As filed with the Securities and Exchange Commission on August 2, 2000
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 14D-9
(RULE 14D-101)
SOLICITATION/RECOMMENDATION STATEMENT UNDER
SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
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CHEMFAB CORPORATION
(Name of Subject Company)
CHEMFAB CORPORATION
(Name of Person(s) Filing Statement)
COMMON STOCK, $0.10 PAR VALUE PER SHARE
(Title of Class of Securities)
16361L102
(CUSIP Number of Common Stock, $0.10 Par Value)
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JOHN W. VERBICKY
President and Chief Executive Officer
Chemfab Corporation
701 Daniel Webster Highway
P.O. Box 1137
Merrimack, New Hampshire 03054
(603) 424-9000
(Name, Address and telephone numbers of person authorized to receive
notices and communications on behalf of the persons filing statement)
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with a copy to:
JOHN R. UTZSCHNEIDER, ESQ.
Bingham Dana LLP
150 Federal Street
Boston, Massachusetts 02110
(617) 951-8000
[_] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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This Solicitation/Recommendation Statement on Schedule 14D-9 relates to an
offer to purchase all of the outstanding shares of common stock of Chemfab
Corporation.
ITEM 1. Subject Company Information
(a) Name and address.
The name of the subject company is Chemfab Corporation, a Delaware
corporation (the "Company"). The address of the principal executive office of
the Company is 701 Daniel Webster Highway, P.O. Box 1137, Merrimack, NH 03054.
The telephone number of the Company's principal executive office is (603) 424-
9000.
(b) Securities.
The title of the class of equity securities that is the subject of this
Solicitation/Recommendation Statement on Schedule 14D-9 (this "Statement") is
the common stock, par value $0.10 per share (the "Common Stock") of the
Company. As of the July 25, 2000, there were 7,463,357 shares of Common Stock
outstanding and 1,596,085 shares of Common Stock reserved for issuance upon the
exercise of outstanding stock options.
ITEM 2. Identity and Background of Filing Person
(a) Name and address.
The name and address of the Company, which is the person filing this
Statement, are set forth in Item 1(a) of this Statement.
(b) Tender Offer.
This Statement relates to the tender offer described in the Tender Offer
Statement on Schedule TO, dated August 2, 2000 (as amended or supplemented, the
"Schedule TO"), by PPLC Acquisition Corp., a Delaware corporation ("Purchaser")
and an indirect wholly-owned subsidiary of Norton Company, a Massachusetts
corporation ("Parent"), an indirect wholly-owned subsidiary of Compagnie de
Saint-Gobain, a French corporation ("Saint-Gobain") to purchase all outstanding
shares (the "Shares") of the Common Stock at a price of $18.25 per share (the
"Offer Price"), net to the seller in cash, without interest, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated August 2,
2000 (the "Offer to Purchase"), and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, constitute the "Offer"),
copies of which are filed as Exhibits (a)(1) and (a)(2), respectively, to the
Schedule TO. The principal executive offices of Purchaser, as set forth in the
Schedule TO, are located at 150 Dey Road, Wayne, NJ 07470, and the principal
executive offices of Parent, as set forth in the Schedule TO, are located at
One New Bond Street, Worcester, MA 01615. The principal executive offices of
Saint-Gobain, as set forth in the Schedule TO, are located at Les Miroirs, 18
avenue d' Alsace, 92400 Courbevoie, France (Postal Address: Les Miroirs, 92096
Paris Le Defense Cedex).
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of July 25, 2000 (the "Merger Agreement"), by and among the Company,
Purchaser and Parent, a copy of which is filed as Exhibit (d)(1) to the
Schedule TO and is incorporated herein by this reference. Pursuant to the
Merger Agreement, following the completion of the Offer and satisfaction or
waiver of certain conditions specified in the Merger Agreement, Purchaser will
be merged with and into the Company (the "Merger"), with the Company as the
surviving corporation in the Merger and an indirect wholly-owed subsidiary of
Parent (the "Surviving Corporation"). In the Merger, each Share issued and
outstanding immediately prior to the Merger (other than Shares (1) owned by the
Company, (2) owned by Parent, Purchaser or their subsidiaries, or (3) owned by
stockholders of the Company, if any, who are entitled to and properly exercise
dissenters' rights under the Delaware General Corporation Law (the "DGCL"))
will be converted into the right to receive, in cash, the Offer Price of $18.25
per share or any higher price paid per Share in the Offer.
