Exhibit (a)(1)(A)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Preferred Stock Purchase Rights)
of
KLLM Transport Services, Inc.
at
$7.75 Net Per Share
by
Low Acquisition, Inc.
a corporation wholly owned
by
Robert E. Low
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON TUESDAY, MAY 9, 2000, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS: (I) THERE BEING VALIDLY
TENDERED PRIOR TO THE EXPIRATION OF THE OFFER AND NOT WITHDRAWN A NUMBER OF
SHARES OF COMMON STOCK, PAR VALUE $1.00 PER SHARE (THE "COMMON STOCK")
(INCLUDING THE ASSOCIATED RIGHTS (THE "RIGHTS") TO PURCHASE PREFERRED STOCK)
(COLLECTIVELY, THE "SHARES") OF KLLM TRANSPORT SERVICES, INC. (THE "COMPANY")
WHICH, TOGETHER WITH THE SHARES BENEFICIALLY OWNED BY ROBERT E. LOW ("PARENT")
AND LOW ACQUISITION, INC. ("PURCHASER"), WILL CONSTITUTE AT LEAST A MAJORITY
OF THE OUTSTANDING SHARES ON A FULLY DILUTED BASIS (AS DEFINED HEREIN) AS OF
THE DATE THE SHARES ARE ACCEPTED FOR PAYMENT PURSUANT TO THE OFFER (THE
"MINIMUM TENDER CONDITION"); (II) THE RIGHTS HAVING BEEN REDEEMED BY THE
COMPANY'S BOARD OF DIRECTORS OR PURCHASER OTHERWISE BEING SATISFIED IN ITS
SOLE DISCRETION THAT SUCH RIGHTS ARE OTHERWISE INVALID OR INAPPLICABLE TO THE
TRANSACTIONS CONTEMPLATED HEREIN (THE "RIGHTS CONDITION"); (III) THE
ACQUISITION OF SHARES PURSUANT TO THE OFFER BEING APPROVED PURSUANT TO SECTION
203 OF THE DELAWARE GENERAL CORPORATION LAW OR PURCHASER BEING SATISFIED IN
ITS SOLE DISCRETION THAT THE PROVISIONS OF SECTION 203 RESTRICTING CERTAIN
BUSINESS COMBINATIONS ARE INVALID OR INAPPLICABLE TO THE ACQUISITION OF SHARES
PURSUANT TO THE OFFER AND THE PROPOSED MERGER (BY ACTION OF THE COMPANY'S
BOARD OF DIRECTORS, THE ACQUISITION OF A SUFFICIENT NUMBER OF SHARES OR
OTHERWISE) (THE "SECTION 203 CONDITION"); AND (IV) ANY WAITING PERIOD UNDER
THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE
REGULATIONS THEREUNDER (THE "HSR ACT") HAVING EXPIRED OR BEEN TERMINATED (THE
"ANTITRUST CONDITION"). THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS
DESCRIBED IN SECTION 13 HEREIN.
THE OFFER IS NOT CONDITIONED UPON PARENT OR PURCHASER OBTAINING FINANCING.
A SUMMARY OF THE PRINCIPAL TERMS OF AND OTHER IMPORTANT INFORMATION
REGARDING THE OFFER APPEARS ON PAGES 2 THROUGH 5. YOU SHOULD READ THIS ENTIRE
DOCUMENT CAREFULLY BEFORE DECIDING WHETHER TO TENDER YOUR SHARES.
THE DATE OF THIS OFFER TO PURCHASE IS APRIL 12, 2000.
TABLE OF CONTENTS
Page
----
SUMMARY TERM SHEET........................................................ 2
INTRODUCTION.............................................................. 6
THE TENDER OFFER
1. Terms of the Offer.................................................. 8
2. Acceptance for Payment and Payment for Shares....................... 9
3. Procedure for Tendering Shares...................................... 10
4. Rights of Withdrawal................................................ 14
5. Material Federal Income Tax Consequences of the Offer............... 15
6. Price Range of Shares; Dividends.................................... 16
7. Effect of the Offer on the Market for Shares; Stock Quotation;
Margin Regulations; Exchange Act Registration......................... 16
8. Certain Information Concerning the Company.......................... 17
9. Certain Information Concerning Purchaser and Parent................. 19
10. Background of the Offer; Contacts with the Company.................. 20
11. Purpose of the Offer; Plans for the Company; The Proposed Merger.... 24
12. Source and Amount of Funds.......................................... 28
13. Certain Conditions of the Offer..................................... 28
14. Dividends and Distributions......................................... 31
15. Certain Legal Matters............................................... 32
16. Fees and Expenses................................................... 34
17. Miscellaneous....................................................... 34
SCHEDULES
Schedule I Information Concerning the Directors and Executive Officers 35
of Purchaser................................................
Schedule II Transactions Effected During the Past Two Years............. 36
SUMMARY TERM SHEET
This summary term sheet is a brief summary of the material provisions of Low
Acquisition, Inc.'s offer to purchase all of the issued and outstanding shares
of common stock of KLLM for $7.75 per share in cash, and is meant to help you
understand the offer. 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 information contained in this summary is qualified in its entirety by the
fuller descriptions and explanations contained in the later pages of this Offer
to Purchase. You are urged to carefully read the entire Offer to Purchase and
related Letter of Transmittal prior to making any decision regarding your
shares of KLLM.
Q. WHO IS OFFERING TO PURCHASE MY SHARES OF COMMON STOCK OF KLLM?
A. We are a Delaware corporation named Low Acquisition, Inc. formed solely to
make the offer on behalf of Robert E. Low, an individual residing in
Springfield, Missouri, and are offering to purchase your KLLM shares. We are
wholly owned by Mr. Low, See "Introduction" and Section 9.
Q. WHAT IS MR. LOW, THROUGH LOW ACQUISITION, SEEKING TO PURCHASE, AT WHAT
PRICE, AND DO I HAVE TO PAY ANY BROKERAGE OR SIMILAR FEES TO TENDER?
A. We are offering to purchase all of the outstanding shares of common stock of
KLLM, at a price of $7.75 per share, net to the seller in cash, without
interest. If you are the record owner of your shares, you will not have to
pay any brokerage or similar fees. However, if you own your shares through a
broker or other
2
nominee, your broker or nominee may charge you a fee to tender. You should
consult your broker or nominee to determine whether any charges will apply.
See "Introduction." In addition, if you do not complete and sign the
Substitute Form W-9 included in the Letter of Transmittal, you may be
subject to required backup federal income tax withholding. See
"Introduction" and Instruction 10 to the Letter of Transmittal.
Q. WHY ARE YOU MAKING THIS OFFER?
A. We are making this offer to enable Mr. Low to acquire control of, and
ultimately to acquire the entire equity interest in, KLLM. See
"Introduction" and Section 11.
Q. HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
A. You have until 12:00 midnight, New York City time, on May 9, 2000. We have
the right to extend the offer and to provide for a subsequent offering
period which, if provided, will be an additional opportunity for you to
tender your shares and receive the offer consideration following the
expiration of the offer. If the offer is extended or a subsequent offering
period is provided, we will issue a press release announcing the extension
or subsequent offering period no later than 9:00 a.m., New York City time
on the first business morning following the date the offer was scheduled to
expire. See Section 1.
Q. WHAT ARE THE MOST IMPORTANT CONDITIONS TO THE OFFER?
A. The most important conditions to the offer are the following:
. that stockholders validly tender and do not withdraw before the
expiration of the offer at least a majority of the shares of KLLM
(including the associated stock purchase rights) on a fully diluted
basis. For the purposes of determining the number of outstanding shares,
options to purchase shares that are outstanding immediately before the
consummation of the offer and are not exercisable at such time will not
be taken into account.
. that the associated stock purchase rights have been redeemed or we are
otherwise satisfied, in our sole discretion, that these rights are
invalid or inapplicable to our offer and any subsequent business
transaction involving Mr. Low and KLLM, including the proposed merger.
. that we are satisfied, in our sole discretion, that Section 203 of the
Delaware law is inapplicable to our acquisition of the KLLM shares and
any subsequent business transaction involving Mr. Low and KLLM, including
the proposed merger.
. that there is no material adverse change to KLLM prior to the expiration
of the offer.
. that the applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 has expired or terminated.
A fuller discussion of the conditions to consummation of the offer may be
found in Section 13.
Q. DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE THE PAYMENT?
A. Mr. Low will provide us with sufficient funds to purchase all shares
tendered in the offer from his personal funds. The offer is not conditioned
on any financing arrangements. See Section 12.
Q. IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
A. We do not think our financial condition is relevant to your decision
whether to tender shares and accept the offer because:
. the offer is being made for all outstanding shares solely for cash,
. the offer is not subject to any financing condition, and
. upon consummation of the offer, we will acquire all shares in the
proposed merger that are not tendered for the same per share cash price,
subject to your appraisal rights. See "Introduction" and Sections 1, 11
and 12.
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Q. HOW DO I ACCEPT THE OFFER AND TENDER MY SHARES?
