OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING ASSOCIATED RIGHTS)
OF
OEA, INC.
AT
$10.00 NET PER SHARE
BY
OEA MERGER CORPORATION
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
AUTOLIV, INC.
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, APRIL 24, 2000, UNLESS THE OFFER IS EXTENDED.
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THE OFFER (AS HEREINAFTER DEFINED) IS BEING MADE IN CONNECTION WITH THE
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, DATED AS OF MARCH 12, 2000
(THE "MERGER AGREEMENT"), BY AND AMONG OEA, INC. (THE "COMPANY"), AUTOLIV, INC.
("PARENT") AND OEA MERGER CORPORATION ("PURCHASER"). THE BOARD OF DIRECTORS OF
THE COMPANY UNANIMOUSLY (I) DETERMINED THAT THE OFFER, THE MERGER (AS
HEREINAFTER DEFINED) AND THE MERGER AGREEMENT ARE ADVISABLE, FAIR TO, AND IN THE
BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS, (II) APPROVED THE MERGER, THE
OFFER, THE MERGER AGREEMENT AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE
MERGER AGREEMENT AND (III) RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE
OFFER AND TENDER THEIR SHARES (AS HEREINAFTER DEFINED) PURSUANT THERETO AND
APPROVE AND ADOPT THE MERGER AGREEMENT.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE OF THE OFFER A
NUMBER OF SHARES OF COMMON STOCK PAR VALUE $0.10 PER SHARE (THE ``COMMON STOCK")
OF THE COMPANY, INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE COMMON STOCK (THE
"RIGHTS" AND TOGETHER WITH THE COMMON STOCK, THE "SHARES"), WHICH REPRESENTS
MORE THAN FIFTY PERCENT OF THE TOTAL ISSUED AND OUTSTANDING SHARES ON A FULLY
DILUTED BASIS (EXCLUDING ANY SHARES HELD BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES) AND (II) THE EXPIRATION OR TERMINATION OF ANY AND ALL WAITING
PERIODS APPLICABLE TO THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT
UNDER THE XXXX-XXXXX-XXXXXX ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED. THE
OFFER IS ALSO SUBJECT TO OTHER CONDITIONS. SEE SECTION 15.
THE OFFER IS NOT CONDITIONED UPON PARENT OR PURCHASER OBTAINING FINANCING.
The Information Agent for the Offer is:
Xxxxxxxxx Shareholder Communications Inc.
00 Xxxxx Xxxxxx, 00(th) Floor
New York, N.Y. 10004
Brokers and Bankers Call Collect (000) 000-0000
Or
All Others Call Toll Free (000) 000-0000
March 24, 2000
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (1) complete and sign the Letter of Transmittal (or a
manually signed facsimile thereof) in accordance with the instructions in the
Letter of Transmittal; mail or deliver it and any other required documents to
the Depositary indicated thereon, and either deliver the certificate(s) for such
tendered Shares to the Depositary along with the Letter of Transmittal or tender
such Shares pursuant to the procedures for book-entry transfer set forth in
Section 2 of this Offer to Purchase, or (2) request such stockholder's broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for the stockholder. Stockholders having Shares registered in the
name of a broker, dealer, commercial bank, trust company or other nominee must
contact such broker, dealer, commercial bank, trust company or other nominee if
they desire to tender such Shares. Unless the context requires otherwise, all
references to Shares herein shall include the associated Rights.
The Rights are presently evidenced by the certificates for the Shares and a
tender by a stockholder of such stockholder's shares of Common Stock will also
constitute a tender of the associated Rights. A stockholder who desires to
tender Shares and whose certificate(s) for Shares is not immediately available,
or who cannot comply with the procedures for book-entry transfer on a timely
basis, may tender such Shares by following the procedures for guaranteed
delivery set forth in Section 2 of this Offer to Purchase.
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. Requests for additional copies of this Offer to Purchase, the
Letter of Transmittal and the Notice of Guaranteed Delivery may also be directed
to the Information Agent. Purchaser will not pay any fee or commission to any
broker or dealer or to any other person (other than to the Depositary and the
Information Agent) in connection with the solicitation of tenders of Shares
pursuant to the Offer.
2
SUMMARY TERM SHEET
OEA Merger Corporation is offering to purchase all of the outstanding shares
of common stock of OEA, Inc. and the rights to purchase common stock associated
with the shares for $10.00 per share in cash. The following are some of the
questions that you, as a stockholder of OEA, Inc., may have and the answers to
those questions. We urge you to read carefully the remainder of this offer to
purchase and the letter of transmittal because the information in this summary
term sheet is not complete. Additional important information is contained in the
remainder of this offer to purchase and the letter of transmittal.
- WHO IS OFFERING TO BUY MY SECURITIES?
Our name is OEA Merger Corporation. We are a Delaware corporation and have
carried on no business other than in connection with the merger agreement. We
are an indirect wholly owned subsidiary of Autoliv, Inc., a Delaware
corporation. See the "Introduction" and Section 8.
- WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?
We are offering to purchase all of the outstanding common stock of
OEA, Inc. and the rights to purchase common stock associated with such shares.
See the "Introduction" and Section 1.
- HOW MUCH ARE YOU OFFERING TO PAY, WHAT IS THE FORM OF PAYMENT AND WILL I HAVE
TO PAY ANY FEES OR COMMISSIONS?
We are offering to pay $10.00 per share, net to you, in cash. If you are the
record owner of your shares and you tender your shares to us in the offer, you
will not have to pay brokerage fees or similar expenses. If you own your shares
through a broker or other nominee, and your broker tenders your shares on your
behalf, your broker or nominee may charge you a fee for doing so. You should
consult your broker or nominee to determine whether any charges will apply. See
the "Introduction."
- DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
Autoliv ASP, Inc., our direct parent company, will provide us with
sufficient funds to purchase all shares validly tendered and not withdrawn in
the offer and to provide funding for the merger which is expected to follow the
successful completion of the offer. We anticipate that a significant portion of
these funds will be obtained from the existing resources of Autoliv ASP, Inc.,
including short term borrowings in the ordinary course of business. For the
remainder, Autoliv, Inc. has obtained a credit agreement dated March 22, 2000
among Autoliv ASP, Inc. as borrower, Autoliv, Inc. as guarantor, Skandinaviska
Enskilda Xxxxxx XX (publ) as lender and SEB Debt Capital Markets as arranger.
The offer, however, is not conditioned upon any financing arrangements. See
Section 9.
- IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
We do not think our financial condition is relevant to your decision whether
to tender in the offer because the form of payment consists solely of cash.
Autoliv, Inc. has arranged for a significant portion of our funding to come from
the existing resources of Autoliv ASP, Inc., including short term borrowings in
the ordinary course of business. For the remainder, Autoliv, Inc. has obtained a
credit agreement dated March 22, 2000 among Autoliv ASP, Inc. as borrower,
Autoliv, Inc. as guarantor, Skandinaviska Enskilda Xxxxxx XX (publ) as lender
and SEB Debt Capital Markets as arranger. Additionally, the offer is not subject
to any financing condition. See Section 9.
3
- HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
You will have at least until 12:00 midnight, New York City time, on Monday,
April 24, 2000 to tender your shares in the offer. Further, if you cannot
deliver everything that is required in order to make a valid tender by that
time, you may be able to use a guaranteed delivery procedure, which is described
later in this offer to purchase. See Section 1 and Section 2.
- CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?
Subject to the terms of the merger agreement, we can extend the offer. We
have agreed in the merger agreement that we may extend the offer without
OEA, Inc.'s consent in the following circumstances:
- If necessary to satisfy any condition of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, we may extend for 40 business days;
or
- If any of the conditions to the offer, other than the condition that more
than 50% of the outstanding shares of OEA, Inc. on a fully diluted basis
(excluding shares held by OEA, Inc. or any of its subsidiaries), be
validly tendered and not properly withdrawn, have not been satisfied or
waived, we may extend the offer for up to 20 business days;
- If all conditions to the offer have been satisfied or waived but less than
90% of the outstanding shares of OEA, Inc. on a fully diluted basis
(excluding shares held by OEA, Inc. or any of its subsidiaries) have been
validly tendered and not properly withdrawn, we may extend the offer for
up to four successive five business day periods (i.e., up to 20 business
days);
- If any conditions to the offer have not been satisfied or waived, and
another takeover proposal has been made or publicly disclosed by a person
other than us, including OEA, Inc. and any of its subsidiaries and
affiliates, or if we otherwise learn that such a takeover proposal has
been made or publicly proposed, we may extend the offer until ten days
after the termination of such other takeover proposal, but not later than
the earlier of June 30, 2000 and the minimum time period necessary to
satisfy all conditions that have not been satisfied or waived.
- HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
If we extend the offer, we will inform First Chicago Trust Company of New
York (which is the depositary for the offer) of that fact and will make a public
announcement of the extension, not later than 9:00 a.m., New York City time, on
the next business day after the day on which the offer was scheduled to expire.
See Section 1.
- WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
- We are not obligated to purchase any shares which are validly tendered
unless the number of shares validly tendered and not properly withdrawn
before the expiration date of the offer represents more than 50% of the
outstanding shares of OEA, Inc. on a fully diluted basis (excluding shares
held by OEA, Inc. or any of its subsidiaries). We call this condition the
"minimum condition".
- We are not obligated to purchase shares which are validly tendered if
there is a material adverse change in the financial condition, business,
operations, liquidity, property or assets of OEA, Inc. and its
subsidiaries (considered as one enterprise) or if any applicable waiting
period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, has not expired or been terminated.
The offer is also subject to a number of other conditions. We can waive any
of the conditions to the offer without OEA, Inc.'s consent other than the
minimum condition. See Section 15.
4
- HOW DO I TENDER MY SHARES?
To tender shares, you must deliver the certificates representing your
shares, together with a completed and duly executed letter of transmittal, to
First Chicago Trust Company of New York, the depositary for the offer, not later
than the time the tender offer expires. If your shares are held in street name,
the shares can be tendered by your nominee through The Depository Trust Company.
If you cannot get any document or instrument that is required to be delivered to
the depositary by the expiration of the tender offer, you may get a little extra
time to do so by having a broker, a bank or other fiduciary which is an eligible
institution guarantee that the missing items will be received by the depositary
within three New York Stock Exchange trading days. For the tender to be valid,
however, the depositary must receive the missing items within that three trading
day period. See Section 2.
- UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
You can withdraw shares at any time until the offer has expired and, if we
have not agreed by April 24, 2000 (or such later date as may apply if the offer
is extended) to accept your shares for payment, you can withdraw them at any
time after such time until we accept shares for payment. See Section 3.
- HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
To withdraw shares, you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to the depositary while you
still have the right to withdraw the shares. See Section 3.
- WHAT DOES OEA, INC.'S BOARD OF DIRECTORS THINK OF THE OFFER?
We are making the offer pursuant to the merger agreement, which has been
unanimously approved by the board of directors of OEA, Inc. The board of
directors of OEA, Inc. unanimously (1) determined that the offer, the merger and
the merger agreement are advisable, fair to, and in the best interests of, its
stockholders, (2) approved the merger, the offer, the merger agreement and the
other transactions contemplated by the merger agreement and (3) recommends that
its stockholders accept the offer and tender their shares pursuant thereto and
approve and adopt the merger agreement. See the "Introduction."
- IF A MAJORITY OF THE SHARES ARE TENDERED AND ACCEPTED FOR PAYMENT, WILL
OEA, INC. CONTINUE AS A PUBLIC COMPANY?
No. Following the purchase of shares in the offer we expect to consummate
the merger, and following the merger, OEA, Inc. no longer will be publicly
owned. Even if for some reason the merger does not take place, if we purchase
all the tendered shares, there may be so few remaining stockholders and publicly
held shares that OEA, Inc. common stock will no longer be eligible to be traded
on the New York Stock Exchange or on any other securities exchange, there may
not be a public trading market for OEA, Inc. stock, and OEA, Inc. may cease
making filings with the SEC or otherwise cease being required to comply with SEC
rules relating to publicly held companies. See Section 13.
- WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL THE OEA, INC. SHARES ARE
NOT TENDERED IN THE OFFER?
Yes. If we accept for payment and pay for more than 50% of the outstanding
shares of OEA, Inc., we will be merged with and into OEA, Inc. If that merger
takes place, Autoliv ASP, Inc. (which in turn is owned by Autoliv, Inc.) will
own all of the shares of OEA, Inc. and all remaining stockholders of
5
OEA, Inc. (other than us and stockholders properly exercising dissenters'
rights) will receive $10.00 per share in cash. See the "Introduction" and
Section 11.
- IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
If the merger described above takes place, stockholders not tendering in the
offer will receive the same amount of cash per share that they would have
received had they tendered their shares in the offer, subject to any rights of
appraisal properly exercised under Delaware law. Therefore, if the merger takes
place, the only difference to you between tendering your shares and not
tendering your shares is that you will be paid earlier and will not have
appraisal rights if you tender your shares. However, if for some reason the
merger does not take place, the number of stockholders of OEA, Inc. and the
number of shares of OEA, Inc. which are still in the hands of the public may be
so small that there no longer will be an active public trading market (or,
possibly, there may not be any public trading market) for OEA, Inc. common
stock. Also, as described above, OEA, Inc. may cease making filings with the SEC
or otherwise being required to comply with the SEC rules relating to publicly
held companies. See the "Introduction" and Section 13.
- WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On March 10, 2000, the last trading day before we announced the tender offer
and the possible subsequent merger, the closing price of OEA, Inc. common stock
reported on the New York Stock Exchange was $7.06 per share. On March 23, 2000,
the last trading day before we commenced the tender offer, the closing price of
OEA, Inc. common stock reported on the New York Stock Exchange was $9.63 share.
We advise you to obtain a recent quotation for shares of OEA, Inc. common stock
in deciding whether to tender your shares. See Section 6.
- WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
You can call Xxxxxxxxx Shareholder Communications Inc. at (000) 000 0000
(toll free). Xxxxxxxxx Xxxxxxxxxxx Communications Inc. is acting as the
information agent for our tender offer. See the back cover of this offer to
purchase.
6
To the Holders of Common Stock of
OEA, Inc.:
INTRODUCTION
OEA Merger Corporation ("Purchaser"), a Delaware corporation and an indirect
wholly owned subsidiary of Autoliv, Inc., a Delaware corporation ("Parent"),
hereby offers to purchase all outstanding shares of common stock, par value
$0.10 per share (the "Common Stock"), of OEA, Inc., a Delaware corporation (the
"Company" or "OEA, Inc."), together with the associated rights to purchase
Common Stock issued pursuant to the Rights Agreement, as amended, dated as of
March 25, 1998 (the "Rights Agreement"), between the Company and LaSalle Bank,
N.A., as Rights Agent (the "Rights" and, together with the Common Stock, the
"Shares"), at a price of $10.00 per Share (the "Offer Price"), net to the
selling stockholder in cash, upon the terms and subject to the conditions set
forth in this Offer to Purchase and in the related Letter of Transmittal (which,
together with any amendments or supplements hereto or thereto, collectively
constitute the "Offer").
Stockholders of record who hold Shares registered in their own name and
tender their Shares directly to the Depositary (as defined below) will not be
obligated to pay brokerage fees, commissions, solicitation fees or, subject to
Instruction 6 of the Letter of Transmittal, stock transfer taxes, if any, on the
purchase of Shares by Purchaser pursuant to the Offer. Stockholders who hold
their Shares through a bank or broker should check with such institution as to
whether they will be charged any service fees. However, any tendering
stockholder or other payee who fails to complete and sign the Substitute
Form W-9 that is included in the Letter of Transmittal may be subject to a
required federal backup withholding tax of 31% of the gross proceeds payable to
such stockholder or other payee pursuant to the Offer. See Section 2. Purchaser
will pay all charges and expenses of Xxxxxxxxx Shareholder Communications Inc.,
as Information Agent (the "Information Agent"), and First Chicago Trust Company
of New York, as Depositary (the "Depositary"), incurred in connection with the
Offer. See Section 17.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE OF THE OFFER
THAT NUMBER OF SHARES WHICH REPRESENTS MORE THAN FIFTY PERCENT OF THE TOTAL
ISSUED AND OUTSTANDING SHARES ON A FULLY DILUTED BASIS (EXCLUDING ANY SHARES
HELD BY THE COMPANY OR ANY OF ITS SUBSIDIARIES) (THE "MINIMUM CONDITION") AND
(II) THE EXPIRATION OR TERMINATION OF ANY AND ALL WAITING PERIODS APPLICABLE TO
THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT UNDER THE
XXXX-XXXXX-XXXXXX ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR
ACT"). THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE SECTION 15.
For purposes of the Offer, "on a fully diluted basis" means, as of any time,
on a basis that includes the number of Shares that are actually issued and
outstanding plus the maximum number of Shares that the Company may be required
to issue pursuant to obligations under stock options, warrants and other rights
or securities convertible into shares of Common Stock, whether or not currently
exercisable.
The Offer is being made pursuant to an Amended and Restated Agreement and
Plan of Merger, dated as of March 12, 2000 (the "Merger Agreement"), by and
among Parent, Purchaser and the Company. The Merger Agreement provides, among
other things, that, upon the terms and subject to the conditions therein, as
soon as practicable after the consummation of the Offer, Purchaser will be
merged with and into the Company (the "Merger"), with the Company being the
corporation surviving the Merger (the "Surviving Corporation"). At the effective
time of the Merger (the "Effective Time"), each outstanding Share (other than
Shares held in the Company's treasury immediately before the Effective Time, and
each Share held by Parent, Purchaser, any other subsidiary of Parent or any
subsidiary of the Company immediately before the Effective Time, all of which
will be cancelled, and other than Shares ("Dissenting Shares") with respect to
which appraisal rights are properly exercised
7
under the Delaware General Corporation Law (the "DGCL")) will be converted into
and represent the right to receive the Offer Price, subject to any applicable
withholding taxes, without interest. See Section 11.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") UNANIMOUSLY
(I) DETERMINED THAT THE OFFER, THE MERGER AND THE MERGER AGREEMENT ARE
ADVISABLE, FAIR TO AND IN THE BEST INTERESTS OF, THE COMPANY'S STOCKHOLDERS,
(II) APPROVED THE MERGER, THE OFFER, THE MERGER AGREEMENT AND THE OTHER
TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT AND (III) RECOMMENDS THAT THE
COMPANY'S STOCKHOLDERS ACCEPT THE OFFER, AND TENDER THEIR SHARES PURSUANT
THERETO AND APPROVE AND ADOPT THE MERGER AGREEMENT.
The Board has received the written opinion of Deutsche Bank
Securities, Inc. ("Deutsche Bank") stating that the proposed consideration to be
received by the holders of shares of Common Stock pursuant to the Offer and the
Merger is fair to such holders from a financial point of view. A copy of the
written opinion of Deutsche Bank, which set forth the assumptions made,
procedures followed, matters considered and limitations on the reviews
undertaken, are included as annexes to the Company's Solicitation/Recommendation
Statement on Schedule 14D-9 filed with the Securities and Exchange Commission
(the "Commission") in connection with the Offer, a copy of which is being
furnished to stockholders concurrently herewith. Stockholders are urged to read
the full text of such opinion carefully.
The Company has represented to Parent that as of March 12, 2000, there were
20,621,691 Shares outstanding and there were options and warrants to acquire
1,327,637 Shares outstanding. Neither Parent, Purchaser nor any person listed on
Schedule I hereto beneficially owns any Shares. Accordingly, the Minimum
Condition will be satisfied if 10,974,665 Shares are tendered in the Offer.
The Merger Agreement provides that, promptly following the purchase of and
payment for a number of Shares that satisfies the Minimum Condition, and from
time to time thereafter, Purchaser shall be entitled to designate the number of
directors, rounded up to the next whole number, on the Board that equals the
product of (i) the total number of directors on the Board (giving effect to any
additional directors elected by Purchaser) and (ii) the percentage that the
number of Shares beneficially owned by Parent and Purchaser following the Offer
bears to the total number of outstanding Shares, and the Company will take all
action within its power to cause Purchaser's designees to be elected or
appointed to the Board, including, without limitation, increasing the number of
directors, and seeking and accepting resignations of incumbent directors;
PROVIDED, HOWEVER, that before the Effective Time, the Board will have at least
three directors who are directors on March 12, 2000. See Section 11. The
designation of directors by Parent is subject to compliance with the
requirements of Section 14(f) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
In connection with the Offer and the Merger, the Board has approved an
amendment to the Company's Rights Agreement to assure that the Rights are not
exercisable as a result of the Offer or the Merger.
The information contained herein concerning or attributed to the Company has
been supplied by the Company, and all other information contained herein has
been supplied by Parent and Purchaser. Although neither the Company nor Parent
or Purchaser have any knowledge that would indicate that any statements
contained herein based on the information provided by the other are untrue,
neither the Company nor Parent or Purchaser take any responsibility for the
accuracy or completeness of any information provided by the other or for any
failure by the other to disclose events that may have occurred and may affect
the significance or accuracy of such information but which are unknown to the
Company or Parent and Purchaser, respectively.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND YOU SHOULD READ THEM IN THEIR ENTIRETY BEFORE MAKING
ANY DECISION WITH RESPECT TO THE OFFER.
8
THE TENDER OFFER
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), Purchaser will accept for payment and pay for all Shares which are
validly tendered and not properly withdrawn on or prior to the Expiration Date,
as soon as practicable after the Expiration Date. The term "Expiration Date"
means 12:00 midnight, New York City time, on Monday, April 24, 2000, unless and
until Purchaser (subject to the terms and conditions of the Merger Agreement)
shall have extended the period of time for which the Offer is open, in which
event the term "Expiration Date" shall mean the latest time and date at which
the Offer, as so extended by Purchaser, shall expire prior to the purchase of
any Shares by Purchaser.
The Offer is conditioned upon the satisfaction of the Minimum Condition and
the other conditions set forth in Section 15 (collectively, the "Offer
Conditions"). Subject to the provisions of the Merger Agreement, Purchaser may
waive any or all of the conditions to its obligation to purchase Shares pursuant
to the Offer other than the Minimum Condition. If by the initial Expiration Date
or any subsequent Expiration Date any or all of the conditions to the Offer have
not been satisfied or waived, subject to the provisions of the Merger Agreement,
Purchaser may elect to (i) terminate the Offer and return all tendered Shares to
tendering stockholders, (ii) waive all of the unsatisfied conditions and,
subject to any required extension, purchase all Shares validly tendered by the
Expiration Date and not properly withdrawn or (iii) extend the Offer and,
subject to the right of stockholders to withdraw Shares until the new Expiration
Date, retain the Shares that have been tendered until the expiration of the
Offer as extended.
Under the terms of the Merger Agreement, neither Parent nor Purchaser may,
without the prior written consent of the Company, (i) decrease the Offer Price,
(ii) decrease the number of Shares subject to the Offer, (iii) change the form
of consideration payable in the Offer, (iv) impose conditions to the Offer in
addition to the conditions set forth in Section 15, (v) except as provided in
the Merger Agreement or as required by any rule, regulation, interpretation or
position of the SEC, change the Expiration Date or (vi) otherwise amend any term
of the Offer in a manner adverse to the holders of Shares. In addition,
Purchaser may not, without the prior written consent of the Company, waive or
amend the Minimum Condition.
Notwithstanding the foregoing, Purchaser may, without the consent of the
Company, extend the Offer beyond the initial Expiration Date in the following
events: (i) if necessary to satisfy any condition of the HSR Act, for a period
not to exceed forty (40) business days, (ii) if any of the Offer Conditions
(other than the Minimum Condition) shall not have been satisfied or waived for a
period not to exceed twenty (20) business days, (iii) if all the Offer
Conditions are satisfied or waived, but the number of Shares validly tendered
and not withdrawn is less than 90% of the number of then-outstanding Shares on a
fully diluted basis (excluding Shares held by the Company or any of its
subsidiaries), for four successive five (5) business day periods for an
aggregate period not to exceed twenty (20) business days, or (iv) if any of the
Offer Conditions (other than the Minimum Condition) shall not have been
satisfied or waived and a proposal or offer for a merger or certain other
extraordinary transactions (a "Takeover Proposal") has been made or publicly
disclosed by a person other than Parent or Purchaser (including the Company and
any of its subsidiaries and affiliates), or if Parent or Purchaser otherwise
learn that a Takeover Proposal has been made or publicly proposed, for a period
of up to ten (10) days after the withdrawal or termination of such Takeover
Proposal, such date in no event to exceed the earlier of (x) June 30, 2000, and
(y) the minimum time necessary to satisfy all such outstanding Offer Conditions.
Subject to the applicable rules and regulations of the SEC and the
provisions of the Merger Agreement, Purchaser also expressly reserves the right,
in its sole discretion, at any time or from time to time, (i) to terminate the
Offer if any of the Offer Conditions have not been satisfied and (ii) to
9
waive any Offer Condition (other than the Minimum Condition) or otherwise amend
the Offer in any respect, in each case by giving oral or written notice of such
extension, termination, waiver or amendment to the Depositary and by making a
public announcement thereof. If Purchaser accepts for payment any Shares
pursuant to the Offer, it will accept for payment all Shares validly tendered
prior to the Expiration Date and not properly withdrawn, and will promptly pay
for all Shares so accepted for payment.
The rights reserved by Purchaser in the preceding paragraph are in addition
to Purchaser's rights pursuant to Section 15. Any extension, delay, termination
or amendment of the Offer will be followed as promptly as practicable by public
announcement thereof, such announcement in the case of an extension to be issued
no later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date, in accordance with the public announcement
requirements of Rule 14e-1(d) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Subject to applicable law (including
Rules 14d-4(d) and 14d-6(c) under the Exchange Act, which require that any
material change in the information published, sent or given to stockholders in
connection with the Offer be promptly disseminated to stockholders in a manner
reasonably designed to inform stockholders of such change), and without limiting
the manner in which Purchaser may choose to make any public announcement,
Purchaser shall have no obligation to publish, advertise or otherwise
communicate any such public announcement other than by making a release to the
Dow Xxxxx News Service.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, Purchaser will disseminate additional tender offer materials (including
by public announcement as set forth above) and extend the Offer to the extent
required by Rules 14d-4(d) and 14e-1 under the Exchange Act. The minimum period
during which an offer must remain open following material changes in the terms
of the Offer, other than a change in price, percentage of securities sought or
inclusion of or change to a dealer's soliciting fee, will depend upon the facts
and circumstances, including the materiality, of the changes. In the SEC's view,
an offer should remain open for a minimum of five (5) business days from the
date the material change is first published, sent or given to stockholders, and,
if material changes are made with respect to information that approaches the
significance of price and share levels, a minimum of ten (10) business days may
be required to allow for adequate dissemination and investor response. With
respect to a change in price or, subject to certain limitations, a change in the
percentage of securities sought or inclusion of or change to a dealer's
soliciting fee, a minimum ten (10) business day period from the date of such
change is generally required to allow for adequate dissemination to
stockholders. Accordingly, if, prior to the Expiration Date, Purchaser decreases
the number of Shares being sought or increases or decreases the consideration
offered pursuant to the Offer, and if the Offer is scheduled to expire at any
time earlier than the tenth business day from the date that notice of such
increase or decrease is first published, sent or given to stockholders, the
Offer will be extended at least until the expiration of such tenth business day.