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ITEM 3. Past Contacts, Transactions, Negotiations and Agreements
(a) Conflicts of Interest.
Except as described below, to the knowledge of the Company, as of the date
hereof, no material agreement, arrangement or understanding or actual or
potential conflict of interest exists between the Company or its affiliates and
(i) the Company's executive officers, directors or affiliates or (ii) Saint-
Gobain, Parent and Purchaser or their respective executive officers, directors
or affiliates.
Treatment of Options. The Merger Agreement provides that at the effective
time of the Merger, each option to purchase shares of Common Stock pursuant to
employee or other stock option plans of the Company, including options held by
executive officers and directors of the Company, which has not otherwise been
exercised as of that date, will become 100% vested and immediately exercisable,
and each holder of such an option will receive a cash payment in an amount
equal to the excess, if any, of the Offer Price over the per share exercise
price of such option, multiplied by the number of shares of Common Stock
covered by such option.
Bonus Plan. In December 1999 (and amended in April 2000), in connection with
the Company's Board of Directors' (the "Board") consideration of a possible
sale or merger of the Company, the Board adopted a Bonus Pool for certain
members of senior management. Under the terms of the Bonus Pool, the amount of
the Bonus Pool will be an amount equal to (i) 1% of the Total Equity Value
(defined as the total amount of consideration received by the Company's
stockholders and option holders as a result of any transaction) up to $100.0
million plus (ii) 3% of the Total Equity Value in excess of $100.0 million.
With respect to the Merger, it is anticipated that the Total Equity Value will
be $141.6 million and that, as a result, the Bonus Pool would be an amount
equal to (i) 1% of $100.0 million plus (ii) 3% of $41.6 million, or $1.25
million. Under the terms of the Bonus Pool, 30% of the Bonus Pool is to be
allocated to John W. Verbicky, President and Chief Executive Officer of the
Company, and the remaining 70% of the Bonus Pool is to be allocated to
participants designated by Mr. Verbicky and approved by the Compensation
Committee of the Board. The Compensation Committee has designated the following
executive officers of the Company as participants in the Bonus Pool at the
percentages indicated below:
. Hilary Arwine--Controller (5%)
. Michael Cushman, Vice President--Americas Business Group (15%)
. Dennis Filger, Vice President--Corporate Business Development and
Technology (5%)
. Eric Kevorkian, General Manger--European Business Group (5%)
. Moosa E. Moosa, Vice President--Mergers and Acquisitions (15%)
. Thomas Platt, Vice President--General Counsel and Administration (5%)
. Lawrence E. Richard, Interim Chief Financial Officer and Treasurer (10%)
. Charles Tilgner, Vice President and Director--U.S. Operations and
Engineering (10%)
Employment Agreements. As disclosed in the Company's Proxy Statement for its
1999 Annual Meeting, which has been filed with the Securities and Exchange
Commission (the "SEC") pursuant to the Securities Exchange Act of 1934, as
amended, and which is incorporated herein by this reference, the Company has
previously entered into employment agreements with certain of its executive
officers, including Mr. Verbicky, providing for the payment of compensation to
such executive officers following a termination of employment.
(b) Agreements with Purchaser.
The Merger Agreement. As noted in Item 2 of this Statement, the Company,
Parent and Purchaser have executed the Merger Agreement. The summary of the
Merger Agreement contained in the Offer to Purchase, which has been filed with
the SEC as Exhibit 1 to the Schedule TO, is incorporated herein by reference.
This
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summary should be read in its entirety. A copy of the Merger Agreement has been
filed as Exhibit (d)(1) to the Schedule TO thereto and is incorporated herein
by reference. The Merger Agreement should be read in its entirety for a more
complete description of its terms and provisions.
