Exhibit (a)(1)(viii)
AMENDED AND RESTATED OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
of
BAIRNCO CORPORATION
at
$13.50 NET PER SHARE
by
BZ ACQUISITION CORP.
A Wholly Owned Subsidiary of
STEEL PARTNERS II, L.P.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON FRIDAY, MARCH 16, 2007, UNLESS THE OFFER IS EXTENDED.
STOCKHOLDERS OF RECORD OF BAIRNCO CORPORATION (THE "COMPANY") ON MARCH 5,
2007 WILL REMAIN ENTITLED TO RECEIVE THE COMPANY'S DECLARED FIRST QUARTER
DIVIDEND OF $0.10 PER SHARE, FOR TOTAL CASH PROCEEDS OF $13.60 PER SHARE
PURSUANT TO THE OFFER AND THE DIVIDEND, EVEN IF STOCKHOLDERS TENDER THEIR
SHARES PRIOR TO THAT DATE.
THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED AS
OF FEBRUARY 23, 2007 (THE "MERGER AGREEMENT"), BY AND AMONG STEEL PARTNERS
II, L.P. ("STEEL PARTNERS II"), BZ ACQUISITION CORP. (THE "PURCHASER") AND
THE COMPANY.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT,
INCLUDING THE OFFER AND THE MERGER, AND IT HAS ALSO UNANIMOUSLY: (I)
DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE ADVISABLE TO THE
STOCKHOLDERS OF THE COMPANY AND (II) RESOLVED TO RECOMMEND THAT THE
STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES
TO THE PURCHASER PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN BEFORE THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES OF COMMON STOCK, PAR VALUE $0.01 PER SHARE, WITH THE ASSOCIATED
PREFERRED STOCK PURCHASE RIGHTS (TOGETHER, THE "SHARES"), OF THE COMPANY
WHICH, TOGETHER WITH THE SHARES THEN OWNED BY STEEL PARTNERS II, THE
PURCHASER AND THEIR AFFILIATES, REPRESENTS AT LEAST A MAJORITY OF THE TOTAL
NUMBER OF SHARES OUTSTANDING ON A FULLY DILUTED BASIS.
IMPORTANT
Any stockholder of the Company desiring to tender Shares in the Offer
should either (i) complete and sign the Amended and Restated Letter of
Transmittal (the "Letter of Transmittal") or a facsimile thereof in accordance
with the instructions in the Letter of Transmittal, and mail or deliver the
Letter of Transmittal together with the certificates representing tendered
Shares and all other required documents to American Stock Transfer & Trust
Company, the Depositary for the Offer, or tender such Shares pursuant to the
procedure for book-entry transfer set forth in "The Offer--Section 3--Book-Entry
Delivery" or (ii) request such stockholder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for such stockholder.
Stockholders whose Shares are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such person if they
desire to tender their Shares. The associated preferred stock purchase rights
are currently evidenced by the certificates representing the Shares, and by
tendering Shares, a stockholder will also tender the associated preferred stock
purchase rights.
Any stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available, or who cannot comply
with the procedures for book-entry transfer on a timely basis, may tender such
Shares pursuant to the guaranteed delivery procedure set forth in "The
Offer--Section 3--Guaranteed Delivery".
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
Amended and Restated Offer to Purchase. Additional copies of this Amended and
Restated Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed
Delivery and other related materials may be obtained from the Information Agent
or from brokers, dealers, commercial banks and trust companies.
THIS AMENDED AND RESTATED OFFER TO PURCHASE AND THE RELATED LETTER OF
TRANSMITTAL CONTAIN IMPORTANT INFORMATION, AND YOU SHOULD CAREFULLY READ BOTH IN
THEIR ENTIRETY BEFORE MAKING A DECISION WITH RESPECT TO THE OFFER.
March 2, 2007
TABLE OF CONTENTS
Page
----
Summary Term Sheet....................................................... 1
Introduction............................................................. 6
The Offer................................................................ 8
1. Terms of the Offer.......................................... 8
2. Acceptance for Payment and Payment.......................... 10
3. Procedure for Tendering Shares.............................. 10
4. Withdrawal Rights............................................ 12
5. Certain Tax Considerations................................... 13
6. Price Range of Shares; Dividends............................ 13
7. Possible Effects of the Offer on the Market for the
Shares; Stock Exchange Listing; Registration under the
Exchange Act................................................ 14
8. Certain Information Concerning the Company.................. 15
9. Certain Information Concerning Steel Partners II
and the Purchaser........................................... 18
10. Source and Amount of Funds.................................. 19
11. Background of the Offer..................................... 19
12. Purpose of the Offer; Plans for the Company;
Statutory Requirements; Approval of the Merger;
Appraisal Rights............................................ 25
13. The Transaction Documents................................... 27
14. Dividends and Distributions................................. 40
15. Conditions of the Offer..................................... 40
16. Certain Legal Matters; Regulatory Approvals................. 42
17. Fees and Expenses........................................... 43
18. Miscellaneous............................................... 44
Schedule I............................................................... S-1
SUMMARY TERM SHEET
BZ Acquisition Corp., a wholly owned subsidiary of Steel Partners II,
L.P., is offering to purchase all outstanding shares of common stock, par value
$0.01 per share, of Bairnco Corporation ("Bairnco") (together with the
associated preferred stock purchase rights) for $13.50 net per share in cash,
upon the terms and subject to the conditions set forth in this Amended and
Restated Offer to Purchase (this "Offer to Purchase") and the related Amended
and Restated Letter of Transmittal (the "Letter of Transmittal"). The following
are some of the questions you, as a Bairnco stockholder, may have and answers to
those questions. This summary term sheet is not meant to be a substitute for the
information contained in the remainder of this Offer to Purchase and the related
Letter of Transmittal. We urge you to carefully read this entire Offer to
Purchase and the related Letter of Transmittal.
WHO IS OFFERING TO BUY MY SECURITIES?
Our name is BZ Acquisition Corp. We are a Delaware corporation formed to
serve as an acquisition vehicle with no current operations other than those
incident to the offer. We are a wholly owned subsidiary of Steel Partners II,
L.P., a Delaware limited partnership. See "The Offer--Section 9".
WHAT SECURITIES ARE YOU OFFERING TO PURCHASE?
We are offering to purchase all of the outstanding common stock, par value
$0.01 per share, and the associated preferred stock purchase rights, of Bairnco.
We refer to one share of Bairnco common stock, together with the associated
stock purchase right, as a "share" or "Share". See "Introduction".
HOW MUCH ARE YOU OFFERING TO PAY FOR MY SHARES AND WHAT IS THE FORM OF PAYMENT?
We are offering to pay you $13.50 per share in cash without brokerage
fees, commissions or, except in certain circumstances, transfer taxes. See
"Introduction". Initially, on June 22, 2006, we commenced an offer, which we
refer to as our original offer, to purchase all of the outstanding shares at a
price of $12.00 net per share in cash. We increased the offer price to $13.35
net per share in cash on February 2, 2007 and have now increased the offer price
to $13.50 net per share in cash pursuant to our merger agreement with Bairnco.
IF I TENDER MY SHARES, WILL I CONTINUE TO BE ENTITLED TO RECEIVE THE $0.10 PER
SHARE FIRST QUARTER DIVIDEND DECLARED BY BAIRNCO?
If you validly tender your shares as described below, you will still
retain ownership of your shares until such time as the offer is successfully
consummated and we accept your shares for payment. Accordingly, even if you
tender your shares pursuant to the offer prior to Bairnco's March 5, 2007
dividend record date, you will remain entitled to receive Bairnco's declared
first quarter dividend of $0.10 per share, for total cash proceeds of $13.60 per
share pursuant to the offer and the dividend. See "The Offer--Section 14".
DO YOU HAVE THE FINANCIAL RESOURCES TO PAY FOR THE SHARES?
Yes. We will need approximately $86.5 million to purchase all Shares
pursuant to the offer not already owned by Steel Partners II, L.P., to pay the
first quarter dividend and to pay related fees and expenses. As of the date of
this Offer to Purchase, Steel Partners II, L.P. had cash and cash equivalents
and short-term investments substantially in excess of the approximately $86.5
million required to acquire the Shares and pay the first quarter dividend.
Accordingly, the offer is not conditioned upon obtaining financing. See "The
Offer--Section 10".
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
Because the form of payment for your Shares consists solely of cash and
the purchase of the Shares is not conditioned upon obtaining financing, we do
not think our financial condition is material to your decision whether to tender
in the offer.
1
IS THERE AN AGREEMENT GOVERNING THE OFFER?
Yes. Bairnco, Steel Partners II and we have entered into a merger
agreement, dated as of February 23, 2007. The merger agreement provides, among
other things, for the terms and conditions of the offer and our subsequent
merger into Bairnco. See "The Offer--Section 13".
WHAT DOES THE BOARD OF DIRECTORS OF BAIRNCO THINK OF THE OFFER?
The Board of Directors of Bairnco has unanimously approved our merger
agreement with Bairnco and the transactions contemplated by the merger
agreement, including the offer and the merger, and it has also unanimously: (1)
determined that the terms of the offer and the merger are advisable to the
stockholders of Bairnco and (2) resolved to recommend that the stockholders of
Bairnco accept the offer and tender their shares to us pursuant to the offer. In
addition, Bairnco has advised us that the Board of Directors of Bairnco has
received an opinion, dated February 23, 2007, from Lazard Freres & Co. LLC,
Bairnco's financial advisor, to the effect that, as of the date of its opinion
and based on and subject to the factors and assumptions set forth in its
opinion, the offer price of $13.50 per Share to be paid to the holders of the
shares (other than Steel Partners II, BZ Acquisition Corp. and their respective
affiliates or, if applicable, holders of shares as to which dissenter's rights
have been perfected) in the offer and the merger pursuant to the merger
agreement is fair, from a financial point of view, to such holders. See
"Introduction".
WHY IS THE OFFER TO PURCHASE BEING AMENDED AND RESTATED?
There have been material developments relating to our offer since it was
commenced on June 22, 2006, including the execution of the merger agreement and
the increase in the offer price, all of which we have reported in amendments to
our tender offer statement on Schedule TO that have been filed with the SEC. We
have amended and restated our original offer to purchase, letter of transmittal
and notice of guaranteed delivery to reflect those developments. See
"Introduction".
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
The offer is conditioned upon, among other things, there being validly
tendered and not withdrawn before the expiration of the offer a number of shares
which, together with the shares then owned by Steel Partners II, BZ Acquisition
Corp. and their affiliates, represents at least a majority of the total number
of shares outstanding on a fully diluted basis. We cannot waive this condition
unless Bairnco consents to a waiver. The tender offer is also subject to a
number of other conditions, which may be waived by us in our reasonable
discretion. These conditions are described in "The Offer--Section 15".
On August 7, 2006, the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, relating to the offer expired.
Accordingly, the condition to the offer relating to the expiration of the
waiting period under this act has been satisfied.
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
You have until the expiration date of the offer to tender. The offer
currently is scheduled to expire at 5:00 p.m., New York City time, on Friday,
March 16, 2007.
CAN THE TENDER OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?
Yes. The merger agreement provides that we may extend the tender offer
beyond Friday, March 16, 2007, without the consent of Bairnco, under the
following circumstances:
o if, at any scheduled expiration of the offer, any of the conditions to
the offer have not been satisfied or waived, we may extend the offer, in
order to permit those conditions to be satisfied, in increments of not
more than five business days each, and no more than 20 business days in
the aggregate;
2
o we may extend the offer for any period required by any rule, regulation
or interpretation of the Securities and Exchange Commission; or
o if, at any scheduled expiration of the offer, the number of shares that
have been validly tendered and not withdrawn pursuant to the offer,
together with the shares then owned by Steel Partners II, BZ Acquisition
Corp. and their affiliates, represents more than 50% of the total number
of shares outstanding on a fully diluted basis but less than 90% of the
outstanding shares, we may extend the offer one or more times for an
aggregate of up to 20 business days.
In lieu of extending the offer under the circumstances described in the
third bullet point above, we may, without the consent of Bairnco, make available
a "subsequent offering period" of 10 to 20 business days. A subsequent offering
period, which is different from an extension of the tender offer, is an
additional period of time, beginning after we have purchased shares tendered
during the offer, during which stockholders may tender, but not withdraw, their
shares and receive the offer consideration. See "The Offer--Section 1".
HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
If we decide to extend the offer, we will inform American Stock Transfer &
Trust Company, the depositary for the offer, of that fact and will make a public
announcement of the extension, no later than 9:00 A.M., New York City time, on
the next business day after the date the offer was scheduled to expire. See "The
Offer--Section 1".
CAN THE OFFER BE TERMINATED AND, IF SO, WOULD BAIRNCO BE OBLIGATED TO PAY US A
TERMINATION FEE?
Under the merger agreement, the offer may be terminated: (1) by mutual
written consent of Steel Partners II and Bairnco; (2) if the first acceptance of
shares for payment pursuant to the offer has not occurred by May 15, 2007; (3)
if a final and non-appealable action by a governmental authority prevents,
prohibits or otherwise makes illegal the consummation of the offer or the
merger; (4) if Steel Partners II, BZ Acquisition Corp. or Bairnco has materially
breached its representations, warranties or covenants; or (5) if the Board of
Directors of Bairnco withdraws or modifies, in a manner adverse to Steel
Partners II, BZ Acquisition Corp. or any of their affiliates, its approval or
recommendation of the merger agreement, the offer or the merger or recommends or
approves a competing takeover proposal for Bairnco. Some of these termination
events, either alone or combined with the existence and/or acceptance of a
competing takeover proposal, would give rise to Bairnco's obligation to pay us a
termination fee of $3,500,000 and reimburse us for up to $1,000,000 of our
expenses in connection with the offer. See "The Offer--Section 13".
HOW DO I TENDER MY SHARES?
To tender shares, you must deliver the certificates representing your
shares, together with a completed and signed Letter of Transmittal and any other
required documents, to American Stock Transfer & Trust Company, the depositary
for the offer, not later than the time the offer expires. If your shares are
held in street name by your broker, dealer, bank, trust company or other
nominee, such nominee can tender your shares through The Depository Trust
Company. If you cannot deliver everything required to make a valid tender to the
depositary before the expiration of the offer, you may have a limited amount of
additional time by having a financial institution (including most banks, savings
and loan associations and brokerage houses) that is a member of a recognized
Medallion Program approved by The Securities Transfer Association Inc.,
including the Securities Transfer Agents Medallion Program (STAMP), the Stock
Exchange Medallion Program (SEMP) and the New York Stock Exchange, Inc.
Medallion Signature Program (MSP), guarantee, pursuant to a Notice of Guaranteed
Delivery, that the missing items will be received by the depositary within three
business days. However, the depositary must receive the missing items within
that three business day period. See "The Offer--Section 3".
UNTIL WHAT TIME CAN I WITHDRAW TENDERED SHARES?
You can withdraw tendered shares at any time until the offer has expired
and, following such expiration, you can withdraw them at any time until we
accept shares for payment. You may not, however, withdraw shares tendered during
a subsequent offering period, if one is included. See "The Offer--Section 4".
3
HOW DO I WITHDRAW TENDERED SHARES?
To withdraw shares, you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to American Stock Transfer &
Trust Company while you have the right to withdraw the shares. See "The
Offer--Section 4".
WHEN AND HOW WILL I BE PAID FOR MY TENDERED SHARES?
Subject to the terms and conditions of the offer, we will pay for all
validly tendered and not withdrawn shares promptly after the expiration of the
offer. See "The Offer--Section 2".
We will pay for your validly tendered and not withdrawn shares by
depositing the purchase price with American Stock Transfer & Trust Company,
which will act as your agent for the purpose of receiving payments from us and
transmitting such payments to you. In all cases, payment for tendered shares
will be made only after timely receipt by American Stock Transfer & Trust
Company of certificates for such shares (or of a confirmation of a book-entry
transfer of such shares as described in "The Offer--Section 3--Book-Entry
Delivery"), a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) and any other required documents for such shares. See "The
Offer--Section 2".
HAVE ANY STOCKHOLDERS OF BAIRNCO AGREED TO TENDER THEIR SHARES?
Yes. All of the members of the Board of Directors of Bairnco and all of
Bairnco's senior executive officers, including Luke E. Fichthorn, III, Chairman
of the Board and Chief Executive Officer, Kenneth L. Bayne, Vice President and
Chief Financial Officer, Larry D. Smith, Vice President, Administration, and
Lawrence C. Maingot, Corporate Controller, have entered into a tender and
support agreement under which they have agreed to tender their shares in the
offer. Together, as of the date of this Offer to Purchase, these individuals
own, beneficially or of record, 659,125 shares (excluding stock options),
representing approximately 9.0% of Bairnco's outstanding shares. See
"Introduction" and "The Offer--Section 13".
WILL THE OFFER BE FOLLOWED BY A MERGER IF ALL THE SHARES ARE NOT TENDERED IN THE
OFFER?
If we accept for payment and pay for a number of shares which, together
with the shares then owned by Steel Partners II, BZ Acquisition Corp. and their
affiliates, represents at least a majority of the outstanding shares on a fully
diluted basis, we will merge with and into Bairnco. Upon consummation of that
merger, Steel Partners II will own, directly or indirectly, all of the shares
and all remaining stockholders (other than us, Steel Partners II and
stockholders properly exercising their appraisal rights) will receive the price
per share paid in the offer. See "The Offer--Section 12".
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
If the offer is successful, we will own a sufficient number of shares to
conclude a merger in which all remaining outstanding shares of Bairnco will
automatically be converted into the right to receive an amount in cash per share
equal to the price per share paid in the offer. Upon consummation of this
second-step merger, stockholders who do not tender in the offer (other than
those properly exercising their appraisal rights) will receive the same amount
of cash per share that they would have received had they tendered their shares
in the offer. Therefore, the main difference between tendering and not tendering
shares in the offer is that tendering stockholders will be paid earlier. In
addition, in connection with the consummation of this merger, stockholders of
Bairnco who have neither voted in favor of the merger nor consented thereto in
writing, and who otherwise under Delaware law comply with the applicable
statutory procedures, will be entitled to receive a judicial determination of
the fair value of their shares (exclusive of any element of value arising from
the accomplishment or expectation of such merger) and to receive payment of such
fair value in cash, together with a fair rate of interest, if any. See "The
Offer--Section 12 (Appraisal Rights)" beginning on page 27 of the Offer to
Purchase.
4
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On June 14, 2006, the last full business day before the announcement of
our intention to commence our original offer, the last reported sales price of
Bairnco common stock reported on the New York Stock Exchange was $9.93 per
share. On February 23, 2007, the date on which we announced our merger agreement
with Bairnco, the last reported sales price of Bairnco common stock reported on
the New York Stock Exchange was $13.50 per share. Please obtain a recent
quotation for your shares prior to deciding whether or not to tender.
WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATING IN THE OFFER?
In general, your sale of shares pursuant to the offer will be a taxable
transaction for U.S. federal income tax purposes and may also be a taxable
transaction under applicable state, local or foreign income or other tax laws.
You should consult your tax advisor about the tax consequences to you of
participating in the offer in light of your particular circumstances. See "The
Offer--Section 5".
IF I ALREADY TENDERED MY SHARES IN THE ORIGINAL OFFER, DO I HAVE TO DO ANYTHING
NEW?
No. Bairnco stockholders do not have to take any action regarding any
shares previously validly tendered and not withdrawn. If the offer is completed,
these shares will be accepted for payment and such stockholders will receive the
offer price of $13.50 per share, net to the seller in cash, without interest,
less any applicable withholding taxes. Stockholders of record on March 5, 2007
will also receive the $0.10 per share first quarter dividend declared by
Bairnco, payable on March 30, 2007, for total cash proceeds of $13.60 per share
pursuant to the offer and the dividend. Stockholders will receive this dividend
even if they tender their shares prior to the March 5, 2007 record date.
WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE OFFER?
You can call MacKenzie Partners, Inc., the information agent for the
offer, at (212) 929-5500 (collect) or (800) 322-2885 (toll-free). See the back
cover of this Offer to Purchase.
5
To the Stockholders of Bairnco Corporation:
INTRODUCTION
We, BZ Acquisition Corp. (the "Purchaser" or "we"), a Delaware corporation
and wholly owned subsidiary of Steel Partners II, L.P., a Delaware limited
partnership ("Steel Partners II"), are offering to purchase all outstanding
shares of common stock, par value $0.01 per share (the "Common Stock"), of
Bairnco Corporation, a Delaware corporation (the "Company"), and the associated
preferred stock purchase rights (the "Rights" and, together with the Common
Stock, the "Shares") issued pursuant to the Rights Agreement, dated as of June
22, 2006, as amended as of February 23, 2007, between the Company and
Computershare Investor Services, LLC, as the rights agent (the "Rights
Agreement"), for $13.50 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in this Amended and Restated Offer to
Purchase (this "Offer to Purchase") and the related Amended and Restated Letter
of Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"). Stockholders of record on March 5, 2007
will remain entitled to receive the Company's declared first quarter dividend of
$0.10 per Share (the "Dividend"), which is payable on March 30, 2007, for total
cash proceeds of $13.60 per Share pursuant to the Offer and the Dividend.