For purposes of the Offer, a "business day" means any day other than a Saturday,
Sunday or a federal holiday and consists of the time period from 12:01 a.m.
through 12:00 midnight, New York City time.
In connection with the Offer, the Company has provided Purchaser with the
names and addresses of all record holders of Shares and security position
listings of Shares held in stock depositories. This Offer to Purchase, the
related Letter of Transmittal and other relevant materials will be mailed to
registered holders of Shares and will be furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the stockholder list or, if applicable, who are
listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares.
10
2. PROCEDURE FOR ACCEPTING THE OFFER AND TENDERING SHARES.
VALID TENDERS. Except as set forth below, in order for Shares to be validly
tendered pursuant to the Offer, the Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message (as hereinafter defined) in
connection with a book-entry transfer of Shares, and any other documents
required by the Letter of Transmittal, must be received by the Depositary at one
of its addresses set forth on the back cover of this Offer to Purchase on or
prior to the Expiration Date, and either (i) certificates representing tendered
Shares must be received by the Depositary, or such Shares must be tendered
pursuant to the procedure for book-entry transfer set forth below (and
confirmation of receipt of such delivery must be received by the Depositary), in
each case on or prior to the Expiration Date, or (ii) the guaranteed delivery
procedures set forth below must be complied with. No alternative, conditional or
contingent tenders will be accepted.
SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of
Transmittal (i) if such Letter of Transmittal is signed by the registered holder
of the Shares tendered therewith, unless such holder has completed the box
entitled "Special Payment Instructions" in the Letter of Transmittal, or
(ii) if Shares are tendered for the account of a firm that is a member in good
standing of the Security Transfer Agent's Medallion Program, (each being
hereinafter referred to as an "Eligible Institution"). In all other cases, all
signatures on a Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instruction 1 of the Letter of Transmittal.
If a certificate representing Shares is registered in the name of a person
other than the signatory of the Letter of Transmittal (or a manually signed
facsimile thereof), or if payment is to be made, or Shares not accepted for
payment or not tendered are to be registered in the name of a person other than
the registered holder, the certificate must be endorsed or accompanied by an
appropriate stock power, in either case signed exactly as the name(s) of the
registered holder(s) appears on the certificate, with the signature(s) on the
certificate or stock power guaranteed by an Eligible Institution. If the Letter
of Transmittal or stock powers are signed or any certificate is endorsed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and, unless waived by Purchaser, proper
evidence satisfactory to Purchaser of their authority to so act must be
submitted. See Instruction 5 of the Letter of Transmittal.
BOOK-ENTRY TRANSFER The Depositary will establish accounts with respect to
the Shares at The Depository Trust Company ("DTC") for purposes of the Offer
within two (2) business days after the date of this Offer to Purchase, and any
financial institution that is a participant in DTC's system may make book-entry
delivery of the Shares by causing DTC to transfer such Shares into the
Depositary's account in accordance with DTC's procedure for such transfer.
However, although delivery of Shares may be effected through book-entry transfer
at DTC, a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof), with any required signature guarantees, or
an Agent's Message and any other required documents, must, in any case, be
transmitted to and received by the Depositary at one of its addresses set forth
on the back cover of this Offer to Purchase prior to the Expiration Date, or the
guaranteed delivery procedures described below must be complied with.
The term "Agent's Message" means a message transmitted through electronic
means by DTC to, and received by, the Depositary and forming a part of a
book-entry confirmation, which states that DTC has received an express
acknowledgment from the participant in DTC tendering the Shares that such
participant has received, and agrees to be bound by, the terms of the Letter of
Transmittal.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
11
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates representing Shares are not
immediately available (or the procedures 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, such Shares may nevertheless
be tendered, PROVIDED that all of the following conditions are satisfied:
(1) such tender is made by or through an Eligible Institution;
(2) the Depositary receives, prior to the Expiration Date, a properly
completed and duly executed Notice of Guaranteed Delivery, substantially
in the form provided by Purchaser; and
(3) the certificates representing all tendered Shares in proper form for
transfer (or confirmation of a book-entry transfer of such Shares into
the Depositary's account at DTC), together with a properly completed and
duly executed Letter of Transmittal (or a manually signed facsimile
thereof) with any required signature guarantees (or, in connection with a
book-entry transfer, an Agent's Message) and any other documents required
by the Letter of Transmittal are received by the Depositary within three
trading days after the date of such Notice of Guaranteed Delivery. A
"trading day" is any day on which the New York Stock Exchange is open for
business.
The Notice of Guaranteed Delivery may be delivered by hand, or may be
transmitted by facsimile transmission or mail, to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in such
Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES,
IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
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 tendered Shares will be determined by Purchaser in its sole discretion,
and its determination shall be final and binding on all persons. Purchaser
reserves the absolute right to reject any or all tenders of any Shares that it
determines are not in appropriate form or the acceptance for payment of or
payment for which may, in the opinion of Purchaser's counsel, be unlawful.
Purchaser also reserves the absolute right to waive any defect or irregularity
in any tender with respect to any particular Shares or any particular
stockholder, and Purchaser's interpretation of the terms and conditions of the
Offer will be final and binding on all persons. No tender of Shares will be
deemed to have been validly made until all defects or irregularities relating
thereto have been expressly waived or cured to the satisfaction of Purchaser.
None of Purchaser, Parent, the Depositary, the Information Agent or any other
person will be under any duty to give notification of any defects or
irregularities in tenders, nor shall any of them incur any liability for failure
to give any such notification.
OTHER REQUIREMENTS. By executing the Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of Purchaser as
such stockholder's proxy, in the manner set forth in the Letter of Transmittal,
with full power of substitution, to the full extent of such stockholder's rights
with respect to the Shares tendered by such stockholder and accepted for payment
by Purchaser (and any and all other Shares or other securities or rights issued
or issuable in respect of such Shares on or after the date of this Offer to
Purchase), effective if, when and to the extent that Purchaser accepts such
Shares for payment pursuant to the Offer. Upon such acceptance for payment, all
prior proxies given by such stockholder with respect to such Shares or other
securities accepted for payment will, without further action, be revoked, and no
subsequent proxies may be given by such stockholder nor any subsequent written
consents executed (and, if given or executed, will not be deemed effective).
Such designees of Purchaser will, with respect to such Shares and other
securities or
12
rights issuable in respect thereof, be empowered to exercise all voting and
other rights of such stockholder as it, in its sole discretion, may deem proper
in respect of any annual, special or adjourned meeting of the Company's
stockholders, action by written consent in lieu of any such meeting or
otherwise. Purchaser reserves the right to require that, in order for Shares to
be deemed validly tendered, Purchaser must be able to exercise full voting
rights with respect to the Shares accepted by Purchaser for payment immediately
upon such acceptance.
Purchaser's acceptance for payment of Shares tendered pursuant to any of the
procedures described above will constitute a binding agreement between the
tendering stockholder and Purchaser upon the terms and subject to the conditions
of the Offer.
To prevent federal backup withholding tax on payments made to stockholders
with respect to Shares purchased pursuant to the Offer, each stockholder must
provide the Depositary with his correct taxpayer identification number ("TIN")
and certify that he is not subject to backup withholding by completing the
Substitute Form W-9 included in the Letter of Transmittal. Non-United States
holders must submit a completed Form W-8BEN to avoid backup withholding. These
forms may be obtained from the Depositary. See Instructions 10 and 11 of the
Letter of Transmittal.
3. WITHDRAWAL RIGHTS.
Tenders of Shares made pursuant to the Offer will be irrevocable, except
that Shares tendered may be withdrawn at any time prior to the Expiration Date,
and, unless theretofore accepted for payment by Purchaser as provided herein,
may also be withdrawn on or after May 22, 2000 (or such later date as may apply
if the Offer is extended).
For a withdrawal of Shares tendered to be effective, a written or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase or
sent by facsimile transmission to the Depositary at the following numbers:
(000) 000-0000 or (000) 000-0000 (please call (000) 000-0000 to confirm receipt
of facsimile only). Any notice of withdrawal must specify the name of the person
who tendered the Shares to be withdrawn, the number of Shares to be withdrawn
and the name(s) in which the certificate(s) representing such Shares are
registered, if different from that of the person who tendered such Shares. If
certificates for Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, the name of the registered holder and the serial
numbers shown on the particular certificates evidencing such Shares to be
withdrawn must also be furnished to the Depositary prior to the physical release
of the Shares to be withdrawn. The signature(s) on the notice of withdrawal must
be guaranteed by an Eligible Institution (except in the case of Shares tendered
by an Eligible Institution). If Shares have been tendered pursuant to the
procedures for book-entry transfer set forth in Section 2, any notice of
withdrawal must specify the name and number of the account at DTC to be credited
with such withdrawn Shares and must otherwise comply with DTC's procedures.
If Purchaser extends the Offer, is delayed in its acceptance for payment of
any Shares tendered, or is unable to accept for payment or pay for Shares
tendered pursuant to the Offer, for any reason whatsoever, then, without
prejudice to Purchaser's rights set forth herein, the Depositary may,
nevertheless, on behalf of Purchaser, retain tendered Shares, and such Shares
may not be withdrawn except to the extent that the tendering stockholder is
entitled to and duly exercises withdrawal rights as described in this Section.
Any such delay will be accompanied by an extension of the Offer to the extent
required by law.
Withdrawals of tenders of Shares may not be rescinded, and Shares properly
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. However, withdrawn Shares may be retendered by again following the
procedures described in Section 2 at any time prior to the Expiration Date.
13
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser, in its sole discretion,
and its determination will be final and binding on all persons. None of Parent,
Purchaser, the Depositary, the Information Agent or any other person will be
under any duty to give notification of any defects or irregularities in any
notice of withdrawal, nor shall any of them incur any liability for failure to
give any such notification.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any extension or
amendment), Purchaser will accept for payment and will pay for all Shares
validly tendered prior to the Expiration Date and not properly withdrawn, as
soon as practicable after the Expiration Date. Purchaser expressly reserves the
right to delay acceptance for payment of, or payment for, Shares in order to
comply in whole or in part with any applicable law. If Purchaser desires to
delay payment for Shares accepted for payment pursuant to the Offer, and such
delay would otherwise be in contravention of Rule 14e-1(c) of the Exchange Act,
Purchaser will extend the Offer. See Section 1.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates
representing such Shares (or a timely confirmation of a book-entry transfer of
such Shares into the Depositary's account at DTC, as described in Section 2),
(ii) a properly completed and duly executed Letter of Transmittal (or a manually
signed facsimile thereof) with any required signature guarantees (or, in
connection with a book-entry transfer, an Agent's Message), and (iii) any other
documents required by the Letter of Transmittal.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares tendered prior to the Expiration Date
when, as and if Purchaser gives oral or written notice to the Depositary, as
agent for the tendering stockholders, of Purchaser's acceptance for payment of
such Shares. Payment for Shares so accepted for payment will be made by the
deposit of the purchase price therefor with the Depositary, which will act as
agent for the tendering stockholders for the purpose of receiving such payment
from Purchaser and transmitting such payment to tendering stockholders. If, for
any reason whatsoever, acceptance for payment of any Shares tendered pursuant to
the Offer is delayed, or Purchaser is unable to accept for payment Shares
tendered pursuant to the Offer, then, without prejudice to Purchaser's rights
under Section 1, the Depositary may, nevertheless, on behalf of Purchaser,
retain tendered Shares, and such Shares may not be withdrawn, except to the
extent that the tendering stockholders are entitled to withdrawal rights as
described in Section 3 and as otherwise required by Rule 14e-1(c) under the
Exchange Act. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE
BY REASON OF ANY DELAY IN MAKING SUCH PAYMENTS.
If any tendered Shares are not accepted for payment and paid for,
certificates representing such Shares will be returned (or, in the case of
Shares delivered by book-entry transfer with DTC as permitted by Section 2, such
Shares will be credited to an account maintained with DTC) without expense to
the tendering stockholder as promptly as practicable following the expiration or
termination of the Offer.
If, prior to the Expiration Date, Purchaser increases the consideration to
be paid for Shares pursuant to the Offer, Purchaser will pay such increased
consideration for all Shares accepted for payment or paid for pursuant to the
Offer, whether or not such Shares have been tendered, accepted for payment or
paid for prior to such increase in the consideration.