A. To tender your shares, you must completely fill out the enclosed Letter of
Transmittal and deliver it, along with your share certificates, to the
depositary prior to the expiration of the offer. If your shares are held in
street name (i.e., through a broker, dealer or other nominee), they can be
tendered by your nominee through The Depository Trust Company. If you cannot
deliver all necessary documents to The Depository Trust Company in time, you
might be able to complete and deliver to the depositary, in lieu of the
missing documents, the enclosed Notice of Guaranteed Delivery, provided you
are able to fully comply with its terms. We should point out that because
the KLLM Board has not approved the making of our offer, it is possible that
the associated stock purchase rights currently evidenced by your share
certificates will separate so that this right will be evidenced by one or
more separate certificates. If this happens, you will also be required to
deliver the certificate(s) evidencing the stock purchase rights related to
the share certificates tendered. See Section 3.
Q. IF I ACCEPT THE OFFER, WHEN WILL I GET PAID?
A. Provided the conditions to the offer are satisfied, you will receive a check
equal to the number of shares you tendered multiplied by $7.75 as promptly
as practicable following the expiration of the offer. See Section 2.
Q. CAN I WITHDRAW MY PREVIOUSLY TENDERED SHARES?
A. You may withdraw a portion or all of your tendered shares at any time until
the offer has expired and, if we have not accepted your shares for payment
by June 10, 2000, you can withdraw them at any time after this time until we
accept your shares for payment. This right to withdraw will not apply to any
subsequent offering period, if one is provided. Once shares are accepted for
payment, they cannot be withdrawn. See Section 4.
Q. WHAT DOES THE BOARD OF DIRECTORS OF KLLM THINK OF THIS OFFER?
A. Since we have been unable to meet with the KLLM Board thus far to discuss
the possibility of our acquiring KLLM, the KLLM Board has not had the
opportunity to consider our offer. However, the KLLM Board will now have the
opportunity to review and evaluate our offer, and will be required to
disclose to you its position with respect to our offer. See Section 10.
Q. IF OUR BOARD DOES NOT APPROVE YOUR OFFER, WILL THAT HAVE ANY EFFECT ON YOUR
ABILITY TO COMPLETE YOUR OFFER?
A. We would be unable to complete our offer if it is not ultimately approved by
the KLLM Board even if holders of a large majority of the outstanding KLLM
stock tendered their shares. The reason for this is the effect such lack of
approval would have on the associated stock purchase rights and, unless at
least 85% of the outstanding shares were tendered, on our ability to effect
the contemplated merger of Low Acquisition into KLLM. See Section 11. For
this reason, we will be seeking to remove all the current directors of KLLM
and replace them with our nominees, who will be in a position to act,
subject to their fiduciary duties owed to you and KLLM, to take all steps
necessary to allow us to complete our offer to you and to effect the
proposed merger. See "Introduction."
Q. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF THE TRANSACTION?
A. The receipt of cash by you in exchange for your KLLM shares pursuant to the
offer, the merger or upon exercise of appraisal rights is taxable for
federal income tax purposes and may be taxable under applicable
4
state, local or foreign tax laws. In general, you will recognize capital
gain or loss equal to the difference between your adjusted tax basis in the
shares you tender and the amount of cash you receive for those shares. You
should consult your tax advisor about the particular effect tendering will
have on your shares. See Section 5.
Q. WHAT WILL HAPPEN TO KLLM?
A. If the offer is consummated, Low Acquisition will be merged with and into
KLLM. KLLM will be the surviving corporation in the merger and Mr. Low will
then be the sole stockholder of KLLM. See Section 11.
Q. IF I DO NOT TENDER BUT THE TENDER OFFER IS SUCCESSFUL, WHAT WILL HAPPEN TO
MY SHARES?
A. Even if you do not tender your shares, if the offer is consummated and Low
Acquisition merges into KLLM, all remaining stockholders of KLLM at the time
of the merger, other than those that properly assert appraisal rights, will
receive $7.75 per share in cash for each share of KLLM common stock owned,
without interest. Therefore, if the merger takes place, the only difference
to you between tendering your shares and not tendering your shares (assuming
that you do not wish to exercise your appraisal rights) is that you will be
paid earlier if you tender your shares.
If, however, Low Acquisition does not merge with KLLM, the number of
stockholders of KLLM that are still in the hands of the public may be so
small the current level of trading activity may be significantly diminished
(or, possibly, there will be no public trading market at all) for the KLLM
shares. Also, KLLM may not be required to and thus cease to comply with SEC
rules governing publicly-held companies. See Section 11.
Q. ARE APPRAISAL RIGHTS AVAILABLE IN EITHER THE OFFER OR THE MERGER?
A. Appraisal rights are not available in the offer. However, if you choose not
to tender, and the offer is consummated, appraisal rights will be available
in the merger of Low Acquisition and KLLM. If you choose to exercise your
appraisal rights, and you comply with the applicable legal requirements, you
will be entitled to payment for your shares based on the fair value of those
shares as determined by the Delaware Court of Chancery, plus a fair rate of
interest as determined by the Court. This value of your shares as determined
in the appraisal may be more or less than $7.75 per share. See Section 11.
Q. WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
A. On March 15, 2000, the last trading day before the first public disclosure
of Mr. Low's intent to seek exploratory discussions with KLLM, the shares of
KLLM closed on the Nasdaq National Market at $6.125 per share. On April 11,
2000, the last trading day before the commencement of the offer, the shares
of KLLM closed on the Nasdaq National Market at $7.00. Please obtain a
recent quotation for your shares prior to deciding whether or not to tender.
See Section 6.
Q. WHO CAN I CALL WITH QUESTIONS?
A. You can call our Information Agent, MacKenzie Partners, Inc. at 1-800-322-
2885 with any questions you may have.
5
TO THE HOLDERS OF SHARES OF
KLLM TRANSPORT SERVICES, INC.:
INTRODUCTION
Low Acquisition, Inc., a Delaware corporation ("Purchaser") wholly owned by
Robert E. Low, an individual residing in Springfield, Missouri ("Parent"),
hereby offers to purchase all of the outstanding shares of common stock, par
value $1.00 per share (the "Common Stock"), of KLLM Transport Services, Inc.,
a Delaware corporation (the "Company"), including the associated preferred
stock purchase rights (the "Rights") issued pursuant to the Stockholder
Protection Rights Agreement, dated as of February 13, 1997 (the "Rights
Agreement"), between the Company and KeyCorp Shareholder Services, Inc. (the
Common Stock and the Rights together are referred to herein as the "Shares"),
at $7.75 per Share (the "Per Share Amount"), net to the seller in cash, upon
the terms and subject to the conditions set forth in this Offer to Purchase
and in the related Letter of Transmittal (which together with any amendments
or supplements hereto or thereto, collectively constitute the "Offer").
Tendering stockholders who have Shares registered in their own name and who
tender directly to the Depositary will not be obligated to pay brokerage fees
or commissions or, subject to Instruction 6 of the Letter of Transmittal,
stock transfer taxes on the purchase of Shares by Purchaser pursuant to the
Offer. Stockholders who hold their Shares through their broker or bank should
consult with such institution as to whether there are any fees applicable to a
tender of Shares. Purchaser will pay all charges and expenses of Wilmington
Trust Company, as depositary (the "Depositary"), and MacKenzie Partners, Inc.,
as information agent (the "Information Agent"). Unless the context requires
otherwise, all references to Shares herein shall include the Rights, and all
references to the Rights shall include all benefits that may inure to the
holders of the Rights pursuant to the Rights Agreement.
The Offer is conditioned upon, among other things, the satisfaction of: (i)
the Minimum Tender Condition; (ii) the Rights Condition; (iii) the Section 203
Condition; and (iv) the Antitrust Condition, as such terms are defined herein.
The Offer is also subject to certain other conditions described in Section 13.
The Offer is not conditioned upon Parent or Purchaser obtaining financing.
Purpose of the Offer; The Proposed Merger. The purpose of the Offer is to
acquire for cash a majority of the outstanding Shares of, and ultimately the
entire equity interest in, the Company. Purchaser currently intends, as soon
as practicable upon consummation of the Offer, to propose and seek to have the
Company effect a merger or similar business combination (the "Proposed
Merger") between the Company and Purchaser, pursuant to which each then
outstanding Share (other than Shares held by the Company in treasury, or owned
by Parent or Purchaser, or Shares, if any, that are held by stockholders who
are entitled to and who properly exercise appraisal rights under Delaware law)
would be converted pursuant to the terms of the Proposed Merger into the right
to receive an amount in cash equal to the Per Share Amount paid pursuant to
the Offer, without interest. See Section 11.