Voting Agreement. Purchaser and each director and certain executive officers
of the Company have executed a Voting Agreement, dated July 25, 2000 (the
"Voting Agreement"), pursuant to which each individual agreed to, among other
things:
. tender his shares of Common Stock in the Offer;
. vote in favor of the Merger (if a stockholder vote is required);
. vote against any other merger transaction that the Company may enter
into;
. refrain from selling his shares of Common Stock; and
. not take action to facilitate a merger transaction between the Company
and any party other than Parent and Purchaser.
The Voting Agreement does not limit or restrict any stockholder's ability to
act or vote in his capacity as an officer or director of the Company in any
manner he so chooses.
The summary of the Voting Agreement contained in the Offer to Purchase,
which has been filed with the SEC as Exhibit 1 to the Schedule TO, is
incorporated herein by reference. A copy of the Voting Agreement has been filed
as Exhibit (d)(2) to the Schedule TO thereto and is incorporated herein by
reference. The Voting Agreement should be read in its entirety for a more
complete description of its terms and provisions.
The Confidentiality Agreements. On February 2, 2000 and March 14, 2000, the
Company and Saint-Gobain Performance Plastics Corporation, a subsidiary of
Parent, entered into two separate confidentiality agreements regarding certain
information to be disclosed to Saint-Gobain Performance Plastics Corporation
concerning the Company (the "Confidentiality Agreements"). Copies of the
Confidentiality Agreements have been filed as Exhibits (d)(3) and (d)(4),
respectively, to the Schedule TO thereto and are incorporated herein by
reference. Pursuant to the March 14, 2000 Confidentiality Agreement (which
amended and restated the February 2, 2000 Confidentiality Agreement), Saint-
Gobain Performance Plastics Corporation agreed to, among other things:
. keep confidential all nonpublic, confidential or proprietary information
of the Company, subject to certain exceptions, and to use the
confidential information for no purpose other than evaluating a possible
business combination with the Company;
. until May 14, 2002, subject to certain exceptions, directly or indirectly
solicit or encourage any employee of the Company with whom it has had
contact in the course of its evaluation of a possible transaction to
leave the employ of the Company;
. until May 14, 2002, employ any person who was, as of March 14, 2000 a
member of the Company's "Senior Leadership Team;"
. in any manner acquire, directly or indirectly, any securities or property
of the Company;
. except at the specific written request of the Company, propose to enter
into, directly or indirectly, any merger or business combination
involving the Company,
. solicit any proxies, participate in groups or otherwise act, alone or in
concert with others, to seek to control or influence the management,
Board of Directors or policies of the Company, or
. enter into any contract, arrangement or understanding with any person
with respect to any securities of the Company, including but not limited
to any joint venture, loan or option agreement, put or call, guarantee of
loans, guarantee of profits or division of losses or profits.
The summary of the Confidentiality Agreements contained in the Offer to
Purchase, which has been filed with the SEC as Exhibit (a)(1) to the Schedule
TO, is incorporated herein by reference.
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ITEM 4. The Solicitation or Recommendation
(a) Recommendation of Board of Directors.
The Board, at a regularly-scheduled meeting held on July 25, 2000,
unanimously (i) approved the Merger Agreement and the transactions contemplated
by that agreement, including the Offer and the Merger, (ii) determined that the
Merger Agreement and the transactions contemplated by that agreement, including
the Offer and the Merger, are advisable, fair to and in the best interests of
the Company and its stockholders, and (iii) resolved to recommend that the
Company's stockholders accept the Offer and tender their Shares to Purchaser in
accordance with the terms of the Offer and approve and adopt the Merger
Agreement and the Merger.
Background
During the third calendar quarter of 1999, the Company was approached by a
third party regarding that third party's interest in engaging in a possible
business combination with the Company. The third party did not specify any
particular terms or structure of any potential business combination, however.
In connection with evaluating this unsolicited indication of interest, in
December 1999, the Board engaged Tanner & Co., Inc. ("Tanner") to act as its
financial advisor to evaluate all strategic alternatives available to the
Company, including engaging in further discussions with that third party. The
Board determined to pursue these discussions with such third party and
authorized Tanner to act on the Company's behalf for purposes of further
exploring this indication of interest. Tanner and the financial advisor to the
third party met to discuss a possible business combination transaction and
management of the Company made a presentation to the third party. Following
this presentation, the third party informed the Company that it was not in a
position to move forward with any transaction. Neither the Company nor Tanner
ever received a formal bid regarding any transaction from this third party.