Stockholders will receive the Dividend even if they tender their Shares pursuant
to the Offer prior to the March 5, 2007 record date.
This Offer to Purchase amends and restates our original offer to purchase,
dated June 22, 2006 (the "Original Offer to Purchase"), and the Amended and
Restated Letter of Transmittal amends and restates the letter of transmittal
circulated with the Original Offer to Purchase (the "Original Letter of
Transmittal"). Our offer was initially commenced on June 22, 2006 (the "Original
Offer").
Stockholders who have Shares registered in their own names and tender
directly to American Stock Transfer & Trust Company, the depositary for the
Offer (the "Depositary"), will not have to pay brokerage fees or commissions.
Stockholders with Shares held in street name by a broker, dealer, bank, trust
company or other nominee should consult with their nominee to determine if they
charge any transaction fees. Except as set forth in Instruction 6 of the Letter
of Transmittal, stockholders will not have to pay transfer taxes on the sale of
Shares pursuant to the Offer. We will pay all charges and expenses of the
Depositary and MacKenzie Partners, Inc. (the "Information Agent") incurred in
connection with the Offer. See "The Offer--Section 17".
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of February 23, 2007 (the "Merger Agreement"), by and among Steel Partners
II, the Purchaser and the Company. Pursuant to the Merger Agreement, as promptly
as practicable after the completion of the Offer and the satisfaction or waiver
of specified conditions, the Purchaser will be merged with and into the Company
with the Company continuing as the surviving corporation as a wholly owned
subsidiary of Steel Partners II (the "Merger"). At the effective time of the
Merger, each Share then outstanding (other than Shares owned by Steel Partners
II or the Purchaser, Shares owned by the Company as treasury stock and Shares
held by stockholders who properly exercise their appraisal rights) will
automatically be converted into the right to receive $13.50 per Share in cash,
or any higher price per Share paid in the Offer (such price being referred to
herein as the "Offer Price"), without interest and subject to applicable
withholding taxes. Stockholders who properly exercise appraisal rights under
Delaware law will receive a judicially determined fair value for their Shares
(exclusive of any element of value arising from the accomplishment or
expectation of the Merger), which value could be more or less than the Offer
Price, together with a fair rate of interest, if any. See "The Offer--Section
12". For a more complete description of the Merger Agreement, see "The
Offer--Section 13".
THE BOARD OF DIRECTORS OF THE COMPANY (THE "COMPANY BOARD") HAS
UNANIMOUSLY: (1) DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE
ADVISABLE TO THE STOCKHOLDERS OF THE COMPANY; (2) APPROVED THE MERGER AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT, INCLUDING THE OFFER
AND THE MERGER; AND (3) RESOLVED TO RECOMMEND THAT THE STOCKHOLDERS OF THE
COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES TO THE PURCHASER PURSUANT TO
THE OFFER. The Company Board has resolved that the restrictions against the
Purchaser or any of its affiliates and the Company engaging in any business
combination as set forth in Section 203 of the Delaware General Corporation Law
(the "Delaware Law") are inapplicable to the Merger Agreement, the Offer, the
Merger and the other transactions contemplated by the Merger Agreement.
6
The Company has advised us that the Company Board has received an opinion,
dated February 23, 2007, from Lazard Freres & Co. LLC ("Lazard"), the Company's
financial advisor, to the effect that, as of the date of its opinion and based
on and subject to the factors and assumptions set forth in its opinion, the
Offer Price to be paid to the holders of the Shares (other than Steel Partners
II, BZ Acquisition Corp. and their respective affiliates or, if applicable,
holders of Shares as to which dissenter's rights have been perfected) in the
Offer and the Merger pursuant to the Merger Agreement is fair, from a financial
point of view, to such holders. The full text of Lazard's opinion, which sets
forth the assumptions made, matters considered and limitations on the review
undertaken, is attached as an exhibit to the Company's amendment to its
Solicitation/Recommendation Statement on Schedule 14D-9 (together with any
amendments or supplements thereto, the "Schedule 14D-9"), which has been filed
by the Company with the Securities and Exchange Commission (the "SEC") on the
date of this Offer to Purchase and will be mailed to the Company's stockholders
together with this Offer to Purchase. STOCKHOLDERS ARE URGED TO READ THE OPINION
CAREFULLY AND IN ITS ENTIRETY.
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn before the Expiration Date (as defined below) a
number of Shares which, together with the Shares then owned by Steel Partners
II, the Purchaser and their affiliates, represents at least a majority of the
total number of Shares outstanding on a fully diluted basis (the "Minimum
Condition"). The Offer is also subject to a number of other conditions, which
are described in "The Offer--Section 15".
The Company has advised us that, as of the date of this Offer to Purchase,
(i) 7,293,978 shares of Common Stock are issued and outstanding and (ii) 346,661
shares of Common Stock are reserved for issuance pursuant to outstanding Company
options. All of the members of the Company Board and all of the Company's senior
executive officers, including Luke E. Fichthorn, III, Chairman of the Board and
Chief Executive Officer, Kenneth L. Bayne, Vice President and Chief Financial
Officer, Larry D. Smith, Vice President, Administration, and Lawrence C.
Maingot, Corporate Controller, have entered into a Tender and Support Agreement,
dated as of February 23, 2007, with Steel Partners II (the "Tender and Support
Agreement"), under which they have agreed to tender their Shares in the Offer.
Together, as of the date of this Offer to Purchase, these individuals own,
beneficially or of record, 659,125 Shares (excluding stock options),
representing approximately 9.0% of the Company's outstanding Shares (the "Tender
and Support Agreement Shares"). In addition, as of the date of this Offer to
Purchase, Steel Partners II beneficially owns 1,110,200 Shares, representing
approximately 15.2% of the Company's outstanding Shares, in addition to the
Tender and Support Agreement Shares it may be deemed to beneficially own.
Accordingly, in addition to the Tender and Support Agreement Shares and the
other Shares beneficially owned by Steel Partners II, we believe that the
Minimum Condition would be satisfied if approximately 2,050,995 Shares are
validly tendered pursuant to the Offer and not withdrawn.
Although the Original Letter of Transmittal only refers to the Original
Offer to Purchase, stockholders using such document to tender their Shares will
nevertheless be deemed to be tendering pursuant to the Offer as amended and will
receive the Offer Price of $13.50 net per Share in cash if Shares are accepted
for payment and paid for by the Purchaser pursuant to the Offer. Unless
otherwise indicated, as used herein, the term "Letter of Transmittal" refers to
either the Original Letter of Transmittal or the Amended and Restated Letter of
Transmittal.
Stockholders tendering their Shares according to the guaranteed delivery
procedures set forth under "The Offer--Section 3" may do so using either the
original Notice of Guaranteed Delivery circulated with the Original Offer to
Purchase or the Amended and Restated Notice of Guaranteed Delivery circulated
herewith. Unless otherwise indicated, as used herein, the term "Notice of
Guaranteed Delivery" refers to either such document.
SHARES PREVIOUSLY TENDERED PURSUANT TO THE ORIGINAL OFFER TO PURCHASE AND
THE ORIGINAL LETTER OF TRANSMITTAL AND NOT WITHDRAWN CONSTITUTE VALID TENDERS
FOR PURPOSES OF THE OFFER AS AMENDED. STOCKHOLDERS WHO HAVE VALIDLY TENDERED AND
NOT WITHDRAWN THEIR SHARES ARE NOT REQUIRED TO TAKE ANY FURTHER ACTION WITH
RESPECT TO SUCH SHARES IN ORDER TO RECEIVE THE OFFER PRICE OF $13.50 NET PER
SHARE IN CASH IF SHARES ARE ACCEPTED FOR PAYMENT AND PAID FOR BY THE PURCHASER
PURSUANT TO THE OFFER, EXCEPT AS MAY BE REQUIRED BY THE GUARANTEED DELIVERY
PROCEDURES IF SUCH PROCEDURES WERE UTILIZED. SEE "THE OFFER--SECTION 3". IF YOU
HAVE NOT ALREADY TENDERED YOUR SHARES, PLEASE DISREGARD THE MATERIALS PREVIOUSLY
DELIVERED TO YOU AND USE THE MATERIALS ACCOMPANYING THIS OFFER TO PURCHASE.
7
The purpose of the Offer and the Merger is to acquire control of, and the
entire equity interest in, the Company. Under Delaware Law, if we acquire,
pursuant to the Offer or otherwise, at least 90% of the outstanding Shares, we
would be able to approve the Merger without a vote of the remaining
stockholders. If we do not acquire at least 90% of the outstanding Shares, we
will have to seek approval of the Merger by the Company's stockholders. In such
event, approval of the Merger would require the affirmative vote of holders of a
majority of the outstanding Shares. Following the consummation of the Offer, we
would own a majority of the outstanding Shares on a fully diluted basis, and
would thus be able to approve the Merger without the affirmative vote of any
other stockholders.
Pursuant to the Merger Agreement, Steel Partners II and Purchaser have
terminated and withdrawn their solicitation of written consents from
stockholders of the Company (the "Consent Solicitation") for the following
purposes: (1) to remove each member of the Company Board and any person (other
than those elected by the Consent Solicitation) elected or appointed to the
Company Board by such directors to fill any vacancy on the Company Board or any
newly-created directorships; (2) to amend the Amended and Restated Bylaws of the
Company (the "Bylaws") to fix the number of directors serving on the Company
Board at five; (3) to amend the Bylaws to provide that any vacancies on the
Company Board resulting from the removal of directors by the stockholders of the
Company may only be filled by the stockholders of the Company; and (4) to elect
five nominees of Steel Partners II to serve as directors of the Company (or, if
any such nominee is unable or unwilling to serve as a director of the Company,
any other person designated as a nominee by the remaining nominee or nominees)
(the "Steel Partners II Nominees").
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION, AND YOU SHOULD CAREFULLY READ BOTH IN THEIR ENTIRETY
BEFORE YOU MAKE A DECISION WITH RESPECT TO THE OFFER.
THE OFFER
1. TERMS OF THE OFFER. Upon the terms and subject to the conditions set
forth in the Offer, we will accept for payment and pay for all Shares that are
validly tendered before the Expiration Date and not withdrawn. "Expiration Date"
means 5:00 p.m., New York City time, on Friday, March 16, 2007, unless extended,
in which event "Expiration Date" means the latest time and date at which the
Offer, as so extended, shall expire. Our obligation to accept for payment and to
pay for Shares validly tendered and not withdrawn prior to the Expiration Date
is subject only to the satisfaction of the Minimum Condition and the
satisfaction or waiver of the other conditions described in "The Offer--Section
15".
The Merger Agreement allows us to extend the Offer beyond the Expiration
Date, without the consent of the Company, as follows: (1) if, at the Expiration
Date, any of the conditions to our obligation to accept Shares for payment
(including, without limitation, the Minimum Condition) has not been satisfied or
waived, we may extend the Offer beyond the Expiration Date for a time period
reasonably necessary to permit such condition to be satisfied, in increments of
not more than five business days each, and no more than 20 business days in the
aggregate; (2) we may extend the Offer for any period required by any rule,
regulation or interpretation of the SEC applicable to the Offer; or (3) if, at
the Expiration Date, the number of Shares that have been validly tendered and
not withdrawn pursuant to the Offer, together with any Shares then owned by
Steel Partners II, the Purchaser and their affiliates, satisfies the Minimum
Condition but represents less than 90% of the outstanding Shares, we may extend
the Offer, one or more times, for an aggregate of up to 20 business days. The
Merger Agreement also permits us, without the consent of the Company, in lieu of
extending the Offer as provided in (3) above, to make available a "subsequent
offering period" in accordance with Rule 14d-11 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), of 10 to 20 business days. There
can be no assurance that we will exercise our right to extend the Offer or
include a subsequent offering period.
Pursuant to Rule 14d-11 under the Exchange Act, we may include a
subsequent offering period so long as, among other things, (1) the Offer remains
open for a minimum of 20 business days and has expired, (2) we accept and
promptly pay for all Shares validly tendered during the Offer, (3) we announce
the results of the Offer, including the approximate number and percentage of
Shares deposited in the Offer, no later than 9:00 A.M., New York City time, on
the next business day after the Expiration Date and immediately begin the
subsequent offering period and (4) we immediately accept and promptly pay for
Shares as they are tendered during the subsequent offering period. In addition,
we may extend any initial subsequent offering period by any period or periods,
provided that the aggregate of the subsequent offering period (including
extensions thereof) is no more than 20 business days. No withdrawal rights apply
8
to Shares tendered in a subsequent offering period, and no withdrawal rights
apply during a subsequent offering period with respect to Shares previously
tendered in the Offer and accepted for payment. The same price paid in the Offer
will be paid to stockholders tendering Shares in the Offer or in a subsequent
offering period, if one is included.
Subject to the applicable rules and regulations of the SEC, we expressly
reserve the right to delay acceptance for payment of any Shares (or delay
payment for any Shares, regardless of whether such Shares were theretofore
accepted for payment) pending the receipt of required governmental consents by
giving oral or written notice of such delay to the Depositary and by making a
public announcement thereof, as described below. Our right to delay acceptance
for payment of, or payment for, any Shares is subject to the applicable rules
and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act,
which requires the Purchaser to pay the consideration offered or return the
Shares tendered promptly after the termination or withdrawal of the Offer.
If we extend the Offer, are delayed in accepting for payment or paying for
Shares or are unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to our rights under the Offer, the
Depositary may, on our behalf, retain all Shares tendered, and such Shares may
not be withdrawn except as provided in "The Offer--Section 4". Our reservation
of the right to delay acceptance for payment of or payment for Shares is subject
to applicable law, which requires that we pay the consideration offered or
return the Shares deposited by or on behalf of stockholders promptly after the
termination or withdrawal of the Offer.
If the Minimum Condition or any of the other conditions to the Offer has
not been satisfied by the Expiration Date, we may elect (1) subject to the
qualifications described above with respect to the extension of the Offer, to
extend the Offer and, subject to applicable withdrawal rights, retain all
tendered Shares until the expiration of the Offer, as extended, subject to the
terms of the Offer, (2) subject to complying with applicable rules and
regulations of the SEC and the terms of the Merger Agreement (including, if
necessary, obtaining the prior written consent of the Company), to accept for
payment, and pay for, all Shares so tendered and not extend the Offer, or (3)
subject to the terms of the Merger Agreement, to terminate the Offer and not
accept for payment, or pay for, any Shares and return all tendered Shares to
tendering stockholders.
Subject to the applicable rules and regulations of the SEC, we expressly
reserve the right to waive any of the conditions to the Offer (other than the
Minimum Condition), to increase the Offer Price and to make any other changes in
the terms of the Offer. However, we may not (1) decrease the Offer Price, (2)
change the form of consideration payable in the Offer, (3) decrease the number
of Shares sought in the Offer, (4) impose additional conditions to the Offer,
(5) extend the Offer beyond the Expiration Date, (6) purchase any Shares
pursuant to the Offer that when added to Shares owned by Steel Partners II and
its affiliates would represent less than the Minimum Condition or (7) amend any
other term or condition of the Offer in any manner adverse to the holders of the
Shares, in each case without the prior written consent of the Company.
If we decrease the percentage of Shares being sought or increase or
decrease the consideration to be paid for Shares pursuant to the Offer, and the
Offer is scheduled to expire at any time before the expiration of a period of 10
business days from, and including, the date that notice of such increase or
decrease is first published, sent or given in the manner specified below, the
Offer will be extended until the expiration of such period of 10 business days.
If we make any other material change in the terms of or information concerning
the Offer or waive a material condition of the Offer, we will extend the Offer,
if required by applicable law, for a period sufficient to allow you to consider
the amended terms of the Offer. In a published release, the SEC has stated that
in its view an offer must remain open for a minimum period of time following a
material change in the terms of such offer. The release states that an offer
should remain open for a minimum of five business days from the date the
material change is first published, sent or given to stockholders, and that if
material changes are made with respect to information that approaches the
significance of price and share levels, a minimum of 10 business days may be
required to allow adequate dissemination and investor response. "Business day"
means any day other than Saturday, Sunday or a U.S. federal holiday and consists
of the time period from 12:01 A.M. through 12:00 Midnight, New York City time.
Any extension, delay, termination, waiver or amendment of the Offer will
be followed as promptly as practicable by a public announcement thereof. Without
limiting the manner in which we may choose to make any public announcement, we
will have no obligation (except as otherwise required by applicable law) to
publish, advertise or otherwise communicate any such public announcement other
than by making a release to the Dow Jones News Service. In the case of an
9
extension of the Offer, we will give oral or written notice of the extension to
the Depositary and will make a public announcement of such extension no later
than 9:00 A.M., New York City time, on the next business day after the
previously scheduled Expiration Date. During any extension, all Shares
previously tendered and not withdrawn will remain subject to the Offer and
subject to the right of a tendering stockholder to withdraw Shares. If we elect
to include or extend a subsequent offering period, we will make a public
announcement of such inclusion or extension no later than 9:00 A.M., New York
City time, on the next business day after the Expiration Date or date of
termination of any prior subsequent offering period.
The Company has provided us with its stockholder list and security
position listings for the purpose of disseminating the Offer to holders of
Shares. We will send this Offer to Purchase, the related Letter of Transmittal
and other related documents to record holders of Shares and to brokers, dealers,
banks, trust companies and other nominees whose names 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.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT. Upon the terms and subject to the
conditions of the Offer, promptly after the Expiration Date, we will accept for
payment and pay for all Shares validly tendered and not withdrawn. For a
description of our right to terminate the Offer and not accept for payment or
pay for Shares, see "The Offer--Section 13" and "The Offer--Section 15". If we
increase the consideration to be paid for Shares pursuant to the Offer, we will
pay such increased consideration for all Shares purchased pursuant to the Offer.
We will pay for Shares accepted for payment pursuant to the Offer by
depositing the purchase price with the Depositary, which will act as your agent
for the purpose of receiving payments from us and transmitting such payments to
you. 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 for
such Shares (or a confirmation of a book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility (as defined in "The
Offer--Section 3")), (ii) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) and (iii) any other required documents. For a
description of the procedure for tendering Shares pursuant to the Offer, see
"The Offer--Section 3". Accordingly, payment may be made to tendering
stockholders at different times if delivery of the Shares and other required
documents occurs at different times. Under no circumstances will we pay interest
on the consideration paid for Shares pursuant to the Offer, regardless of any
delay in making such payment.
For purposes of the Offer, we shall be deemed to have accepted for payment
tendered Shares when, as and if we give oral or written notice of our acceptance
to the Depositary.
We reserve the right to transfer or assign, in whole or from time to time
in part, to one or more of our affiliates the right to purchase Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve us
of our obligations under the Offer or prejudice your rights to receive payment
for Shares validly tendered and accepted for payment.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if certificates are submitted for more Shares than are tendered,
certificates for such unpurchased or untendered Shares will be returned (or, in
the case of Shares tendered by book-entry transfer, such Shares will be credited
to an account maintained at the Book-Entry Transfer Facility), without expense
to you, promptly following the expiration or termination of the Offer.
3. PROCEDURE FOR TENDERING SHARES.
VALID TENDER OF SHARES. To tender Shares pursuant to the Offer, either (i)
the Depositary must receive at one of its addresses set forth on the back cover
of this Offer to Purchase (a) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) and any other documents required by the
Letter of Transmittal and (b) certificates for the Shares to be tendered or
delivery of such Shares pursuant to the procedures for book-entry transfer
described below (and a confirmation of such delivery including an Agent's
Message (as defined below) if the tendering stockholder has not delivered a
Letter of Transmittal), in each case by the Expiration Date, or (ii) the
guaranteed delivery procedure described below must be complied with.
10
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS,
INCLUDING THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT YOUR OPTION AND RISK,
AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY.
IF CERTIFICATES FOR SHARES ARE SENT BY MAIL, WE RECOMMEND REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED, IN TIME TO BE RECEIVED PRIOR TO THE
EXPIRATION DATE.
The tender of Shares pursuant to any one of the procedures described above
will constitute your acceptance of the Offer, as well as your representation and
warranty that (i) you own the Shares being tendered within the meaning of Rule
14e-4 under the Exchange Act, (ii) the tender of such Shares complies with Rule
14e-4 under the Exchange Act and (iii) you have the full power and authority to
tender, sell, assign and transfer the Shares tendered, as specified in the
Letter of Transmittal. Our acceptance for payment of Shares tendered by you
pursuant to the Offer will constitute a binding agreement between you and us
with respect to such Shares, upon the terms and subject to the conditions of the
Offer.
As of the date of this Offer to Purchase, the Rights do not trade
separately. Accordingly, by tendering Common Stock you are automatically
tendering a similar number of Rights.
