Depositary. The Depositary will receive
reasonable and customary compensation for its services in connection with the
Offer, will be reimbursed for its reasonable out-of-pocket expenses and will be
indemnified against certain liabilities and expenses in connection therewith.
Except as set forth above, we will not pay any fees or commissions to any
broker, dealer or other person (other than the Information Agent) for soliciting
tenders of Shares pursuant to the Offer. We will reimburse brokers, dealers,
commercial banks and trust companies and other nominees for customary clerical
and mailing expenses incurred by them in forwarding materials to their
customers.
34
18. MISCELLANEOUS.
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 the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. However, we may, in our
own discretion, take any action as we may deem necessary to make the Offer in
any jurisdiction and extend the Offer to holders of Shares in those
jurisdictions.
In any jurisdiction where the securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer will be deemed to
be made on our behalf by or one or more registered brokers or dealers that are
licensed under the laws of such jurisdiction.
We have filed with the Commission a Tender Offer Statement on Schedule TO,
together with exhibits, pursuant to Rule 14d-3 of the General Rules and
Regulations under the Exchange Act, furnishing certain additional information
with respect to the Offer, and may file amendments to our Schedule TO. Our
Schedule TO and any exhibits or amendments may be examined and copies may be
obtained from the office of the Commission in the same manner as described in
Section 8 with respect to information concerning the Company.
We have not authorized any person to give any information or to make any
representation on our behalf not contained in this Offer to Purchase or in the
Letter of Transmittal and, if given or made, you should not rely on any such
information or representation as having been authorized. Neither the delivery of
the Offer to Purchase nor any purchase pursuant to the Offer will, under any
circumstances, create any implication that there has been no change in the
affairs of Wiley, Purchaser, the Company or any of their respective subsidiaries
since the date as of which information is furnished or the date of this Offer to
Purchase.
HMI ACQUISITION CORP.
August 20, 2001
35
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF WILEY
Set forth below are the name, business address and present principal
occupation or employment, and material occupations, positions, offices or
employment for the past five years of each director and executive officer of
Wiley. The business address of each director and executive officer employed by
Wiley is 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000. All executive officers
and directors are citizens of the United States, except for Xxxxxxx X. Xxxx, who
is a citizen of the United Kingdom.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
------- -------------------------------------------------
Xxxxxx X. Xxxxx............ Xxxxxx X. Xxxxx, a director since 1993, has been
President of California Polytechnic State
University since 1979 and was a Member of the
National Science Board from 1985 to 1994. He was a
Regent of the American Architectural Foundation
from 1995 to 1998, and was Chair of the Board of
Directors of the ASCE Civil Engineering Research
Foundation from 1989 to 1991. He is a Fellow of
the American Society of Civil Engineers; a Member
of the Board of Directors of the California
Council on Science and Technology; and Co-Chair of
the California Joint Policy Council on Agriculture
and Higher Education.
X. Xxxxx Xxxxxxx........... X. Xxxxx Xxxxxxx, a director since 1979, is
President and Chief Executive Officer of Down East
Enterprise, Inc., and Performance Media LLP, both
of which are magazine and book publishers. He is a
member and past Chair of the University of Maine
President's Council, and Vice Chair of the Board
of Visitors; a Director of United Publishing,
Inc.; Sun Journal Publishing, Inc.; Foreside
Company, Inc.; and University of Maine Press.
Xxxxx Xxxxxxxx............. Xxxxx Xxxxxxxx, a director since 1994, became
Chairman, Chief Executive Officer and Director of
Xxxxx-Xxxxx, Inc., an international direct
marketing company, on May 5, 1999. Previously, he
was President, Chief Executive Officer and
Director. He is on the Board of the Southwest
Foundation for Biomedical Research.
Xxxx X. Xxxxxx, Xx......... Xxxx X. Xxxxxx, Xx., a director since 1999, is an
investment advisor with XxXxxxx & Co., an
investment consulting company, and has been
associated with various members of the Bass family
of Fort Worth, Texas since 1990.