Following these discussions, after exploring with Tanner all of the
alternatives available to the Company, including remaining an independent
company, divesting non-core businesses, undertaking significant joint ventures
or acquisitions or selling the Company, the Board determined that a potential
sale of the Company was the alternative that would most likely allow the
Company to satisfy the objectives of increasing shareholder value and providing
liquidity to all of the Company's stockholders.
Following the Board's decision to explore a potential sale of the Company,
Tanner recommended (and the Board adopted) a multi-step process in order to
solicit potential bids. The first step would be a broad marketing effort
designed to attract as wide and competitive a field of interested parties as
possible. The second step would be to seek more specific proposals from a
smaller group of interested parties. As the third step, the Company would enter
into exclusive negotiations concerning a definitive agreement with the party
whose bid would be most likely to provide the best value for the Company's
stockholders.
As part of this process, Tanner contacted, on the Company's behalf, over
fifteen parties, including strategic buyers and financial companies, regarding
a possible acquisition of the Company. The Company, with Tanner's assistance,
also prepared a confidential information memorandum for distribution to those
potential buyers who had indicated interest in a possible transaction and who
agreed to execute a confidentiality agreement with the Company. Of the parties
contacted by Tanner, approximately nine expressed interest in reviewing the
confidential information memorandum. Of those parties, those who expressed
further interest in exploring a possible acquisition of the Company conducted
due diligence of the Company and its operations. As described below, one of
those parties who received the confidential information memorandum and
conducted due diligence was Parent.
Hearing about the Company's sale process from Lazard Freres & Co. LLC, who
were contacted by Tanner on behalf of the Company, representatives of Parent
contacted Tanner. On February 2, 2000 and March 14, 2000, the Company and a
subsidiary of the Parent entered into the Confidentiality Agreements. Based
upon the information contained in the confidential evaluation material, on
April 5, 2000, Parent and its affiliates
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submitted a preliminary indication of interest regarding an acquisition of the
Company, which contemplated an offer price in the range of $18 to $24 per Share
in cash.
On May 8, 2000, representatives of Parent attended a management presentation
held by the Company in New York City. Also on May 8 and again on May 9, 2000,
representatives from Parent and Davis Polk & Wardwell ("Davis Polk"), counsel
to Parent, conducted due diligence at a data room established by the Company.
Following this initial due diligence through the execution of the Merger
Agreement, Parent and its advisors conducted further due diligence with respect
to the Company and were in contact with the Company and its advisors in
relation to this diligence.
On May 25, 2000, Messrs. Philipe Crouzet, Robert Ayotte, Ged Walsh, Kenneth
Sidman and Steven Parker, all of Parent, Mr. Moosa Moosa, Vice President--
Mergers and Acquisitions of the Company, and Mr. Michael Stanfield of Tanner,
visited the Company's Merrimack, New Hampshire and North Bennington, Vermont
plants. On May 31, 2000, Messrs. Ayotte, and Joseph Grewe and Ms. Joanne Moon,
all representatives of Parent and its affiliates, visited the Company's Gary,
Indiana plant, at which Messrs. Moosa and Stanfield were also present.
On June 6, 2000, Messrs. Ayotte, Walsh, Parker and Sidman visited the
Company's Kilrush, Ireland plant with Messrs. Moosa and Stanfield.
On June 9, 2000, Parent received a bid solicitation, including a draft
agreement and plan of merger, from Tanner.
On June 30, 2000, Parent and its affiliates submitted a proposal to acquire
the Company at a price per share of $17.50 in cash, together with a proposed
mark-up of the draft merger agreement. Parent advised the Company that the
price per share contained in its proposal was at the bottom-end of the range
originally proposed by Parent on April 5, 2000 as a result of revised earnings
projections prepared by the Company and delivered to Parent subsequent to the
April 5th proposal. The June 30th proposal was subject to various conditions,
including additional environmental due diligence, receipt by Parent of
previously requested due diligence items, the unanimous recommendation by the
Board, receipt of all U.S. and foreign antitrust approvals and clearance under
Exon-Florio and execution of a mutually acceptable definitive agreement. In
addition, Parent indicated to the Company that it would proceed with the
acquisition of the Company only if the Company's directors and certain of its
executive officers executed an agreement pursuant to which, among other things,
such persons would agree to tender their Shares into the Offer and, in their
capacities as stockholders, vote in favor of the Merger.