BOOK-ENTRY DELIVERY. The Depositary has established an account with
respect to the Shares for purposes of the Offer at The Depository Trust Company
(the "Book-Entry Transfer Facility"). Any financial institution that is a
participant in the system of the Book-Entry Transfer Facility may deliver Shares
by causing the Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account in accordance with the procedures of the Book-Entry
Transfer Facility. However, although delivery of Shares may be effected through
book-entry transfer, the Letter of Transmittal (or facsimile thereof) properly
completed and duly executed together with any required signature guarantees or
an Agent's Message and any other required documents must, in any case, be
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase by the Expiration Date, or the guaranteed delivery
procedure described below must be complied with. Delivery of the Letter of
Transmittal and any other required documents to the Book-Entry Transfer Facility
does not constitute delivery to the Depositary. "Agent's Message" means a
message, transmitted by the Book-Entry Transfer Facility to, and received by,
the Depositary and forming a part of a book-entry confirmation stating that the
Book-Entry Transfer Facility has received an express acknowledgment from the
participant in the Book-Entry Transfer Facility tendering the Shares that are
the subject of such book-entry confirmation that such participant has received,
and agrees to be bound by, the terms of the Letter of Transmittal and that the
Company may enforce such agreement against such participant.
SIGNATURE GUARANTEES. All signatures on a Letter of Transmittal must be
guaranteed by a financial institution (including most banks, savings and loan
associations and brokerage houses) that is a member of a recognized Medallion
Program approved by The Securities Transfer Association Inc., including the
Securities Transfer Agents Medallion Program (STAMP), the Stock Exchange
Medallion Program (SEMP) and the New York Stock Exchange, Inc. Medallion
Signature Program (MSP), or any other "eligible guarantor institution" (as such
term is defined in Rule 17Ad-15 under the Exchange Act) (each an "Eligible
Institution"), unless (i) the Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered therewith and such holder(s) has not completed
the box entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" on the Letter of Transmittal or (ii) such Shares are
tendered for the account of an Eligible Institution. See Instructions 1 and 5 of
the Letter of Transmittal.
GUARANTEED DELIVERY. If you wish to tender Shares pursuant to the Offer
and cannot deliver such Shares and all other required documents to the
Depositary by the Expiration Date or cannot complete the procedure for delivery
by book-entry transfer on a timely basis, you may nevertheless tender such
Shares if all of the following conditions are met:
o such tender is made by or through an Eligible Institution;
o a properly completed and duly executed Notice of Guaranteed Delivery
in the form provided by the Purchaser is received by the Depositary
(as provided below) by the Expiration Date; and
o the certificates for such Shares (or a confirmation of a book-entry
transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facility), together with a properly completed and
11
duly executed Letter of Transmittal together with any required
signature guarantee (or facsimile thereof) or an Agent's Message and
any other required documents, are received by the Depositary within
three business days after the date of execution of the Notice of
Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in such
Notice.
BACKUP WITHHOLDING. Under the U.S. federal income tax laws, backup
withholding will apply to any payments made pursuant to the Offer unless you
provide the Depositary with your correct taxpayer identification number and
certify that you are not subject to such backup withholding by completing the
Substitute Form W-9 included in the Letter of Transmittal. If you are a
non-resident alien or foreign entity not subject to backup withholding, you must
give the Depositary a completed Form W-8BEN Certificate of Foreign Status before
receipt of any payment.
APPOINTMENT OF PROXY. By executing a Letter of Transmittal, you
irrevocably appoint our designees as your proxies in the manner set forth in the
Letter of Transmittal to the full extent of your rights with respect to the
Shares tendered and accepted for payment by us (and any and all other Shares or
other securities issued or issuable in respect of such Shares on or after
February 23, 2007). All such proxies are irrevocable and coupled with an
interest in the tendered Shares. Such appointment is effective only upon our
acceptance for payment of such Shares. Upon such acceptance for payment, all
prior proxies and consents granted by you with respect to such Shares and other
securities will, without further action, be revoked, and no subsequent proxies
may be given (and, if previously given, will cease to be effective). Our
designees will be empowered to exercise all your voting and other rights as
they, in their sole discretion, may deem proper at any annual, special or
adjourned meeting of the Company's stockholders. We reserve the right to require
that, in order for Shares to be deemed validly tendered, immediately upon our
acceptance for payment of such Shares, we or our designee must be able to
exercise full voting rights with respect to such Shares and other securities
(including voting at any meeting of stockholders).
The foregoing proxies are effective only upon acceptance for payment of
Shares pursuant to the Offer. The Offer does not constitute a solicitation of
proxies, absent a purchase of Shares, for any meeting of the Company's
stockholders.
DETERMINATION OF VALIDITY. We will determine, in our sole discretion, all
questions as to the form of documents and the validity, eligibility (including
time of receipt) and acceptance for payment of any tender of Shares, and our
determination shall be final and binding, subject to the tendering stockholder's
right to bring any dispute with respect thereto before a court of competent
jurisdiction. We reserve the absolute right to reject any or all tenders of
Shares that we determine not to be in proper form or the acceptance for payment
of or payment for which may, in the opinion of our counsel, be unlawful. We also
reserve the absolute right to waive any defect or irregularity in any tender of
Shares. None of Steel Partners II, the Purchaser, the Depositary, the
Information Agent or any other person will be under any duty to give
notification of any defect or irregularity in tenders or waiver of any such
defect or irregularity or incur any liability for failure to give any such
notification.
4. WITHDRAWAL RIGHTS. You may withdraw tenders of Shares made pursuant to
the Offer at any time before the Expiration Date. Thereafter, such tenders may
be withdrawn only if such Shares have not been accepted for payment as provided
in this Offer to Purchase. If we extend the period of time during which the
Offer is open, are delayed in accepting for payment or paying for Shares or are
unable to accept for payment or pay for Shares pursuant to the Offer for any
reason, then, without prejudice to our rights under the Offer, the Depositary
may, on our behalf, retain all Shares tendered, and such Shares may not be
withdrawn except as otherwise provided in this Section 4.
For your withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal with respect to the tendered Shares
must be timely received by the Depositary at one of its addresses set forth on
the back cover of this Offer to Purchase, and the 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 of the registered holder of
Shares, if different from that of the person who tendered such Shares. If the
Shares to be withdrawn have been delivered to the Depositary, a signed notice of
withdrawal with (except in the case of Shares tendered by an Eligible
12
Institution) signatures guaranteed by an Eligible Institution must be submitted
before the release of such Shares. In addition, such notice must specify, in the
case of Shares tendered by delivery of certificates, the name of the registered
holder (if different from that of the tendering stockholder) and the serial
numbers shown on the particular certificates evidencing the Shares to be
withdrawn or, in the case of Shares tendered by book-entry transfer, the name
and number of the account at the Book-Entry Transfer Facility to be credited
with the withdrawn Shares. Withdrawals may not be rescinded, and Shares
withdrawn will thereafter be deemed not validly tendered. However, withdrawn
Shares may be retendered by again following one of the procedures described in
"The Offer--Section 3" at any time before the Expiration Date.
If we include a subsequent offering period (as described in more detail in
"The Offer--Section 1") following the Offer, no withdrawal rights will apply to
Shares tendered in such subsequent offering period and no withdrawal rights
apply during such subsequent offering period with respect to Shares previously
tendered in the Offer and accepted for payment.
We will determine, in our sole discretion, all questions as to the form
and validity (including time of receipt) of any notice of withdrawal, and our
determination shall be final and binding, subject to the withdrawing
stockholder's right to bring any dispute with respect thereto before a court of
competent jurisdiction. None of Steel Partners II, the Purchaser, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defect or irregularity in any notice of withdrawal or
waiver of any such defect or irregularity or incur any liability for failure to
give any such notification.
5. CERTAIN TAX CONSIDERATIONS. THE U.S. FEDERAL INCOME TAX DISCUSSION SET
FORTH BELOW IS INCLUDED FOR GENERAL INFORMATION ONLY AND IS BASED UPON PRESENT
LAW. DUE TO THE INDIVIDUAL NATURE OF TAX CONSEQUENCES, YOU ARE URGED TO CONSULT
YOUR TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES TO YOU OF THE OFFER,
INCLUDING THE EFFECTS OF APPLICABLE STATE, LOCAL AND OTHER TAX LAWS. The
following discussion may not apply to certain stockholders. For example, the
following discussion may not apply to you if you acquired your Shares pursuant
to the exercise of stock options or other compensation arrangements with the
Company, you are not a citizen or resident of the United States or you are
otherwise subject to special tax treatment under the Internal Revenue Code of
1986, as amended.
Your sale of Shares pursuant to the Offer will be a taxable transaction
for U.S. federal income tax purposes and may also be a taxable transaction under
applicable state, local and other tax laws. In general, if you tender Shares
pursuant to the Offer, you will recognize gain or loss equal to the difference
between the tax basis of your Shares and the amount of cash received in exchange
therefor. Such gain or loss will be capital gain or loss if you hold the Shares
as capital assets and will be long-term gain or loss if your holding period for
the Shares is more than one year as of the date of the sale of such Shares.
A stockholder whose Shares are purchased in the Offer may be subject to
backup withholding unless certain information is provided to the Depositary or
an exemption applies. See "The Offer--Section 3--Backup Withholding".
6. PRICE RANGE OF SHARES; DIVIDENDS. According to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2005 (the "Company
10-K"), the Shares are traded on the New York Stock Exchange under the symbol
BZ. The following table sets forth for the periods indicated the high and low
sales prices per Share on the New York Stock Exchange during each quarter
presented as reported in published financial sources:
Fiscal Year Ended December 31,
2005 High Low
-------- --------
First Quarter $ 12.21 $ 10.41
Second Quarter 11.37 9.90
Third Quarter 11.85 10.20
Fourth Quarter 10.81 8.66
2006
First Quarter 10.69 8.70
Second Quarter 12.49 9.89
13
Third Quarter 12.50 11.70
Fourth Quarter 13.70 11.75
2007
First Quarter (through March 1, 2007) 14.10 12.65
According to the Company 10-K and subsequent filings made by the Company
with the SEC, the Company declared and paid quarterly cash dividends of $.05 per
Share in the first three quarters of fiscal 2004, $.06 per Share in the fourth
quarter of fiscal 2004 through the second quarter of fiscal 2006 and $.07 per
Share in the third and fourth quarters of fiscal 2006, and has declared a
quarterly cash dividend of $.10 per Share payable on March 30, 2007 to
stockholders of record on the close of business on March 5, 2007. If we
successfully consummate the Offer, we currently intend that no dividends will be
declared on the Shares prior to the acquisition of the entire equity interest in
the Company pursuant to the Merger.
On June 14, 2006, the last full business day before the announcement of
our intention to commence the Original Offer, the last reported sales price of
the Common Stock reported on the New York Stock Exchange was $9.93 per share. On
February 23, 2007, the date on which we announced the Merger Agreement, the last
reported sales price of the Common Stock reported on the New York Stock Exchange
was $13.50 per share. Please obtain a recent quotation for your Shares prior to
deciding whether or not to tender.
7. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK
EXCHANGE LISTING; REGISTRATION UNDER THE EXCHANGE ACT.
POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES. If the Offer
is consummated, the number of stockholders and Shares that are still in the
hands of the public may be so small that there will no longer be an active or
liquid public trading market (or, possibly, any public trading market) for
Shares held by stockholders other than the Purchaser. We cannot predict whether
the reduction in the number of Shares that might otherwise trade publicly would
have an adverse or beneficial effect on the market price for, or marketability
of, the Shares or whether such reduction would cause future market prices to be
greater or less than the Offer Price.
Upon consummation of the Merger, stockholders not tendering their Shares
in the Offer (other than those properly exercising their appraisal rights) will
receive cash in an amount per Share equal to the Offer Price. Therefore, the
main difference between tendering and not tendering Shares in the Offer is that
tendering stockholders will be paid earlier. In addition, in connection with the
consummation of the Merger, stockholders of the Company who have neither voted
in favor of the Merger nor consented thereto in writing, and who otherwise under
the Delaware Law comply with the applicable statutory procedures, will be
entitled to receive a judicial determination of the fair value of their Shares
(exclusive of any element of value arising from the accomplishment or
expectation of the Merger) and to receive payment of such fair value in cash,
together with a fair rate of interest, if any.
STOCK EXCHANGE LISTING. As stated above, the Shares are presently listed
on the New York Stock Exchange. The purchase of the Shares by the Purchaser
pursuant to the Offer will reduce the number of Shares that might otherwise
trade publicly and will reduce the number of holders of Shares, which could
adversely affect the liquidity and market value of the remaining Shares held by
the public. Depending upon the number of Shares tendered to and purchased by the
Purchaser in the Offer, the Shares may no longer meet the requirements for
continued inclusion on the New York Stock Exchange.
In that event, it is possible that the Shares would continue to trade in
the over-the-counter market and that price or other quotations would be reported
by other sources. The extent of the public market for the Shares and the
availability of such quotations would depend, however, upon such factors as the
number of stockholders and the aggregate market value of the Shares available in
the public market at such time, the interest in maintaining a market in the
Shares on the part of securities firms, the possible termination of registration
of the Shares under the Exchange Act as described below, and other factors.
REGISTRATION UNDER THE EXCHANGE ACT. The Shares are currently registered
under the Exchange Act. Such registration may be terminated upon application of
the Company to the SEC if the Shares are neither listed on a national securities
14
exchange nor held by 300 or more holders of record. Termination of the
registration of the Shares under the Exchange Act would substantially reduce the
information required to be furnished by the Company to holders of Shares and to
the SEC and would make certain of the provisions of the Exchange Act, such as
the short-swing profit recovery provisions of Section 16(b), the requirement to
furnish a proxy statement pursuant to Section 14(a) in connection with a
stockholders meeting and the related requirement to furnish an annual report to
stockholders and the requirements of Rule 13e-3 under the Exchange Act with
respect to "going private" transactions, no longer applicable to the Shares.
Furthermore, "affiliates" of the Company and persons holding "restricted
securities" of the Company may be deprived of the ability to dispose of such
securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as
amended (the "Securities Act"). We intend to seek to cause the Company to
terminate registration of the Shares under the Exchange Act as soon after
consummation of the Offer as the requirements for termination of registration of
the Shares are met.
8. CERTAIN INFORMATION CONCERNING THE COMPANY. The information
concerning the Company contained in this Offer to Purchase has been taken from
or based upon publicly available documents and records on file with the SEC and
other public sources. None of Steel Partners II, the Purchaser, the Information
Agent or the Depositary can take responsibility for the accuracy or completeness
of the information contained in such documents and records or for any failure by
the Company to disclose events which may have occurred or may affect the
significance or accuracy of any such information but which are unknown to Steel
Partners II, the Purchaser, the Information Agent or the Depositary.
According to the Company 10-K, the Company was incorporated in the State
of New York on April 19, 1981. Effective September 24, 1991, the Company changed
its state of incorporation from New York to Delaware. The principal executive
offices of the Company are located at 300 Primera Boulevard, Suite 432, Lake
Mary, Florida 32746, and its telephone number is (407) 875-2222. According to
the Company 10-K, the Company operates two core businesses - Arlon and Kasco.
Arlon businesses design, manufacture, and sell engineered materials and
components for the electronic, industrial and commercial markets. These products
are based on common technologies in coating, laminating, polymers, and
dispersion chemistry. Kasco is a leading provider of meat-room products and
maintenance services for the meat and deli departments of supermarkets;
restaurants; meat, poultry and fish processing plants; and manufacturers and
distributors of electrical saws and cutting equipment throughout North America,
Europe, Asia and South America.
PREFERRED STOCK PURCHASE RIGHTS.
The following description of the Rights is based upon publicly available
documents. This description does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is filed as Exhibit 4.1
to the Company's registration statement on Form 8-A12B filed with the SEC on
June 23, 2006.
On June 22, 2006, the Company entered into the Rights Agreement with
Computershare Investors Services (the "Rights Agent"). In connection therewith,
the Company Board declared a dividend distribution of one Right for each
outstanding share of Common Stock. Upon certain events, each Right will entitle
the registered holder to purchase from the Company one one-hundredth of a share
of Series A Junior Participating Preferred Stock, par value $.01 per share, of
the Company (the "Preferred Stock") at a price of $40 per one one-hundredth of a
share of Preferred Stock, subject to adjustment (the "Purchase Price").
Initially, the Rights are attached to all Common Stock certificates
representing shares then outstanding, and no separate certificates representing
the Rights ("Right Certificates") will be distributed. The Rights will separate
from the Common Stock and a "Distribution Date" will occur upon the earlier to
occur of (I) ten days following the time (the "Stock Acquisition Time") of a
public announcement or notice to the Company that a person or group of
affiliated or associated persons (an "Acquiring Person") acquired, or obtained
the right to acquire, beneficial ownership of 20% or more of the outstanding
Common Stock of the Company and (II) ten business days (or, if determined by the
Company Board, a specified or unspecified later date) following the commencement
or announcement of an intention to make a tender offer or exchange offer which,
if successful, would cause the bidder to own 20% of more of the outstanding
Common Stock, or, in the event any such commencement or announcement occurred
prior to the date of the Rights Agreement, ten business days after the date of
the Rights Agreement (or, if determined by the Company Board, a specified or
unspecified later date). In its Schedule 14D-9, the Company disclosed that, on
July 6, 2006, the Company Board took action to delay the Distribution Date with
respect to the Original Offer.
15
The Rights Agreement provides that, until the Distribution Date, (I) the
Rights will be transferred with and only with the Common Stock, (II) new Common
Stock certificates issued after June 23, 2006, upon transfer, new issuance or
reissuance of the Common Stock, will contain a notation incorporating the Rights
Agreement by reference and (III) the surrender for transfer of any of the Common
Stock certificates outstanding will also constitute the transfer of the Rights
associated with the shares of Common Stock represented by such certificate. As
soon as practicable following the Distribution Date, separate Right Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and such separate Right Certificates alone
will evidence the Rights. Except in connection with the issuance of Common Stock
pursuant to employee stock plans, options and certain convertible securities,
and except as otherwise determined by the Company Board, only shares of Common
Stock issued prior to the Distribution Date will be issued with Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on June 23, 2016, unless earlier redeemed or exchanged by the
Company as described below.
In the event that, after the Stock Acquisition Time, the Company is
acquired in a merger or other business combination transaction or 50% or more of
its assets, cash flow or earning power is sold, proper provision shall be made
so that each holder of a Right (other than the Acquiring Person) shall
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction would have a market
value (as defined in the Rights Agreement) of two times the Purchase Price of
the Right. In the event that, after the Stock Acquisition Time, the Company were
the surviving corporation of a merger and its Common Stock were changed or
exchanged, proper provision shall be made so that each holder of a Right (other
than the Acquiring Person) will thereafter have the right to receive upon
exercise that number of shares of common stock of the Company having a market
value of two times the exercise price of the Right.
In the event that a person or group becomes an Acquiring Person, each
holder of a Right (other than the Acquiring Person) will thereafter have the
right to receive upon exercise that number of shares of Common Stock (or, in
certain circumstances, cash, a reduction in the Purchase Price, Preferred Stock,
other equity securities of the Company, debt securities of the Company, other
property or a combination thereof) having a market value (as defined in the
Rights Agreement) of two times the Purchase Price of the Right. Notwithstanding
any of the foregoing, following the occurrence of any of the events set forth in
this paragraph, all Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by any Acquiring Person (or an
affiliate, associate or transferee thereof) will be null and void. A person will
not be an Acquiring Person if the Company Board determines that such person or
group became an Acquiring Person inadvertently and such person or group promptly
divests itself of a sufficient number of shares of Common Stock so that such
person or group is no longer an Acquiring Person.
The Purchase Price payable, and the number of shares of Preferred Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (I) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock, (II) upon the grant to holders of Preferred Stock of certain rights,
option or warrants to subscribe for Preferred Stock or convertible securities at
less than the current market price of Preferred Stock or (III) upon the
distribution to holders of Preferred Stock of evidences of indebtedness or
assets (excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above). The number of Rights and number of shares of Preferred Stock
issuable upon the exercise of each Right are also subject to adjustment in the
event of a stock split, combination or stock dividend on the Common Stock.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Preferred Stock will be issued
(other than fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock which may, upon the election of the Company, be
evidenced by depositary receipts) and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
16
At any time prior to the earlier of the Stock Acquisition Time and the
Expiration Date (as defined in the Rights Agreement), the Company Board may
redeem the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). Immediately upon the action of the Company Board ordering
redemption of the Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
At any time after a person becomes an Acquiring Person and prior to the
acquisition by such Person of 50% or more of the outstanding shares of Common
Stock, the Company Board may exchange the Rights (other than Rights beneficially
owned by such Person which have become null and void), in whole or part, at an
exchange ratio of one share of Common Stock per Right (subject to adjustment).