Purchaser reserves the right to transfer or assign in whole or in part to
one or more affiliates of Purchaser the right of Purchaser to purchase Shares
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve Purchaser of its obligations under the Offer and will in no way
14
prejudice the rights of tendering stockholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer.
5. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
The receipt of cash for Shares pursuant to the Offer or the Merger will be a
taxable transaction for U.S. federal income tax purposes and may also be a
taxable transaction under state, local, or foreign tax laws. In general, a
stockholder who tenders Shares in the Offer or receives cash in exchange for
Shares in the Merger will recognize gain or loss for U.S. federal income tax
purposes equal to the difference, if any, between the amount of cash received
and the stockholder's tax basis in the Shares sold. Gain or loss will be
determined separately for each block of Shares (i.e., Shares acquired at the
same time and price) exchanged pursuant to the Offer or the Merger. Such gain or
loss will generally be capital gain or loss if the Shares disposed of were held
as capital assets by the stockholder and will be long-term capital gain or loss
if such Shares have been held for more than one year.
A stockholder who perfects his or her stockholder's appraisal rights, if
any, under the DGCL will probably recognize gain or loss at the Effective Time
in an amount equal to the difference between the "amount realized" and such
stockholder's adjusted tax basis of such Shares. For this purpose, although
there is no authority to this effect directly on point, the amount realized
should generally equal the trading value per share of the Shares at the
Effective Time. Ordinary interest income and/or capital gain (capital loss),
assuming that the Shares were held as capital assets, should be recognized by
such stockholder at the time of actual receipt of payment, to the extent that
such payment exceeds (or is less than) the amount realized at the Effective
Time.
A stockholder who is a non-U.S. Holder will not be subject to United States
federal income or withholding tax on the receipt of cash for Shares pursuant to
the Offer or the Merger unless (i) the income from the Shares is effectively
connected with the conduct by the non-U.S. Holder of a trade or business in the
United States or (ii) in the case of an individual non-U.S. Holder, the non U.S.
Holder is present in the United States for 183 days or more in the taxable year
in which cash is received for the Shares pursuant to the Offer or the Merger and
certain other conditions are met. As used herein, a "U.S. Holder" is a
beneficial owner of a Share who is (i) an individual citizen or resident of the
United States, (ii) a corporation or partnership organized in or under the laws
of the United States or any state thereof or the District of Columbia, (iii) an
estate the income of which is subject to U.S. federal income tax regardless of
source or (iv) a trust if a court within the United States is able to control
all substantial decisions of the trust. A "Non-U.S. Holder" is a beneficial
owner of a Share who is not a U.S. Holder.
The foregoing summary is for general information purposes only and is based
on the U.S. federal income tax law now in effect, which is subject to change,
possibly retroactively. This summary does not discuss all aspect of U.S. federal
income taxation which may be important to particular stockholder in light of
their individual investment circumstances or to certain types of stockholder
subject to special tax rules (including, but not limited to, insurance
companies, tax-exempt organizations, financial institutions, or broker dealers,
foreign stockholder and stockholder who have acquired their Shares pursuant to
the exercise of employee stock options or otherwise as compensation), nor does
it address state, local, or foreign tax consequences. Each stockholder is urged
to consult his or her tax advisor regarding the specific U.S. federal, state,
local and foreign income and other tax consequences of the Offer and Merger.
6. PRICE RANGE OF SHARES; DIVIDENDS.
The Company's Common Stock is listed and traded on the New York Stock
Exchange ("NYSE") under the symbol "OEA". The following table sets forth, for
the fiscal periods indicated, the high and low sales prices for the Common Stock
on the NYSE with respect to periods occurring in fiscal years
15
1998, 1999 and 2000 as reported by published financial sources. On November
24, 1998, the Company paid a cash dividend on its Common Stock of $0.08 per
share of Common Stock. The Merger Agreement prohibits the Company from
declaring, setting aside or paying any cash dividends prior to the earlier of
the termination of the Merger Agreement or the Offer Completion Date.
COMMON STOCK
-------------------
FISCAL YEAR HIGH LOW
----------- -------- --------
FISCAL 1998:
First Quarter............................................... $29.56 $ 17.5
Second Quarter.............................................. $20.63 $14.94
Third Quarter............................................... $16.38 $ 7.75
Fourth Quarter.............................................. $14.06 $ 8.06
FISCAL 1999
First Quarter............................................... $15.44 $ 8.25
Second Quarter.............................................. $11.56 $ 7.81
Third Quarter............................................... $ 9.38 $ 6.63
Fourth Quarter.............................................. $ 8.31 $ 4.31
FISCAL 2000
First Quarter............................................... $ 9.75 $ 4.50
The Rights trade together with the Common Stock. On March 10, 2000, the last
full trading day prior to the public announcement of the execution of the Merger
Agreement, the closing price per Share reported on the NYSE was $7.06. On
March 23, 2000, the last full trading day before the commencement of the Offer,
the closing price per Share reported on the NYSE was $9.63. STOCKHOLDERS ARE
URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. CERTAIN INFORMATION CONCERNING THE COMPANY.
Except as otherwise stated in this Offer to Purchase, the information
concerning the Company contained herein has been taken from or is based upon
reports and other documents on file with the SEC or otherwise publicly
available. Although neither Purchaser nor Parent have any knowledge that would
indicate that any statements contained herein based upon such reports and
documents are untrue, neither Purchaser nor Parent takes any responsibility for
the accuracy or completeness of the information contained in such reports and
other documents or for any failure by the Company to disclose events that may
have occurred and may affect the significance or accuracy of any such
information but that are unknown to Purchaser or Parent.
GENERAL
The Company is a Delaware corporation with its principal executive offices
located at 00000 Xxxx Xxxxxx Xxxxxx, X.X. Box 100488, Denver, Colorado, 80250.
The Company's telephone number is (000) 000-0000. The Company produces
high-reliability, propellant-actuated safety devices for the automotive and
aerospace industries. Its automotive safety products division designs, develops,
tests and manufactures propellant-actuated devices for use in automotive safety
products, which are currently single-stage hybrid inflators (passenger, driver
and side-impact) and electric initiators. These products are sold to automotive
module and inflator manufacturers, which in turn sell their products directly to
automobile manufacturers. The Company's aerospace division, among other things,
designs, develops, and manufactures propellant and explosive-actuated devices
used by the United States Government and major military and aerospace companies.
16
FINANCIAL INFORMATION Set forth below is certain selected consolidated
financial information relating to the Company and the Company Subsidiaries which
has been excerpted or derived from the audited financial statements contained in
the Company's Annual Report on Form 10-K for the fiscal year ended July 31, 1999
and for the quarters ended January 30, 2000 and January 29, 1999, as contained
in the Company's Quarterly Report on Form 10-Q for the quarters ended January
30, 2000 and January 29, 1999, which are incorporated by reference herein. More
comprehensive financial information is included in such reports and other
documents filed by the Company with the Commission. The financial information
that follows is qualified in its entirety by reference to such reports and other
documents, including the financial statements and related notes contained
therein. Such reports and other documents may be examined and copies may be
obtained from the offices of the Commission in the manner set forth below.
OEA, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
6 MONTHS ENDED YEAR ENDED JULY 31,
--------------------------- ------------------------------
JANUARY 30, JANUARY 29,
2000 1999 1999 1998 1997
----------- ------------- -------- -------- --------
(UNAUDITED) (UNAUDITED)
INCOME STATEMENT DATA:
Net Sales.................................... $119,592 $ 116,227 $248,805 $245,375 $211,557
Operating Profit (Loss)...................... (9,164) (3,198) 527 (5,588) 49,559
Earnings (Loss) Before Minority Interest and
Income Taxes............................... (11,325) (5,415) (4,154) (13,931) 55,304
Minority Interest............................ -- -- -- -- --
Income Tax Expense (Benefit)................. (4,200) (1,697) 1,746 4,655 (19,863)
-------- ------------- -------- -------- --------
Net Earnings (Loss) Before Cumulative Effect
of a Change in Accounting Principle........ (7,125) (3,718) (2,408) (9,276) 35,441
Cumulative Effect of a Change in Accounting
Principle.................................. -- -- -- (10,040) --
-------- ------------- -------- -------- --------
Net Earnings (Loss)...................... $ (7,125) (3,718) (2,408) (19,316) 35,441
======== ============= ======== ======== ========
Basic Earnings (Loss) Per Share Before
Cumulative Effect of a Change in Accounting
Principle.................................. $ (.35) (.18) (.12) (.45) 1.73
======== ============= ======== ======== ========
Basic Earnings (Loss) Per Share.......... $ (.35) (.18) (.12) (.94) 1.73
======== ============= ======== ======== ========
Cash Dividends Per Share..................... $ -- .08 .08 .33 .30
======== ============= ======== ======== ========
Weighted Average Number of Shares Outstanding
During Period.............................. 20,615 20,598 20,602 20,581 20,540
======== ============= ======== ======== ========
Total Number of Shares Outstanding at Year
End........................................ -- -- 20,610 20,595 20,552
======== ============= ======== ======== ========
BALANCE SHEET DATA:
Current Assets............................... $116,272 108,302 95,875 117,578 127,319
Current Liabilities.......................... $147,834 29,824 34,192 31,461 36,031
Working Capital.............................. $(31,562) 78,478 61,683 86,117 91,288
Working Capital Ratio........................ 0.8 to 1 3.6 to 1 2.8 to 1 3.7 to 1 3.5 to 1
Total Assets................................. $311,054 319,664 298,358 328,759 331,556
Shareholders' Equity......................... $146,773 157,061 156,574 161,506 186,778
Book Value Per Share......................... $ 7.12 $ 7.62 7.60 7.84 9.09
17
AVAILABLE INFORMATION The Shares are registered under the Exchange Act.
Accordingly, the Company is subject to the informational filing requirements of
the Exchange Act and, in accordance therewith, is obligated to file periodic
reports, proxy statements and other information with the Commission relating to
its business, financial condition and other matters. Information, as of
particular dates, concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal holders of the
Company's securities and any material interest of such persons in transactions
with the Company is required to be disclosed in such proxy statements and
distributed to the Company's stockholders and filed with the Commission. Such
reports, proxy statements and other information should be available for
inspection at the public reference facilities at the Commission's principal
office at 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxx Xxxxx, Xxxxxxxxxx, X.X. 00000, and
at the regional offices of the Commission located at 0 Xxxxx Xxxxx Xxxxxx, Xxxxx
0000, Xxx Xxxx, Xxx Xxxx 10048 and 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx 00000. The Commission maintains a site on the World Wide Web, and the
reports, proxy statements and other information filed by the Company with the
Commission may be accessed electronically on the World Wide Web at
xxxx://xxx.xxx.xxx. Copies of such material may also be obtained by mail, upon
payment of the Commission's customary fees, from the Commission's principal
office at 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000.
CERTAIN PROJECTIONS. The Company does not, as a matter of course, make
public any forecasts as to its future financial performance. However, in
connection with Xxxxxx's review of the transactions contemplated by the Offer
and the Merger, the Company has provided Parent with certain projected financial
information concerning the Company. Such information included, among other
things, the Company's projections of revenue, earnings before interest, income
taxes, depreciation and amortization, and capital expenditure for the Company
for the years 2000 through 2002. Set forth below is a summary of such
projections. These projections should be read together with the financial
statements of the Company referred to herein.
YEAR ENDED JULY 31,
2000 2001 2002
-------- -------- ---------
(IN THOUSANDS)
Revenue..................................................... $260,871 $353,667 $ 395,525
EBITDA(1)................................................... $ 29,906 $ 66,160 $ 75,120
Capital Expenditure......................................... $ 24,663 $ 24,929 $ 33,501
(1) Earnings before interest, income taxes, depreciation and amortization.
It is the understanding of Parent and Purchaser that the projections were
not prepared with a view to public disclosure or compliance with published
guidelines of the Commission or the guidelines established by the American
Institute of Certified Public Accountants regarding projections or forecasts and
are included herein only because such information was provided to Parent and
Purchaser. 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 presented herein, and
accordingly assume no responsibility for them. These forward-looking statements
(as that term is defined in the Private Securities Litigation Reform Act of
1995) are subject to certain risks and uncertainties that could cause actual
results to differ materially from the projections. The Company has advised
Purchaser and Parent that its internal financial forecasts (upon which the
projections provided to Parent 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 (not all of
which were provided to Parent and Purchaser) all made by management of the
Company with respect to industry performance, general business, economic, market
and financial conditions and other matters, including effective tax rates
consistent with historical levels for the Company, 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
18
Parent or Purchaser. Accordingly, there can be no assurance that the assumptions
made in preparing the projections will prove accurate, 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 Parent, 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. None of Parent, 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. It is expected that there will be differences between actual and
projected results, and actual results may be materially higher or lower than
those projected. For further information on risks associated with
forward-looking statements, please refer to the Company's 8-K filed with the
Commission on June 4, 1998.
8. CERTAIN INFORMATION CONCERNING PARENT AND PURCHASER.
Parent is a Delaware holding corporation with principal executive offices at
World Trade Center, Xxxxxxxxxxxxxxxxxxx 00, XX-000 00 Xxxxxxxxx, Xxxxxx. The
telephone number of Parent is x00 0 000 00 000. Parent, through its two wholly
owned operating subsidiaries, Autoliv AB, a Swedish corporation, and Autoliv
ASP, Inc., an Indiana corporation, is one of the world's leading suppliers of
automotive occupant safety restraint systems with a broad range of product
offerings including modules and components for passenger and driver-side
airbags, side-impact airbag protection systems, seat belts, steering wheels,
safety seats and other safety systems and products.