Consent Solicitation. On April 12, 2000, Parent filed preliminary consent
solicitation materials with the Securities and Exchange Commission (the
"SEC"), which, in definitive form, will be mailed to stockholders of the
Company after completion of review by the staff of the SEC and receipt from
the Company of a current stockholder list. The consent solicitation materials
(the "Consent Solicitation") request stockholders of the Company to, among
other things, remove all of the current members of the Board of Directors of
the Company (the "Company Board"), establish the size of the Company Board at
four members and fill the newly created vacancies on the Company Board with
four other persons (including Parent) (the "Nominees"). If the Nominees are
elected, the Nominees will consider, consistent with their fiduciary duties to
the Company and its stockholders under applicable law, whether to redeem the
Rights (or amend the Rights Agreement to make the Rights inapplicable to the
Offer and the Proposed Merger) and approve the Offer and the Proposed Merger
under Section 203 of the Delaware General Corporation Law (the "DGCL"), which
would satisfy the Rights Condition and the Section 203 Condition, and take
such other actions as may be required to permit the prompt consummation of the
Offer and the Proposed Merger. Parent and Purchaser expect that, subject to
their fiduciary duties under applicable law, the Nominees would redeem the
Rights (or amend the Rights Agreement to make
6
the Rights inapplicable to the Offer and the Proposed Merger) and approve the
Offer and the Proposed Merger under Section 203 of the DGCL, which would
satisfy the Rights Condition and the Section 203 Condition, and take such
other actions as may be required to permit the prompt consummation of the
Offer and the Proposed Merger. The Consent Solicitation will be made pursuant
to separate consent solicitation materials.
THIS OFFER TO PURCHASE DOES NOT CONSTITUTE A SOLICITATION OF PROXIES OR
CONSENTS. ANY SUCH SOLICITATION WILL BE MADE PURSUANT TO SEPARATE PROXY OR
CONSENT SOLICITATION MATERIALS COMPLYING WITH THE REQUIREMENTS OF SECTION
14(A) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER (THE "EXCHANGE ACT").
Parent and Purchaser are prepared to commence immediate good faith
negotiations with the Company Board regarding the possibility of increasing
the Per Share Amount after appropriate due diligence and access to the
Company's business plan. See Section 10. Purchaser reserves the right to amend
the Offer at any time, including in the event it enters into a merger
agreement with the Company or it negotiates a merger agreement with the
Company not involving a tender offer pursuant to which Purchaser would
terminate the Offer and the Shares would, upon consummation of such merger, be
converted into cash.
In the event Purchaser obtains 90% or more of the outstanding Shares
pursuant to the Offer or otherwise, Purchaser will be able to effect the
Proposed Merger pursuant to Section 253 of the DGCL, without prior notice to,
or any action by, any other stockholder of the Company. See Section 11.
Minimum Tender Condition. The Minimum Tender Condition conditions the Offer
upon there being validly tendered prior to the Expiration Date (as defined
below) and not withdrawn at least that number of Shares that, together with
the Shares beneficially owned by Parent and Purchaser, would represent a
majority of all outstanding Shares on a fully diluted basis on the date of
purchase (the "Minimum Number of Shares"). For purposes of the Offer (other
than in the context of financial statement information), on a "fully diluted
basis" means, as of any date, the number of Shares outstanding plus the number
of Shares that the Company is required to issue pursuant to obligations
outstanding at that date under convertible securities, warrants, stock options
or otherwise upon conversion or exercise thereof. Purchaser reserves the right
(subject to the applicable rules and regulations of the SEC) to waive or
reduce the Minimum Tender Condition and to elect to purchase, pursuant to the
Offer, fewer than the Minimum Number of Shares. See Sections 1 and 13 herein.
According to the Company's Form 10-K for the fiscal year ended December 31,
1999 (the "Company Form 10-K") , as of March 24, 2000, there were 4,101,468
Shares issued and outstanding. According to the Company's Form 10-K, as of
December 31, 1999, there were 103,334 Shares reserved for issuance (i) to fund
subscriptions for Shares issued under the Company's employee stock purchase
plan (of which 9,334 Shares were subscribed for as of March 24, 2000) and (ii)
to fund outstanding options (of which 51,000 Shares were issuable under
options which were exercisable as of December 31, 1999). Based on the
foregoing and assuming, from December 31, 1999 through the Expiration Date,
that no options were granted, no options were exercised, canceled or expired,
and no Shares were issued or reacquired, there would be 4,204,802 Shares
outstanding on a fully diluted basis on the Expiration Date. Given Parent's
ownership of 539,600 Shares, the Minimum Number of Shares on the Expiration
Date would be 1,562,802. Therefore, 1,562,802 Shares must be tendered and not
withdrawn prior to the expiration of the Offer to satisfy the Minimum Tender
Condition. However, the actual Minimum Number of Shares will depend on the
facts as they exist on the date of purchase.
Rights Condition. The Offer is conditioned on, among other things, the
Rights Condition being satisfied. Unless the Rights Condition shall have been
satisfied, stockholders will be required to tender one Right for each share of
Common Stock tendered in order to effect a valid tender in accordance with the
procedures set forth in Section 3. The tender of Rights with Common Stock
shall not, in itself, however, satisfy the Rights Condition. Unless separate
certificates for the Rights are issued, a tender of Common Stock will also
constitute a tender of the associated Rights. For a description of the Rights,
see Section 11.
7
The Section 203 Condition. The Offer is conditioned on, among other things,
the Section 203 Condition being satisfied. The Offer is subject to the
condition that the acquisition of Shares pursuant to the Offer and the
Proposed Merger shall have been approved pursuant to Section 203 of the DGCL
("Section 203") or that Purchaser shall be satisfied in its sole discretion
that the provisions of Section 203 restricting certain business combinations
are invalid or inapplicable to the acquisition of Shares pursuant to the Offer
and the Proposed Merger (by action of the Company Board, the acquisition of a
sufficient number of Shares or otherwise). The provisions of Section 203 are
described in Section 11 herein.
There can be no assurance that the Company Board will, pursuant to Section
203, approve the acquisition of Shares pursuant to the Offer and the Proposed
Merger. Even if such Company Board approval is not obtained, Section 203 will
be inapplicable to the Offer and the Proposed Merger if, upon the purchase of
Shares pursuant to the Offer, Purchaser owns at least 85% of the outstanding
Shares, excluding, for purposes of determining the number of Shares
outstanding, those Shares owned (i) by persons who are directors and also
officers of the Company and (ii) employee stock plans in which employee
participants do not have the right to determine whether Shares held subject to
the plan will be tendered in a tender or exchange offer.
The Antitrust Condition. The Offer is conditioned on, among other things,
the Antitrust Condition being satisfied. For a more detailed description of
certain time periods applicable to this condition, see Section 15.
Certain other conditions to the Offer are described in Section 13 herein.
Purchaser reserves the right (but shall not be obligated) to waive any or all
such conditions. See Sections 1, 11, 13 and 15 herein.
THE OFFER IS NOT CONDITIONED UPON PARENT OR PURCHASER OBTAINING FINANCING.
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions set forth in the Offer
(including the terms and conditions set forth in Section 13 (the "Offer
Conditions") and if the Offer is extended or amended, the terms and conditions
of such extension or amendment), Purchaser will accept for payment, and pay
for, all Shares validly tendered on or prior to the Expiration Date (as
defined herein) and not withdrawn as permitted by Section 4. The term
"Expiration Date" means 12:00 Midnight, New York City time, on Tuesday, May 9,
2000, unless and until Purchaser shall, in its sole discretion, have extended
the period for which the Offer is open, in which event the term "Expiration
Date" shall mean the latest time and date on which the Offer, as so extended
by Purchaser, shall expire.
Subject to the applicable rules and regulations of the SEC, Purchaser
expressly reserves the right, in its sole discretion, at any time or from time
to time, to extend the period of time during which the Offer is open by giving
oral or written notice of such extension to the Depositary and by making a
public announcement thereof. During any such extension, all Shares previously
tendered and not withdrawn will remain subject to the Offer, subject to the
right of a tendering stockholder to withdraw such stockholder's tender of
Shares. See Section 4. Subject to the applicable regulations of the SEC,
Purchaser also expressly reserves the right, in its sole discretion, at any
time or from time to time, (i) to delay acceptance for payment of or
(regardless of whether such Shares were theretofore accepted for payment)
payment for, any tendered Shares, or to terminate or amend the Offer as to any
Shares not then paid for, if any of the conditions set forth in Section 13 are
not satisfied and (ii) to waive any condition and to set forth or change any
other term or condition of the Offer, by giving oral or written notice of such
delay, termination or amendment to the Depositary and by making a public
announcement thereof. If Purchaser accepts any Shares for payment pursuant to
the terms of the Offer, it will accept for payment all Shares validly tendered
prior to the Expiration Date and not withdrawn, and, subject to the terms and
conditions of the Offer, including but not limited to the Offer Conditions, it
will accept for payment and promptly pay for all Shares so accepted for
payment. Purchaser confirms that its reservation of the right to delay payment
for Shares which it has accepted for payment is limited by Rule 14e-1(c) under
the Exchange Act, which requires that no person making a tender offer shall
fail to pay the consideration offered or return any securities deposited by or
on behalf of tendering security holders promptly after the termination or
withdrawal of a tender offer. Purchaser
8
reserves the right to acquire Shares, after expiration or termination of the
Offer, through open market purchases, privately negotiated transactions, a
tender offer or exchange offer or otherwise, upon such terms and at such
prices as it may determine, which may be more or less than the applicable
offer price to be paid per Share in the Offer and could be for cash or other
consideration.