The Company, at its option, may substitute one-hundredth (subject to adjustment)
of a share of Preferred Stock (or other series of substantially similar
preferred stock of the Company) for each share of Common Stock to be exchanged.
Each share of Preferred Stock purchasable upon exercise of the Rights will
have a minimum preferential dividend of $10 per year, but will be entitled to
receive, in the aggregate, a dividend of 100 times the dividend declared on the
shares of Common Stock. In the event of liquidation, the holders of the shares
of Preferred Stock will be entitled to receive a minimum liquidation payment of
$10 per share, but will be entitled to receive an aggregate liquidation payment
equal to 100 times the payment made per share of Common Stock. Each share of
Preferred Stock will have one hundred votes, voting together with the shares of
Common Stock. In the event of any merger, consolidation or other transaction in
which shares of Common Stock are exchanged, each share of Preferred Stock will
be entitled to receive 100 times the amount and type of consideration received
per share of Common Stock. The rights of the shares of Preferred Stock as to
dividends and liquidation, and in the event of mergers and consolidations, are
protected by anti-dilution provisions.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, other than rights resulting from such
holder's ownership of shares of Common Stock, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights will
not be taxable to stockholders or to the Company, stockholders may, depending
upon the circumstances, recognize taxable income in the event that the Rights
become exercisable for Common Stock (or other consideration) of the Company or
for common stock of the acquiring company as set forth above.
Other than those provisions relating to the Redemption Price and
expiration date of the Rights, any of the provisions of the Rights Agreement may
be amended by the Company Board prior to the Stock Acquisition Time. After such
time, the provisions of the Rights Agreement may be amended by the Company Board
in order to cure any ambiguity, to correct or supplement defective or
inconsistent provisions, to shorten or lengthen any time period under the Rights
Agreement, to make changes which do not adversely affect the interests of the
holders of Rights (excluding the interests of any Acquiring Person) or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing redemption shall
be made at such time as the Rights are not redeemable.
One Right will be distributed to stockholders of the Company for each
share of Common Stock owned of record by them on June 23, 2006. As long as the
Rights are attached to shares of Common Stock, the Company will issue one Right
with each new share of Common Stock so that all shares of Common Stock will have
attached Rights. The Company agreed to reserve the number of shares of Preferred
Stock that, as provided in the Rights Agreement, will be sufficient to permit
the exercise in full of all outstanding Rights.
In connection with its approval of the Merger Agreement and the
transactions contemplated thereby, including the Offer and the Merger, the
Company Board approved, and the Company and the Rights Agent entered into, an
amendment to the Rights Agreement dated as of February 23, 2007 (the "Rights
Amendment"). Pursuant to the Rights Amendment, neither the execution and
delivery of the Merger Agreement or the Tender and Support Agreement nor the
consummation of the Offer, the Merger or any of the other transactions
contemplated thereby will result in (i) Steel Partners II, the Purchaser or any
of their respective affiliates becoming an Acquiring Person or (ii) the
occurrence of (A) a Distribution Date, (B) the Stock Acquisition Time, (C) a
Section 11(a)(ii) Event or (D) a Section 13 Event, in each case as such terms
are defined in the Rights Agreement.
A tender of Common Stock pursuant to the Offer will also constitute a
tender of the Rights.
17
ADDITIONAL INFORMATION. The Company is subject to the informational
requirements of the Exchange Act and in accordance therewith files periodic
reports, proxy statements and other information with the SEC relating to its
business, financial condition and other matters. The Company is required to
disclose in such proxy statements certain 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. Such
reports, proxy statements and other information may be inspected at the public
reference room maintained by the SEC at 100 F Street, N.E., Washington, D.C.
20549. Copies of such material can also be obtained at prescribed rates from the
public reference room of the SEC at 100 F Street, N.E., Washington, D.C. 20549,
or free of charge at the Web site maintained by the SEC at http://www.sec.gov.
Please call the SEC at 1-800-SEC-0330 for further information on the operation
of the public reference room.
9. CERTAIN INFORMATION CONCERNING STEEL PARTNERS II AND THE PURCHASER.
We are a Delaware corporation formed on June 15, 2006. Our principal executive
offices are located at 590 Madison Avenue, New York, New York 10022. The
telephone number of our principal executive offices is (212) 520-2300. We were
formed to serve as an acquisition vehicle for Steel Partners II and have no
current operations other than those incident to the Offer. We are a wholly owned
subsidiary of Steel Partners II.
Steel Partners II is a Delaware limited partnership that invests in the
securities of small cap companies. Warren G. Lichtenstein is Chairman of the
Board, Secretary and the Managing Member of Steel Partners, L.L.C., a Delaware
limited liability company ("Partners LLC"), which in turn is the general partner
of Steel Partners II. The principal business of Partners LLC is acting as the
general partner of Steel Partners II. The principal occupation of Mr.
Lichtenstein is investing in the securities of small cap companies. The
principal business address of Mr. Lichtenstein, Partners LLC and Steel Partners
II is 590 Madison Avenue, New York, New York 10022. Collectively, Steel Partners
II and Partners LLC are referred to herein as the "Steel Entities." The business
telephone number for each of the Steel Entities and Mr. Lichtenstein is (212)
520-2300.
Steel Partners II beneficially owns 1,110,200 Shares, representing
approximately 15.2% of the Company's outstanding Shares, in addition to the
Tender and Support Agreement Shares it may be deemed to beneficially own. As the
general partner of Steel Partners II, Partners LLC may be deemed to beneficially
own the 1,110,200 Shares owned by Steel Partners II, representing approximately
15.2% of the Company's outstanding Shares, in addition to the Tender and Support
Agreement Shares it may be deemed to beneficially own. As the sole executive
officer and managing member of Partners LLC, which in turn is the general
partner of Steel Partners II, Mr. Lichtenstein may be deemed to beneficially own
the 1,110,200 Shares owned by Steel Partners II, representing approximately
15.2% of the Company's outstanding Shares, in addition to the Tender and Support
Agreement Shares he may be deemed to beneficially own. Each of the Steel
Entities and Mr. Lichtenstein expressly disclaims beneficial ownership of the
Tender and Support Agreement Shares.
The name, business address, principal occupation or employment, five-year
employment history and citizenship of each director and executive officer of the
Steel Entities and the Purchaser and certain other information are set forth on
Schedule I hereto.
Except as set forth elsewhere in this Offer to Purchase or Schedule I to
this Offer to Purchase: (i) none of the Steel Entities, the Purchaser and, to
the Steel Entities' and the Purchaser's knowledge, the persons listed in
Schedule I hereto or any associate or majority owned subsidiary of the Steel
Entities, the Purchaser or of any of the persons so listed, beneficially owns or
has a right to acquire any Shares or any other equity securities of the Company;
(ii) none of the Steel Entities, the Purchaser and, to the Steel Entities' and
the Purchaser's knowledge, the persons or entities referred to in clause (i)
above has effected any transaction in the Shares or any other equity securities
of the Company during the past 60 days; (iii) none of the Steel Entities, the
Purchaser and, to the Steel Entities' and the Purchaser's knowledge, 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 the voting
of any such securities, joint ventures, loan or option arrangements, puts or
calls, guaranties of loans, guaranties against loss or the giving or withholding
of proxies, consents or authorizations); (iv) during the two years before the
date of this Offer to Purchase, there have been no transactions between the
Steel Entities, the Purchaser, their respective subsidiaries or, to the Steel
Entities' and the Purchaser's knowledge, any of the persons listed in Schedule I
to this Offer to Purchase, on the one hand, and the Company or any of its
executive officers, directors or affiliates, on the other hand, that would
18
require reporting under SEC rules and regulations; and (v) during the two years
before the date of this Offer to Purchase, there have been no contracts,
negotiations or transactions between the Steel Entities, the Purchaser, their
respective subsidiaries or, to the Steel Entities' and the Purchaser's
knowledge, any of the persons listed in Schedule I to this Offer to Purchase, on
the one hand, and the Company or any of its subsidiaries or affiliates, on the
other hand, concerning a merger, consolidation or acquisition, a tender offer or
other acquisition of securities, an election of directors or a sale or other
transfer of a material amount of assets.
10. SOURCE AND AMOUNT OF FUNDS. We will need approximately $86.5 million
to purchase all of the Shares pursuant to the Offer not already owned by Steel
Partners II, to pay the Dividend and to pay related fees and expenses. As of the
date of this Offer to Purchase, Steel Partners II had cash and cash equivalents
and short-term investments substantially in excess of the approximately $86.5
million required to acquire the Shares and pay the Dividend. The Purchaser
intends to obtain all funds needed for the Offer and the Dividend through a
capital contribution or a loan from Steel Partners II. Steel Partners II plans
to provide the funds for such capital contribution or loan from its available
cash, cash equivalents and working capital. The Offer is not subject to any
financing condition.
11. BACKGROUND OF THE OFFER. Below is a background description of Steel
Partners II's involvement with the Company.
Steel Partners II commenced investing in Shares of the Company in July
1996. On February 18, 2003, Steel Partners II filed a Schedule 13D with the SEC
indicating it owned 572,600 Shares as of February 13, 2003, representing
approximately 7.8% of the Company's then outstanding Shares. Steel Partners II
subsequently filed amendments to the Schedule 13D on each of September 8, 2004,
September 17, 2004, October 28, 2004 and July 6, 2005 reporting increases in
Steel Partners II's ownership position to 661,700, 861,700, 940,400 and
1,057,300 Shares, respectively.
From time to time after the Company's announcement of its quarterly
earnings, representatives of Steel Partners II and the Company discussed
generally the operations of the Company and its financial performance. During
one telephone call, representatives of Steel Partners II spoke with Luke E.
Fichthorn, III, the Chairman of the Board and Chief Executive Officer of the
Company, regarding a potential strategic transaction involving the Company and
Steel Partners II (or one of its affiliates).
In December 2005, representatives of Steel Partners II had a telephone
conversation with Mr. Fichthorn to discuss the Company's 2005 third quarter
earnings release. The call included a more in-depth discussion of the Company's
business and operations, including issues at the Company's recently opened Arlon
Coated Materials San Antonio facility, the Company's defined pension plan and
general concerns related to controlling escalating medical costs, as well as
suggestions to maximize stockholder value. During this call, Steel Partners II's
representatives requested to visit some of the Company's facilities. Steel
Partners II continued to evaluate its investment in the Company subsequent to
this call.
On January 9, 2006, Steel Partners II, which then owned approximately
14.9% of the outstanding Shares, sent a letter to the Company Board requesting
the Company Board to (i) adopt a resolution exempting Steel Partners II from the
limitations of Section 203 of the Delaware Law and (ii) recommend a proposal for
stockholder approval at the next annual meeting of stockholders to amend the
Company's charter to elect not to be governed by Section 203.
On January 31, 2006, Mr. Fichthorn sent a letter to Warren G.
Lichtenstein, Steel Partners II's managing member, informing him of the Company
Board's decision to reject Steel Partners II's request and explaining the
reasoning behind the Company Board's decision. In his letter, Mr. Fichthorn
explained that the Company Board, after careful consideration and consultation
with outside counsel, determined that allowing Steel Partners II to purchase
shares in excess of the threshold set by Section 203 of the Delaware Law and
pursuing action to cause the Company not to be governed by Section 203 of the
Delaware Law were not in the best interest of all of the Company's stockholders.
The Company therefore did not approve further purchases by Steel Partners II and
did not seek to amend the Company's certificate of incorporation.
19
In March 2006, representatives of Steel Partners II again asked to visit
certain of the Company's facilities. In response to this request,
representatives of Steel Partners II and the Company arranged for
representatives of Steel Partners II to visit certain Company facilities. In
April 2006, representatives of Steel Partners II toured the Company's Arlon
Electronic Materials facility located in Rancho Cucamonga, CA and its Arlon
Coated Materials facility located in Santa Ana, CA. Following this visit, Steel
Partners II conducted further review of the Company's business and financial
performance, and ultimately determined to pursue the Original Offer in order to
maximize the value of the Shares.
On June 15, 2006, Steel Partners II sent a letter to Mr. Fichthorn
informing him of Steel Partners II's intention to commence the Original Offer
and requesting a meeting with Mr. Fichthorn and the Company Board to negotiate a
definitive merger agreement. The letter stated that, after the Company Board had
denied Steel Partners II's request to take the necessary steps to opt out of
Section 203 of the Delaware Law, Steel Partners II, having evaluated all of its
options, determined that commencing the Original Offer "would be in the best
interest of all shareholders and would provide shareholders with immediate
liquidity at a significant premium to market." Steel Partners II also issued a
press release on that day announcing its intention to commence the Original
Offer. The letter and press release were preceded by a telephone call from a
representative of Steel Partners II to Mr. Fichthorn informing him of Steel
Partners II's intention to commence the Original Offer.
On June 16, 2006, the Company issued a press release cautioning the
Company's stockholders against tendering, stating that the Company Board would
make a recommendation to the Company's stockholders with respect to the Original
Offer in a timely manner.
On June 22, 2006, Steel Partners II and Purchaser commenced the Original
Offer.
Also on June 22, 2006, the Company issued a press release announcing its
adoption of a shareholder rights plan and its retention of Lazard as its
financial adviser and Debevoise & Plimpton LLP as its legal counsel in
connection with the Original Offer.
On June 26, 2006, Steel Partners II issued a press release responding to
the Company's adoption of a shareholder rights plan.
On June 28, 2006, the Company filed a Current Report on Form 8-K with the
SEC announcing that it had entered into change in control agreements with
certain senior executives of the Company, including Kenneth L. Bayne, Larry C.
Maingot, Larry D. Smith, Daniel T. Holverson, Elmer G. Pruim, Robert M. Carini,
Brian E. Turner and Morgan Ebin. The change in control agreements entitle the
executives to severance benefits in cases where their employment with the
Company is terminated within 24 months of a change in control of the Company.
On July 6, 2006, Steel Partners II's outside legal counsel received a
letter from the Company setting forth a list of 19,300 stock options and 16,000
shares of restricted stock that the Company Board had granted to various
employees of the Company on June 22, 2006.
Also on July 6, 2006, the Company filed a solicitation/recommendation
statement with the SEC on Schedule 14D-9 announcing that the Company Board had
determined that the Original Offer is inadequate and not in the best interests
of the Company's stockholders (other than Steel Partners II and its affiliates)
and recommended that the Company's stockholders reject the Original Offer and
not tender their Shares. In the afternoon on that day, Steel Partners II
received a letter from the Company attaching the Company's press release
relating to the Original Offer.
On July 21, 2006, Steel Partners II announced the extension of the
expiration date of the Original Offer to 5:00 p.m., New York City time, on
August 9, 2006.
On July 28, 2006, the Company issued a press release announcing its
intention to explore possible strategic alternatives, including the possible
sale of the Company.
20
On July 31, 2006, a representative of Lazard sent to a representative of
Steel Partners II a proposed form of confidentiality agreement for Steel
Partners II to sign in order to receive information concerning the business
operations of the Company. Steel Partners II determined that it was not
advisable for it to sign the confidentiality agreement at that time, as the
Company's provision of any material non-public information to Steel Partners II
under the terms of the confidentiality agreement could have precluded Steel
Partners II from consummating the Original Offer.
On August 10, 2006, Steel Partners II announced the extension of the
expiration date of the Original Offer to 5:00 p.m., New York City time, on
September 8, 2006.
On September 11, 2006, Steel Partners II announced the extension of the
expiration date of the Original Offer to 5:00 p.m., New York City time, on
September 28, 2006.
On September 29, 2006, Steel Partners II announced the extension of the
expiration date of the Original Offer to 5:00 p.m., New York City time, on
October 26, 2006.
On October 11, 2006, the Company issued a press release announcing that
the Company had completed its review of strategic alternatives and determined to
continue to implement its strategic plan. The press release also announced that
the Company, through its wholly-owned subsidiary, Kasco Corporation, had
purchased certain assets and assumed certain liabilities of Atlanta SharpTech
for approximately $14.0 million (subject to purchase price adjustments), using
borrowings under the Company's credit facility, which it had just expanded. The
press release further stated that Atlanta SharpTech's revenues were
approximately $18.5 million for its fiscal year ended June 2006.
In mid-October 2006, counsel for Steel Partners II and counsel for the
Company had limited discussions on the terms of the confidentiality agreement
but did not reach any understanding related thereto.
Between October 20 and October 26, 2006, Mr. Lichtenstein and Mr.
Fichthorn engaged in several conversations regarding a possible sale of the
Company to Steel Partners II and the proposed purchase price. Mr. Fichthorn
suggested that the Company Board might be receptive to a transaction at a price
significantly higher than $12.00 per Share and orally disclosed to Mr.
Lichtenstein that, for the Company's 2007 fiscal year, the Company's operating
income was expected to be approximately $15 million and its EBITDA was expected
to be in the range of $23-24 million. Mr. Lichtenstein informed Mr. Fichthorn
that, because Steel Partners II had not had the opportunity to perform a due
diligence investigation of the Company and was concerned about the Company's
ability to meet its projected financial results, Steel Partners II would be
willing to pay $12.00 per Share in cash plus $1.50 per Share in the form of a
contingent promissory note, payment of which would depend on the Company's
future financial performance. Mr. Fichthorn rejected the structuring of the
transaction in this manner. On October 26, 2006, Mr. Lichtenstein indicated that
Steel Partners II would be willing to pay $12.50 per Share in cash in a
negotiated transaction, but this proposal was also declined. During these
conversations, Mr. Lichtenstein requested that Mr. Fichthorn ask the Company
Board to redeem the Company's shareholder rights plan and opt out of Section 203
of the Delaware Law so that the Company's stockholders could have the ability to
decide whether they wanted to accept the Original Offer, but this request was
denied.
On October 27, 2006, Steel Partners II announced the extension of the
expiration date of the Original Offer to 5:00 p.m., New York City time, on
November 27, 2006.
In an effort to reach agreement on an appropriate valuation for the
Company, Steel Partners II and the Company entered into a confidentiality
agreement on October 31, 2006. The confidentiality agreement provided for the
ability of Steel Partners II to conduct a due diligence review of the Company
over a 30-day period, which was subsequently extended to December 15, 2006. The
terms of the confidentiality agreement also enabled Steel Partners II, in the
event the parties were unable to reach agreement, to publicly disclose any
material non-public information provided to it by the Company that was
reasonably necessary under applicable securities laws to allow Steel Partners II
to consummate the Original Offer.
21
On November 3, 2006, Steel Partners II delivered a comprehensive document
request list to a representative of Lazard. On November 13, 2006, Steel Partners
II received from the Company a CD-ROM containing certain of the information
requested by Steel Partners II. Thereafter, during the due diligence review
period, Steel Partners II conducted a review of the Company's business and
historical and projected financial results, including discussions with
representatives of the Company and its financial advisors. Steel Partners II
also retained an independent environmental consultant to review environmental
studies of the Company's facilities that had been previously prepared for the
Company.
On November 21, 2006, a representative of Steel Partners II spoke with
representatives of Lazard regarding the process that Lazard had undertaken to
determine potential purchasers' interests in acquiring the Company. During this
discussion, Lazard's representatives indicated that this process did not produce
any offers for the acquisition of the entire Company.
On November 28, 2006, Steel Partners II announced the extension of the
expiration date of the Original Offer to 5:00 p.m., New York City time, on
December 29, 2006.
On December 6 and 7, 2006, representatives of Steel Partners II visited
the Company's executive offices in Lake Mary, Florida for the primary purpose of
determining the achievability of the guidance the Company had issued for 2007.
During this visit, Steel Partners II's representatives met with Mr. Fichthorn,
Kenneth L. Bayne, the Company's Chief Financial Officer, and Lawrence C.
Maingot, the Company's Corporate Controller, to discuss, among other things, the
assumptions underlying the Company's 2007 financial projections and various
concerns expressed by Steel Partners II relating to some of the Company's
facilities, including the Arlon Coated Materials San Antonio facility and the
Kasco plant in St. Louis. During these meetings, Steel Partners II's
representatives also requested to visit the Company's San Antonio and St. Louis
facilities.
On December 20, 2006, representatives of Steel Partners II spoke with Mr.
Fichthorn and indicated that, as a result of Steel Partners II's due diligence
findings and its continued concerns about the Company's ability to meet its
projected financial results, Steel Partners II would be willing to increase the
Original Offer price to a maximum of $12.50 per Share in cash. The increase in
the Original Offer price to $12.50 per Share depended upon the Company's
willingness to enter into a mutually acceptable merger agreement with Steel
Partners II, and was not indicative of the price Steel Partners II was prepared
to pay in a non-negotiated transaction, due to the additional costs involved in
pursuing a non-negotiated transaction. Among the concerns expressed by Steel
Partners II's representatives were: (1) the significant increase in sales and
production needed to ramp-up the Company's Chinese facility, which began limited
operations in October 2006, from its current operating loss to its projected
profitability in view of the Company's prior announcement that production was
expected to commence by the end of 2005 and that the facility was expected to be
profitable in 2006; (2) continuing production and other problems at the
Company's Arlon Coated Materials San Antonio facility; (3) the Company's
acquisition of the Atlanta SharpTech business and the challenges faced by the
Company in integrating this business with the Company's underperforming Kasco
division; (4) the additional change in control contracts given to certain senior
executives of the Company following the commencement of the Original Offer; (5)
the substantial expenses incurred by the Company in contesting the Original
Offer without advancing other strategic alternatives; and (6) the Company's
overall poor track record in meeting its stated goals in the past. Mr. Fichthorn
said that he would present Steel Partners II's proposal to the Company Board but
that he did not expect the Company Board to accept Steel Partners II's increased
offer.