Parent has production facilities in 26 countries and has as its customers
almost all of the world's largest car manufacturers. Parent employs
approximately 22,500 people and had sales in 1999 of $3.8 billion, approximately
70% of which consisted of airbags and associated products and approximately 30%
of which consisted of seat belts and associated products. Parent's major markets
are in Europe and the United States.
Purchaser is a Delaware corporation with its principal offices located at
0000 Xxxxxxx Xxxxx, Xxxxxx Xxxxx, XX 00000. The telephone number of Purchaser is
(000) 000-0000. Purchaser is an indirect wholly owned subsidiary of Parent.
Purchaser has not carried on any activities other than in connection with the
Merger Agreement.
The name, citizenship, business address, business phone number, principal
occupation or employment and five-year employment history for each of the
directors and officers of Parent and Purchaser are set forth in Schedule I
hereto.
Except as provided in the Merger Agreement or as otherwise described in this
Offer to Purchase, none of Parent, Purchaser nor, to the best knowledge of
Parent and Purchaser, any of the persons listed in Schedule I to this Offer to
Purchase, has any contract, arrangement, understanding or relationship with any
other person with respect to any securities of the Company, including, but not
limited to, any contract, arrangement, understanding or relationship concerning
the transfer or voting of such securities, finder's fees, joint ventures, loan
or option arrangements, puts or calls, guarantees of loans, guarantees against
loss or the giving or withholding of proxies.
The Company is a supplier of airbag initiators and airbag inflators to the
Parent. Parent purchased approximately 8.8 million and 9.3 million airbag
initiators during the calendar years ended December 31, 1999 and December 31,
1998 for an aggregate price of approximately $14.5 million and $19.6 million,
respectively. Parent purchased approximately 200,000 airbag inflators from the
Company during the calendar year ended December 31, 1999 for an aggregate price
of $2.7 million. Parent purchased no airbag inflators from the Company during
the calendar year ended December 31, 1998.
19
Except as set forth in this Offer to Purchase, none of Parent, Purchaser nor, to
the best knowledge of Parent and Purchaser, any of the persons listed on
Schedule I hereto, has had any business relationship or transaction with the
Company or any of its executive officers, directors or affiliates that is
required to be reported under the rules and regulations of the SEC applicable to
the Offer. Except as set forth in this Offer to Purchase, there have been no
contacts, negotiations or transactions between Parent or any of its subsidiaries
or, to the best knowledge of Parent, any of the persons listed in Schedule I to
this Offer to Purchase, on the one hand, and the Company or its affiliates, on
the other hand, concerning a merger, consolidation or acquisition, tender offer
or other acquisition of securities, an election of directors or a sale or other
transfer of a material amount of assets. None of the persons listed in
Schedule I have, during the past five years, been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors). None of the
persons listed in Schedule I have, during the past five years, been a party to
any judicial or administrative proceeding (except for matters that were
dismissed without sanction or settlement) that resulted in a judgment, decree or
final order enjoining the person from future violations of, or prohibiting
activities subject to federal or state securities, laws, or a finding of any
violation of federal or state securities laws.
9. SOURCE AND AMOUNT OF FUNDS.
The total amount of funds required by Purchaser to purchase Shares pursuant
to the Offer and the Merger is estimated to be approximately $219,493,280.
Purchaser will obtain such funds from Autoliv ASP, Inc., a Delaware corporation
which is the direct parent of Purchaser and a wholly owned subsidiary of Parent
("Autoliv ASP") who will obtain a significant portion of such funds from its
existing resources, including short term borrowings in the ordinary course of
business. For the remainder, Autoliv, Inc. has obtained a $300 million Credit
Agreement dated March 22, 2000 among Autoliv ASP as Borrower, the Parent as
Guarantor, Skandinaviska Enskilda Xxxxxx XX (publ) as Lender and SEB Debt
Capital Markets as Arranger (the "Credit Agreement"). The term of the Credit
Agreement is from April 25, 2000 until September 25, 2000, subject to extension
by mutual agreement and the interest rate for the loans borrowed under the
Credit Agreement is LIBOR plus 0.5% and other applicable costs. In addition
Autoliv ASP is not required to supply collateral to the Lender for any loan
borrowed under the Credit Agreement. The Offer is not conditioned on any
financing arrangements.
10. BACKGROUND OF THE OFFER AND THE MERGER; PAST CONTACTS OR NEGOTIATIONS WITH
THE COMPANY.
Executives of Parent are familiar with the business and operations of the
Company because the Company is a significant supplier of Parent and because each
of Parent and the Company conduct business in the same markets.
In December 1999 Parent was initially contacted by Deutsche Bank, acting at
the Company's instruction as the Company's financial advisors, with a view to
determining whether Parent was interested in potentially acquiring the Company.
Deutsche Bank informed Parent that several potential strategic buyers had been
contacted to solicit their interest in the Company.
On January 5(th) the Company and Parent entered into a confidentiality
agreement and Parent subsequently received an offering memorandum and related
materials about the Company. On January 22(nd) representatives of Parent
attended a management presentation by the Company held in Denver, Colorado. As
requested in the Company's bid sale process instructions, Parent submitted a
preliminary, non-binding indication of interest on February 7(th). In February,
representatives of Parent conducted a due diligence investigation of the
Company.
On March 9(th) in response to an invitation from the Company, Xxxxxx
submitted a final written proposal to acquire the Company through a cash tender
offer of $9.00 per Share for all outstanding
20
Shares. Parent's proposal included revisions to a form of merger agreement
distributed by the Company.
During March 9(th) and 10(th), a representative of Deutsche Bank and the
management of the Company had discussions with management of Parent regarding
outstanding due diligence issues and the economics and structure of Parent's
proposal. During those discussions, Parent was requested by Deutsche Bank to
revise its proposal and increase its offer price. On March 10(th), Xxxxxx was
informed that the Board of the Company was scheduled to meet that afternoon and
would consider any revision to Xxxxxx's proposal made at that time. Prior to the
Board meeting, the chief executive officer of Parent contacted Deutsche Bank to
modify the final proposal and increase the price of the offer per Share.
On March 11(th) and 12(th), representatives of Parent and the Company
negotiated the terms of the definitive merger agreement.
On March 12(th) the Board of the Company met to review and unanimously
approved the Offer and the Merger and the form of Merger Agreement, which was
subsequently finalized. Following such meeting, Parent and the Company executed
the Merger Agreement on March 12(th). Thereafter, the Company and Parent issued
separate press releases announcing the transaction.
On March 24(th), 2000, in accordance with the Merger Agreement, Parent
commenced the Offer.
11. THE MERGER AGREEMENT.
THE MERGER AGREEMENT. The following is a summary of the material provisions
of the Merger Agreement, a copy of which is filed as an exhibit to the Tender
Offer Statement on Schedule TO filed by Parent and Purchaser pursuant to
Rule 14d-3 of the General Rules and Regulations under the Exchange Act with the
Commission in connection with the Offer (the "Schedule TO"). The summary is
qualified in its entirety by reference to the Merger Agreement, which is deemed
to be incorporated by reference herein.
THE OFFER. The Merger Agreement provides for the making of the Offer. The
obligation of Purchaser to accept for payment and pay for Shares tendered
pursuant to the Offer is subject to the satisfaction or waiver of the Minimum
Condition and certain other conditions that are described in
Section 15--"Certain Conditions of the Offer." Pursuant to the Merger Agreement,
without the consent of the Company, Purchaser may not extend the Offer beyond
April 24, 2000, except in the following circumstances: (i) if necessary to
satisfy any condition of the HSR Act, for a period not to exceed forty
(40) business days, (ii) if any of the Offer Conditions (other than the Minimum
Condition) shall not have been satisfied or waived for a period not to exceed
twenty (20) business days, (iii) if all the Offer Conditions are satisfied or
waived, but the number of Shares validly tendered and not withdrawn is less than
90% of the number of then-outstanding Shares on a fully diluted basis (excluding
shares held by the Company or any of its subsidiaries), for four successive five
(5) business day periods for an aggregate period not to exceed twenty
(20) business days, or (iv) if any of the Offer Conditions (other than the
Minimum Condition) shall not have been satisfied or waived and a Takeover
Proposal has been made or publicly disclosed by a person other than Parent or
Purchaser (including the Company and any of its subsidiaries and affiliates), or
if Parent or Purchaser otherwise learn that a Takeover Proposal has been made or
publicly proposed, for a period of up to ten (10) days after the withdrawal or
termination of such Takeover Proposal, such date in no event to exceed the
earlier of (x) June 30, 2000, and (y) the minimum time period necessary to
satisfy all such outstanding Offer Conditions.
Subject to the foregoing restrictions, Purchaser has the right (but is not
obligated), in its sole discretion, to extend the period during which the Offer
is open by giving oral or written notices of extension to the Depositary in such
offer and by making a public announcement of such extension.
21
The Purchaser will not, without the prior consent of the Company, decrease
the Offer Price or the number of Shares sought pursuant to the Offer, or change
the form of consideration in the offer, or otherwise amend or add any term or
condition of or to the Offer, except as otherwise expressly permitted in or
contemplated by the Merger Agreement. The Purchaser can waive any other
condition to the Offer in its discretion.
For information concerning directors of the Company prior to consummation of
the Merger, see Section 12--"Purpose of the Offer; Plans for the Company."
DIRECTORS. The Merger Agreement provides that effective upon the acceptance
for payment of Shares, Purchaser shall be entitled to designate at least such
number of directors, rounded up to the next whole number, on the Board that
equals the product of (i) the total number of directors on the Board (determined
after giving effect to the directors elected pursuant to this sentence) and
(ii) the percentage that the aggregate number of Shares beneficially owned by
Parent or Purchaser (including Shares accepted for payment pursuant to the
Offer) bears to the total number of Shares then outstanding and the Company
will, upon request of the Purchaser promptly take all actions necessary to cause
the Purchaser's designees to be so elected, including, if necessary, seeking the
resignations of one or more existing directors; PROVIDED, HOWEVER, that before
the Effective Time, the Board will always have at least three members who have
been in place since March 12, 2000 (the "Continuing Directors"). Following the
election or appointment of the Purchaser's designees and before the Effective
Time, any amendment or termination of the Merger Agreement by the Company, or
any extension by the Company of the time for the performance of any of the
obligations or other acts of Parent or Purchaser or waiver of any of the
Company's rights thereunder, will require the concurrence of a majority of the
directors of the Company then in office who are Continuing Directors.
OPTIONS. Prior to the Expiration Date, the Company will use its reasonable
best efforts to cause each person who holds an option to acquire Shares from the
Company ("Options") to exercise, terminate or consent to their cancellation. As
of the Effective Time, all remaining Options will be canceled, redeemed or
repurchased by the Company, and each holder of Options will receive the
aggregate Offer Price that such holder would have received pursuant to this
Offer if the holder had tendered the Shares underlying such Options, less the
aggregate exercise or purchase price of such underlying Shares (subject to any
applicable withholding tax).
THE MERGER. The Merger Agreement provides that as soon as practicable after
the satisfaction or waiver of each of the conditions to the Merger set forth
therein, Purchaser will be merged with and into the Company. Following the
Merger, the separate existence of Purchaser will cease, and the Company will
continue as the Surviving Company, wholly owned by Parent.
If required by the DGCL, the Company shall call and hold a meeting of its
stockholders (the "Company Stockholders' Meeting") promptly following
consummation of the Offer for the purpose of voting upon the approval of the
Merger Agreement. At any such meeting all outstanding Shares then owned by
Parent or Purchaser or any subsidiary of Parent shall be voted in favor of
approval of the Merger.
Pursuant to the Merger Agreement, each Share outstanding immediately before
the Effective Time (other than Shares owned beneficially or of record by Parent
or any subsidiary of Parent or held in the treasury of the Company, all of which
will be cancelled, and other than Shares which are held by stockholders, if any,
who properly exercise their appraisal rights under the DGCL) will be converted
into the right to receive the Offer Price except as described below.
Shareholders who perfect their right to appraisal of their Shares under the DGCL
shall be entitled to the amounts determined pursuant to such proceedings. See
Section 12--"Purpose of the Offer; Plans for the Company."
REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains customary
representations and warranties of the parties thereto, including representations
by the Company as to its corporate
22
existence and power, capitalization, corporate authorizations, Commission
filings, financial statements, absence of certain changes (including: (i) any
material adverse effect in the financial condition, business, operations or
assets would be reasonably expected to have, either individually or in the
aggregate, a Company Material Adverse Effect (as defined in the Merger
Agreement) on the Company and its subsidiaries, taken as a whole; (ii) entry by
the Company into an agreement which, under the rules and regulations of the
Exchange Act, would be required to be filed as an exhibit to an Exchange Act
filing; or (iii) changes by the Company in its accounting principles),
government authorizations, absence of litigation, compliance with laws, employee
matters, certain contracts, taxes, environmental, intellectual property,
brokers, the opinion of the Company's financial advisor, noncontravention,
product liability, recalls, required shareholder vote and rights agreement.