Any extension, delay, termination or amendment of the Offer will be
followed as promptly as practicable by public announcement thereof, such
announcement in the case of an extension to be issued no later than 9:00 A.M.,
New York City time, on the next business day after the previously scheduled
Expiration Date. Subject to applicable law (including Rules 14d-4(d) and 14d-
6(c) under the Exchange Act, which require that any material change in the
information published, sent or given to stockholders in connection with the
Offer be promptly disseminated to stockholders in a manner reasonably designed
to inform stockholders of such change) and without limiting the manner in
which Purchaser may choose to make any public announcement, Purchaser shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by issuing a press release or other
announcement.
Purchaser confirms that if it makes a material change in the terms of the
Offer or the information concerning the Offer, or if it waives a material
condition of the Offer, Purchaser will extend the Offer to the extent required
by Rules 14d-4(d), 14d-6(c) and 14e-1 under the Exchange Act.
If, prior to the Expiration Date, Purchaser, in its sole discretion, shall
decrease the percentage of Shares being sought or increase or decrease the Per
Share Amount offered to holders of Shares, such increase or decrease shall be
applicable to all holders whose Shares are accepted for payment pursuant to
the Offer and, if at the time notice of any increase or decrease is first
published, sent or given to holders of Shares, the Offer is scheduled to
expire at any time earlier than the tenth business day from and including the
date that such notice is first so published, sent or given, the Offer will be
extended so that it shall not expire earlier than the expiration of such ten
business day period. For purposes of the Offer, a "business day" means any day
other than a Saturday, Sunday or United States federal holiday and consists of
the time period from 12:01 A.M. through 12:00 Midnight, New York City time.
A demand has been made to the Company for the use of the Company's
stockholder list and security position listings for the purpose of, among
other things, disseminating the Offer to stockholders. Upon compliance by the
Company with such demand, this Offer to Purchase and the related Letter of
Transmittal will be mailed to record holders of Shares and will be furnished
to brokers, banks and similar persons whose names, or the names of whose
nominees, appear on the stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including the
Offer Conditions and, if the Offer is extended or amended, the terms and
conditions of any such extension or amendment), Purchaser will accept for
payment, and will pay for, Shares validly tendered and not withdrawn as
promptly as practicable after the later of (i) subject to compliance with the
applicable rules and regulations of the SEC, including Rule 14e-1(c) under the
Exchange Act, the satisfaction or waiver of the conditions set forth in
Section 13 of this Offer to Purchase and (ii) the Expiration Date.
In addition, subject to applicable rules of the SEC, Purchaser expressly
reserves the right to delay acceptance for payment of or payment for Shares in
order to comply, in whole or in part, with any applicable law. See Section 15.
In all cases, payment for Shares tendered and accepted for payment pursuant to
the Offer will be made only after timely receipt by the Depositary of
certificates for such Shares (or a confirmation of a book-entry transfer of
such Shares (a "Book-Entry Confirmation") into the Depositary's account at The
Depository Trust Company (the "Book-Entry Transfer Facility")), a properly
completed and duly executed Letter of Transmittal, or facsimile thereof, with
any required signature guarantees, or an Agent's Message (as defined in
Section 3) and any other required documents.
9
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not withdrawn as,
if and when Purchaser gives oral or written notice to the Depositary of its
acceptance for payment of such Shares pursuant to the Offer. Upon the terms
and subject to the conditions of the Offer, payment for Shares accepted for
payment pursuant to the Offer will be made by deposit of the purchase price
therefor with the Depositary, which will act as agent for the tendering
stockholders for the purpose of receiving payments from Purchaser and
transmitting such payments to the tendering stockholders whose Shares have
been accepted for payment. Under no circumstances will interest on the
purchase price for Shares be paid, regardless of any delay in making such
payment. Upon the deposit of funds with the Depositary for the purpose of
making payment to validly tendering stockholders, Purchaser's obligation to
make such payment shall be satisfied and such tendering stockholders must
thereafter look solely to the Depositary for payment of the amounts owed to
them by reason of acceptance for payment of Shares pursuant to the Offer.
If Purchaser includes a "Subsequent Offering Period" (as hereinafter
defined), Purchaser must accept and promptly pay for all Shares tendered prior
to the date of such extension. Rule 14d-11 under the Exchange Act provides
that a bidder may, subject to certain conditions, elect to provide a
subsequent offering period ("Subsequent Offering Period") of three business
days to 20 business days so long as, among other things, (i) the Offer remains
open for a minimum of 20 business days and has expired, (ii) the Offer is for
all outstanding Shares, (iii) the bidder accepts and promptly pays for all
Shares tendered during the Offer, (iv) the bidder announces the results of the
Offer, including the approximate number and percentage of Shares deposited no
later than 9:00 a.m., New York City time on the next business day after the
Expiration Date and immediately begins the Subsequent Offering Period, (v) the
bidder immediately accepts and promptly pays for the Shares as they are
tendered during the Subsequent Offering Period, and (vi) the bidder pays the
Per Share Amount for all Shares tendered in the Subsequent Offering Period. A
Subsequent Offering Period, if one is included, is not an extension of the
Offer but would be an additional period of time, following the expiration of
the Offer, in which stockholders may tender Shares not tendered in the Offer.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, or if certificates are submitted
for more Shares than are tendered, certificates for such unpurchased Shares
will be returned, without expense, to the tendering stockholder (or, in the
case of Shares tendered by book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility pursuant to the
procedures set forth in Section 3, such Shares will be credited to an account
maintained on behalf of the tendering stockholder with the Book-Entry Transfer
Facility) as soon as practicable following expiration or termination of the
Offer.
Purchaser reserves the right to transfer or assign in whole or in part from
time to time to Parent or one or more direct or indirect subsidiaries of
Parent the right to purchase all or any portion of the Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve
Purchaser of its obligations under the Offer and will in no way prejudice the
rights of tendering stockholders to receive payment for Shares validly
tendered and accepted for payment pursuant to the Offer.
3. PROCEDURE FOR TENDERING SHARES.
Valid Tender of Shares. To tender Shares pursuant to the Offer (a) a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions of the Letter of Transmittal,
with any required signature guarantees, certificates for Shares (and, if
separated, certificates for the Rights) to be tendered, and any other
documents required by the Letter of Transmittal, must be received by the
Depositary prior to the Expiration Date at its address set forth on the back
cover of this Offer to Purchase, (b) such Shares must be delivered pursuant to
the procedures for book-entry transfer described below (and a Book-Entry
Confirmation of such delivery received by the Depositary, including an Agent's
Message (as defined herein) if the tendering stockholder has not delivered a
Letter of Transmittal), prior to the Expiration Date, or (c) the tendering
stockholder must comply with the guaranteed delivery procedures set forth
below. The term "Agent's Message" means a message transmitted by the Book-
Entry Transfer Facility to, and received by, the Depositary and forming a part
of a Book-Entry Confirmation, which states that the Book-Entry Transfer
Facility
10
has received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares which are the subject of the Book-Entry
Confirmation, that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that Purchaser may enforce such
agreement against the participant.
Unless the Rights Condition is satisfied, stockholders will be required to
tender one Right (subject to adjustment) for each Share tendered in order to
effect a valid tender of Shares. Accordingly, stockholders who sell their
Rights separately from their Shares and do not otherwise acquire Rights may
not be able to satisfy the requirements of the Offer for a valid tender of
Shares. Unless separate certificates representing the Rights are issued, a
tender of Shares will also constitute a tender of the associated Rights.