Xxxxx X. XxXxxxxxx......... Xxxxx X. XxXxxxxxx, a director since 1996, has
been Chairman and Chief Executive Officer of
Pfizer, Inc., a research-based pharmaceutical
firm, since May 2001. He previously served as
President and Chief Executive Officer of Pfizer
from January to April 2001, and was President of
PPG Pfizer's global pharmaceutical business, since
January 1996. He is a Director of Pfizer, Inc.;
Xxxxx'x Corporation; the Business Roundtable; the
Trilateral Commission; and the Stanford University
Graduate School of Business Advisory Council. He
is Chairman of the Pharmaceutical Research and
Manufacturers of America, and Chairman Emeritus of
the Business-Higher Education Forum. He is also a
Trustee of the New York Police Foundation, the New
York Public Library, and the Economic Club of New
York.
I-1
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
------- -------------------------------------------------
Xxxxxxx X. Xxxxx........... Xxxxxxx X. Xxxxx has been President and Chief
Executive Officer and a director since May 1,
1998. He was previously Chief Operating Officer
since May 1997; Executive Vice President,
Educational and International Group since February
1996; and Vice President, Educational Publishing
since September 1989. He is a Member of the Board
of Overseers of The Xxxxx School of Business at
New York University, and is on the Board of
Directors of the Association of American
Publishers.
Xxxxx Xxxxxxxx............. Xxxxx X. Xxxxxxxx, a director since 2000, is a
senior partner and co-founder of Xxxxxxx Xxxxxxxx,
a management consulting firm, since 1999.
Previously, she was a co-founder and senior
partner of The Research Board, an information
technology research group from 1975 to 1999. She
is a member of the Board of Directors of Asera,
Inc.; The Dun & Bradstreet Corporation; Exodus
Communications, Inc.; Xxxxxx Xxxxxxx Living
Omnimedia, Inc.; Oblix, Inc.; Sun Microsystems,
Inc. and Chemdex Ventro Corporation. She is also a
trustee of the Boston Museum of Science and a
member of the Committee of 200.
Xxxxxxx X. Xxxxxxxxxx...... Xxxxxxx X. Xxxxxxxxxx, a director since 1987,
retired as a Vice President of Sun Microsystems,
Inc., a manufacturer of network and computing
equipment, in August 2000. He was the Director of
Sun Microsystems Laboratories from July 1993 to
October 1998. He was previously Deputy Director
since March 1991, and was Vice President and
Treasurer, Xxxxxxxxxx Xxxxxxx & Associates, Inc.,
an information and technology consulting firm. He
is a partner in Advanced Technology Ventures, a
venture capital firm, and a former Director of
Newmarket Venture Capital, PLC.
Xxxxxxxx Xxxxx XX......... Xxxxxxxx Xxxxx XX, a director since 1979, has been
Chairman since January 1993, and was an editor in
Higher Education from 1989 to 1998. He was
previously a newspaper journalist, viticulturist
and winery manager.
Xxxxx X. Xxxxx............ Xxxxx X. Xxxxx, a director since 1984, is an
author and journalist. He is a Member of the Board
of the Friends and Foundation of the San Francisco
Public Library, and a member of the Boards of the
Data Center and Schoolwise Press.
Xxxxx X. Xxxxxxx........... Xxxxx X. Xxxxxxx has been Executive Vice President
and Chief Financial and Operations Officer since
March 2001 and is a director of Xxxx Xxxxx &Sons
International Rights, Inc., Wiley Subscription
Services, Inc., Wiley Publishing Services, Inc.,
Wiley Foreign Sales Corporation, Xxxxx-Xxxx, Inc.,
Clinical Psychology Publishing Company, Inc.,
Trans-editions, Inc., Wiley Interscience, Inc. and
WWL, Inc. He was previously Senior Vice President,
Chief Financial Officer of Bookspan, a Xxxxxxxxxx
XX joint venture, from March 2000; Vice President,
Finance and Strategic Planning of Xxxxxxxxxx XX
from March 1999; Vice President, Chief Financial
Officer of XXX.xxx, a subsidiary of Xxxxxxxxxx XX,
from August 1998; Vice President, Financial
Planning and Analysis of Reader's Digest
Association, Inc. from May 1997; and Director
Financial Planning and Analysis of Reader's Digest
Association, Inc. from May 1996.