COMPANY COVENANTS. The Merger Agreement contains various customary
covenants of the parties thereto. A description of certain of these covenants
follows:
CONDUCT OF BUSINESS. Prior to the Effective Time, except as otherwise set
forth in the Merger Agreement or approved by Parent, the Company will:
(1) conduct its business in the ordinary course of business and consistent
with past practices and such that, as of the Effective Time, the closing
conditions set forth in the Merger Agreement will be met;
(2) use reasonable efforts to (a) maintain the business organizations of the
Company and its subsidiaries, (b) maintain all significant customer,
supplier, contractor, distributor, licensor, licensee and other business
relationships, and (c) retain officers and employees;
(3) not engage in an extraordinary corporate transaction;
(4) not amend its certificate of incorporation or bylaws;
(5) not (a) authorize, issue or provide for the issuance of or sell, pledge,
dispose of or encumber its capital stock or Options (other than with
respect to disclosed Option plans), (b) enter into any contract with
respect to the purchase or voting of capital stock, (c) split, combine or
reclassify capitalization any material term of its capital stock or
(d) make any other change in its capitalization;
(6) not declare, set aside or pay dividends or distributions or purchase or
redeem any capital stock or Options;
(7) maintain its accounting policies in accordance with past practice and
generally accepted accounting principles and not adopt any material
changes in its reporting regarding taxation or accounting procedures
except in accordance with such generally accepted accounting principles;
(8) not: (a) modify the terms of any existing indebtedness or incur any new
indebtedness unless such indebtedness (1) is in the ordinary course of
business and (2) does not exceed the sum of total indebtedness on
January 31, 2000 and $10,000,000; (b) make loans of more than $100,000
(except intercompany loans); (c) pay or discharge any claims, liens or
liabilities involving more than $100,000 individually and $500,000 in the
aggregate; or (d) write off any accounts or notes receivable other than
in the ordinary course of business;
(9) not take any action with respect to employees that would: (a) grant or
increase any severance or termination pay; (b) adopt or establish a new
employee benefit plan or make any material amendment with respect to an
existing benefit plan; or (c) enter into or materially amend any
employment or employment related agreement (including union or labor
agreements) with any employees, directors, officers or consultants;
23
(10) not settle or compromise any suit or claim for an amount which would
exceed $250,000 individually; and
(11) not take any action or fail to take action that would result in:
(a) any condition to the Offer not being satisfied; (b) a breach of any
representation or warranty in the Merger Agreement or (c) an impairment
by any party to the Merger Agreement to consummate the transactions
contemplated in the Merger Agreement.
NO SOLICITATION. The Company will not directly or indirectly (1) solicit,
initiate or encourage any Takeover Proposal, (2) engage in negotiations or
discussions concerning, provide any information to any third party relating to,
or take any other actions to facilitate a Takeover Proposal or (3) enter into
any agreement relating to a Takeover Proposal. The term "Takeover Proposal" is
defined in the Merger Agreement to mean any proposal or offer for a merger or
certain other extraordinary transactions. The foregoing will not prohibit the
Company from complying with Rule 14e-2 under the Exchange Act.
Notwithstanding the foregoing, the Company may furnish, at any time before
the closing of the Offer, non-public information to, or enter discussions with
respect to any unsolicited bona fide written proposal for a Takeover Proposal,
but only to the extent (1) the Board determines after consultation with outside
counsel and financial advisors that doing so is required by its fiduciary
duties, (2) the Board reasonably determines that the Takeover Proposal is likely
to lead to a Superior Proposal and (3) before taking action on such Takeover
Proposal the Company receives an executed customary (as determined by outside
counsel) confidentiality agreement. The term "Superior Proposal" is defined in
the Merger Agreement to mean any Takeover Proposal: (a) which is more favorable
to the Company's stockholders than the Offer and the Merger as determined by the
Board based upon the written opinion of the Company's financial advisors;
(b) in which the person making such proposal has or is reasonably likely to
obtain the necessary funds to make the Superior Proposal; and (c) that will have
a consideration greater than the Offer Price.
The Board may not withdraw or modify its approval of the Offer and the
Merger or approve any Takeover Proposal unless the Board determines after
consultation with outside counsel and financial advisors that doing so is
required by its fiduciary duties and such Takeover Proposal is a Superior
Proposal. However, the Company may not enter into an agreement with respect to
the Superior Proposal unless the Merger Agreement is terminated and the
Termination Fee (as defined below) is paid to Parent and Purchaser
simultaneously with the Board's approval of a Superior Proposal.
The Company has agreed to notify Parent promptly after receiving a Takeover
Proposal.
INDEMNIFICATION. The Merger Agreement provides that for four (4) years
after the Effective Time, the Surviving Corporation will indemnify and hold
harmless each present and former director, officer, employee, fiduciary and
agent from liabilities for acts or omissions occurring at or prior to the
Effective Time to the fullest extent required under applicable law and the
Company's certificate of incorporation and bylaws; and that the bylaws of the
Surviving Corporation after the Effective Time will provide the same
indemnification protection as the bylaws of the Company in effect on the date of
the Merger Agreement.
EMPLOYEES, EMPLOYEE BENEFITS. The Merger Agreement contains certain
covenants relating to the treatment of employees of the Company for one year
after the consummation of the Offer. Parent: (a) intends to cause the Surviving
Corporation to provide benefits to employees who were employed by the Company on
the date of the consummation of the Offer that are no less favorable than those
for employees in comparable positions in the Surviving Corporation; (b) will
honor all legally imposed obligations relating to employment matters; and
(c) will recognize time served with the Company for determination of
eligibility, vesting and level under benefit plans of the Surviving Corporation.
24
CONDITIONS TO THE MERGER. The obligations of Parent, Purchaser and the
Company to consummate the Merger are subject to the satisfaction of the
following conditions at or prior to the Effective Time:
(1) if required by the DGCL, the approval of the Merger Agreement by the
shareholders of the Company, the Parent and the Purchaser in accordance
with such law;
(2) the termination of any waiting period with respect to the HSR Act; and
(3) the absence of any injunction, order, statute, regulation, rule order or
judgment that shall prohibit consummation of the Offer or the Merger.
In addition, the obligations of Parent and Purchaser to consummate the
Merger are further subject to the satisfaction of the following condition at or
prior to the Effective Time:
(1) the Company shall have obtained all material consents, waivers,
approvals or authorizations.
The obligations of the Company to consummate the Merger are further subject
to the satisfaction of the following condition at or prior to the Effective
Time:
(1) the Purchaser shall have purchased all shares validly tendered and not
withdrawn pursuant to the Offer.
TERMINATION. The Merger Agreement may be terminated at any time prior to
the Effective Time:
(1) by mutual written consent of Purchaser, Parent and the Company;
(2) by Purchaser, Parent or the Company, if the Merger shall not have been
consummated by June 30, 2000 (provided that the right to terminate shall
not be available to any party whose failure to fulfill any obligation
under the Merger Agreement has caused or resulted in the failure of the
Merger to occur on or before such date, and such time periods shall be
tolled for any time during which any party is subject to a non-final
order or decree restraining, enjoining or otherwise prohibiting the
consummation of the Merger);
(3) by Purchaser, Parent or the Company, if any court or governmental entity
prohibits the transaction by final, nonappealable order, decree or ruling
permanently restraining, enjoining or otherwise prohibiting the
consummation of the Merger;
(4) by Parent if, as a result of the failure of the conditions to the Offer,
the Offer is terminated or expires without Purchaser purchasing Shares;
(5) by the Company, if the Company executes an agreement relating to a
Superior Proposal; or
(6) by Parent, if (a) the Company has entered into an agreement with a third
party to sell all or substantially all of the assets, any substantial
equity in or enter into a business combination with, the Company or any
of its subsidiaries, or (b) if the Board has withdrawn or modified its
recommendation of the Offer or the Merger in a manner materially adverse
to Parent or Purchaser.
If the Merger Agreement is terminated, it will become void and there will be
no liability on the part of the Company, Parent or Purchaser, except for
obligations regarding the confidentiality agreement and certain fees and
expenses payable pursuant to the Merger Agreement (see "Fees and Expenses"),
PROVIDED, HOWEVER, that no such termination shall relieve any party from
liability for any breach of the Merger Agreement prior to such termination.
FEES AND EXPENSES. Except as otherwise specified in the following sentence,
all costs and expenses incurred in connection with the Merger Agreement and the
transactions contemplated thereby shall be paid by the party incurring such cost
or expense.
25
If this Merger Agreement is terminated as set forth below, the Company shall
promptly pay to Parent, by wire transfer in immediately available funds, a fee
of $6 million (the "Termination Fee"), plus interest from the date the
Termination Fee is payable until paid at an interest rate of 8% calculated per
annum. The Termination Fee applies where the Merger Agreement is terminated:
(1) as a result of the Company executing an agreement relating to a Superior
Proposal;
(2) as a result of the Company entering into an agreement with a third party
to sell all or substantially all of the assets or any substantial equity
in or enter into a business combination with, the Company or any of its
subsidiaries, or the Board withdrawing or modifying its recommendation of
the Offer or the Merger in a manner materially adverse to Parent or
Purchaser.
AMENDMENTS AND WAIVERS. Any provision of the Merger Agreement may be
amended or waived at any time; provided, however, that after adoption of the
Merger Agreement by the shareholders of the Company, no amendment may be made
which changes the form or decreases the Offer Price or in any other way
materially and adversely affects the rights of such shareholders (other than
termination in accordance with its terms) without the approval of such
shareholders.
12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY.
PURPOSE OF THE OFFER AND THE MERGER. The purpose of the Offer and the
Merger is for Parent to acquire the entire equity interest in the Company.
Through the Offer, Purchaser intends to acquire control of, and a majority
equity interest in, the Company. Following the completion of the Offer, Parent
intends to acquire any outstanding Shares not owned by Purchaser by consummating
the Merger.
Under the DGCL the approval of the Board and the affirmative vote of a
majority of the holders of outstanding Shares are required to adopt the Merger
Agreement. The Board has unanimously approved the transactions contemplated by
the Merger Agreement, including the Offer and the Merger, and, unless the Merger
is consummated pursuant to the short form merger provisions of the DGCL
described below, the only remaining required corporate action necessary to
consummate the Merger is the adoption of the Merger Agreement by the affirmative
vote of the holders of a majority of the then outstanding Shares. If the Minimum
Condition is satisfied, Purchaser will have sufficient voting power to cause the
adoption of the Merger Agreement by the requisite vote of stockholders of the
Company without the affirmative vote of any other stockholder.
Under the DGCL, if Purchaser acquires at least 90% of the outstanding
Shares, Purchaser will be able to adopt the Merger Agreement without a vote of
the Company's other stockholders. The Merger Agreement provides that if
Purchaser, or any other direct or indirect subsidiary of Parent, acquires at
least 90% of the outstanding Shares, Parent, Purchaser and the Company will take
all necessary and appropriate action to cause the Merger to become effective as
soon as practicable after the expiration of the Offer without action by the
other stockholders of the Company, in accordance with Section 253 of the DGCL.
In the event that all of the conditions to Purchaser's obligation to purchase
Shares in the Offer is satisfied or waived and the number of Shares tendered is
less than 90% of the outstanding Shares on a fully diluted basis, Purchaser may
extend the Offer for the purpose of attempting to reach the 90% threshold
required for a short form merger. Under these circumstances, the Offer may be
extended for four successive five (5) business day periods for an aggregate
period not to exceed twenty (20) business days. See Section 1. If Purchaser is
unable to satisfy the requirements for a short form merger, a significantly
longer period of time may be required to effect the Merger, because a vote of
the Company's stockholders would be required under the DGCL.
PLANS FOR THE COMPANY. Except as otherwise set forth in this Offer to
Purchase, it is expected that, initially following the Merger, the business and
operations of the Company will be continued by the
26
Surviving Corporation substantially as they are currently being conducted. The
directors of Purchaser will be the initial directors of the Surviving
Corporation, and the officers of the Purchaser will be the initial officers of
the Surviving Corporation.
Upon completion of the Offer and the Merger, Parent intends to conduct a
detailed review of the Company and its assets, corporate structure,
capitalization, operations, policies, management and personnel. After such
review, Parent will determine what actions or changes, if any, would be
desirable in light of the circumstances which then exist. Thereafter Parent will
implement any such actions or changes in accordance with, among other things,
its corporate strategy.
Except as described in this Offer to Purchase, neither Parent nor Purchaser
has any present plans or proposals that would relate to or result in (i) any
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Company or any of its subsidiaries, (ii) a sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries, (iii) any change in the Board or management, (iv) any material
change in the Company's capitalization or dividend policy, or (v) any other
material change in the Company's corporate structure or business, (vi) a class
of securities of the Company being delisted from a national securities exchange
or ceasing to be authorized to be quoted in an inter-dealer quotation system of
a registered national securities association, or (vii) a class of equity
securities of the Company becoming eligible for termination of registration
pursuant to Section 12(g) of the Exchange Act.
APPRAISAL RIGHTS. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders of the Company may
have certain rights under the DGCL to dissent, and demand appraisal of, and to
obtain payment for the fair value of their Shares. Such rights, if the statutory
procedures are complied with, could lead to a judicial determination of the fair
value of the Shares (excluding any element of value arising from the
accomplishment or expectation of the Merger) required to be paid in cash to such
dissenting stockholders for their Shares. In addition, such dissenting
stockholders would be entitled to receive payment of a fair rate of interest
from the date of consummation of the Merger on the amount determined to be the
fair value of their Shares. In determining the fair value of the Shares, a
Delaware court would be required to take into account all relevant factors.