Rights are presently evidenced by the certificates for the Common Stock and
the tender by a stockholder of such stockholder's shares of Common Stock will
also constitute a tender of the associated Rights. However, after a Separation
Time (as defined in the Rights Agreement), upon request, the Rights Agent will
send to each record holder of Shares as of the close of business on the
Separation Time a Rights certificate evidencing one Right for each share of
Common Stock held. Pursuant to the Offer, no separate payment will be made by
Purchaser for the Rights. If separate certificates representing the Rights are
issued to holders of Common Stock prior to the time a holder's Shares are
tendered pursuant to the Offer, certificates representing a number of Rights
equal to the number of shares of Common Stock tendered must be delivered to
the Depositary, or, if available, a Book-Entry Confirmation received by the
Depositary with respect thereto, in order for such shares of Common Stock to
be validly tendered. If the Separation Time occurs and separate certificates
representing the Rights are not distributed prior to the time shares of Common
Stock are tendered pursuant to the Offer, Rights may be tendered prior to a
stockholder receiving the certificates for Rights by use of the guaranteed
delivery procedure described below. A tender of shares of Common Stock
constitutes an agreement by the tendering stockholder to deliver certificates
representing all Rights formerly associated with the number of shares of
Common Stock tendered pursuant to the Offer to the Depositary prior to
expiration of the period permitted by such guaranteed delivery procedures for
delivery of certificates for, or a Book-Entry Confirmation with respect to,
Rights (the "Rights Delivery Period"). However, after expiration of the Rights
Delivery Period, Purchaser may elect to reject as invalid a tender of shares
of Common Stock with respect to which certificates for, or a Book-Entry
Confirmation with respect to, the number of Rights required to be tendered
with such Common Stock have not been received by the Depositary. Nevertheless,
Purchaser will be entitled to accept for payment shares of Common Stock
tendered by a stockholder prior to receipt of the certificates for the Rights
required to be tendered with such shares of Common Stock, or a Book-Entry
Confirmation with respect to such Rights, and either (a) subject to complying
with applicable rules and regulations of the SEC, withhold payment for such
shares of Common Stock pending receipt of the certificates for, or a Book-
Entry Confirmation with respect to, such Rights or (b) make payment for shares
of Common Stock accepted for payment pending receipt of the certificates for,
or a Book-Entry Confirmation with respect to, such Rights in reliance upon the
agreement of a tendering stockholder to deliver Rights pursuant to such
guaranteed delivery procedures. Any determination by Purchaser to make payment
for shares of Common Stock in reliance upon such agreement and such guaranteed
delivery procedures or, after expiration of the Rights Delivery Period, to
reject a tender as invalid will be made in the sole and absolute discretion of
Purchaser.
Book-Entry Delivery. The Depositary will make a request to establish an
account with respect to the Shares at the Book-Entry Transfer Facility for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in the Book-Entry
Transfer Facility's system may make book-entry transfer of Shares by causing
the Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account in accordance with the Book-Entry Transfer Facility's procedures for
such transfer. However, although delivery of Shares may be effected through
book-entry transfer, either the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, together with any required signature
guarantees, or an Agent's Message in lieu of the Letter of Transmittal, and
any other required documents, must, in any case, be transmitted to and
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase on or prior to the Expiration Date for such Shares
to be validly tendered pursuant to the Offer, or the tendering stockholder
must comply with the guaranteed delivery procedures described below. If the
11
Separation Time occurs, the Depositary will also make a request to establish
an account with respect to the Rights at the Book-Entry Transfer Facility, but
no assurance can be given that book-entry transfer of Rights will be
available. If book-entry transfer of Rights is available, the foregoing book-
entry transfer procedures will also apply to Rights. If book-entry transfer of
Rights is not available and the Separation Time occurs, a tendering
stockholder will be required to tender Rights by means of physical delivery of
certificates for Rights to the Depositary (in which event references in this
Offer to Purchase to Book-Entry Confirmations with respect to Rights will be
inapplicable). The confirmation of a book-entry transfer of Shares or Rights
into the Depositary's account at the Book-Entry Transfer Facility as described
above is referred to herein as a "Book-Entry Confirmation." Delivery of
documents to the Book-Entry Transfer Facility in accordance with the Book-
Entry Transfer Facility's procedures does not constitute delivery to the
Depositary.
The method of delivery of Shares, Rights, the Letter of Transmittal and all
other required documents, including delivery through the Book-Entry Transfer
Facility, is at the election and risk of the tendering stockholder. Shares
will be deemed delivered only when actually received by the Depositary
(including, in the case of a Book-Entry Transfer, by Book-Entry Confirmation).
If delivery is by mail, it is recommended that the stockholder use properly
insured registered mail with return receipt requested. In all cases,
sufficient time should be allowed to ensure timely delivery.
Signature Guarantees. Except as otherwise provided below, all signatures on
a Letter of Transmittal must be guaranteed by a financial institution
(including most commercial banks, savings and loan associations and brokerage
houses) that is a participant in good standing in the Security Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program or the Stock Exchange Medallion Program (each, an "Eligible
Institution"). Signatures on a Letter of Transmittal need not be guaranteed
(a) if the Letter of Transmittal is signed by the registered holders (which
term, for purposes of this section, includes any participant in the Book-Entry
Transfer Facility's system whose name appears on a security position listing
as the owner of the Shares or Rights) of Shares and Rights tendered therewith
and such registered holder has not completed the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" on the
Letter of Transmittal or (b) if such Shares and Rights are tendered for the
account of an Eligible Institution. See Instructions 1 and 5 of the Letter of
Transmittal. If the certificates for Shares or Rights are registered in the
name of a person other than the signer of the Letter of Transmittal, or if
payment is to be made or certificates for Shares or Rights not tendered or not
accepted for payment are to be returned to a person other than the registered
holder of the certificates surrendered, then the tendered certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered holders or owners appear on the
certificates, with the signatures on the certificates or stock powers
guaranteed by an Eligible Institution as described above. See Instructions 1
and 5 of the Letter of Transmittal.
Guaranteed Delivery. A stockholder who desires to tender Shares (or Rights,
if applicable) pursuant to the Offer and whose certificates for Shares (or
Rights, if applicable) are not immediately available (including because
certificates for Rights have not yet been distributed by the Rights Agent), or
who cannot comply with the procedure for book-entry transfer on a timely
basis, or who cannot deliver all required documents to the Depositary on or
prior to the Expiration Date, may tender such Shares (and/or Rights, if
applicable) by following all of the procedures set forth below:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Purchaser, is received by
the Depositary, as provided below, on or prior to the Expiration Date; and
(iii) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation with respect to all such Shares),
together with a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), with any required signature guarantees (or, in the
case of a book-entry transfer, an Agent's Message in lieu of the Letter of
Transmittal), and any other required documents, are received by the
Depositary within (a) in the case of Shares, three Nasdaq Stock Market
trading days after the date of
12
execution of such Notice of Guaranteed Delivery or (b) in the case of
Rights, a period ending on the later of (1) three Nasdaq Stock Market
trading days after the date of execution of such Notice of Guaranteed
Delivery or (2) three Nasdaq Stock Market trading days after the date
certificates for Rights are distributed to stockholders by the Rights
Agent. A "Nasdaq Stock Market trading day" is any day on which the Nasdaq
Stock Market is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary 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 of Guaranteed Delivery and a representation
that the stockholder on whose behalf the tender is being made is deemed to own
the Shares being tendered within the meaning of Rule 14e-4 promulgated under
the Exchange Act.
Other Requirements. Notwithstanding any provision hereof, payment for
Shares accepted for payment pursuant to the Offer will in all cases be made
only after timely receipt by the Depositary of (a) certificates for (or a
timely Book-Entry Confirmation with respect to) such Shares and, if the
Separation Time occurs, certificates for (or a timely Book-Entry Confirmation,
if available, with respect to) the Rights (unless Purchaser elects to make
payment for such Shares pending receipt of the certificates for, or a Book-
Entry Confirmation with respect to, such Rights as described above), (b) a
Letter of Transmittal, or facsimile thereof, properly completed and duly
executed, with any required signature guarantees (or, in the case of a book-
entry transfer, an Agent's Message in lieu of the Letter of Transmittal) and
(c) any other documents required by the Letter of Transmittal. Accordingly,
tendering stockholders may be paid at different times depending upon when
certificates for Shares (or Rights, if applicable) or Book-Entry Confirmations
with respect to Shares (or Rights, if applicable) are actually received by the
Depositary. Under no circumstances will interest on the purchase price of the
Shares be paid by Purchaser, regardless of any extension of the Offer or any
delay in making such payment.
If the Rights Condition is satisfied, the guaranteed delivery procedures
with respect to certificates for Rights and the requirement for the tender of
Rights will no longer apply.
It is a violation of Section 14(e) of the Exchange Act and Rule 14e-4
promulgated thereunder for a person, directly or indirectly, to tender Shares
for his own account unless the person so tendering (i) has a net long position
equal to or greater than his amount of (x) Shares tendered or (y) other
securities immediately convertible into, exercisable, or exchangeable for the
amount of Shares tendered and will acquire such Shares for tender by
conversion, exercise or exchange of such other securities and (ii) will cause
such Shares to be delivered in accordance with the terms of the Offer. Rule
14e-4 provides a similar restriction applicable to the tender or guarantee of
a tender on behalf of another person.
A tender of Shares made pursuant to any one of the procedures set forth
above will constitute the tendering stockholder's acceptance of the terms and
conditions of the Offer, including the tendering stockholder's representation
and warranty that (i) such stockholder has a net long position in the Shares
being tendered within the meaning of Rule 14e-4 and (ii) the tender of such
Shares complies with Rule 14e-4.
Tender Constitutes an Agreement. The valid tender of Shares and, if
applicable, Rights pursuant to one of the procedures described above will
constitute a binding agreement between the tendering stockholder and Purchaser
upon the terms and subject to the conditions of the Offer.