On July 5, 2000, the Board met to discuss the proposal submitted by Parent.
At the meeting, Mr. Verbicky and representatives of Tanner reviewed for the
Board their discussions with Parent and the terms of the proposal. The Board
also requested that the Company's legal advisors, Bingham Dana LLP, review the
proposed mark-up of the draft merger agreement submitted by Parent and the
Board's legal responsibilities in considering the proposal. The Board also was
presented information by Tanner evaluating the proposal, reviewing the trading
performance of the Company's stock and its prospects for the future. Tanner
also reviewed with the Board the results of the multi-step process which had
resulted in the Parent bid. The Board authorized Tanner to continue discussions
with Parent to see if a higher price could be obtained.
On July 6, 2000, representatives of Tanner telephoned Parent to advise them
of the Board's reaction to Parent's proposal. Tanner informed Parent that the
Board was interested in pursuing the transaction, and agreed that it would be
prepared to recommend such a transaction to its stockholders if Parent could
offer a higher price per share.
During the period from July 5, 2000 to July 7, 2000, representatives of
Tanner and Parent spoke several times regarding the proposal. On July 7, 2000,
representatives of Parent indicated their willingness to offer $18.00 per Share
and Tanner, on behalf of the Company, informed Parent that, based on Parent's
proposal and
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the discussions that had taken place up to that date, the Company was willing
to proceed toward further negotiations regarding price and execution of a
definitive agreement and plan of merger. From July 7, 2000 to July 14, 2000,
representatives of Parent and the Company continued to negotiate the terms of
the transaction.
On July 14, 2000, counsel to the Company distributed a revised draft of the
Merger Agreement. On July 18, 2000, counsel to the Company distributed draft
disclosure schedules.
During the period from July 14, 2000 through July 24, 2000, representatives
of Parent and the Company continued to negotiate and revise the draft agreement
and plan of merger and terms of the transaction. The principal issues discussed
among the parties during these negotiations included the purchase price, the
nature and extent of the Company's representations and warranties, the
conditions to the Offer, the parties' respective rights to terminate the
agreement, the amount of the termination payments that would be required of the
Company and the circumstances under which such termination payments would
become payable, and Parent's commitments with respect to the Company's benefit
plans for Company employees. In the course of these negotiations, in response
to the Company's request to increase the offer price, Parent and its affiliates
increased the offer price to $18.25 per Share. During this negotiation period,
representatives of Parent conducted additional environmental due diligence on
seven of the Company's properties.
On July 25, 2000, at a regularly-scheduled meeting, the Board unanimously
(i) approved the Merger Agreement and the transactions contemplated by that
agreement, including the Offer and the Merger, (ii) determined that the Merger
Agreement and the transactions contemplated by that agreement, including the
Offer and the Merger, are advisable, fair to and in the best interests of the
Company and its stockholders and (iii) resolved to recommend that the Company's
stockholders accept the Offer and tender their Shares to Purchaser in
accordance with the terms of the Offer and approve and adopt the Merger
Agreement and the Merger.
On July 25, 2000, Parent, Purchaser and the Company executed the Merger
Agreement. Saint-Gobain issued a press release in France and Parent and the
Company issued a joint press release in the United States, both announcing the
signing of the Merger Agreement.
(b) Reasons.