Accordingly, such determination could be based upon considerations other than,
or in addition to, the market value of the Shares, including, among other
things, asset value and earning capacity. In XXXXXXXXXX V. UOP, INC., the
Delaware Supreme Court stated, among other things, that "proof of value by any
techniques or methods which are generally considered acceptable in the financial
community and otherwise admissible in court" should be considered in an
appraisal proceeding. Therefore, the value so determined in any appraisal
proceeding could be higher or lower than the Offer Price.
13. CERTAIN EFFECTS OF THE OFFER.
EFFECT ON THE MARKET FOR THE SHARES. The purchase of Shares pursuant to the
Offer will reduce the number of holders of Shares and the number of Shares that
might otherwise trade publicly. Consequently, depending upon the number of
Shares purchased and the number of remaining holders of Shares, the purchase of
Shares pursuant to the Offer may adversely affect the liquidity and market value
of the remaining Shares held by the public. Purchaser 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.
STOCK QUOTATIONS. The Shares are currently listed and traded on the NYSE,
which constitutes the principal trading market for the Shares. Depending upon
the aggregate market value and the number of Shares not purchased pursuant to
the Offer, the Shares may no longer meet the standards for continued listing on
the NYSE. According to its published guidelines, the NYSE would give
27
consideration to delisting the Shares if, among other things, the number of
publicly held Shares falls below 600,000, the number of holders of round lots of
Shares falls below 400 (or below 1,200 if the average monthly trading volume is
below 100,000 for the last twelve months) or the aggregate market value of such
publicly held Shares falls below $8,000,000. Shares held by officers or
directors of the Company or their immediate families, or by any beneficial owner
of more than 10% or more of the Shares, ordinarily will not be considered as
being publicly held for this purpose.
If, as a result of the purchase of Shares pursuant to the Offer, the Shares
no longer meet the requirements for continued listing on the NYSE, the market
for the Shares could be adversely affected. In the event the Shares are no
longer eligible for listing on the NYSE, quotations might still be available
from other sources. The extent of the public market for the Shares and the
availability of such quotations would, however, depend upon the number of
holders of such Shares at such time, the interest in maintaining a market in
such Shares on the part of securities firms, the possible termination of
registration of such Shares under the Exchange Act as described below and other
factors.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. Such registration may be terminated upon application of the
Company to the Commission if such Shares are not listed on a national securities
exchange and there are fewer than 300 holders of record of the Shares. The
termination of the registration of the Shares under the Exchange Act would
substantially reduce the information required to be furnished by the Company to
its stockholders and to the Commission, and would make certain of the provisions
of the Exchange Act, such as the short-swing profit recovery provisions of
Section 16(b) and the requirement of furnishing a proxy statement in connection
with stockholders meetings and the related requirement of an annual report to
stockholders, and the requirements of Rule 13e-3 with respect to going private
transactions, no longer applicable with respect to the Shares or to the Company.
Furthermore, if registration of the Shares under the Exchange Act were
terminated, 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, may be
impaired or, with respect to certain persons, eliminated. If the Shares were no
longer registered under the Exchange Act, the Shares would no longer be eligible
for NYSE listing. Parent and Purchaser intend to cause the Company to make an
application for termination of registration of the Shares as soon as possible
after consummation of the Offer if the Shares are then eligible for such
termination.
MARGIN SECURITIES. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of allowing
brokers to extend credit on such Shares as collateral. Depending on factors
similar to those described above regarding listing and market quotations, it is
possible the Shares would no longer constitute "margin securities" for purposes
of the Federal Reserve Board's margin regulations and therefore could no longer
be used as collateral for loans made by brokers. If registration of the Shares
under the Exchange Act were terminated, the Shares would no longer be "margin
securities."
14. DIVIDENDS AND DISTRIBUTIONS.
As discussed in Section 11, pursuant to the Merger Agreement, without the
prior approval of Parent or as otherwise contemplated in the Merger Agreement,
the Company has agreed to not (i) declare, set aside, make or pay any dividend
or other distribution in respect of any of its capital stock, except that a
wholly owned subsidiary of the Company may declare and pay a dividend to its
parent, (ii) split, combine or reclassify any of its capital stock or issue or
authorize or propose the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock or (iii) except as
required by the terms of any security as in effect on the date of the Merger
Agreement or expressly permitted under the Merger Agreement, amend the terms or
change the period of exercisability of, purchase, repurchase, redeem or
otherwise acquire, or permit any subsidiary
28
to amend the terms or change the period of exercisability of, purchase,
repurchase, redeem or otherwise acquire, any of its securities or any securities
of its subsidiaries, including, without limitation, shares of Common Stock or
any option, warrant or right, directly or indirectly, to acquire any such
securities, or propose to do any of the foregoing.
15. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, Purchaser will not be
required to accept for payment or, subject to the Merger Agreement and any
applicable rules and regulations of the Commission, including Rule 14e-1(c)
promulgated under the Exchange Act, pay for, and (subject to any such rules or
regulations) may postpone the acceptance for payment of or the payment for any
tendered Shares and (except as provided in the Merger Agreement) amend or
terminate the Offer if:
(1) the Minimum Condition has not been satisfied prior to the expiration of
the Offer;
(2) any applicable waiting period under the HSR Act has not expired or been
terminated prior to the expiration of the Offer; or
(3) any of the following conditions exist at the expiration date of the
Offer:
(a) the representations and warranties of the Company set forth in the
Merger Agreement shall not have been true or correct in any material
respect as of the date of the Merger Agreement or there has been a
breach by the Company which would have a Company Material Adverse
Effect of any covenant or agreement set forth in the Merger Agreement
which is not remedied within five (5) days (or by the date of
expiration of the Offer if sooner) of written notice specifying the
breach;
(b) (i) there shall be any action taken, or any statute, rule,
regulation, decree, order or injunction promulgated, enacted, entered
into or enforced by any state, federal or foreign government or
governmental agency or authority or by any court (domestic or
foreign) that would (a) make the acceptance for payment of, the
payment for, or the purchase of, some or all of the Shares by
Purchaser illegal or otherwise materially restrict or prohibit
consummation of the Offer or the Merger, (b) restrict or prohibit the
ability of Purchaser, or render Purchaser unable, to accept for
payment, pay for or purchase some or all of Shares in a manner that
is adverse in any material respect to the transactions contemplated
by the Offer or the Merger, (c) require the divestiture by Parent,
Purchaser or the Company or any of their subsidiaries of material
portions of their business, assets or property or any Shares, or
impose any material limitation on their ability to conduct their
business and own their assets, properties and Shares, (d) impose
material limitations on the ability of Purchaser or Parent to acquire
or hold or to exercise effectively all rights of ownership of Shares,
including, without limitation, the right to vote any Shares purchased
by Purchaser on all matters properly presented to the stockholders of
the Company or (e) impose any limitations on the ability of Parent or
Purchaser or any of their subsidiaries effectively to control in any
material respect the business or operations of the Company or its
subsidiaries; (ii) there shall have been instituted, pending or
threatened (in writing or by public announcement) an action by a
governmental entity seeking (a) to restrain or prohibit the making or
consummation of the Offer or the consummation of the Merger or
(b) to impose any other restriction, prohibition or limitation
referred to in the foregoing sub-paragraph (i);
(c) since the date of the Merger Agreement there shall have occurred any
material adverse effect in the financial condition, business,
operations, liquidity, property or assets of the Company and its
Subsidiaries taken as a whole; PROVIDED, HOWEVER, that events or
conditions that affect the automotive supply industry generally and
affect all other
29
similarly situated companies in the automotive supply industry shall
not be deemed a material adverse change for purposes of this
paragraph (c);
(d) there shall have occurred: (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, (ii) a declaration of a
banking moratorium or any suspension of payments in respect of banks
in the United States, (iii) any material limitation (whether or not
mandatory) by any governmental authority on the extension of credit
by commercial banks or other commercial lending institutions, (iv) a
commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United
States, or (v) in the case of any of the foregoing existing at the
time of the commencement of the Offer a material acceleration or
worsening thereof;
(e) the Merger Agreement shall have been terminated in accordance with
its terms;
(f) the Board shall have withdrawn, modified or amended in any respect
adverse to Parent or Purchaser its recommendation of the Offer and
the Merger or resolved to do so in any manner adverse to Parent or
shall have withdrawn its recommendation of the Offer, or shall have
recommended acceptance of any Takeover Proposal or shall have
resolved to do any of the foregoing; or
(g) any corporation, entity or group (as defined in the Exchange Act),
other than Parent and Purchaser shall have acquired beneficial
ownership of more than 20% of the outstanding Shares, or shall have
been granted any options or rights, conditional or otherwise, to
acquire a total of more than 20% of the outstanding Shares and does
not tender the Shares beneficially owned by it in the Offer;
(h) the Rights have not been exercised;
which in the reasonable judgment of Parent or the Purchaser, in any such case,
and regardless of the circumstances giving rise to such condition, makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment or
payments.
The foregoing conditions are for the sole benefit of Parent and Purchaser
and may be asserted by Parent and Purchaser regardless of the circumstances
giving rise to any such condition, and, subject to the terms of the Merger
Agreement, may be waived by Parent and Purchaser, in whole or in part, at any
time and from time to time, in the sole discretion of Parent and Purchaser. The
failure by Xxxxxx and Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any right, the waiver of such right with
respect to any particular facts or circumstances shall not be deemed a waiver
with respect to any other facts or circumstances, and each right shall be deemed
an ongoing right which may be asserted at any time and from time to time. Should
the Offer be terminated pursuant to the foregoing provisions, all tendered
Shares not theretofore accepted for payment pursuant thereto shall forthwith be
returned to the tendering stockholders.
16. CERTAIN LEGAL MATTERS.
GENERAL. Except as described in this Section 16, based on a review of
publicly available filings by the Company with the Commission and other publicly
available information concerning the Company, Purchaser is not aware of any
license or regulatory permit that appears to be material to the business of the
Company and that might be adversely affected by Purchaser's acquisition of
Shares pursuant to the Offer, or of any approval or other action by any
governmental, administrative or regulatory agency or authority, domestic or
foreign, that would be required for the acquisition or ownership of Shares by
Purchaser pursuant to the Offer. Should any such approval or other action be
required, it is presently contemplated that such approval or action would be
sought, except as described below under "--State Takeover Laws." While Purchaser
does not currently intend to delay acceptance for payment of Shares
30
tendered pursuant to the Offer pending the outcome of any such matter, there can
be no assurance that any such approval or other action, if required, would be
obtained without substantial conditions or that adverse consequences would not
result to the Company's business or that certain parts of the Company's business
would not have to be disposed of in the event that such approvals were not
obtained or such other actions were not taken or in order to obtain any such
approval or other action. If certain types of adverse action are taken with
respect to the matters discussed below, Purchaser may decline to accept for
payment or pay for any Shares tendered. See Section 15.
STATE TAKEOVER LAWS. The Company and certain of its subsidiaries conduct
business in a number of states throughout the United States, some of which have
adopted laws and regulations applicable to offers to acquire shares of
corporations that are incorporated or have substantial assets, stockholders
and/or a principal place of business in such states. In XXXXX X. MITE CORP., the
Supreme Court of the United States held that the Illinois Business Takeover
Statute, which involved state securities laws that made the takeover of certain
corporations more difficult, imposed a substantial burden on interstate commerce
and was therefore unconstitutional. In CTS CORP. V. DYNAMICS CORP. OF AMERICA,
however, the Supreme Court of the United States held that a state may, as a
matter of corporate law and, in particular, those laws concerning corporate
governance, constitutionally disqualify a potential acquiror from voting on the
affairs of a target corporation without prior approval of the remaining
stockholders, PROVIDED that such laws were applicable only under certain
conditions, in particular, that the corporation has a substantial number of
stockholders in and is incorporated under the laws of such state. Subsequently,
in TLX ACQUISITION CORP. V. TELEX CORP., a federal district court in Oklahoma
ruled that the Oklahoma statutes were unconstitutional insofar as they applied
to corporations incorporated outside Oklahoma in that they would subject such
corporations to inconsistent regulations. Similarly, in TYSON FOODS, INC. X.
XXXXXXXXXX, a federal district court in Tennessee ruled that four Tennessee
takeover statutes were unconstitutional as applied to corporations incorporated
outside Tennessee. This decision was affirmed by the United States Court of
Appeals for the Sixth Circuit.
The Company is incorporated under the laws of the State of Delaware. In
general, Section 203 of the DGCL ("Section 203") prevents an "interested
stockholder" (including a person who owns or has the right to acquire 15% or
more of the corporation's outstanding voting stock) from engaging in a "business
combination" (defined to include mergers and certain other actions) with a
Delaware corporation for a period of three years following the date such person
became an interested stockholder. The Board has taken all appropriate action so
that neither Parent nor Purchaser is or will be considered an "interested
stockholder" pursuant to Section 203.