I-2
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
------- -------------------------------------------------
Xxxxxxx X. Xxxxxx......... Xxxxxxx X. Xxxxxx has been Executive Vice
President and President, Professional/Trade
Publishing since July 1998, and he previously
served as Executive Vice President and Group
President, Professional, Reference & Trade; and
Senior Vice President, Professional, Reference &
Trade Publishing Group.
Xxxxxxx X. Xxxxxxxxx....... Xxxxxxx X. Xxxxxxxxx has been Senior Vice
President, Human Resources since June 1996, and he
previously served as Vice President, Human
Resources.
Xxxxx X. Xxxxxxxx.......... Xxxxx X. Xxxxxxxx has been Senior Vice President,
Finance, Corporate Controller and Chief Accounting
Officer since June 1996, and he previously served
as Vice President, Finance and Controller.
Xxxxxxx X. Xxxx............ Xxxxxxx X. Xxxx has been Senior Vice President,
Planning and Development since June 1996 and he
previously served as Vice President, Planning and
Development.
Xxxxxxx X. Xxxxxx.......... Xxxxxxx X. Xxxxxx has been General Counsel since
1978 and Senior Vice President since 1989, and he
previously served as Vice President and Corporate
Secretary.
Xxxxxxx X. Xxxxx........... Xxxxxxx X. Xxxxx has been Senior Vice President,
Corporate Communications since June 1996, and she
served as Vice President and Director of Corporate
Communications, and was a Director of the Company
until September 1998.
Xxxxxxxxx X. Xxxxxx........ Xxxxxxxxx X. Xxxxxx has been Corporate Secretary
since 1992, and she previously served as Assistant
Secretary and Executive Assistant to the Chairman.
Xxxxxx X. Xxxxxxx.......... Xxxxxx X. Xxxxxxx has been Treasurer since 1988,
and he previously served as Corporate Controller.
I-3
SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER
Set forth below are the name, business address and present principal
occupation or employment, and material occupations, positions, offices or
employment for the past five years of each director and executive officer of
Purchaser. The business address of each director and executive officer employed
by Purchaser is 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000. All executive
officers and directors are citizens of the United States, except for Xxxxxxx X.
Xxxx, who is a citizen of the United Kingdom.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
------- -------------------------------------------------
Xxxxxxx X. Xxxx............ Xxxxxxx X. Xxxx is President of Purchaser. Same
material occupations as above in Schedule I.
Xxxxxxx X. Xxxxxx.......... Xxxxxxx X. Xxxxxx is Secretary of Purchaser. Same
material occupations as above in Schedule I.
Xxxxx X. Xxxxxxxx.......... Xxxxx X. Xxxxxxxx is the sole director and Vice
President and Treasurer of Purchaser. Same
material occupations as above in Schedule I.
Xxxxxxxxx X. Xxxxxx........ Xxxxxxxxx X. Xxxxxx is Assistant Secretary of
Purchaser. Same material occupations as above in
Schedule I.
II-1
SCHEDULE III
DIRECTORS AND EXECUTIVE OFFICERS OF HMI INVESTMENT, INC.
Set forth below are the name, business address and present principal
occupation or employment, and material occupations, positions, offices or
employment for the past five years of each director and executive officer of
HMIInvestment, Inc. The business address of each director and executive officer
employed by HMI Investment, Inc. is 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000. All executive officers and directors are citizens of the United
States, except for Xxxxxxx X. Xxxx, who is a citizen of the United Kingdom.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
------- -------------------------------------------------
Xxxxxxx X. Xxxx............ Xxxxxxx X. Xxxx is President of HMI Investment,
Inc. Same material occupations as above in
Schedules I and II.
Xxxxxxx X. Xxxxxx.......... Xxxxxxx X. Xxxxxx is Secretary of HMI Investment,
Inc. Same material occupations as above in
Schedules I and II.
Xxxxx X. Xxxxxxxx.......... Xxxxx X. Xxxxxxxx is the sole director and Vice
President and Treasurer of HMI Investment, Inc.
Same material occupations as above in Schedules I
and II.