Appointment. By executing a Letter of Transmittal as set forth above, the
tendering stockholder irrevocably appoints designees of Purchaser as such
stockholder's proxies, each with full power of substitution, to the full
extent of such stockholder's rights with respect to the Shares tendered by
such stockholder and accepted for payment by Purchaser and with respect to any
and all cash dividends, distributions, rights, other Shares or other
securities issued or issuable in respect of such Shares on or after the date
of this Offer to Purchase. All such proxies will be considered coupled with an
interest in the tendered Shares and Rights. Such appointment is effective
when, and only to the extent that, Purchaser deposits the payment for such
Shares with the Depositary. Upon the effectiveness of such appointment, all
prior powers of attorney, proxies and consents given by such
13
stockholder (including revocation of proxies and written consents) will be
revoked without further action, and no subsequent powers of attorney, proxies
and consents may be given (and, if given, will not be deemed effective).
Purchaser designees will, with respect to the Shares for which the appointment
is effective, be empowered to exercise all voting and other rights of such
stockholder as they, in their sole discretion, may deem proper at any annual,
special or adjourned meeting of the stockholders of the Company, by written
consent in lieu of any such meeting or otherwise. Purchaser reserves the right
to require that, in order for Shares to be deemed validly tendered,
immediately upon Purchaser's payment for such Shares, Purchaser must be able
to exercise full voting rights with respect to such Shares.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
or Rights will be determined by Purchaser in its sole discretion, which
determination will be final and binding. Purchaser reserves the absolute right
to reject any and all tenders determined by it not to be in proper form or the
acceptance for payment of or payment for which may, in the opinion of
Purchaser's counsel, be unlawful. Purchaser also reserves the absolute right
to waive any defect or irregularity in the tender of any Shares or Rights of
any particular stockholder whether or not similar defects or irregularities
are waived in the case of other stockholders. No tender of Shares will be
deemed to have been validly made until all defects and irregularities relating
thereto have been cured or waived. None of Purchaser, Parent, the Depositary,
the Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification. Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter
of Transmittal and the instructions thereto) will be final and binding.
Backup Withholding. In order to avoid "backup withholding" of Federal
income tax on payments of cash pursuant to the Offer, a stockholder
surrendering Shares in the Offer must, unless an exemption applies, provide
the Depositary with such stockholder's correct taxpayer identification number
("TIN") on a Substitute Form W-9 and certify under penalties of perjury that
such TIN is correct and that such stockholder is not subject to backup
withholding. If a stockholder does not provide such stockholder's correct TIN
or fails to provide the certifications described above, the Internal Revenue
Service (the "IRS") may impose a penalty on such stockholder and payment of
cash to such stockholder pursuant to the Offer may be subject to backup
withholding of 31%. All stockholders surrendering Shares pursuant to the Offer
should complete and sign the main signature form and the Substitute Form W-9
included as part of the Letter of Transmittal to provide the information and
certification necessary to avoid backup withholding (unless an applicable
exemption exists and is proved in a manner satisfactory to Purchaser and the
Depositary). If, however, the tendering stockholder completes the box entitled
"Special Payment Instructions" on the Letter of Transmittal, the person to
whom payment is to be made, rather than the tendering stockholder, should
complete and sign Substitute Form W-9. Certain stockholders (including, among
others, corporations and certain foreign individuals and entities) are not
subject to backup withholding. Non-corporate foreign stockholders should
complete and sign the main signature form and a Form W-8, Certificate of
Foreign Status, a copy of which may be obtained from the Depositary, in order
to avoid backup withholding. See Instruction 10 to the Letter of Transmittal.
4. RIGHTS OF WITHDRAWAL.
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to
the Expiration Date and, unless theretofore accepted for payment by Purchaser
pursuant to the Offer, may also be withdrawn at any time after June 10, 2000.
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase. Any such notice of withdrawal must specify the name of the person
having tendered the Shares to be withdrawn, the number of Shares to be
withdrawn and the names in which the certificate(s) evidencing the Shares to
be withdrawn are registered, if different from that of the person who tendered
such Shares. The signature(s) on the notice of withdrawal must be guaranteed
by an Eligible Institution, unless such Shares have been tendered
14
for the account of any Eligible Institution. If Shares have been tendered
pursuant to the procedures for book-entry tender as set forth in Section 3,
any notice of withdrawal must specify the name and number of the account at
the Book-Entry Transfer Facility to be credited with the withdrawn Shares. If
certificates for Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, the name of the registered holder and the serial
numbers of the particular certificates evidencing the Shares to be withdrawn
must also be furnished to the Depositary as aforesaid prior to the physical
release of such certificates. All questions as to the form and validity
(including time of receipt) of any notice of withdrawal will be determined by
Purchaser, in its sole discretion, which determination shall be final and
binding. None of Purchaser, Parent, the Depositary, the Information Agent, or
any other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure
to give such notification. Withdrawals of tenders of Shares may not be
rescinded, and any Shares properly withdrawn will be deemed not to have been
validly tendered for purposes of the Offer. However, withdrawn Shares may be
retendered by following one of the procedures described in Section 3 at any
time prior to the Expiration Date.
If Purchaser extends the Offer or if Purchaser is delayed in its acceptance
for payment of or payment (whether before or after its acceptance for payment
of Shares) for Shares or it is unable to pay for Shares pursuant to the Offer
for any reason, then, without prejudice to Purchaser's rights under the Offer,
the Depositary may retain tendered Shares on behalf of Purchaser, and such
Shares may not be withdrawn except to the extent tendering stockholders are
entitled to withdrawal rights as described herein under this Section 4.
However, the ability of Purchaser to delay the payment for Shares that
Purchaser has accepted for payment is limited by Rule 14e-1(c) under the
Exchange Act, which requires that a bidder pay the consideration offered or
return the securities deposited by or on behalf of stockholders promptly after
termination or withdrawal of such bidder's offer, unless such bidder elects to
offer a Subsequent Offering Period under Rule 14d-11 under the Exchange Act
and pays for Shares tendered during the Offer and the Subsequent Offering
Period in accordance with Rule 14d-11.
5. MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER.
Sales of Shares pursuant to the Offer and the exchange of Shares for cash
pursuant to the Proposed Merger will be taxable transactions for federal
income tax purposes and may also be taxable transactions under applicable
state, local, foreign and other tax laws. The tax consequences of the receipt
of cash in exchange for Shares pursuant to the Offer or the Proposed Merger
may vary depending on, among other things, the particular circumstances of a
stockholder. For federal income tax purposes, a stockholder whose Shares are
purchased pursuant to the Offer or who receives cash as a result of the
Proposed Merger generally will recognize gain or loss equal to the difference
between the adjusted basis of the Shares sold or exchanged and the amount of
cash received therefor. Such gain or loss generally will be capital gain or
loss if the Shares are held as capital assets by the stockholder and will be
long-term capital gain or loss if the stockholder's holding period in such
Shares for federal income tax purposes is more than one year at the time of
the sale or exchange. Long-term capital gain recognized by a non-corporate
stockholder is generally subject to tax at a maximum rate of 20%. In addition,
a stockholder's ability to use capital losses to offset ordinary income is
limited.
A stockholder that tenders Shares pursuant to the Offer or Proposed Merger
may be subject to backup withholding at a rate of 31% unless such stockholder
provides a TIN and certifies under penalties of perjury that such TIN is
correct or properly certifies that such stockholder is awaiting a TIN, or
unless an exemption applies. See "Backup Withholding" under Section 3 hereof
and Instruction 10 in the Letter of Transmittal.
The income tax discussion set forth above is included for general
information only and may not be applicable to stockholders in special
situations, such as stockholders who received their Shares upon the exercise
of employee stock options or otherwise as compensation and stockholders who
are not United States persons. Stockholders should consult their own tax
advisors with respect to the specific tax consequences to them, in their
particular circumstances, of the Offer and the Proposed Merger, including the
application and effect of federal, state, local, foreign or other tax laws.
15
6. PRICE RANGE OF SHARES; DIVIDENDS.
According to the Company Form 10-K, the Shares are traded on the Nasdaq
National Market under the symbol "KLLM". The following table sets forth, for
the fiscal periods indicated, the high and low sales prices for the Common
Stock on the Nasdaq Stock Market as reported in the Company Form 10-K with
respect to periods occurring in fiscal years 1998 and 1999 and as reported
thereafter by published financial sources, with respect to periods occurring
in fiscal year 2000.
Sales Price
-------------
Fiscal Year High Low
----------- ------ ------
Fiscal 1998
First Quarter............................................ $13.75 $11.00
Second Quarter........................................... $14.13 $11.50
Third Quarter............................................ $13.00 $ 8.00
Fourth Quarter........................................... $ 9.00 $ 7.00
Fiscal 1999
First Quarter............................................ $ 7.63 $ 5.75
Second Quarter........................................... $ 7.00 $ 5.38
Third Quarter............................................ $ 6.00 $ 4.00
Fourth Quarter........................................... $ 7.50 $ 4.25
Fiscal 2000
First Quarter............................................ $ 7.25 $ 4.69
Second Quarter (through April 11, 2000).................. $ 7.06 $ 6.00
The Rights trade together with the Common Stock. On March 15, the last full
trading day prior to the first public disclosure of Parent's intent to seek
exploratory discussions with the Company, the reported closing price per Share
reported on the Nasdaq National Market was $6.125. On April 11, the last full
trading day prior to the first public announcement of Purchaser's intention to
commence the Offer, the reported closing price per Share reported on the
Nasdaq National Market was $7.00. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT
MARKET QUOTATION FOR THE SHARES.