Neither Parent nor Purchaser has determined whether any other state takeover
laws and regulations will by their terms apply to the Offer or the Merger, and,
except as set forth above, neither Parent nor Purchaser has presently sought to
comply with any state takeover statute or regulation. Parent and Purchaser
reserve the right to challenge the applicability or validity of any state law or
regulation purporting to apply to the Offer or the Merger, and neither anything
in this Offer to Purchase nor any action taken in connection herewith is
intended as a waiver of such right. In the event it is asserted that one or more
state takeover statutes is applicable to the Offer or the Merger and an
appropriate court does not determine that such statute is inapplicable or
invalid as applied to the Offer or the Merger, Parent or Purchaser might be
required to file certain information with, or to receive approval from, the
relevant state authorities, and Purchaser might be unable to accept for payment
or pay for Shares tendered pursuant to the Offer, or be delayed in consummating
the Offer.
ANTITRUST. Under the HSR Act and the rules that have been promulgated
thereunder by the Federal Trade Commission (the "FTC"), certain acquisition
transactions may not be consummated unless certain information has been
furnished to the Antitrust Division of the Department of Justice (the "Antitrust
Division") and the FTC and certain waiting period requirements have been
satisfied. The purchase of Shares pursuant to the Offer is subject to such
requirements.
31
Pursuant to the requirements of the HSR Act, Purchaser filed a Notification
and Report Form with respect to the Offer and Merger with the Antitrust Division
and the FTC on March 21, 2000. As a result, the waiting period applicable to the
purchase of Shares pursuant to the Offer is scheduled to expire at 11:59 p.m.,
New York City time, fifteen (15) days after such filing. However, prior to such
time, the Antitrust Division or the FTC may extend the waiting period by
requesting additional information or documentary material relevant to the Offer
from Purchaser. If such a request is made, the waiting period will be extended
until 11:59 p.m., New York City time, on the tenth day after substantial
compliance by Purchaser with such request. Thereafter, such waiting period can
be extended only by court order.
A request is being made pursuant to the HSR Act for early termination of the
waiting period applicable to the Offer. There can be no assurance, however, that
the applicable 15-day HSR Act waiting period will be terminated early. Shares
will not be accepted for payment or paid for pursuant to the Offer until the
expiration or early termination of the applicable waiting period under the HSR
Act. See Section 15. Any extension of the waiting period will not give rise to
any withdrawal rights not otherwise provided for by applicable law. See
Section 3. If Purchaser's acquisition of Shares is delayed pursuant to a request
by the Antitrust Division or the FTC for additional information or documentary
material pursuant to the HSR Act, the Offer will be extended in certain
circumstances. See Section 1.
The Antitrust Division and the FTC scrutinize the legality under the
antitrust laws of transactions such as the acquisition of Shares by Purchaser
pursuant to the Offer. At any time before or after the consummation of any such
transactions, the Antitrust Division or the FTC could take such action under the
antitrust laws of the United States as it deems necessary or desirable in the
public interest, including seeking to enjoin the purchase of Shares pursuant to
the Offer or seeking divestiture of the Shares so acquired or divestiture of
substantial assets of Parent or the Company. Private parties (including
individual States) may also bring legal actions under the antitrust laws of the
United States. Purchaser does not believe that the consummation of the Offer
will result in a violation of any applicable antitrust laws. However, there can
be no assurance that a challenge to the Offer on antitrust grounds will not be
made, or if such a challenge is made, what the result will be. See Section 15
for certain conditions to the Offer, including conditions with respect to
certain governmental actions and Section 11 for certain termination rights.
NON-U.S. ANTITRUST The German Act Against Restraints of Competition
prohibits the Purchaser from purchasing and voting the Shares until notification
has been filed with the German Federal Cartel Office (the "Cartel Office") and
the Cartel Office has cleared the transaction. Upon receipt of the notification,
the Cartel Office conducts a preliminary review with a maximum duration of 30
days. Upon conclusion of the preliminary review, the Cartel Office may either
approve the transaction or initiate an in-depth review which may, at a maximum,
take an additional 90 days if further examination is necessary to determine
whether the transaction is compatible with the German Act Against Restraints of
Competition. The Purchaser and the Company plan to jointly file the notification
with the Cartel Office. There can be no assurances that the Cartel Office might
not open an
in-depth review to further examine the transaction under the German Act Against
Restraints of Competition.
17. FEES AND EXPENSES.
Parent and Purchaser have retained Xxxxxxxxx Shareholder
Communications Inc. to be the Information Agent and First Chicago Trust Company
of New York to be the Depositary in connection with the Offer. The Information
Agent may contact holders of Shares by mail, telephone, telecopy, telegraph and
personal interview and may request banks, brokers, dealers and other nominees to
forward materials relating to the Offer to beneficial owners of Shares.
32
The Information Agent and the Depositary each will receive reasonable and
customary compensation for their respective services in connection with the
Offer, will be reimbursed for reasonable out-of-pocket expenses, and will be
indemnified against certain liabilities and expenses in connection therewith,
including certain liabilities under federal securities laws.
None of Parent or Purchaser will pay any fees or commissions to any broker
or dealer or to any other person (other than to the Depositary and the
Information Agent) in connection with the solicitation of tenders of Shares
pursuant to the Offer. Brokers, dealers, commercial banks and trust companies
will, upon request, be reimbursed by Purchaser for customary mailing and
handling expenses incurred by them in forwarding offering materials to their
customers.
18. MISCELLANEOUS.
The Offer is being made to all holders of Shares. Purchaser is not aware of
any jurisdiction where the making of the Offer is prohibited by administrative
or judicial action pursuant to any valid state statute. If Purchaser becomes
aware of any valid state statute prohibiting the making of the Offer or the
acceptance of Shares pursuant thereto, Purchaser will make a good faith effort
to comply with any such state statute or seek to have such statute declared
inapplicable to the Offer. If, after such good faith effort, Purchaser cannot
comply with any such state statute, the Offer will not be made to (nor will
tenders be accepted from or on behalf of) the holders of Shares in such state.
In any jurisdiction where the securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Offer will be deemed to be
made on behalf of Purchaser by one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR PURCHASER NOT CONTAINED IN THIS OFFER TO
PURCHASE OR IN THE RELATED LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Parent and Purchaser have filed with the SEC a Tender Offer Statement on
Schedule TO, together with all exhibits thereto, pursuant to Rule 14d-3 of the
General Rules and Regulations under the Exchange Act, furnishing certain
additional information with respect to the Offer. In addition, the Company has
filed a Solicitation/Recommendation Statement on Schedule 14D-9, together with
all exhibits thereto, pursuant to Rule 14d-9 of the General Rules and
Regulations of the Exchange Act setting forth its recommendation with respect to
the Offer and the reasons for such recommendations and furnishing certain
additional related information. Such Schedules and any amendments thereto,
including exhibits, may be inspected and copies may be obtained from the offices
of the Commission in the manner set forth in Section 7 (except that they will
not be available at the regional offices of the Commission).
OEA Merger Corporation
March 24, 2000
33
SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE
OFFICERS OF PARENT AND PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT.
Set forth in the table below are the name and the present principal
occupations or employment and citizenship and the name, principal business and
address of any corporation or other organization in which such occupation or
employment is conducted, and the five-year employment history of each of the
directors and executive officers of Parent. The principal business address of
Parent, and, unless otherwise indicated, the business address of each person
identified below, is World Trade Center, Xxxxxxxxxxxxxxxxxxx 00, XX-000 00
Xxxxxxxxx, Xxxxxx.
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT, CITIZENSHIP AND MATERIAL
NAME POSITIONS HELD DURING THE PAST FIVE YEARS
---- ------------------------------------------------------
Xxxxxx Xxxx Chairman of the Board and Chief Executive Officer from
May 1, 1997 until January 31, 1999. He has been
Chairman of the Board since May 1, 1997. He is a
Swedish citizen.
Xxxx Xxxxxxxxxx President and Chief Executive Officer since February
1, 1999. Director of the Board. He is a Swedish
citizen.
Xxxx Xxxxxxxxx Vice President Purchasing since May 1, 1997. He has
been Vice President Quality of Autoliv AB since 1988
and Vice President Purchasing of Autoliv AB since
1992. He is a Swedish citizen.
Xxxx Xxxxxx Vice President and Chief Financial Officer since April
1, 1999. He has been Vice President, Treasurer since
September 1998. Prior to such time, he held CFO
positions in Esselte AB and EBS Inc. He is a Swedish
citizen.
Xxxxxxx Xxxx Vice President IT and Chief Financial Officer from May
1, 1997 until March 31, 1999. He is a Swedish citizen.
Xxxxx Xxxxxx Vice President Human Resources since May 1, 1997. He
has been Vice President Human Resources of Autoliv AB
since 1989. He is a Swedish citizen.
Xxxxx Xxxxxx Vice President Research since May 1, 1997. He has been
Vice President Research of Autoliv AB since 1994.
Prior to such time, he was Group Manager Research for
Autoliv AB since 1989. He is a Swedish citizen.
Xxxxxx Xxxxxxx Vice President Manufacturing since February 4, 1998.
He has been Vice President Manufacturing of Autoliv AB
since 1992 and was appointed President of Autoliv
France in May 1997. He is a French citizen.
Xxxx Xxxxx Director of Investor Relations since May 1, 1997. He
has been Director of Investor Relations of Autoliv AB
since 1994. He previously held the same position in
Fermenta AB and Gambro AB. Prior to such time, he was
Investor Relations Manager of Pharmacia AB. He is a
Swedish citizen.
34
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT, CITIZENSHIP AND MATERIAL
NAME POSITIONS HELD DURING THE PAST FIVE YEARS
---- ------------------------------------------------------
Xxx Xxxxxx Vice President Engineering since October 1, 1997. He
has been Manager of Engineering of Autoliv Sverige AB
since 1989 and President of such company since August
1994. He is a Swedish citizen.
Xxxx-Xxxxx Xxxxxxx Vice President Purchasing since July 1, 1999. He
previously held the same positions at SKF, Volvo Cars
and in the passenger car division of Saab-Scania. He
is a Swedish citizen.
Xxxxxx X. Xxxxxxxx Vice President Legal Affairs, General Counsel and
Secretary since May 1, 1997. He has been Legal Counsel
of Autoliv AB since 1989, General Counsel since 1991
and Vice President Legal Affairs and General Counsel
since 1994. He has also been Vice President and
Treasurer of Purchaser since March 13, 2000. He is a
Swedish citizen.
2. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER.
Set forth in the table below are the name and the present principal
occupations or employment and citizenship and the name, principal business and
address of any corporation or other organization in which such occupation or
employment is conducted, and the five-year employment history of each of the
directors and executive officers of Purchaser. The principal business address of
Purchaser and, unless otherwise indicated, the business address of each person
identified below, is the World Trade Center, Xxxxxxxxxxxxxxxxxxx 00, XX-000 00
Xxxxxxxxx, Xxxxxx.
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT, CITIZENSHIP AND MATERIAL
NAME POSITIONS HELD DURING THE PAST FIVE YEARS
---- ------------------------------------------------------
Xxxx Xxxxxx President since March 13, 2000. He has been Vice
President and Chief Financial Officer of Parent since
April 1, 1999 and Vice President, Treasurer since
September 1998. Prior to such time, he held CFO
positions in Esselte AB and EBS Inc. He is a Swedish
citizen.
Xxxxxx X. Xxxxxxxx Vice President and Treasurer of Purchaser since March
13, 2000. He has been Vice President Legal Affairs,
General Counsel and Secretary of Parent since May 1,
1997. He has also been Legal Counsel of Autoliv AB
since 1989, General Counsel since 1991 and Vice
President Legal Affairs and General Counsel since
1994. He is a Swedish citizen.
Xxxxxxx Xxxxxxxx Vice President and Secretary since March 13, 2000. He
has also been Vice President and General Counsel of
Autoliv ASP since March 31, 1998. He was previously
Vice President and Special Counsel of Autoliv ASP from
May 1, 1997 to March 31, 1998 and Vice President and
General Counsel of Autoliv North America, Inc. from
August 1994 to May 1, 1997. His business address is
0000 Xxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxxx 00000. He
is a U.S. citizen.
35
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. Letters of Transmittal and certificates for Shares 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:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
BY HAND: BY MAIL: BY OVERNIGHT COURIER:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Attention: Corporate Actions Attention: Corporate Actions Attention: Corporate Actions
c/o Securities Transfer and Suite 4660 Suite 4660
Reporting Services Inc. P.O. Box 2565 000 Xxxxxxxxxx Xxxxxxxxx
000 Xxxxxxx Xxxxxx Xxxx, XX 00000-0000 Xxxxxx Xxxx, XX 00000
Xxxxxx--Xxxxxxxx X
Xxx Xxxx, XX 00000
FOR INFORMATION CALL:
(000) 000-0000
Any questions or requests for assistance may be directed to the Information
Agent at its address and telephone numbers set forth below. Requests for
additional copies of this Offer to Purchase and the Letter of Transmittal may be
directed to the Information Agent. Stockholders may also contact their brokers,
dealers, commercial banks, trust companies or other nominees for assistance
concerning the Offer.
The Information Agent for the Offer is:
[LOGO]
00 Xxxxx Xxxxxx, 10(th) Floor
New York, N.Y. 10004
Brokers and Bankers Call Collect (000) 000-0000
Or
All Other Call Toll Free (000) 000-0000