A letter to stockholders communicating the Board's recommendation and a
press release announcing the signing of the Merger Agreement are filed as
Exhibits 1 and 2 to this Statement, respectively, and are incorporated herein
by reference. In considering the Offer and determining to recommend its
acceptance, the Board in several meetings analyzed the present and potential
value of the Common Stock, the terms of the Offer and its fairness from a
financial point of view. The Board decided to recommend acceptance of the Offer
based on a number of factors, including, without limitation, the following:
. the terms and conditions of the Offer and the Merger Agreement;
. the belief of the Board that the Offer and the Merger represent a more
desirable alternative than continuing to operate the Company as a public
company. In particular, the Board believed that the Common Stock had
become a relatively illiquid security, adversely affecting its trading
price. In this regard, the Board noted the limited trading volume of the
Common Stock on the New York Stock Exchange, as evidenced by its average
monthly trading volume. In addition, the Board believed that continuing
to operate the Company as a public company entailed significant costs
which could hinder the execution of the Company's business strategy;
. information with respect to the financial condition, results of
operations and business of the Company, on both a historical and a
prospective basis, current industry, economic and market conditions and
trends, and the Board's belief, on the basis of such information, that
the price to be paid in the Offer and the Merger fairly reflects the
Company's prospects and the risks and uncertainties as well as the
opportunities involved in the Company's current business environment;
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. the Board believed that the Offer and the Merger was the best offer
reasonably available to the Company's stockholders. The Board believed
that there were no other prospective buyers that both had the financial
ability to complete a strategic transaction and would be willing to pay
an aggregate consideration greater than that to be paid by Parent in the
Offer and the Merger. The Board took into account the difficulties the
Company had in generating interest in the Company with respect to a
potential business combination, taking into account the multi-step
process pursuant to which the Company and its financial advisors
solicited the interest of over 15 prospective buyers;
. the relationship of the Offer Price to the recent historical trading
prices of Common Stock and the fact that the Offer Price represents a
significant premium to such trading prices. In particular, the Board
considered the fact that the Offer Price represents a premium of
approximately 80% to the closing sale price of $10.25 for a share of
Common Stock as reported by the New York Stock Exchange on July 24, 2000,
the trading day immediately preceding the date on which the Board
approved the Merger Agreement;
. the oral opinion of Tanner & Co., Inc., the Company's financial advisors,
delivered to the Board, which was confirmed by its written opinion to the
Board, dated as of July 25, 2000, to the effect that, based upon and
subject to certain factors and assumptions stated therein, as of such
date, the Offer Price was fair from a financial point of view to the
stockholders of the Company;
. the financial ability and willingness of Parent to consummate the Offer
and the Merger. In particular, the Board considered the fact that Parent
would not be required to obtain any equity or debt financing in
connection with the Offer and the Merger; and
. the fact that while the Merger Agreement prohibits the Company from
soliciting other takeover proposals, the Company may, subject to the
satisfaction of certain conditions, furnish information concerning the
Company to a third party and may engage in discussions or negotiations
with a third party regarding certain takeover proposals. The Board also
considered the fact that the Company could terminate the Merger Agreement
following receipt of an offer to engage in a more favorable transaction
with a third party. The Board considered the termination fee that would
be payable to Parent in such circumstances and concluded that the fee was
reasonable and necessary to induce Parent to enter into the Merger
Agreement.
The foregoing includes the material factors considered by the Board. In view
of its many considerations, the Board did not find it practicable to, and did
not, quantify or otherwise assign relative weights to the specific factors
considered. After weighing all of these considerations, the Board unanimously
determined to approve the Merger Agreement and recommend to the Company's
stockholders that they tender their Shares in the Offer.
(c) Intent to tender.
To the best knowledge of the Company, each executive officer and director of
the Company who owns shares of Common Stock intends to tender his shares to
Purchaser in accordance with the terms of the Offer. As described above in Item
3, each of the Company's directors and certain of its executive officers has
entered into a Voting Agreement, pursuant to which each agreed to tender to
Purchaser in the Offer any shares of Common Stock held by those persons.
ITEM 5. Person/Assets, Retained, Employed, Compensated or Used
On December 1, 1999, the Company entered into a letter agreement with Tanner
& Co., Inc. pursuant to which the Company retained Tanner to act as its
financial advisor in connection with a possible sale of the Company and, if
requested, to render an opinion as to the fairness, from a financial point of
view, of the consideration payable to the stockholders of the Company in
connection with any transaction. On January 3, 2000, the Company paid Tanner a
fee of $75,000. In addition, pursuant to the terms of the letter agreement, in
the event that the Company completed a sale transaction in which the Company
conducted significant
8
discussions regarding a sale transaction with more than one potential buyer, as
was the case prior to the announcement of the Offer and the Merger, the Company
agreed to pay Tanner a fee equal to 1.00% of the aggregate consideration (which
shall include 50% of the principal amount of any indebtedness for borrowed
money existing on the Company's balance sheet at the time of the transaction,
provided that such amount of indebtedness shall not be less than $11 million)
paid to the Company's stockholders in the sale transaction. The Company has
also agreed to reimburse Tanner for reasonable out-of-pocket expenses,
including fees and disbursements of counsel and to indemnify Tanner against
certain liabilities arising out of or in connection with its engagement.