Xxxxxxxxx X. Xxxxxx........ Xxxxxxxxx X. Xxxxxx is Assistant Secretary of HMI
Investment, Inc. Same material occupations as
above in Schedules I and II.
III-1
SCHEDULE IV
DIRECTORS AND EXECUTIVE OFFICERS OF HMI INVESTMENT, LIMITED
Set forth below are the name, business address and present principal
occupation or employment, and material occupations, positions, offices or
employment for the past five years of each director and executive officer of
HMIInvestment, Limited. The business address of each director and executive
officer employed by HMI Investment, Limited is Baffins Lane, Chichester, West
Sussex, PO191 UD, United Kingdom. All executive officers and directors are
citizens of the United Kingdom, except for Xxxxx X. Xxxxxxx, who is a citizen of
the United States.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
------- -------------------------------------------------
Xxxxx X. Xxxxxxx........... Xxxxx X. Xxxxxxx is a director and Chairman of HMI
Investment, Limited. Same positions as above in
Schedule I.
C.J. Dicks................. X.X. Xxxxx is a director and Secretary of HMI
Investment, Limited. Xx. Xxxxx served as Financial
Director and Secretary of Xxxx Xxxxx & Sons, Ltd.
since 1991 and Chief Financial and Operational
Officer since May 2001 and as Vice President,
Wiley Europe since 1996. Xx. Xxxxx is also a
director and Secretary of Wiley Europe, Ltd.,
Xxxxx Xxxxxx Ltd., Wiley Distribution Services,
Ltd., Capstone Publishing Ltd. and
InPharm-internet Services Ltd.
Xx. X.X. Xxxxxx............ Xx. X.X. Xxxxxx is a director of HMI Investment,
Limited. Xx. Xxxxxx served as Managing Director of
Xxxx Xxxxx & Sons, Ltd. since 1993 and was
appointed Senior Vice President, Wiley Europe in
1996. Xx. Xxxxxx is a director of Wiley Europe,
Ltd., Xxxxx Xxxxxx Ltd., Wiley Distribution
Services, Ltd., Capstone Publishing Ltd. and
InPharm-internet Services Ltd.
IV-1
SCHEDULE V
SHARES OR OTHER EQUITY SECURITIES OF THE COMPANY
BENEFICIALLY OWNED BY PURCHASER AND WILEY
(INCLUDING EXECUTIVE OFFICERS, DIRECTORS AND SUBSIDIARIES)
Set forth below is the beneficial ownership of Shares of the Company by
each of Purchaser and Wiley, and their respective executive officers, directors
and subsidiaries.
NAME BENEFICIAL OWNERSHIP TRANSACTIONS IN THE PAST 60 DAYS
------ -------------------- --------------------------------
Xxxxx X. Xxxxxxxx 6,700 Shares None.
V-1
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The Letter of Transmittal, certificates for Shares and any other required
documents should be sent or delivered by each stockholder of the Company or his
broker, dealer, commercial bank, trust company or other nominee to the
Depositary at one of its addresses set forth below:
THE DEPOSITARY FOR THE OFFER IS:
EQUISERVE TRUST COMPANY, N.A.
BY MAIL: BY HAND: BY OVERNIGHT DELIVERY:
EQUISERVE TRUST COMPANY, N.A. SECURITIES TRANSFER EQUISERVE TRUST COMPANY, N.A.
P.O. Box 43025 &REPORTING SERVICES, INC. ATTN: CORPORATE ACTIONS
Providence, RI 02940-3025 C/O EQUISERVE LIMITED PARTNERSHIP 00 Xxxxxxxxxx Xxxxx
000 Xxxxxxxx Xxxxxx Xxxxxxxx Xxxxxxxxx, XX 00000
Xxx Xxxx, XX 00000
You may direct questions and requests for assistance to the Information
Agent at the address and telephone number listed below. You may obtain
additional copies of this Offer to Purchase, the Letter of Transmittal, the
Notice of Guaranteed Delivery and other tender offer materials from the
Information Agent as set forth below and they will be furnished promptly at our
expense. You may also contact your broker, dealer, commercial bank, trust
company or other nominee for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
X.X. XXXX & CO., INC.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Call Toll Free: (000) 000-0000