On December 21, 2006, representatives of Steel Partners II had a telephone
conversation with a representative of Lazard regarding Steel Partners II's
proposed increase in the Original Offer price to $12.50 per Share in cash in a
negotiated transaction. During this conversation, the Lazard representative
confirmed that no other offers had been made to purchase the entire Company.
On December 27, 2006, Mr. Fichthorn telephoned a representative of Steel
Partners II and informed him that the Company Board had turned down Steel
Partners II's proposal to pursue a negotiated transaction with the Company at an
increased offer price of $12.50 per Share in cash.
On December 29, 2006, as a result of the inability to reach agreement with
the Company and the Company Board's unwillingness to redeem the Company's
shareholder rights plan and opt out of Section 203 of the Delaware Law, Steel
22
Partners II announced that it was filing a preliminary consent solicitation
statement with the SEC for the purpose of, among other things, removing and
replacing the Company Board and that it had extended the expiration date of the
Original Offer to 5:00 p.m., New York City time, on January 29, 2007. Because
the proposed increase in the Original Offer price to $12.50 per Share in cash
depended upon the Company's willingness to enter into a mutually acceptable
merger agreement with Steel Partners II, and the Company Board had not accepted
Steel Partners II's proposal, the Original Offer price remained at $12.00 per
Share in cash due to the additional costs that Steel Partners II must incur to
pursue a non-negotiated transaction.
On December 29, 2006, the Company issued a statement in response to Steel
Partners II's announcement that it was filing a preliminary consent solicitation
statement with the SEC.
On January 3, 2007, Steel Partners II sent to the Company a demand to
inspect its stockholder list to enable Steel Partners II to communicate with
stockholders in connection with the Consent Solicitation.
On January 10, 2007, Steel Partners II sent to the Company a request that
the Company Board fix a record date for the purpose of determining the
stockholders entitled to provide written consents in connection with the Consent
Solicitation.
Steel Partners II filed a revised preliminary consent solicitation
statement relating to the Consent Solicitation with the SEC on January 11, 2007
and filed a definitive consent solicitation statement with the SEC on January
12, 2007. Steel Partners II mailed the definitive consent solicitation statement
and accompanying consent card to stockholders on or about January 16, 2007. Also
on January 16, 2007, Steel Partners II delivered its consent card to the Company
in which it consented to each of the four proposals pursuant to the Consent
Solicitation.
On January 11, 2007, the Company filed a preliminary consent statement
with the SEC. It filed a revised preliminary consent statement on January 23,
2007 and a definitive consent statement on January 24, 2007.
On January 16, 2007, the Company distributed a letter to its stockholders
relating to the Consent Solicitation.
On January 22, 2007, the Company announced that the Company Board set a
record date of January 30, 2007 in connection with the Consent Solicitation.
On January 23, 2007, Steel Partners II announced that it received
notification that the Company Board set January 30, 2007 as the record date for
determining stockholders entitled to provide written consents in connection with
the Consent Solicitation, and Steel Partners II supplemented its definitive
consent solicitation statement accordingly.
Also on January 23, 2007, Steel Partners II delivered a letter to the
Company nominating the Steel Partners II Nominees for election to the Company
Board at the Company's 2007 annual meeting of stockholders, or any other meeting
of stockholders held in lieu thereof, and any adjournments, postponements,
reschedulings or continuations thereof.
On January 24, 2007, Steel Partners II sent a letter to stockholders of
the Company with respect to the Consent Solicitation. Steel Partners II also
issued a press release containing its letter to stockholders on that date.
On January 30, 2007, Steel Partners II announced the extension of the
expiration date of the Original Offer to 5:00 p.m., New York City time, on
February 23, 2007.
On February 1, 2007, the Company distributed a letter to its stockholders
and issued a press release in connection therewith.
On February 2, 2007, Steel Partners II announced that it had increased the
offer price to $13.35 per Share in cash (the "Revised Offer"). Prior to the
announcement, a representative of Steel Partners II telephoned Mr. Fichthorn to
inform him of the Revised Offer.
23
Later in the day on February 2, 2007, the Company issued a press release
responding to the Revised Offer.
On February 4, 2007, Mr. Lichtenstein had a telephone conversation with
Mr. Fichthorn regarding the Revised Offer.
On February 5, 2007, representatives of Steel Partners II delivered a
presentation to Institutional Shareholder Services relating to the Consent
Solicitation.
On February 6, 2007, Mr. Fichthorn contacted Mr. Lichtenstein to discuss
the possibility of reaching an agreement as to an increase in the price of the
Revised Offer. Mr. Lichtenstein and Mr. Fichthorn determined to explore whether
Steel Partners II and the Company could reach an agreement regarding a
transaction at a potential price of $13.65 per Share in cash, subject to Steel
Partners II conducting certain additional due diligence.
Between February 8, 2007 and February 21, 2007, Steel Partners II
requested, received from the Company and reviewed additional due diligence
information. In addition, in contemplation of a negotiated transaction between
the parties, the Company's counsel delivered to Steel Partners II's counsel (1)
a proposed amendment to Mr. Fichthorn's employment agreement (the "Employment
Agreement Amendment"), entitling Mr. Fichthorn to receive the severance payments
provided in his original employment agreement if he terminates his employment
for any reason within six months following a change of control of the Company,
and (2) the terms of a proposed one-time bonus to all officers, directors and
employees of the Company who own unexercised stock options as of the close of
business on March 5, 2007 (the record date for the Dividend), whether or not
such options are currently exercisable or vested. During this time, the parties
and their respective counsel discussed the terms and timing of Mr. Fichthorn's
severance payments as a result of the proposed transaction, and Mr. Fichthorn
agreed to waive the $0.10 per Share bonus on his unexercised stock options, as
well as any gross-up payments related to interest on certain deferred severance
payments.
On February 8, 2007, Steel Partners II's counsel delivered to the
Company's counsel a draft of a proposed merger agreement providing for a
negotiated transaction between the parties. Steel Partners II's and the
Company's respective counsel exchanged several drafts of the merger agreement
and negotiated its terms between February 8, 2007 and February 22, 2007.
Also on February 8, 2007, Steel Partners II's environmental consultant
visited the Company's Kasco plant located in St. Louis, Missouri.
On February 10, 2007, representatives of Steel Partners II toured the
Company's Arlon Coated Materials facility located in San Antonio, Texas.
On February 13, 2007, Steel Partners II's counsel delivered to the
Company's counsel a draft of a proposed tender and support agreement pursuant to
which, among other things, all of the members of the Company Board and certain
of the Company' senior executive officers would agree to tender their Shares in
the Offer and grant Steel Partners II an irrevocable proxy to vote their Shares
in favor of the Merger Agreement and the Merger. Steel Partners II's and the
Company's respective counsel exchanged several drafts of this agreement and
negotiated its terms between February 13, 2007 and February 22, 2007.
On February 14, 2007, representatives of Steel Partners II participated in
a conference call with representatives of the Company and Grant Thornton LLP,
the Company's independent public accountants, to discuss the status of the
Company's 2006 audit.
Also on February 14, 2007, the Company's counsel advised Steel Partners
II's counsel that, at a meeting of the Company Board held on that date, the
Company Board had approved the parameters of a transaction with Steel Partners
II, although the terms of the transaction, including the price, had not yet been
finalized and remained subject to confirmatory due diligence on the part of
Steel Partners II. The parties' respective counsel discussed that, in the event
that the parties did not reach a definitive agreement by the following day, the
Company was required to file an amendment to its Schedule 14D-9 by February 15,
2007 stating the Company Board's position with respect to the Revised Offer.
24
On February 15, 2007, a representative of Steel Partners II informed Mr.
Fichthorn that, based on the results of its due diligence to that point and its
growing concerns over the Company's ability to achieve its projected financial
results for 2007, Steel Partners II was not prepared to proceed with a
negotiated transaction at a price of $13.65 per Share in cash and that Steel
Partners II required additional access to Company information and employees,
including the managers of each of the Company's Arlon Coated Materials, Arlon
Electronic Materials and Kasco segments, in order to finalize the terms of a
negotiated transaction.
On February 15, 2007, the Company filed with the SEC an amendment to its
Schedule 14D-9 announcing that the Company Board had determined that the Revised
Offer is inadequate and not in the best interests of the Company's stockholders
(other than Steel Partners II and its affiliates) and recommended that the
Company's stockholders reject the Revised Offer and not tender their Shares.
Between February 15, 2007 and February 16, 2007, a representative of Steel
Partners II had telephone conversations with each of the Company's three segment
managers primarily focused on the Company's ability to meet its projected
operating results for 2007.
On February 21, 2007, a representative of Steel Partners II informed Mr.
Fichthorn that, based on the results of Steel Partners II's due diligence and
its concerns that the Company would not be able to achieve its projected
financial results for 2007, Steel Partners II was willing to proceed with a
negotiated transaction, based on the transaction documents that had been
negotiated by the parties' respective counsel, at a price of $13.50 per Share in
cash. Mr. Fichthorn said that he would present these terms to the Company Board
at its meeting the next day.
On February 22, 2007, the Company Board held a meeting to consider Steel
Partners II's revised offer. Lazard provided to the Company Board its oral
opinion, subsequently confirmed in writing, to the effect that, as of February
23, 2007, and subject to the qualifications and limitations set forth in the
written opinion, the Offer Price to be paid to the holders of the Shares (other
than Steel Partners II and its affiliates or, if applicable, holders of Shares
as to which dissenter's rights have been perfected) in the Offer and the Merger
pursuant to the Merger Agreement is fair, from a financial point of view, to
such holders. After careful consideration, including a thorough review of the
revised offer at an Offer Price of $13.50 net per Share in cash with its
financial and legal advisers, the Company Board unanimously (i) determined that
the terms of the Offer, the Merger and the Merger Agreement are advisable to the
Company's stockholders, (ii) recommended that the Company's stockholders accept
the Offer and tender their Shares pursuant to the Offer, (iii) approved, adopted
and authorized and, to the extent necessary, ratified and confirmed the Merger
Agreement, (iv) approved, adopted and authorized and, to extent necessary,
ratified and confirmed the Rights Amendment, (v) approved, adopted and
authorized and, to the extent necessary, ratified and confirmed Mr. Fichthorn's
employment agreement, including the Employment Agreement Amendment, and each of
the payments contemplated thereby and (vi) resolved that the restriction
potentially prohibiting the Purchaser or any of its affiliates from engaging in
any business combination with the Company pursuant to Section 203 of the
Delaware Law is inapplicable to (x) the Merger Agreement, the Offer, the Merger
and the other transactions contemplated by the Merger Agreement and (y) the
Tender and Support Agreement.
As of February 23, 2007, the respective parties to the Merger Agreement
and the Tender and Support Agreement executed those agreements, and Steel
Partners II and the Company issued a joint press release announcing the signing
of the Merger Agreement and the increase in the offer price to $13.50 per Share
in cash. Steel Partners II also issued a separate press release announcing the
signing of the Merger Agreement and the extension of the expiration date of the
Offer to 5:00 p.m., New York City time, on March 16, 2007. In addition, Steel
Partners II terminated and withdrew the Consent Solicitation as of February 23,
2007.
12. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY; STATUTORY REQUIREMENTS;
APPROVAL OF THE MERGER; APPRAISAL RIGHTS.
PURPOSE OF THE OFFER; PLANS FOR THE COMPANY. The purpose of the Offer is
to acquire control of, and the entire equity interest in, the Company. The Offer
is being made pursuant to the Merger Agreement and is intended to facilitate the
acquisition of all of the Shares and increase the likelihood that the Merger
will be effected. The purpose of the Merger is to acquire all outstanding Shares
not purchased pursuant to the Offer. The transaction structure includes the
Merger in order to ensure the acquisition by Steel Partners II of all the
outstanding Shares.
25
If the Merger is consummated, Steel Partners II's common equity interest
in the Company would increase to 100% and Steel Partners II would be entitled to
all the benefits resulting from that interest. These benefits include complete
management with regard to the future conduct of the Company's business and any
increase in its value. Similarly, Steel Partners II will also bear the risk of
any losses incurred in the operation of the Company and any decrease in its
value.
Upon consummation of the Offer, we will be entitled to exercise our rights
under the Merger Agreement to obtain pro rata representation, based on the
number of Shares purchased pursuant to the Offer, on the Company Board and in no
event less than a majority of the Company Board. We intend to exercise this
right upon consummation of the Offer and to designate Jack L. Howard, Glen M.
Kassan and John J. Quicke, each of whom is affiliated with the Steel Entities,
to serve as directors of the Company. Certain information regarding each of
these individuals is contained in the amendment to the Schedule 14D-9 filed by
the Company with the SEC on the date of this Offer to Purchase. It is also
expected that Luke E. Fichthorn, III will resign as Chairman of the Board and
Chief Executive Officer at that time.
In connection with the Offer, Steel Partners II has reviewed and will
continue to review various possible business strategies that it might consider
in the event that the Purchaser acquires control of the Company pursuant to the
Offer. Following a review of additional information regarding the Company, such
changes could include, among other things, changes in the Company's business,
operations, personnel, employee benefit plans, corporate structure,
capitalization and management.
Except as described above or elsewhere in this Offer to Purchase, the
Purchaser has no present plans or proposals that would relate to or result in an
extraordinary corporate transaction involving the Company or any of its
subsidiaries (such as a merger, reorganization, liquidation, relocation of any
operations or sale or other transfer of a material amount of assets), any change
in the Company Board or management, any material change in the Company's
capitalization or dividend policy or any other material change in the Company's
corporate structure or business.
STATUTORY REQUIREMENTS; APPROVAL OF THE MERGER. Generally, under the
Delaware Law, the affirmative vote of the holders of a majority of the
outstanding shares of a company's stock entitled to vote thereon is required to
adopt and approve a merger agreement and the merger of a company. The Company
has represented to us in the Merger Agreement that the execution and delivery of
the Merger Agreement and the consummation of the transactions contemplated
thereby, including the Offer and the Merger, have been duly and validly
authorized and approved by the Company Board and that such approval is
sufficient to render inapplicable to the Merger Agreement, the Offer, the Merger
and the other transactions contemplated by the Merger Agreement the restriction
against Steel Partners II, the Purchaser and the Company, or any of their
affiliates, engaging in a business combination as set forth in Section 203 of
the Delaware Law. The Company has also represented to us that no other corporate
proceedings on the part of the Company are necessary to authorize the execution
and delivery of the Merger Agreement or to consummate the transactions
contemplated thereby, other than the requisite approval of the Merger by the
stockholders of the Company in accordance with the Delaware Law.
In addition, the Company has represented to us in the Merger Agreement
that, if required under the Delaware Law, the affirmative vote of the holders
(including the Purchaser and its affiliates following the Purchaser's acceptance
of Shares for payment under the Offer) of a majority of the outstanding Shares
is the only vote of the holders of any class or series of the Company's capital
stock necessary to approve the Merger. Therefore, unless the Merger is
consummated pursuant to the short-form merger provisions of Section 253 of the
Delaware Law described below, the only remaining required corporate action of
the Company would be the approval of the Merger Agreement and the Merger by the
affirmative vote of the holders of a majority of the outstanding Shares.
If we acquire, pursuant to the Offer or otherwise, a number of Shares
which, together with the Shares then owned by us, represents at least a majority
of the outstanding Shares, we would have sufficient voting power to approve the
Merger without the affirmative vote of any other stockholder of the Company. In
addition, under Section 253 of the Delaware Law, if we acquire, pursuant to the
Offer or otherwise, a number of Shares which, together with the Shares then
owned by us, represents at least 90% of the outstanding Shares, we would be able
to approve the Merger without a vote of the stockholders. Steel Partners II
presently intends to effect a short-form merger if permitted to do so under
Section 253 of the Delaware Law.
26
"GOING PRIVATE" TRANSACTIONS. The SEC has adopted Rule 13e-3 promulgated
under the Exchange Act ("Rule 13e-3"), which is applicable to certain "going
private" transactions and which may under certain circumstances be applicable to
the Merger following the purchase of Shares pursuant to the Offer. However, Rule
13e-3 would not be applicable if (1) the Shares are deregistered under the
Exchange Act prior to the Merger or (2) the Merger is consummated within one
year after the purchase of the Shares pursuant to the Offer and the amount paid
per Share in the Merger is at least equal to the Offer Price. We believe that
Rule 13e-3 will not be applicable to the Merger because it is anticipated that
the Merger will be effectuated within one year following the consummation of the
Offer and, in the Merger, stockholders will receive the Offer Price. If
applicable, Rule 13e-3 requires, among other things, that certain financial
information concerning the Company and certain information relating to the
fairness of the proposed transaction and the consideration offered to minority
stockholders be filed with the SEC and disclosed to stockholders prior to
consummation of the transaction.
APPRAISAL RIGHTS. You do not have appraisal rights as a result of the
Offer. However, if we consummate the Merger, stockholders of the Company who
have neither voted in favor of the Merger nor consented thereto in writing, and
who otherwise under the Delaware Law comply with the applicable statutory
procedures, will be entitled to receive a judicial determination of the fair
value of their Shares (exclusive of any element of value arising from the
accomplishment or expectation of the Merger) and to receive payment of such fair
value in cash, together with a fair rate of interest, if any (all such Shares
collectively, the "Dissenting Shares"). Any such judicial determination of the
fair value of the Dissenting Shares could be based upon considerations other
than or in addition to the Offer Price and the market value of the Shares.
Stockholders should recognize that the value so determined could be higher or
lower than the Offer Price. Moreover, we may argue in an appraisal proceeding
that, for purposes of such a proceeding, the fair value of the Dissenting Shares
is less than the Offer Price.
If any holder of Shares who demands appraisal under Section 262 of the
Delaware Law fails to perfect, or effectively withdraws or loses his rights to
appraisal as provided in the Delaware Law, the Shares of such stockholder will
be converted into the right to receive the Offer Price. A stockholder may
withdraw his demand for appraisal by delivering to us a written withdrawal of
his demand for appraisal and acceptance of the Merger.
Failure to follow the steps required by Section 262 of the Delaware Law
for perfecting appraisal rights may result in the loss of such rights.
The foregoing discussion is not a complete statement of Section 262 of the
Delaware Law.
13. THE TRANSACTION DOCUMENTS.
THE MERGER AGREEMENT
The following is a summary of certain provisions of the Merger Agreement.
This summary is qualified in its entirety by reference to the Merger Agreement,
which is incorporated herein by reference and a copy of which is filed as an
exhibit to the amendment to the Tender Offer Statement on Schedule TO that Steel
Partners II and the Purchaser filed with the SEC on February 23, 2007. The
Merger Agreement may be examined and copies may be obtained in the manner set
forth in Section 8 under "Additional Information."
The Merger Agreement has been included to provide stockholders with
information regarding its terms. It is not intended to provide any other factual
information about Steel Partners II, the Purchaser or the Company. The Merger
Agreement contains representations and warranties that the parties to the Merger
Agreement made to and solely for the benefit of each other, and the assertions
embodied in such representations and warranties are qualified by information
contained in confidential disclosure schedules that the parties exchanged in
connection with signing the Merger Agreement. Accordingly, stockholders should
not rely on such representations and warranties as characterizations of the
actual state of facts or circumstances, since they were only made as of the date
of the Merger Agreement and are modified in important part by the underlying
disclosure schedules.
THE OFFER. The Merger Agreement provides that, promptly following the
execution and delivery thereof, Steel Partners II will amend, and will cause the
Purchaser to amend, their existing tender offer to purchase all of the
outstanding Shares to increase the purchase price for the Offer to $13.50 per
Share, subject to any applicable withholding for taxes, net to the seller in
27
cash. The Merger Agreement requires Steel Partners II to amend, and Steel
Partners II to cause the Purchaser to amend, their existing Offer to Purchase as
soon as practicable after the date of the Merger Agreement, but in no event
later than five business days (as defined in Rule 14d-1(g)(3) of the Exchange
Act) from the date of the Merger Agreement, to reflect the terms set forth in
the Merger Agreement, the Minimum Condition and the other conditions set forth
in "The Offer--Section 15" and other related terms, and provides for Steel
Partners II and the Purchaser to cause the Offer to remain open through March
16, 2007, unless extended pursuant to the terms of the Merger Agreement. As
promptly as practicable following the date of the Merger Agreement, Steel
Partners II and the Purchaser are obligated to file with the SEC an amendment to
their existing Tender Offer Statement on Schedule TO (together with all
amendments and supplements thereto, the "Schedule TO") with respect to the Offer
that contains or incorporates by reference this Offer to Purchase and forms of
the related letter of transmittal and all other ancillary Offer documents. Steel
Partners II and the Purchaser will cause these Offer documents to be
disseminated to the holders of the Shares as and to the extent required by
applicable federal securities laws.