Neither the Company nor any person acting on its behalf has retained any
other person to make solicitations or recommendations to stockholders with
respect to the Offer.
ITEM 6. Interest in Securities of the Subject Company
To the best of the Company's knowledge, except with respect to the execution
and delivery of the Voting Agreement, there were no transactions by any
executive officer, director, affiliate or subsidiary of the Company in shares
of Common Stock during the past sixty (60) days.
ITEM 7. Purposes of the Transaction and Plans or Proposals
Except as described in this Statement, the Company is not currently
undertaking or engaged in any negotiations in response to the Offer that relate
to:
. a tender offer or other acquisition of the Company's securities by the
Company or any other person;
. an extraordinary transaction, such as a merger, reorganization or
liquidation, involving the Company or any subsidiary of the Company;
. a purchase, sale or transfer of a material amount of assets of the
Company or any subsidiary of the Company; or
. any material change in the present dividend policy, indebtedness or
capitalization of the Company.
ITEM 8. Additional Information
A description of certain regulatory approvals required in connection with
the Offer and the Merger is contained in Section 16 "Certain Legal Matters;
Regulatory Approvals" of the Offer to Purchase which is attached as Exhibit
(a)(1) to the Schedule TO and is incorporated herein by this reference. A brief
summary of certain of these approvals is set forth below.
(a) Regulatory--United States Antitrust Compliance.
Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules that have been promulgated thereunder by the Federal Trade
Commission, types of acquisition transactions identified in the Act and the
rules may not be consummated unless information about the transaction and the
parties has been provided to the Antitrust Division of the Department of
Justice and the FTC, and the waiting period requirements have been satisfied.
The proposed purchase of the shares of Common Stock in the Offer is subject to
these requirements. A description of these rules is contained in Section 16
"Certain Legal Matters; Regulatory Approvals" of the Offer to Purchase which is
attached as Exhibit (a)(1) to the Schedule TO and is incorporated herein by
this reference.
Regulatory--Foreign Antitrust Compliance.
The Offer and the Merger are also subject to compliance with antitrust and
competition laws of various foreign jurisdictions in which Parent and its
affiliates and the Company and its subsidiaries do business. A description of
these laws and their applicability to the Offer and the Merger is contained in
Section 16 "Certain Legal Matters; Regulatory Approvals" of the Offer to
Purchase which is attached as Exhibit (a)(1) to the Schedule TO and is
incorporated herein by this reference.
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(b) Short-Form Merger.
Section 253 of the DGCL provides that, if a parent corporation owns at least
90% of the then outstanding shares of each class of a subsidiary corporation,
the merger into the subsidiary corporation of the parent corporation may be
effected by a plan of merger adopted by the board of directors of the parent
corporation and the appropriate filings with the Delaware Secretary of State.
Under Delaware law, if Purchaser acquires at least 90% of the outstanding
shares of Common Stock, Purchaser will be able to effect the Merger without a
vote of the other stockholders of the Company.
(c) Dissenters' Rights.
Under Delaware law dissenters' rights are not available to Company
stockholders in connection with the Offer. However, the Merger Agreement and
Delaware law provide that, if the Merger is consummated, holders of Common
Stock will have the right to dissent and demand fair value of their shares.
Dissenting stockholders who comply with the applicable statutory procedures
will be entitled to receive a judicial determination of the fair value of their
shares of Common Stock and to receive payment of such fair value in cash. Any
such judicial determination of the fair value of shares of Common Stock could
be based upon considerations other than, or in addition to, the Offer Price.
Stockholders should recognize that the value so determined could be higher or
lower than the price per share of Common Stock paid in the Offer and the
Merger. Stockholders who wish to exercise dissenters' rights in connection with
the Merger need not take any action at this time. If the Offer is consummated,
the Company will distribute to the remaining stockholders additional
information on the procedures to be followed to perfect their dissenters'
rights.