According to the Company Form 10-K, the Company has not paid any cash
dividends on its Common Stock during either of its two most recent fiscal
years, and it is the current policy of the Company Board to continue to retain
earnings to finance future growth.
7. EFFECT OF THE OFFER ON THE MARKET FOR SHARES; STOCK QUOTATION; MARGIN
REGULATIONS; EXCHANGE ACT REGISTRATION.
Market for Shares. The purchase of Shares by Purchaser pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly and
may reduce the number of holders of Shares, which could adversely affect the
liquidity and market value of the remaining Shares held by the public.
Purchaser cannot predict whether the reduction in the number of Shares that
might otherwise trade publicly would have an adverse or beneficial effect on
the market price for, or marketability of, the Shares or whether such
reduction would cause future market prices to be greater or less than the per
share amount being offered in this Offer.
Stock Quotation. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the standards for continued inclusion
on the Nasdaq National Market. If, as a result of the purchase of Shares
pursuant to the Offer, the Shares no longer meet the criteria for continued
inclusion in the Nasdaq National Market, the market for the Shares could be
adversely affected. According to the Nasdaq National Market's published
guidelines, the Shares would not be eligible for continued listing if, among
other things, the number of Shares publicly-held fall below 750,000, the
number of beneficial holders of Shares falls below 400 (round lot holders) or
the aggregate market value of such publicly-held shares does not exceed $5
million. If the Shares were no longer eligible for inclusion in the Nasdaq
National Market, they might nevertheless continue to be included in the
Nasdaq's SmallCap Market unless, among other things, the public float is less
than 500,000
16
Shares or there are fewer than 300 stockholders (round lot holders) in total,
or the market value of the public float is less than $1 million.
Margin Regulations. The Shares are presently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve Board (the
"Federal Reserve Board"), which has the effect, among other things, of
allowing brokers to extend credit on the collateral of such Shares. Depending
upon factors similar to those described above regarding market quotations, the
Shares may no longer constitute "margin securities" for the purposes of the
Federal Reserve Board's margin regulations, in which event the Shares would be
ineligible as collateral for margin loans made by brokers.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. This registration may be terminated upon application by the
Company to the SEC if the Shares are not listed on a national securities
exchange and there are fewer than 300 record holders of the Shares. The
termination of 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 provisions of the
Exchange Act, such as the short-swing profit recovery provisions of Section
16(b), the requirement to furnish a proxy statement in connection with
stockholders' meetings pursuant to Section 14(a) and the requirements of Rule
13e-3 under the Exchange Act with respect to "going private" transactions, no
longer applicable to the Shares. In addition, "affiliates" of the Company and
persons holding "restricted securities" of the Company may be deprived of the
ability to dispose of these securities pursuant to Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act").
If registration of the Shares under the Exchange Act were terminated, the
Shares would no longer be eligible for trading on the Nasdaq National Market.
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
The information concerning the Company contained in this Offer to Purchase,
including financial information, has been taken from or based upon publicly
available documents and records on file with the SEC and other public sources
and is qualified in its entirety by reference thereto. None of Parent,
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 Parent, Purchaser, the Information Agent
or the Depositary.
According to the Company Form 10-K, the Company is a Delaware corporation
with its principal executive offices located at 135 Riverview Drive, Richland,
Mississippi 39218, its telephone number is (601) 939-2545. The Company has
described its business in the Company Form 10-K as follows:
The Company (through its only owned subsidiary, KLLM, Inc.) is an
irregular-route common carrier that specializes in providing high-quality
transportation service in North America. The Company primarily serves the
continental United States, Canada and Mexico.
Set forth below is certain selected consolidated financial information for
each of the Company's last two fiscal years for the period ended December 31,
1999 as contained in the Company Form 10-K, which financial data information
has not been audited. More comprehensive financial information is included in
such reports (including management's discussion and analysis of financial
condition and results of operations) and other documents filed by the Company
with the SEC, and the following summary is qualified in its entirety by
reference to such reports and other documents and all of the financial
information and notes contained therein. Copies of such reports and other
documents may be examined at or obtained from the SEC in the manner set forth
below.
17
KLLM TRANSPORT SERVICES, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(In thousands, except per share and operating data)
Year ended
December 31,
------------------
1999 1998
-------- --------
(In thousands,
except per share
and operating
data)
STATEMENTS OF OPERATIONS DATA:
Operating revenue from truckload operations.............. $234,595 $228,988
Operating revenue from rail container operations......... -- --
Operating expenses from truckload operations............. 232,125 223,346
Operating expenses from rail container operations........ -- --
-------- --------
Operating income (loss).................................... 2,470 5,642
Interest and other income.................................. 58 945
Interest expense........................................... (3,403) (3,551)
-------- --------
Earnings (loss) from continuing operations before income
taxes..................................................... (875) 3,036
Income tax expense (benefit)............................... (330) 1,200
-------- --------
Net earnings (loss) from continuing operations before
extraordinary item........................................ (545) 1,836
Extraordinary item, net of income tax benefit.............. (247) --
Loss from operations of discontinued division, net of
income tax benefit........................................ -- --
Loss on disposal of discontinued division, net of income
tax benefit............................................... -- --
-------- --------
Net earnings (loss)........................................ $ (792) $ 1,836
======== ========
Basic and diluted earnings (loss) per share:
From continuing operations............................... $ (0.13) $ 0.42
From extraordinary item.................................. (0.06) --
From operations of discontinued division................. -- --
From disposal of discontinued division................... -- --
-------- --------
Net earnings (loss) per common share....................... $ (0.19) $ 0.42
======== ========
Weighted average diluted common shares outstanding......... 4,117 4,341
======== ========
BALANCE SHEET DATA (AT YEAR-END):
Net property and equipment............................... $ 99,046 $ 98,212
Total assets............................................. 139,147 133,362
Total liabilities........................................ 88,180 80,694
Long-term debt, less current maturities.................. 48,000 36,571
Stockholders' equity..................................... 50,967 52,668
OPERATING DATA:
Average number of truckloads per week.................... 3,999 3,708
Average miles per trip................................... 936 990
Total miles traveled (000s).............................. 194,680 190,975
Average revenue per total mile........................... $ 1.13 $ 1.13
Empty mile percentage.................................... 13.6% 12.8%
Equipment at year-end:
Company-operated tractors.............................. 1,422 1,467
Owner-operated tractors................................ 260 279
-------- --------
Total tractors....................................... 1,682 1,746
Refrigerated trailers.................................. 1,948 1,998
Dry-van trailers....................................... 793 695
-------- --------
Total trailers....................................... 2,741 2,693
Refrigerated rail containers........................... -- --
18
Available Information. The Company is subject to the information and
reporting requirements of the Exchange Act and, in accordance therewith, is
obligated to file reports and other information with the SEC relating to its
business, financial condition and other matters. Information, as of particular
dates, concerning the Company's directors and officers, their remuneration,
stock options granted to them, the principal holders of the Company's
securities, any material interests of such persons in transactions with the
Company and other matters is required to be disclosed in proxy statements
distributed to the Company's stockholders and filed with the SEC. Such
reports, proxy statements and other information should be available for
inspection at the public reference room at the SEC's offices at 450 Fifth
Street, N.W., Washington, D.C. 20549 and also should be available for
inspection and copying at the regional offices of the SEC located at Seven
World Trade Center, 13th Floor, New York, New York 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies may be
obtained by mail, upon payment of the SEC's customary charges, by writing to
its principal office at 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549 and can be obtained electronically on the SEC's World Wide Web site
at http://www.sec.gov. Such materials should also be available for inspection
at the office of the Nasdaq Stock Market, Inc., 8513 Key West Avenue,
Rockville, Maryland 20850.
9. CERTAIN INFORMATION CONCERNING PURCHASER AND PARENT.
Parent is an individual residing in Springfield, Missouri. Parent, since
1970, has been actively engaged in the interstate truckload business providing
transportation services for both temperature-controlled and dry commodities,
through New Prime, Inc., a Nebraska corporation, which is wholly owned by
Parent (since 1985) and its predecessor corporation. The principal business
address of New Prime, Inc. is at 2740 North Mayfair, Springfield, Missouri
65803.
Purchaser is a Delaware corporation and to date has engaged in no
activities other than those incident to its formation and the commencement of
the Offer. Purchaser is wholly owned by Parent. Purchaser is the record owner
of 100 Shares. The principal executive offices of Purchaser are located at
2740 North Mayfair, Springfield, Missouri 65803.
The name, citizenship, business address, present principal occupation, and
material positions held during the past five years by Parent and each of the
directors and executive officers of Purchaser are set forth in Schedule I to
this Offer to Purchase.