SCHEDULE 14D-9. The Merger Agreement provides that, as promptly as
practicable following the filing of the amendment to the Schedule TO, the
Company will file with the SEC an amendment to its Solicitation/Recommendation
Statement on Schedule 14D-9 (together with all amendments and supplements
thereto, the "Schedule 14D-9") with respect to the Offer, which will contain the
recommendation of the Company Board that the stockholders of the Company accept
the Offer and tender their Shares to the Purchaser pursuant to the Offer,
subject to the no solicitation provisions described below. The Company further
agreed to take all steps necessary to cause the amendment to the Schedule 14D-9
to be disseminated to holders of the Shares as and to the extent required by
applicable federal securities laws.
CONSENT SOLICITATION; ANNUAL MEETING. The Merger Agreement provides that,
as promptly as practicable after the date thereof, Steel Partners II and the
Purchaser will terminate the Consent Solicitation and amend their consent
statement filed with the SEC to provide for such termination, and in no event
will Steel Partners II, the Purchaser or any of their affiliates take any action
to replace the members of the Company Board, by stockholder meeting, consent
solicitation or otherwise, other than pursuant to the terms of the Merger
Agreement. However, nothing contained in the Merger Agreement prevents Steel
Partners II, the Purchaser or any of their affiliates from taking any such
action to replace the members of the Company Board at any time following the
earlier of the termination of the Merger Agreement and the time of the first
acceptance for payment of Shares pursuant to the Offer. The Company agreed to
take all required action to postpone its 2007 annual meeting of stockholders
until no earlier than May 10, 2007.
COMPANY BOARD. Immediately upon the purchase of and payment for Shares by
the Purchaser or any of its affiliates pursuant to the Offer following
satisfaction of the Minimum Condition, Steel Partners II will be entitled to
designate such number of directors, rounded up to the next whole number, on the
Company Board as is equal to the product obtained by multiplying the total
number of directors on the Company Board by the percentage that the number of
Shares so purchased and paid for bears to the total number of Shares then
outstanding, but in no event less than a majority of the number of directors. In
furtherance thereof, the Company and the Company Board will, after the purchase
of and payment for Shares by the Purchaser or any of its affiliates pursuant to
the Offer, upon request of the Purchaser, immediately increase the size of the
Company Board, secure the resignations of such number of directors or remove
such number of directors, or any combination of the foregoing, as is necessary
to enable Steel Partners II's designees to be elected to the Company Board and
will cause Steel Partners II's designees to be so elected. In the event that the
Purchaser requests the resignation of directors of the Company pursuant to the
immediately preceding sentence, the Company will cause such directors of the
Company to resign as may be designated by the Purchaser in a writing delivered
to the Company. Immediately upon the first purchase of and payment for Shares by
the Purchaser or any of its affiliates pursuant to the Offer, the Company will,
if requested by Steel Partners II, also cause directors designated by Steel
Partners II to constitute at least the same percentage (rounded up to the next
whole number) of each committee of the Company Board as is on the Company Board.
Notwithstanding the foregoing, if Shares are purchased pursuant to the Offer,
the Company will use its reasonable efforts to assure that there will be until
the effective time of the Merger (the "Effective Time") at least two of the
members of the Company Board who are directors on the date of the Merger
Agreement and are not employees of the Company (each a "Continuing Director").
If at any time prior to the Effective Time, only one Continuing Director is in
office for any reason, the Company Board will be entitled to appoint a person
who is not an officer or employee of the Company or any subsidiary designated by
the remaining Continuing Director to fill such vacancy (and such person shall be
28
deemed to be a Continuing Director for all purposes of the Merger Agreement),
and if at any time prior to the Effective Time no Continuing Directors then
remain, the other directors of the Company then in office will use their
reasonable efforts to designate two persons to fill such vacancies who are not
officers or employees or affiliates of the Company, its subsidiaries, Steel
Partners II, the Purchaser or any of their respective affiliates (and such
persons will be deemed to be Continuing Directors for all purposes of the Merger
Agreement).
The Company will promptly take all actions required pursuant to Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order to
fulfill its obligations under the preceding paragraph, including mailing to
stockholders together with the amendment to the Schedule 14D-9 the information
required by such Section 14(f) and Rule 14f-1 as is necessary to enable Steel
Partners II's designees to be elected to the Company Board. Steel Partners II
and the Purchaser will supply the Company and be solely responsible for any
information with respect to them and their nominees, officers, directors and
affiliates required by such Section 14(f) and Rule 14f-1.
THE MERGER. Upon the terms and subject to the conditions of the Merger
Agreement, the Merger will be consummated in accordance with the Delaware Law.
At the Effective Time, upon the terms and subject to the conditions of the
Merger Agreement, the Purchaser will be merged with and into the Company in
accordance with the Delaware Law, the separate existence of the Purchaser will
cease and the Company, as the surviving corporation in the Merger (the
"Surviving Corporation"), will continue its corporate existence under the laws
of the State of Delaware as a wholly-owned subsidiary of the direct parent of
the Purchaser immediately prior to the Effective Time.
CONVERSION OF SECURITIES. At the Effective Time, by virtue of the Merger
and without any action on the part of the holders of any securities of the
Purchaser or the Company, each issued and outstanding Share (other than Shares
owned by Merger Sub or its direct parent or owned by the Company as treasury
stock, which Shares will be cancelled, and Shares owned by stockholders who
properly exercise their appraisal rights under the Delaware Law) will
automatically be converted into the right to receive the Offer Price in cash,
payable, without interest, to the holder of such Share upon surrender of the
certificate that formerly evidenced such Share. All such Shares, when so
converted, will no longer be outstanding and will automatically be cancelled and
retired and will cease to exist, and each holder of a certificate representing
any such Shares will cease to have any rights with respect thereto, except the
right to receive the Offer Price therefor upon the surrender of such
certificate.
Also at the Effective Time, each issued and outstanding share of common
stock of the Purchaser will be converted into one share of common stock of the
Surviving Corporation.
OPTIONS AND RESTRICTED STOCK. With respect to all outstanding options to
purchase Shares (the "Company Options") granted under the Company's 1990 Stock
Plan and 2000 Stock Incentive Plan (the "Company Option Plans") or otherwise,
whether or not then vested, immediately prior to the consummation of the Offer,
each holder of a Company Option will be entitled to receive from the Company,
and will receive, in settlement of each Company Option a Cash Amount. The "Cash
Amount" will be equal to the net amount of (A) the product of (i) the excess, if
any, of the Offer Price over the exercise price per share of such Company Option
immediately prior to the consummation of the Offer, multiplied by (ii) the
number of shares subject to such Company Option, less (B) any applicable
withholdings for taxes. If the exercise price per share of any Company Option
equals or exceeds the Offer Price, the Cash Amount therefore will be zero.
Notwithstanding the foregoing, payment of the Cash Amount is subject to written
acknowledgement, in a form reasonably acceptable to Steel Partners II,
consenting to the foregoing arrangement and that no further payment is due to
such holder on account of any Company Option and all of such holder's rights
under such Company Options have terminated.
In addition to the Cash Amount, the Company Board has approved the payment
of one-time bonuses to each officer, director and employee of the Company who
owns any unexercised Company Options as of the close of business on March 5,
2007 (the record date for the Dividend), whether or not such Company Options are
currently exercisable or vested. Pursuant to a waiver agreement entered into by
the Company and Mr. Fichthorn, Mr. Fichthorn waived his right to receive this
bonus payment of $0.10 per option held by him.
Immediately prior to the consummation of the Offer, except as otherwise
provided above, all rights under any Company Option and any provision of the
Company Option Plans and any other plan, program or arrangement providing for
29
the issuance or grant of any other interest in respect of the capital stock of
the Company will be cancelled. The Company will use reasonable efforts to ensure
that, immediately prior to, as of and after the consummation of the Offer,
except as otherwise provided above, no person will have any right under the
Company Option Plans or any other plan, program or arrangement with respect to
securities of the Company, the Surviving Corporation or any of their respective
subsidiaries. Prior to the consummation of the Offer, the Company will use
reasonable efforts to cause to be effected any necessary amendments to the
Company Option Plans and any other resolutions, consents or notices, in a form
reasonably acceptable to Steel Partners II, required under any of the Company
Option Plans or any Company Options to give effect to the foregoing provisions.
The Merger Agreement further provides that the Company will take all
actions necessary to cause all shares of restricted stock of the Company to
become fully vested immediately prior to the consummation of the Offer and will
make all required withholdings in connection therewith under applicable tax
laws. These shares of restricted stock may be tendered in the Offer and acquired
by the Purchaser pursuant to the Offer.
CERTIFICATE OF INCORPORATION AND BYLAWS; DIRECTORS AND OFFICERS. Subject
to the provisions on indemnification described below, at and after the Effective
Time, until amended, (i) the Certificate of Incorporation of the Surviving
Corporation will be identical to the Certificate of Incorporation of the
Purchaser in effect at the Effective Time and (ii) the Bylaws of the Surviving
Corporation will be identical to the Bylaws of the Purchaser in effect at the
Effective Time.
At and after the Effective Time, the directors of the Purchaser
immediately prior to the Effective Time will be the directors of the Surviving
Corporation, and the officers of the Purchaser immediately prior to the
Effective Time will be the officers of the Surviving Corporation, except as the
Purchaser otherwise provides in writing, in each case until their successors are
elected or appointed and qualified. If, at the Effective Time, a vacancy exists
on the Board of Directors or in any office of the Surviving Corporation, that
vacancy may thereafter be filled in the manner provided by law.
REPRESENTATIONS AND WARRANTIES. In the Merger Agreement, the Company has
made customary representations and warranties to Steel Partners II and the
Purchaser relating to the following:
o the due organization and good standing of the Company;
o the Company's capitalization;
o the authorization and binding effect of the Merger Agreement and
other transaction documents;
o governmental approvals required to consummate the transactions
contemplated by the Merger Agreement;
o no conflicts with the Company's organizational documents,
material contracts and applicable laws;
o the Company's SEC filings and financial statements;
o absence of material changes in the Company's business;
o absence of undisclosed liabilities;
o permits;
o litigation;
o material contracts;
30
o intellectual property;
o employee benefit plans;
o taxes;
o the Company's financial advisor and fairness opinion received;
o stockholder approval required for the Merger;
o environmental matters;
o Company disclosures in the Offer documents, including the
Schedule 14D-9; and
o the Company's shareholder rights plan.
Steel Partners II and the Purchaser have also made customary
representations and warranties to the Company relating to the following:
o their due organization and good standing;
o the authorization and binding effect of the Merger Agreement and
other transaction documents;
o governmental approvals required to consummate the transactions
contemplated by the Merger Agreement;
o no conflicts with their organizational documents, material
contracts and applicable laws;
o no finders or investment bankers employed;
o their disclosures in the Offer documents;
o their financing for the Offer and the Merger;
o litigation; and
o no prior activities of the Purchaser.
CONDUCT OF BUSINESS OF THE COMPANY. Unless Steel Partners II otherwise
agrees in writing or except as expressly provided by the Merger Agreement,
including the Company's disclosure schedules, during the period from the date of
the Merger Agreement to the Effective Time, the Company has agreed that (i) the
Company and its subsidiaries will conduct their respective businesses in the
ordinary course and consistent with past practice and (ii) the Company will use
its reasonable efforts to preserve intact its business organization, to keep
available the services of its and its subsidiaries' officers and employees, to
maintain satisfactory relationships with all persons with whom it and its
subsidiaries do business, and to preserve the possession, control and condition
of all of its and its subsidiaries' assets. Specifically, except as expressly
provided by the Merger Agreement, including the Company's disclosure schedules,
during the period from the date of the Merger Agreement to the Effective Time,
the Company has agreed that neither the Company nor any of its subsidiaries
will, without the prior written consent of Steel Partners II:
o amend or propose to amend its Certificate of Incorporation or Bylaws
(or comparable governing instruments);
31
o authorize for issuance, issue, grant, sell, pledge or dispose of any
shares of, or any options, warrants, commitments, subscriptions or
rights of any kind to acquire or sell any shares of, its capital
stock or other securities or equity interests or any voting debt,
including any securities convertible into or exchangeable for shares
of stock of any class, except for the issuance of Shares pursuant to
the exercise of stock options outstanding on the date of the Merger
Agreement in accordance with their present terms;
o split, combine or reclassify any shares of its capital stock or
equity interests or declare, pay or set aside any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of its capital stock or equity interests, or
directly or indirectly redeem, purchase or otherwise acquire or
offer to acquire any shares of its capital stock or other securities
or equity interests, other than dividends and distributions to the
Company or one of its wholly-owned subsidiaries and the Dividend;
o (a) create, incur, assume, forgive or make any changes to the terms
or collateral of any debt or receivables, or any employee or officer
loans or advances, except in the ordinary course of business
consistent with past practice or incurrences that constitute a
refinancing of existing obligations on terms that are no less
favorable to the Company than the existing terms; (b) except in the
ordinary course of business consistent with past practice, assume,
guarantee, endorse or otherwise become liable or responsible
(whether directly, indirectly, contingently or otherwise) for the
obligations of any person; (c) except in accordance with its fiscal
year 2007 capital expenditure budget, make any capital expenditures
in excess of $250,000; (d) make any loans, advances or capital
contributions to, or investments in, any other person (other than
customary travel, relocation or business advances to employees); (e)
acquire the stock or assets of, or merge or consolidate with, any
other person; (f) voluntarily incur any material liability or
obligation (absolute, accrued, contingent or otherwise) other than
in the ordinary course of business consistent with past practice; or
(g) sell, transfer, mortgage, pledge, encumber or otherwise dispose
of, or agree to sell, transfer, mortgage, pledge, encumber or
otherwise dispose of, any material assets or properties (real,
personal or mixed, tangible or intangible) other than to secure debt
permitted under clause (a) above or other than in the ordinary
course of business consistent with past practice;
o increase in any manner the wages, salaries, bonus, compensation or
other benefits of any of its officers or employees or enter into,
establish, amend or terminate any employment, consulting, retention,
change in control, collective bargaining, bonus or other incentive
compensation, profit sharing, health or other welfare, stock option
or other equity, pension, retirement, vacation, severance,
termination, deferred compensation or other compensation or benefit
plan, policy, agreement, trust, fund or other arrangement with, for
or in respect of any officer, director, employee, agent, consultant
or affiliate other than as required by applicable law or pursuant to
the terms of agreements in effect on the date of the Merger
Agreement or in the ordinary course of business consistent with past
practice with employees (other than officers) of the Company or any
of its subsidiaries or enter into or engage in any agreement,
arrangement or transaction with any of its directors, officers,
employees or affiliates, except for expense reimbursements, and
current compensation and benefits, in the ordinary course of
business consistent with past practice or as permitted under the
terms of the Merger Agreement;
o (i) commence any litigation or other proceedings with any
governmental authority or other person or (ii) make or rescind any
election relating to taxes except to the extent consistent with
prior practice, settle any material claim, action, suit, litigation,
proceeding, arbitration, investigation, audit or controversy
relating to taxes, file any amended tax return or claim for refund,
change any method of accounting or make any other material change in
its accounting or tax policies, but in each case only if such action
could reasonably be expected to have a material adverse effect on
the Company, and in each case except as required by applicable law
or generally accepted accounting principles;
32
o adopt or amend any resolution or agreement concerning
indemnification of its directors, officers, employees or agents;
o materially modify or amend, or terminate, any material contract, or
waive, release or assign any material rights or claims thereunder,
except, in each case, in the ordinary course of business consistent
with past practice;
o modify, amend or terminate, or waive, release or assign any material
rights or claims with respect to, any confidentiality agreement or
non-competition agreement to which the Company or any of its
subsidiaries is a party;
o establish any subsidiary or enter into any new line of business;
o enter into any lease, contract or agreement pursuant to which the
Company or any of its subsidiaries is obligated to pay or incur
obligations of more than $250,000 per year, other than leases
contemplated in connection with the Company's fiscal year 2007
capital expenditure budget or other leases, contracts or agreements
in the ordinary course of business consistent with past practice;
o permit any material insurance policy naming the Company or any of
its subsidiaries as a beneficiary or a loss payee to be cancelled or
terminated without notice to and consent by Steel Partners II,
unless the Company uses reasonable efforts to maintain substantially
similar insurance coverage as is currently in place;
o revalue any of its assets or make any change in accounting methods,
principles or practices, except as required by generally accepted
accounting principles;
o fail to make in a timely manner any filings with the SEC required
under the Securities Act or the Exchange Act or the rules and
regulations promulgated thereunder;
o discharge any obligations (including accounts payable) other than
intercompany obligations or other obligations discharged on a timely
basis in the ordinary course of business consistent with past
practice;
o close or materially reduce the Company's or any subsidiary's
activities, or effect any material layoff at any of the Company's or
any subsidiary's facilities; or
o authorize any of, or agree to commit to do any of, the foregoing
actions.
SPECIAL MEETING; PROXY STATEMENT. As promptly as practicable after the
Purchaser has purchased sufficient Shares pursuant to the Offer to satisfy the
Minimum Condition, if required by applicable law in order to consummate the
Merger, the Company, acting through the Company Board, has agreed, in accordance
with applicable law, that it will:
o (A) duly call, give notice of, convene and hold a special meeting of
its stockholders (the "Special Meeting") for the purposes of
considering and taking action upon the approval and adoption of the
Merger and the Merger Agreement; (B) subject to the no solicitation
provisions described below, declare advisable and recommend to its
stockholders that they approve the Merger and adopt the Merger
Agreement, and include disclosure regarding the approval of the
Company Board. The Company agrees that its obligation to hold the
Special Meeting will not be affected by the commencement, public
proposal, public disclosure or communication to the Company or any
other person of any Company Takeover Proposal (as such term is
defined below) or the withdrawal or modification by the Company
Board of its approval or recommendation of the Offer, the Merger or
the Merger Agreement; and
33
o prepare and file with the SEC a preliminary proxy or information
statement relating to the Merger and the Merger Agreement and obtain
and furnish the information required to be included by the SEC
therein and, after consultation with Steel Partners II, respond
promptly to any comments made by the SEC with respect to the
preliminary proxy or information statement and cause a definitive
proxy or information statement, including any amendments or
supplements thereto (the "Proxy Statement"), to be mailed to its
stockholders at the earliest practicable date.
Steel Partners II has agreed that it will vote, or cause to be voted, all
of the Shares acquired in the Offer or otherwise then owned by it or the
Purchaser in favor of the approval and adoption of the Merger and the Merger
Agreement.
Notwithstanding the foregoing, the Merger Agreement provides that in the
event that Steel Partners II and the Purchaser acquire that number of Shares
which, together with the Shares they already own, constitute in the aggregate at
least 90% of the outstanding Shares, pursuant to the Offer or otherwise, the
parties to the Merger Agreement will take all necessary and appropriate action
to cause the Merger to become effective as soon as practicable after such
acquisition, without a meeting of stockholders of the Company, in accordance
with the short-form merger provisions of Section 253 of the Delaware Law.
NO SOLICITATION. The Merger Agreement provides that, except as otherwise
provided below, the Company will not, directly or indirectly, and will not,
directly or indirectly, authorize or permit any officer, director, employee,
agent or representative of the Company to, (i) solicit, encourage, initiate or
facilitate the making, submission or announcement of any Company Takeover
Proposal, (ii) furnish any non-public information regarding the Company to any
person (other than Steel Partners II, the Purchaser, any of their respective
affiliates or any of their respective representatives) in connection with or in
response to a Company Takeover Proposal or an inquiry that the Company believes
in good faith could reasonably be expected to lead to a Company Takeover
Proposal, (iii) engage in discussions or negotiations with any person with
respect to any Company Takeover Proposal, except as to the existence of these
provisions, (iv) withdraw or modify, or propose publicly to withdraw or modify,
in a manner adverse to Steel Partners II, the Purchaser or any of their
respective affiliates, the approval or recommendation by the Company Board of
the Offer, the Merger Agreement or the Merger, (v) approve or recommend, or
propose publicly to approve or recommend, any Company Takeover Proposal or (vi)
cause the Company to enter into any letter of intent, agreement in principle,
acquisition agreement or other similar agreement (each, a "Company Acquisition
Agreement") related to any Company Takeover Proposal.