ITEM 9. Exhibits
1. Form of Letter to Stockholders of Chemfab Corporation, dated of August 2,
2000 (Included as Exhibit 1 hereto).
2. Text of Joint Press Release of Chemfab Corporation and Norton Company,
dated July 25, 2000 (Previously filed with the Securities and Exchange
Commission on July 26, 2000 as Exhibit 1 to Schedule 14D-9).
3. Agreement and Plan of Merger, dated as of July 25, 2000, by and among
Chemfab Corporation, Norton Company and PPLC Acquisition Corp (Filed as
Exhibit (d)(1) to Schedule TO filed by Norton Company and PPLC Acquisition
Corp. with the Securities and Exchange Commission on August 2, 2000 and
incorporated herein by this reference).
4. Voting Agreement, dated as of July 25, 2000 by and among PPLC Acquisition
Corp. and each of the stockholders listed thereto (Filed as Exhibit (d)(2)
to Schedule TO filed by Norton Company and PPLC Acquisition Corp. with the
Securities and Exchange Commission on August 2, 2000 and incorporated
herein by this reference).
5. Confidentiality Agreements, dated as of February 2, 2000 and March 14,
2000, respectively, by and between Tanner & Co., Inc., on behalf of Chemfab
Corporation, and Saint-Gobain Performance Plastics Corporation (Filed as
Exhibits (d)(3) and (d)(4), respectively, to Schedule TO filed by Norton
Company and PPLC Acquisition Corp. with the Securities and Exchange
Commission on August 2, 2000 and incorporated herein by this reference).
6. Opinion of Tanner & Co., Inc. (included as Exhibit 2 hereto).
7. Offer to Purchase, dated as of August 2, 2000 (Filed as Exhibit (a)(1) to
Schedule TO filed by Norton Company and PPLC Acquisition Corp. with the
Securities and Exchange Commission on August 2, 2000 and incorporated
herein by this reference).
8. Letter of Transmittal (Filed as Exhibit (a)(2) to Schedule TO filed by
Norton Company and PPLC Acquisition Corp. with the Securities and Exchange
Commission on August 2, 2000 and incorporated herein by this reference).
9. Information Statement of Chemfab Corporation, dated August 2, 2000
(included as Exhibit 3 hereto).
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10. Third Amended and Restated Chemfab Corporation 1991 Stock Option Plan
(Filed as Exhibit 10(a)(15) to Chemfab Corporation's Annual Report on Form
10-K for the year ended June 30, 1998, and incorporated herein by this
reference).
11. Forms of Stock Option Agreements under 1991 Stock Option Plan, for
Officers, Directors, Director Consultants, and Non-Officer Employees (Filed
as Exhibit 10(a)(16) to Chemfab Corporation's Quarterly Report on Form 10-Q
for the quarter ended December 28, 1997, and incorporated herein by this
reference).
12. Employment Agreement with Dr. John W. Verbicky dated August 5, 1997 (Filed
as Exhibit 10(a)(14) to Chemfab Corporation's Quarterly Report on Form 10-Q
for the quarter ended September 28, 1997 and incorporated herein by this
reference).
13. Letter Agreement with Mr. Moosa E. Moosa dated June 25, 1996 (Filed as
Exhibit 10(a)(11) to Chemfab Corporation's Annual Report on Form 10-K for
the year ended June 30, 1997 and incorporated herein by this reference).
14. Letter Agreement with Mr. Thomas C. Platt III dated June 26, 1997 (Filed as
Exhibit 10(a)(13) to Chemfab Corporation's Quarterly Report on Form 10-Q
for the quarter ended September 28, 1997 and incorporated herein by this
reference).
15. Letter Agreement with Dr. Dennis L. Filger, dated February 15, 1999 filed
as Exhibit 10(a)(10) to Chemfab Corporation's Annual Report on Form 10-K
for the year ended June 30, 1998 and incorporated herein by this
reference).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
CHEMFAB CORPORATION
Date: August 2, 2000
By: /s/ John W. Verbicky
Name: John W. Verbicky
Title: President and Chief
Executive Officer
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