For purposes of the Merger Agreement, "Company Takeover Proposal" means
(other than the transactions contemplated by the Merger Agreement) any inquiry,
proposal or offer from any person relating to (1) any direct or indirect
acquisition or purchase of assets representing 10% or more of the assets of the
Company or any of its subsidiaries, (2) any issuance, sale or other disposition
of (including by way of merger, consolidation, business combination, share
exchange, joint venture or any similar transaction) securities (or options,
rights or warrants to purchase, or securities convertible into or exchangeable
for, such securities) representing 10% or more of the voting power of the
Company, (3) any tender offer, exchange offer or other transaction in which, if
consummated, any person or "group" (as that term is defined under the Exchange
Act) would acquire beneficial ownership (as that term is defined in Rule 13d-3
under the Exchange Act), or the right to acquire beneficial ownership, of 10% or
more of the outstanding voting capital stock of the Company, or (4) any merger,
consolidation, share exchange, business combination, recapitalization,
liquidation or dissolution involving the Company or any of its subsidiaries. In
addition, for purposes of the Merger Agreement, a "Company Superior Offer" means
a Company Takeover Proposal on terms that the Company Board determines, in good
faith, based upon consultations with its outside legal counsel and its financial
advisor, if consummated, are more favorable to the Company's stockholders than
the Merger Agreement, the Offer and the Merger and is reasonably likely to be
consummated, taking into account all legal, financial (including, without
limitation, any financing contingencies) and regulatory aspects of the offer and
the person making the offer.
Notwithstanding the restrictions contained in the first paragraph under
"No Solicitation" above, nothing in the Merger Agreement prohibits or limits (A)
the Company, or the Company Board, prior to the time of the first acceptance of
Shares for payment pursuant to the Offer, from furnishing non-public information
regarding the Company to, or entering into discussions or negotiations with, any
person in response to an unsolicited, bona fide written Company Takeover
Proposal that the Company Board concludes in good faith (after consultation with
its financial advisor) could reasonably be expected to constitute a Company
34
Superior Offer if (1) the Company has not violated any of the restrictions
contained in the first paragraph above in connection with such Company Takeover
Proposal, (2) the Company Board determines in good faith, after consultation
with its outside legal counsel, that such action with respect to such Company
Takeover Proposal is consistent with its fiduciary duties to the stockholders of
the Company under applicable law, (3) the Company receives from such person an
executed confidentiality agreement with provisions not substantially more
favorable to such person than those contained in the Company's confidentiality
agreement with Steel Partners II, and (4) the Company furnishes such non-public
information to such person and to Steel Partners II at substantially the same
time (to the extent such non-public information has not been previously
furnished by the Company to Steel Partners II); or (B) the Company from
complying with Rules l4d-9 and 14e-2 promulgated under the Exchange Act with
regard to any Company Takeover Proposal.
The Merger Agreement obligates the Company to notify Steel Partners II as
promptly as practicable (and in any event within two business days) of the
receipt by the Company, or any of its representatives, of any bona fide
inquiries, proposals or offers, requests for information or requests for
discussions or negotiations relating to any Company Takeover Proposal (including
providing the identity of the person making or submitting such Company Takeover
Proposal or request, and a summary of the material terms and conditions thereof,
if the Company Takeover Proposal or request is not in writing, or a copy of the
Company Takeover Proposal or request and any related draft Company Acquisition
Agreements if it is in writing). The Company must keep Steel Partners II
informed on a current basis of the status of any such discussions or
negotiations and of any modifications to such inquiries, proposals or offers.
The Company agreed that it will not terminate, waive, amend or modify, or
release any person from, any provision of any standstill or confidentiality
agreement to which it is a party and that relates to a Company Takeover
Proposal, and the Company agreed to use reasonable efforts to enforce the
provisions of any such agreement. The Merger Agreement requires the Company to
immediately cease and cause to be terminated any discussions or negotiations
with any parties with respect to any Company Takeover Proposal and to take
reasonable steps to inform its representatives of the obligations undertaken
under these no solicitation provisions.
Notwithstanding anything in the Merger Agreement to the contrary, the
Company Board may, at any time prior to the first acceptance of Shares for
payment pursuant to the Offer (subject to the Company's compliance with the
above no solicitation provisions): (i) withdraw or modify its approval or
recommendation of the Offer, the Merger Agreement or the Merger or (ii) approve
or recommend a Company Superior Offer if, in the case of both clause (i) and
(ii) above: (A) an unsolicited, bona fide written offer is made to the Company
(and not withdrawn) by a third party for a Company Takeover Proposal; (B) the
Company Board determines in good faith, after consultation with its financial
advisor, that such offer constitutes a Company Superior Offer; and (C) following
consultation with outside legal counsel, the Company Board determines in good
faith that the withdrawal or modification of its approval or recommendation of
the Offer, the Merger Agreement or the Merger is consistent with its fiduciary
duties to the stockholders of the Company under applicable law, but only, in the
case of both clause (i) and (ii) above, (x) after providing written notice to
Steel Partners II (a "Notice of Superior Offer") advising Steel Partners II that
the Company Board has received a Company Superior Offer, specifying the material
terms and conditions of such Company Superior Offer (and including with such
notice any draft Company Acquisition Agreement) and identifying the person or
persons making such Company Superior Offer, and (y) if Steel Partners II, or one
of its affiliates, does not, within three business days of its receipt of the
Notice of Superior Offer, make an offer that the Company Board determines in
good faith, after consultation with its financial advisor, to be at least as
favorable to the Company's stockholders as the Company Superior Offer. During
that three business day period, the Company must, and must use reasonable
efforts to cause its financial and legal advisors to, negotiate in good faith
with Steel Partners II and its affiliates (to the extent they wish to negotiate)
to enable Steel Partners II or its affiliate to make such an offer.
INDEMNIFICATION AND INSURANCE. The Merger Agreement requires the
Certificate of Incorporation and Bylaws of the Surviving Corporation to contain
provisions no less favorable with respect to indemnification than are set forth
in the Certificate of Incorporation and Bylaws, respectively, of the Company.
These provisions may not be amended, repealed or otherwise modified for a period
of six years from the Effective Time in any manner that would affect adversely
the rights of individuals who, at or prior to the Effective Time, were
directors, officers, employees, fiduciaries or agents of the Company or any of
its subsidiaries. The Merger Agreement provides that, after the Effective Time,
the Surviving Corporation will, to the fullest extent permitted under applicable
law, indemnify and hold harmless each present and former director and officer of
the Company and each of its subsidiaries (collectively, the "Indemnified
35
Parties") against all costs and expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages, liabilities and settlement amounts
paid in connection with any claim, action, suit, proceeding or investigation
(whether arising before or after the Effective Time), whether civil, criminal,
administrative or investigative, arising out of or pertaining to any action or
omission, in his or her capacity as an officer, director, employee, fiduciary or
agent of the Company or any of its subsidiaries, occurring at or before the
Effective Time, to the same extent as provided in the Certificate of
Incorporation or Bylaws of the Company. In the event of any such claim, action,
suit, proceeding or investigation, (i) the Surviving Corporation will pay the
reasonable fees and expenses of counsel selected by the Indemnified Parties,
which counsel must be reasonably satisfactory to the Surviving Corporation,
promptly after statements therefor are received (provided the applicable
Indemnified Party provides an undertaking to repay all advanced expenses if it
is finally judicially determined that such Indemnified Party is not entitled to
indemnification) and (ii) the Surviving Corporation will cooperate in the
defense of any such matter. However, the Surviving Corporation will not be
liable for any settlement effected without its prior written consent (which
consent may not be unreasonably withheld or delayed). In addition, the Surviving
Corporation will not be obligated to pay the fees and expenses of more than one
counsel (selected by a plurality of the applicable Indemnified Parties) for all
Indemnified Parties in any jurisdiction with respect to any single action except
to the extent that two or more of such Indemnified Parties have conflicting
interests in the outcome of such action. Further, in the event that any claim
for indemnification is asserted or made within such six-year period, all rights
to indemnification in respect of such claim will continue until the disposition
of such claim.
The Merger Agreement also provides that the Company will purchase at or
prior to the consummation of the Offer, and the Surviving Corporation will
maintain in effect, tail policies to the Company's current directors' and
officers' liability insurance, which tail policies (i) will be effective for a
period of six years after the Effective Time with respect to claims arising from
acts or omissions occurring prior to the Effective Time with respect to those
persons who are currently covered by the Company's directors' and officers'
liability insurance and (ii) will contain terms with respect to coverage and
amount no less favorable, in the aggregate, than those of such policy or
policies as in effect on the date of the Merger Agreement. Notwithstanding the
foregoing, if the tail policies described above cannot be obtained or can only
be obtained by paying aggregate premiums in excess of 225% of the aggregate
annual amount currently paid by the Company for such coverage, the Surviving
Corporation will only be required to provide as much coverage as can be obtained
by paying aggregate premiums equal to 225% of the aggregate annual amount
currently paid by the Company for such coverage.
EMPLOYEE MATTERS. The Merger Agreement provides that, from and after the
Effective Time, Steel Partners II will, and will cause the Surviving Corporation
to, honor all Company employee benefit plans in accordance with their terms as
in effect immediately before the consummation of the Offer, but nothing
prohibits Steel Partners II or the Surviving Corporation from amending or
terminating any such Company employee benefit plan in accordance with its terms
at any time or from time to time thereafter.
CONDITIONS TO THE MERGER. The respective obligations of the parties to the
Merger Agreement to effect the Merger are subject to the fulfillment or waiver
at or prior to the Effective Time of the following conditions:
o The requisite approval of the Merger by the Company's stockholders
has been obtained.
o No order, statute, rule, regulation, executive order, stay, decree,
judgment or injunction has been enacted, entered, promulgated or
enforced by any court or other governmental authority since the date
of the Merger Agreement, which prohibits or prevents the
consummation of the Merger and which has not been vacated, dismissed
or withdrawn prior to the Effective Time. The Company and Steel
Partners II will use their reasonable efforts to have any of the
foregoing vacated, dismissed or withdrawn by the Effective Time.
o Steel Partners II, the Purchaser or any affiliate of either of them
has purchased Shares pursuant to the Offer that together with Shares
otherwise owned by Steel Partners II and its affiliates represent at
least the Minimum Condition.
o Any "subsequent offering period" has expired.
36
In addition, the obligations of Steel Partners II and the Purchaser to
effect the Merger are subject to the fulfillment at or prior to the Effective
Time of the condition, which may be waived by Steel Partners II, that all
material consents required in connection with the Merger Agreement or the
transactions contemplated thereby have been obtained and are in full force and
effect.
TERMINATION. The Merger Agreement may be terminated and the Offer, the
Merger and the other transactions contemplated thereby may be abandoned at any
time prior to the time of the first acceptance of Shares for payment pursuant to
the Offer ("First Acceptance Time") as follows:
o by mutual written consent of Steel Partners II and the Company;
o by either Steel Partners II or the Company, if the First Acceptance
Time has not occurred on or before May 15, 2007. However, this right
to terminate the Merger Agreement is not available to any party
whose failure to fulfill any obligation under the Merger Agreement
has been the cause of, or resulted in, the failure of the First
Acceptance Time to occur on or before that date;
o by either Steel Partners II or the Company, if any governmental
authority has enacted, issued, promulgated, enforced or entered any
legally binding injunction, order, decree or ruling (whether
temporary, preliminary or permanent) or taken any other action
(including the failure to have taken an action) which has become
final and non-appealable and has the effect of making consummation
of the Offer or the Merger illegal or otherwise preventing or
prohibiting consummation of the Offer or the Merger;
o by Steel Partners II, if neither Steel Partners II nor the Purchaser
is in material breach of any of its representations, warranties or
covenants under the Merger Agreement, and if (i) any of the
representations or warranties of the Company in the Merger Agreement
become untrue or inaccurate in a manner that would reasonably be
expected to have, individually or in the aggregate, a material
adverse effect on the Company, (ii) there has been a material breach
on the part of the Company of any of its covenants or agreements in
the Merger Agreement and such breach (if curable) has not been cured
within 20 days after written notice to the Company or (iii) the
Company has breached in any material respect any of the no
solicitation provisions of the Merger Agreement;
o by the Company, if the Company is not in material breach of any of
its representations, warranties or covenants under the Merger
Agreement, and if (i) any of the representations or warranties of
Steel Partners II or the Purchaser in the Merger Agreement become
untrue or inaccurate in a manner that would reasonably be expected
to have a material adverse effect on the ability of Steel Partners
II or the Purchaser to consummate the transactions contemplated by
the Merger Agreement, or (ii) either Steel Partners II or the
Purchaser has failed to perform in any material respect its
obligations or to comply in any material respect with its agreements
or covenants to be performed or complied with by it under the Merger
Agreement, and such breach (if curable) has not been cured within 20
days after written notice to Steel Partners II;
o by Steel Partners II, if the Company Board has (i) withdrawn or
modified, in a manner adverse to Steel Partners II, the Purchaser or
any of their respective affiliates, its approval or recommendation
of the Offer, the Merger Agreement or the Merger or (ii) recommended
or approved, or proposed publicly to recommend or approve, any
Company Takeover Proposal or any Company Acquisition Agreement
relating to any Company Takeover Proposal or (iii) resolved to do
any of the foregoing; or
o by the Company, if the Company Board has withdrawn or modified in a
manner adverse to Steel Partners II, the Purchaser or any of their
respective affiliates its approval or recommendation of the Offer,
the Merger Agreement or the Merger in compliance with the no
solicitation provisions of the Merger Agreement. Concurrently with
such termination, the Company must pay to Steel Partners II the
Company Termination Fee and the Termination Expenses (as such terms
are defined below).
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In the event of the termination of the Merger Agreement in accordance with
the foregoing terms, the Merger Agreement will become void, and there will be no
liability under the Merger Agreement on the part of any party thereto (except
that specified sections of the Merger Agreement will survive any such
termination), but nothing will relieve any party from liability for any breach
of any of its representations, warranties, covenants or agreements set forth in
the Merger Agreement prior to such termination.
FEES AND EXPENSES. The Merger Agreement states that, except as otherwise
provided below, all expenses incurred in connection with the Merger Agreement
and the transactions contemplated thereby will be paid by the party incurring
such expenses, whether or not the Offer, the Merger or any other related
transaction is consummated.
However, if the Merger Agreement is terminated:
o by Steel Partners II or the Company because the First Acceptance
Time has not occurred by May 15, 2007, if (A) at any time prior to
such termination a Company Takeover Proposal has been publicly
announced or has been made or submitted to the Company and (B)
concurrently with such termination or within 12 months after the
termination date the Company or any of its subsidiaries enters into
a definitive agreement with respect to, or consummates, any Company
Takeover Proposal, then the Company will pay Steel Partners II the
Company Termination Fee and the Termination Expenses;
o by Steel Partners II as a result of a material breach of the
Company's representations, warranties or covenants, then (A) the
Company will pay Steel Partners II the Termination Expenses and (B)
if, concurrently with such termination or within 12 months after the
termination date the Company or any of its subsidiaries enters into
a definitive agreement with respect to, or consummates, any Company
Takeover Proposal, then the Company will also pay Steel Partners II
the Company Termination Fee;
o by Steel Partners II because the Company Board has withdrawn or
modified its approval or recommendation of the Offer, the Merger
Agreement or the Merger or recommended or approved any Company
Takeover Proposal, then the Company will pay Steel Partners II the
Company Termination Fee and the Termination Expenses; or
o by the Company because the Company Board has withdrawn or modified
its approval or recommendation of the Offer, the Merger Agreement or
the Merger , then the Company will pay Steel Partners II the Company
Termination Fee and the Termination Expenses concurrently with such
termination.
For purposes of the Merger Agreement, (i) "Company Termination Fee" means
an amount equal to $3,500,000 and (ii) "Termination Expenses" means an amount,
not to exceed $1,000,000, equal to the reasonably documented expenses of Steel
Partners II, the Purchaser and their respective affiliates. For purposes of the
above fee and expense provisions, a "Company Takeover Proposal" has the meaning
set forth under "No Solicitation" above, except that references to "10%" in such
definition are replaced by "50%", although the sale, in whatever form (whether
by merger, consolidation, stock or asset sale, joint venture or otherwise), of
all or a material part of any segment of the Company will be deemed to
constitute a "Company Takeover Proposal".
In the event that the Company fails to pay the Company Termination Fee or
any Termination Expenses when due, the Company will reimburse Steel Partners II,
in addition to the Termination Expenses and not subject to any cap or limit, for
all reasonable costs and expenses actually incurred or accrued by Steel Partners
II (including reasonable fees and expenses of counsel) in connection with the
collection of these amounts. Notwithstanding anything to the contrary in the
Merger Agreement, if the Merger Agreement is terminated under any of the
circumstances as a result of which Steel Partners II is entitled to receive
payment of the Company Termination Fee and/or Termination Expenses, Steel
Partners II's right to receive payment of the Company Termination Fee and/or
38
Termination Expenses will be the exclusive remedy of Steel Partners II and the
Purchaser for the loss suffered as a result of any such termination of the
Merger Agreement, and upon payment of the Company Termination Fee and/or
Termination Expenses, the Company will have no further liability or obligation
relating to or arising out of the Merger Agreement (with limited exceptions) if
the Merger Agreement is terminated under any of such circumstances.
CONSENT OF CONTINUING DIRECTORS TO TERMINATION, AMENDMENTS OR WAIVERS.
Following the election of Steel Partners II's designees to the Company Board
after the consummation of the Offer and prior to the Effective Time, (i) any
amendment or termination of the Merger Agreement by the Company, (ii) any
extension or waiver by the Company of the time for the performance of any of the
obligations or other acts of Steel Partners II or the Purchaser under the Merger
Agreement, or (iii) any waiver of any of the Company's rights thereunder or any
other action that could adversely effect in any material respect the rights of
the Company's stockholders thereunder will, in any such case, require the
concurrence of a majority of the directors of the Company then in office who
neither were designated by Steel Partners II nor are employees of the Company.
ASSIGNMENT. The Merger Agreement allows Steel Partners II to assign any or
all of its rights or delegate any or all of its obligations thereunder, and also
permits Steel Partners II to transfer, sell or otherwise dispose of all or any
part of its interest in the Purchaser, to any of its affiliates without the
Company's prior written consent. The Company may not assign or delegate any of
its rights or obligations under the Merger Agreement without Steel Partners II's
prior written consent.
TENDER AND SUPPORT AGREEMENT
The following is a summary of certain provisions of the Tender and Support
Agreement. This summary is qualified in its entirety by reference to the Tender
and Support Agreement, which is incorporated herein by reference and a copy of
which is filed as an exhibit to the amendment to the Tender Offer Statement on
Schedule TO that Steel Partners II and the Purchaser filed with the SEC on
February 23, 2007. The Tender and Support Agreement may be examined and copies
may be obtained in the manner set forth in Section 8 under "Additional
Information."
All of the members of the Company Board and all of the Company's senior
executive officers have entered into the Tender and Support Agreement, under
which they have agreed to tender all of their Shares, whether now owned or
hereafter acquired ("Subject Shares"), pursuant to the Offer, and not to
withdraw any of their Subject Shares from the Offer unless the Tender and
Support Agreement has been terminated under the circumstances described below.
The directors and executive officers who have entered into the Tender and
Support Agreement are: Luke E. Fichthorn, III, Chairman of the Board and Chief
Executive Officer; Kenneth L. Bayne, Vice President and Chief Financial Officer;
Larry D. Smith, Vice President, Administration; Lawrence C. Maingot, Corporate
Controller; and Gerald L. DeGood, Charles T. Foley, James A. Wolf and William F.
Yelverton, directors of the Company (each, a "Securityholder"). Together, as of
the date of this Offer to Purchase, these Securityholders own, beneficially or
of record, 659,125 Shares (excluding stock options), representing approximately
9.0% of the Company's outstanding Shares.
The Tender and Support Agreement further provides that, at every meeting
of the stockholders of the Company called, and at every adjournment or
postponement thereof, each Securityholder will, or will cause the holder of
record on any applicable record date to, vote his Subject Shares (to the extent
that any of such Securityholder's Subject Shares are not purchased in the Offer)
(i) in favor of the adoption of the Merger Agreement and the transactions
contemplated thereby, (ii) against (A) any agreement or Company action regarding
any Company Takeover Proposal, (B) any liquidation, dissolution,
recapitalization, extraordinary dividend or other significant corporate
reorganization of the Company or any of its subsidiaries, (C) any agreement or
Company action that would result in a breach of any covenant, representation or
warranty or any other obligation or agreement of the Company under the Merger
Agreement or (D) any agreement or Company action that would reasonably be
expected to prevent, impede, interfere with or delay the transactions
contemplated by the Merger Agreement or that would reasonably be expected to
dilute the benefits to Steel Partners II and its affiliates of the transactions
contemplated by the Merger Agreement and (iii) in favor of any other matter
necessary for consummation of the transactions contemplated by the Merger
Agreement, which is considered at any such meeting of stockholders. By entering
into the Tender and Support Agreement, each Securityholder thereby granted to
Steel Partners II an irrevocable proxy to vote his Subject Shares in the manner
provided above. This irrevocable proxy will be revoked automatically upon the
termination of the Tender and Support Agreement in accordance with its terms.
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Except as otherwise provided under the Tender and Support Agreement or
under the Merger Agreement, each Securityholder agreed not to, directly or
indirectly, (i) transfer (which term includes any sale, assignment, gift,
pledge, hypothecation or other disposition), or consent to or permit any such
transfer of, any or all of his Subject Shares, or any interest therein, or
create or permit to exist any lien on any of his Subject Shares, (ii) enter into
any contract, agreement, arrangement or understanding with respect to any
transfer of his Subject Shares or any interest therein, (iii) grant or permit
the grant of any proxy, power of attorney or other authorization in or with
respect to his Subject Shares, (iv) deposit or permit the deposit of his Subject
Shares into a voting trust or enter into a voting agreement or arrangement with
respect to his Subject Shares or (v) take or permit any other action that would
in any way restrict, limit or interfere with the performance of his obligations
under the Tender and Support Agreement or the transactions contemplated thereby
or otherwise make any of his representations or warranties therein untrue or
incorrect.
Each Securityholder agreed to comply with the no solicitation provisions
under the Merger Agreement. However, nothing in the Tender and Support Agreement
in any way restricts any officer or director of the Company in the exercise of
his or her fiduciary duties as an officer or director of the Company.
Each Securityholder also agreed not to exercise any appraisal rights or
dissenter's rights in respect of his Subject Shares which may arise with respect
to the Merger.
The Tender and Support Agreement will terminate automatically, without any
notice or other action by any person, upon the earlier of (i) the termination of
the Merger Agreement in accordance with its terms and (ii) the Effective Time.
14. DIVIDENDS AND DISTRIBUTIONS. The Merger Agreement provides that,
during the period from the date of the Merger Agreement to the effective time of
the Merger, neither the Company nor any of its subsidiaries will, without the
prior written consent of Steel Partners II, split, combine or reclassify any
shares of its capital stock or equity interests or declare, pay or set aside any
dividend or other distribution (whether in cash, stock or property or any
combination thereof) in respect of its capital stock or equity interests, or
directly or indirectly redeem, purchase or otherwise acquire or offer to acquire
any shares of its capital stock or other securities or equity interests, other
than dividends and distributions to the Company or one of its wholly-owned
subsidiaries and the Dividend.
If you validly tender your Shares in accordance with the procedures
described in this Offer to Purchase, you will still retain ownership of your
Shares until such time as the Offer is successfully consummated and we accept
the Shares for payment. Accordingly, even if you tender your Shares pursuant to
the Offer prior to the Company's March 5, 2007 Dividend record date, you will
remain entitled to receive the Dividend, for total cash proceeds of $13.60 per
Share pursuant to the Offer and the Dividend.
15. CONDITIONS OF THE OFFER. The Offer is conditioned upon, among other
things, there being validly tendered and not withdrawn before the Expiration
Date a number of Shares which, together with the Shares then owned by Steel
Partners II, the Purchaser and their affiliates, represents at least a majority
of the total number of Shares outstanding on a fully diluted basis (the "Minimum
Condition").
Notwithstanding any other provision of the Offer, we will not be required
to accept for payment or, subject to any applicable rules and regulations of the
SEC, including Rule 14e-1(c) promulgated under the Exchange Act (relating to our
obligation to pay for or return tendered Shares promptly after termination or
withdrawal of the Offer), pay for any Shares tendered pursuant to the Offer if
(i) the Minimum Condition has not been satisfied at any scheduled expiration
date of the Offer or (ii) immediately prior to the expiration of the Offer, any
of the following conditions exists:
(a) there has been entered, enforced, instituted or issued by any
governmental authority any legally binding judgment, order, temporary
restraining order, temporary or permanent injunction, ruling, proceeding,
action, suit, charge or decree which: (i) makes illegal, prevents, restrains or
prohibits the making of the Offer, the acceptance for payment of, or payment
40
for, any Shares by Steel Partners II, the Purchaser or any other affiliate of
Steel Partners II, or the consummation of the Merger or any of the other
transactions contemplated by the Merger Agreement; (ii) prohibits or limits the
ownership or operation by the Company, Steel Partners II or any of their
respective subsidiaries or affiliates of all or a material portion of the
business or assets of the Company, Steel Partners II or any of their respective
subsidiaries or affiliates; (iii) imposes limitations on the ability of Steel
Partners II, the Purchaser or any other affiliate of Steel Partners II to
exercise full rights of ownership of any Shares, including, without limitation,
the right to vote any Shares acquired pursuant to the Offer or otherwise on all
matters presented to the Company's stockholders, including, without limitation,
the approval and adoption of the Merger Agreement and the Merger; (iv) would
reasonably be expected to require divestiture by Steel Partners II, the
Purchaser or any other affiliate of Steel Partners II of any Shares; or (v)
otherwise would reasonably be expected to have, individually or in the
aggregate, a material adverse effect on the Company or on the ability of Steel
Partners II or the Purchaser to consummate the transactions contemplated by the
Merger Agreement;
(b) there has been any statute, law, rule, regulation, order, injunction,
judgment or decree enacted, enforced, promulgated or issued by any governmental
authority, or deemed by any governmental authority applicable to (i) Steel
Partners II, the Company or any subsidiary or affiliate of Steel Partners II or
the Company or (ii) any transaction contemplated by the Merger Agreement, which
is reasonably likely to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (v) of paragraph (a) above;
(c) there has occurred any changes, conditions, events or developments
that would have, or be reasonably likely to have, individually or in the
aggregate, a material adverse effect on the Company;
(d) there has occurred (i) any general suspension of, or limitation on
prices for, trading in securities on the New York Stock Exchange, other than a
shortening of trading hours or any coordinated trading halt triggered solely as
a result of a specified increase or decrease in a market index, (ii) a
declaration of a banking moratorium or any suspension of payments in respect of
banks in the United States, or (iii) any limitation (whether or not mandatory)
on the extension of credit by banks or other lending institutions in the United
States or a disruption of or material adverse change in either the syndication
market for credit facilities or the financial, banking or capital markets;
(e) the Company Board has (i) withdrawn or modified, in a manner adverse
to Steel Partners II, the Purchaser or any of their respective affiliates, its
approval or recommendation of the Offer, the Merger Agreement or the Merger,
(ii) approved or recommended, or proposed publicly to approve or recommend, any
Company Takeover Proposal or any Company Acquisition Agreement relating to any
Company Takeover Proposal or (iii) resolved to do any of the foregoing;
(f) the representations and warranties of the Company (i) set forth in the
Merger Agreement (other than the representations as to the Company's
capitalization and its authorization of the Merger Agreement) shall not be true
and correct, and the failure of those representations and warranties to be so
true and correct (without giving effect to any limitation as to "materiality" or
"material adverse effect" set forth therein) would be reasonably expected to
have, individually or in the aggregate, a material adverse effect on the Company
and (ii) as to the Company's capitalization and its authorization of the Merger
Agreement shall not be true and correct, in each case on the date of the Merger
Agreement and as of the expiration of the Offer, as if made at and as of that
date (except to the extent expressly made as of an earlier date, in which case
as of that earlier date) (it being understood that, for purposes of determining
the accuracy of such representations and warranties, any update of or
modification to the Company's disclosure schedules made or purported to have
been made after the date of the Merger Agreement will be disregarded);
(g) the Company has failed to perform in any material respect its
obligations or to comply in any material respect with its agreements or
covenants to be performed or complied with by it under the Merger Agreement;
(h) the Merger Agreement has been terminated in accordance with its terms;
(i) there has been instituted or is pending any stockholder derivative
litigation or stockholder class action litigation against the Company, any of
its subsidiaries or its executive officers or directors, which, after taking
into account any then existing director and officer insurance coverage, would
reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the Company;
41
(j) the applicable waiting period, if any, under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), has not expired
or been terminated. On August 7, 2006, the waiting period under the HSR Act
relating to the Offer expired. Accordingly, this condition to the Offer has been
satisfied;
(k) all material consents required in connection with the Merger Agreement
or the transactions contemplated thereby (other than any consent related to the
Company's secured credit facility with Bank of America, N.A.) have not been
obtained or are not in full force and effect, and the failure to so obtain or
have in effect such consents could reasonably be expected to have, in the
aggregate, a material adverse effect on the Company; or
(l) the Company has not filed with the SEC its Annual Report on Form 10-K
for the fiscal year ended December 31, 2006.
The foregoing conditions are for the sole benefit of Steel Partners II and
the Purchaser and may be asserted by Steel Partners II or the Purchaser
regardless of the circumstances giving rise to any such condition or may be
waived by Steel Partners II or the Purchaser in whole or in part at any time and
from time to time in their reasonable discretion. The failure by Steel Partners
II or the Purchaser at any time to exercise any of the foregoing rights will not
be deemed a waiver of any such right; the waiver of any such right with respect
to particular facts and other circumstances will not be deemed a waiver with
respect to any other facts and circumstances; and each such right will be deemed
an ongoing right that may be asserted at any time and from time to time.
16. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
GENERAL. Based on our examination of publicly available information filed
by the Company with the SEC and other publicly available information concerning
the Company, other than under the HSR Act, we are not aware of any governmental
license or regulatory permit that appears to be material to the Company's
business that might be adversely affected by our acquisition of Shares pursuant
to the Offer or, except as set forth below, of any approval or other action by
any government or governmental administrative or regulatory authority or agency,
domestic or foreign, that would be required for our acquisition or ownership of
Shares pursuant to the Offer. Should any such approval or other action be
required or desirable, we currently contemplate that, except as described below
under "State Takeover Statutes", such approval or other action will be sought.
There can be no assurance that any such approval or other action, if needed,
would be obtained (with or without substantial conditions) or that if such
approvals were not obtained or such other actions were not taken adverse
consequences might not result to the Company's business or certain parts of the
Company's business might not have to be disposed of, any of which could cause a
failure of a condition to the Offer, which could cause us to elect to terminate
the Offer without the purchase of Shares thereunder. Our obligation under the
Offer to accept for payment and pay for Shares is subject to the conditions set
forth in "The Offer--Section 15".
ANTITRUST. Under the HSR Act and the rules and regulations that have been
issued by the Federal Trade Commission (the "FTC"), certain acquisition
transactions may not be consummated until certain information and documentary
material has been furnished for review by the Antitrust Division and the FTC and
certain waiting period requirements have been satisfied. The acquisition of
Shares pursuant to the Offer is subject to these requirements. In connection
with the Original Offer, we filed a Premerger Notification and Report Form with
the Antitrust Division and the FTC.
Under the HSR Act, the purchase of Shares in the Offer may not be
completed until the expiration of a 15-calendar-day waiting period following the
filing by the Purchaser of the Premerger Notification and Report Form with the
FTC and Antitrust Division, unless the waiting period is earlier terminated by
the FTC and the Antitrust Division or we receive a Request for Additional
Information and Documentary Material from the Antitrust Division or the FTC
prior to that time. If either the FTC or the Antitrust Division were to issue a
Request for Additional Information and Documentary Material to us, the waiting
period with respect to the Offer would expire at 11:59 p.m., Eastern time, on
the tenth calendar day after the date of our substantial compliance with that
request. Thereafter, the waiting period could be extended only by court order or
with our consent. The additional 10-calendar-day waiting period may be
terminated sooner by the FTC and the Antitrust Division. Although the Company is
required to file certain information and documentary material with the Antitrust
Division and the FTC in connection with the Offer, neither the Company's failure
to make those filings nor the issuance to the Company by the FTC or the
Antitrust Division of a Request for Additional Information and Documentary
Material will extend the waiting period with respect to the Offer.
42
The Antitrust Division and the FTC frequently scrutinize the legality
under the antitrust laws of transactions, such as our acquisition of Shares in
the Offer and the Merger. At any time before or after our purchase of Shares,
the Antitrust Division or the FTC could take such action under the antitrust
laws that either deems necessary or desirable in the public interest, including
seeking to enjoin the purchase of Shares in the Offer, the divestiture of Shares
purchased pursuant to the Offer or the divestiture of substantial assets of the
Company or any of its subsidiaries.
State antitrust authorities and attorneys general, as well as private
parties, in certain circumstances may bring legal action under the antitrust
laws seeking to enjoin the Offer or to impose conditions on the Offer.
On August 7, 2006, the waiting period under the HSR Act relating to the
Offer expired. Accordingly, the condition to the Offer relating to the
expiration of the waiting period under the HSR Act has been satisfied.
STATE TAKEOVER STATUTES. A number of states have adopted laws which
purport, to varying degrees, to apply to attempts to acquire corporations that
are incorporated in, or which have substantial assets, stockholders, principal
executive offices or principal places of business or whose business operations
otherwise have substantial economic effects in, such states. The Company,
directly or through subsidiaries, conducts business in a number of states
throughout the United States, some of which have enacted such laws. Except as
described herein, we do not know whether any of these laws will, by their terms,
apply to the Offer or the Merger, and we have not complied with any such laws.
To the extent that certain provisions of these laws purport to apply to the
Offer or the Merger, we believe that there are reasonable bases for contesting
such laws.
If any government official or third party seeks to apply any state
takeover law to the Offer or the Merger, we will take such action as then
appears desirable, which action may include challenging the applicability or
validity of such statute in appropriate court proceedings. If it is asserted
that one or more state takeover statutes is applicable to the Offer or the
Merger and an appropriate court does not determine that it is inapplicable or
invalid as applied to the Offer or the Merger, we might be required to file
certain information with, or to receive approvals from, the relevant state
authorities or holders of Shares, and we may be unable to accept for payment or
pay for Shares tendered pursuant to the Offer, or be delayed in continuing or
consummating the Offer or the Merger. In such case, we may not be obligated to
accept for payment or pay for any tendered Shares. See "The Offer--Section 15".
Under the Merger Agreement, the Company has agreed that, if any state
takeover statute becomes applicable to the transactions contemplated by the
Merger Agreement, the Company and the members of the Company Board will grant
such approvals and take such actions as are necessary so that the transactions
contemplated by the Merger Agreement may be consummated as promptly as
practicable on the terms and conditions contemplated thereby and otherwise act
to eliminate the effect of any takeover statute on any of the transactions
contemplated by the Merger Agreement.
17. FEES AND EXPENSES. We have retained MacKenzie Partners, Inc. to act
as the Information Agent and American Stock Transfer & Trust Company to act as
the Depositary in connection with the Offer. The Information Agent may contact
holders of Shares by mail, telephone, telex, telegraph and personal interviews
and may request brokers, dealers, banks, trust companies and other nominees to
forward materials relating to the Offer to beneficial owners. The Information
Agent and the Depositary each will receive reasonable and customary compensation
for their respective services, will be reimbursed for certain reasonable
out-of-pocket expenses and will be indemnified against certain liabilities in
connection therewith, including certain liabilities under the U.S. federal
securities laws.
We will not pay any fees or commissions to any broker or dealer or any
other person (other than the Information Agent and the Depositary) for
soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, banks,
trust companies and other nominees will, upon request, be reimbursed by us for
reasonable and necessary costs and expenses incurred by them in forwarding
materials to their customers.
43
18. MISCELLANEOUS. The Offer is not being made to, nor will tenders be
accepted from or on behalf of, holders of Shares in any jurisdiction in which
the making of the Offer or acceptance thereof would not be in compliance with
the laws of such jurisdiction. However, we may, in our sole discretion, take
such action as we may deem necessary to make the Offer in any such jurisdiction
and extend the Offer to holders of Shares in such jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of Steel Partners II or the Purchaser not contained in
this Offer to Purchase or in the Letter of Transmittal and, if given or made,
such information or representation must not be relied upon as having been
authorized.
We have filed with the SEC a Tender Offer Statement on Schedule TO, as
amended, together with exhibits, pursuant to Rule 14d-3 under the Exchange Act,
furnishing certain additional information with respect to the Offer. The
Schedule TO and any amendments thereto, including exhibits, may be examined and
copies may be obtained from the offices of the SEC in the manner described in
"The Offer--Section 8" of this Offer to Purchase.
BZ ACQUISITION CORP.
March 2, 2007
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE STEEL ENTITIES AND THE PURCHASER
Warren G. Lichtenstein is the sole executive officer and director of the
Steel Entities and the Purchaser.
The current principal occupation or employment and material occupations,
positions, offices or employment for the past five years of Mr. Lichtenstein are
set forth below. The business address of Mr. Lichtenstein is care of Steel
Partners II, L.P., 590 Madison Avenue, New York, New York 10022. Except as
provided in the Offer to Purchase, Mr. Lichtenstein has not, during the past
five years, (i) been convicted in a criminal proceeding or (ii) been a party to
any judicial or administrative proceeding that resulted in a judgment, decree or
final order enjoining him from future violations of, or prohibiting activities
subject to, U.S. federal or state securities laws, or a finding of any violation
of U.S. federal or state securities laws. Mr. Lichtenstein is a citizen of the
United States.
Current Principal Occupation or
Name Age Employment and Five-year Employment History
- ---- --- --------------------------------------------------
Warren G. Lichtenstein 41 Mr. Lichtenstein co-founded Steel Partners II,
L.P. in 1993. He has been Managing Member of
Steel Partners, L.L.C., which has been the
general partner of Steel Partners II, L.P., since
January 1, 1996. He has served as the President,
Chief Executive Officer and a director of Steel
Partners, Ltd., a management and advisory company
that provides management services to Steel
Partners II, L.P. and its affiliates, since June
1999. He is also a Co-Founder of Steel Partners
Japan Strategic Fund, a private investment
partnership investing in Japan, and Steel
Partners China Access Fund I LP, a private equity
partnership investing in China. Mr. Lichtenstein
has been a director (currently Chairman of the
Board) of United Industrial Corporation, a
company principally focused on the design,
production and support of defense systems, since
May 2001. Mr. Lichtenstein has been a director
(currently Chairman of the Board) of SL
Industries, Inc., a designer and manufacturer of
power electronics, power motion equipment, power
protection equipment, and teleprotection and
specialized communication equipment, since
January 2002 and served as Chief Executive
Officer from February 2002 to August 2005. He
has served as Chairman of the Board of WHX
Corporation, a holding company, since July 2005.
Mr. Lichtenstein has been a director of KT&G
Corporation, South Korea's largest tobacco
company, since March 2006. Mr. Lichtenstein was
a director of Layne Christensen Company, a
provider of products and services for the water,
mineral, construction and energy markets, from
January 2004 to October 2006. He served as a
director of WebFinancial Corporation, a consumer
and commercial lender, from 1996 to June 2005, as
Chairman and Chief Executive Officer from
December 1997 to June 2005 and as President from
December 1997 to December 2003. Prior to the
formation of Steel Partners II, L.P. in 1993, Mr.
Lichtenstein co-founded Steel Partners, L.P., an
investment partnership, in 1990 and co-managed
its business and operations. From 1988 to 1990,
Mr. Lichtenstein was an acquisition/arbitrage
analyst with Ballantrae Partners, L.P., which
invested in risk arbitrage, special situations,
and undervalued companies. From 1987 to 1988, he
was an analyst at Para Partners, L.P., a
partnership that invested in arbitrage and
related situations. Mr. Lichtenstein has
previously served as a director of the following
companies: Alpha Technologies Group, Inc., Aydin
Corporation (Chairman), BKF Capital Group Inc.,
CPX Corp. (f/k/a CellPro, Incorporated), ECC
International Corporation, Gateway Industries,
Inc., Layne Christensen Company, PLM
International, Inc. Puroflow Incorporated,
Saratoga Beverage Group, Inc., Synercom
S-1
Technology, Inc., TAB Products Co., Tech-Sym
Corporation, U.S. Diagnostic Labs, Inc. and
Tandycrafts Inc. Mr. Lichtenstein graduated from
the University of Pennsylvania with a B.A. in
Economics.
S-2
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal and certificates for Shares and any other required documents
should be sent to the Depositary at one of the addresses set forth below:
The Depositary for the Offer is:
AST
American Stock Transfer
& Trust Company
BY MAIL OR OVERNIGHT BY HAND:
COURIER:
BY FACSIMILE:
American Stock Transfer & (FOR ELIGIBLE INSTITUTIONS American Stock Transfer
Trust Company ONLY) & Trust Company
Operations Center (718) 234-5001 Attn: Reorganization
Attn: Reorganization Department
Department CONFIRM FACSIMILE 59 Maiden Lane
6201 15th Avenue TRANSMISSION: Concourse Level
Brooklyn, NY 11219 (BY TELEPHONE ONLY) New York, NY 10038
Toll Free: (877) 248-6417
If you have questions or need additional copies of this Offer to Purchase
and the Letter of Transmittal, you can call the Information Agent at its address
and telephone numbers set forth below. You may also contact your broker, dealer,
bank, trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
MacKenzie Partners, Inc.
105 Madison Avenue
New York, New York
(212) 929-5500 (call collect)
or
Call Toll-Free (800) 322-2885
bairnco@mackenziepartners.com