Other Information. Except as set forth in Section 10 and Schedule II, none
of Parent or Purchaser, or, to the best of their knowledge, any of the persons
listed in Schedule I hereto or any associate or majority-owned subsidiary of
any of the foregoing, beneficially owns or has a right to acquire any equity
securities of the Company. Except as set forth in Section 10 and Schedule II,
none of Parent or Purchaser, or, to the best of their knowledge, any of the
persons or entities referred to above, or any director, executive officer or
subsidiary of any of the foregoing, has effected any transaction in such
equity securities during the past two years.
Except as set forth in Sections 10 and 11, none of Parent or Purchaser, or,
to the best of their knowledge, any of the persons listed in Schedule I
hereto, has any contract, arrangement, understanding or relationship with any
other person with respect to any securities of the Company, including, 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. Except as set forth in
Sections 10 and 11, there have been no contacts, negotiations or transactions,
between Parent or Purchaser, or, to the best of their knowledge, any of the
persons listed in Schedule I hereto, on the one hand, and the Company or its
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. Except
as described in Sections 10 and 11, none of Parent or Purchaser, or, to the
best of their knowledge, any of the persons listed in Schedule I hereto, has
had any transaction with the Company or any of its executive officers,
directors or affiliates that would require disclosure under the rules and
regulations of the SEC applicable to the Offer.
19
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY
Parent has known Jack Liles, the Chairman of the Board, President and Chief
Executive Officer of the Company, for several years and has been generally
familiar with the Company particularly since the Company went public in 1992.
Parent began acquiring shares of Common Stock of the Company through several
open market purchases, commencing in September, 1999, accumulating an
aggregate of 289,600 Shares, representing approximately 7.1% of the
outstanding Shares by December, 1999. As indicated in Parent's Schedule 13D,
Parent's then current intent in acquiring such Shares was for investment
purposes.
During January, 2000, Parent received a telephone call from a
representative of an institutional investor inquiring as to the interest of
Parent in purchasing a significant block of Shares over which such
institutional investor had shared dispositive power. Parent indicated at that
time that Parent might be interested and would give the matter some thought.
Given Parent's then significant ownership of Shares, the financial
performance of the Company, the then current economic environment in the
interstate truckload transportation services industry and the interest of the
institutional investor in selling a significant block of Shares, Parent first
began to consider the prospects of acquiring the entire equity interest in the
Company during the first week of February.
On February 10, 2000, Parent purchased 250,000 Shares from the
institutional investor at a per share purchase price of $6.06 in an open
market transaction facilitated by a third party broker-dealer. The
institutional investor had offered to sell more Shares at the same purchase
price, but Parent limited its purchase to 250,000 Shares in order to avoid
triggering the application of Section 203 of the DGCL. Parent's amendment to
its Schedule 13D with respect to such purchase then indicated that Parent
intended to pursue exploratory discussions with the Company but was reserving
Parent's rights to formulate other plans or proposals regarding the Company to
the extent deemed advisable by Parent.
On February 14, 2000, Parent met with Mr. Liles in Biloxi, Mississippi at
which time a general discussion ensued with regard to Parent's possible
acquisition of the Company. At that meeting, Mr. Liles stated that
notwithstanding the then current price at which the Shares were then trading,
he would not be interested in a sale of the Company for consideration of less
than $12 per share. Parent responded by stating that such a price would
represent a 100% premium over the then current trading price of the Shares and
that he believed that a price in the range of $7 to $7.50 per Share would
represent a full and fair price for the Shares.
By March 16, 2000, Parent was concerned that Mr. Liles, and/or the Company
Board would not be willing to engage in friendly exploratory discussions
regarding Parent's acquisition of the Company, and decided that it would be in
Parent's best interest to begin preparatory action toward taking Parent's
proposal directly to the stockholders of the Company, while at the same time,
continuing to explore the possibility of friendly negotiations directly with
the Company. In that regard, Parent had assembled a group of three persons
who, along with Parent, would serve as a new slate of directors to replace the
current directors of the Company so that the nominees could, if elected,
consider approving the Offer and the Proposed Merger and to take all other
action required in order to facilitate the Offer and the Proposed Merger, all
subject to their fiduciary duties to the stockholders of the Company. Also,
Parent executed a Consent of Stockholder, providing for, among other things,
the removal of the entire current Company Board and its replacement with
Parent's slate of nominees. A copy of such Consent of Stockholder was
delivered to The Prentice-Hall Corporation System, Inc., the registered agent
of the Company in the State of Delaware, on the next day, thereby establishing
the record date for the record holders entitled to exercise their consent as
March 17, 2000.
20
On March 16, 2000, Parent sent the following letter to the Company, which
letter was filed as an Exhibit to Parent's Amendment to its Schedule 13D,
making public the interest of Parent in exploring the possibility of acquiring
the Company.
March 15, 2000
Mr. Jack Liles
Chairman of the Board, President and Chief Executive Officer
KLLM Transport Services, Inc.
135 Riverview Drive
Richmond, Mississippi 39218
Dear Jack:
This letter is to express my interest in acquiring KLLM Transport Services,
Inc., either directly or through New Prime, Inc., a corporation wholly-owned
by me, in an all cash transaction.
Although I have not had the opportunity to conduct any due diligence other
than a preliminary review of KLLM's public documents, I think that a premium
of as much as 25% over the closing price of KLLM's common stock, as quoted on
the Nasdaq Stock Market on the trading day first preceding the disclosure of
our interest expressed in this letter, would be feasible. Based upon Tuesday's
closing price, the price per share to your stockholders would be approximately
$7.60 per share.
As you know, I have filed a Schedule 13D as a result of the level of my
ownership of KLLM shares, which requires amendment upon the occurrence of any
material change in the information contained therein. Consequently, I have
filed an amendment to my Schedule 13D contemporaneously with the delivery of
this letter disclosing my having advised you of my interest in acquiring KLLM
(either directly or indirectly) on a friendly basis and the execution by me of
a consent of stockholder for the purpose of protecting certain alternatives
that may be pursued by me in the future. A copy of the letter and the consent
of stockholder are attached as exhibits to the amendment.
I think that an all cash transaction will be attractive to your
stockholders, who currently hold a stock which is thinly traded and
historically has not paid dividends, to liquidate their investment in KLLM at
a substantial premium over current share value.
I would like to emphasize my desire to proceed with exploratory discussions
with you and your management as promptly as possible, with the dual objectives
of commencing a due diligence review (subject, of course, to an appropriate
confidentiality agreement), and negotiating the specific terms of an all cash
transaction with KLLM on a friendly basis.
I look forward to hearing from you.
Very truly yours,
/s/ Robert E. Low
Robert E. Low
On March 29, 2000, Parent received from Morgan Keegan & Company, Inc.
("Morgan Keegan"), the Company's investment advisor, a form of confidentiality
agreement which had been signed on behalf of the Company, seeking Parent's
signature thereto, presumably so as to permit Parent to conduct a due
diligence review of the Company. The form of confidentiality agreement
submitted to Parent contained a two-year standstill
21
provision and other provisions which were unacceptable to Parent. By letter
dated March 30, 2000, Parent responded to Morgan Keegan indicating that the
confidentiality agreement submitted to Parent was unacceptable, primarily
because of the two-year standstill provision.
On March 30, 2000, the Company filed its Annual Report on Form 10-K for its
fiscal year ended December 31, 1999, wherein it was disclosed that the Company
had entered into change in control agreements with Jack Liles, Steven L. Dutro
and Nancy M. Sawyer, each an executive officer of the Company. These
agreements provide for, among other things, a bonus payment equal to 200% of
such executive's then gross annual salary if such executive's employment with
the Company shall have terminated within 12 months after a change in control
as a result of such executive's termination by the Company without cause or
such executive's resignation for good reason. The change in control agreement
provides that such bonus is payable in full on the date of such termination.
Also, on March 30, 2000, Mr. Liles filed an amendment to his Schedule 13D
disclosing his communication to the Company Board of his strong interest in
acquiring the Company and that Mr. Liles was in the process of developing a
proposal in that regard. According to such amendment, the Company Board formed
an independent committee (the "Special Committee") consisting of Leland R.
Speed, Walter P. Neely and David L. Metzler, which would consider any proposal
submitted to it by Mr. Liles.
After considering the events that had transpired, Parent concluded that if
he was to acquire the entire equity interest in the Company, Parent would
probably be required to commence a consent solicitation to remove the Board
and replace the Board with Parent's nominees in order to be in a position to
complete a cash tender offer for all of the outstanding Shares. Accordingly,
on April 5, 2000, Parent sent the following letter to the Company demanding
access to, among other things, the Company's stockholder list and securities
listing position.
April 5, 2000
Via Overnight Delivery
Corporate Secretary
KLLM Transport Services, Inc.
135 Riverview Drive
Richland, Mississippi 39218
The Prentice-Hall Corporation System, Inc.
as Registered Agent of KLLM Transport Services, Inc.
1013 Centre Road
Wilmington, Delaware
Ladies and Gentlemen:
I am a stockholder of record of 100 shares of Common Stock, par value $1.00
per share, including the associated rights to purchase preferred stock
("Common Stock"), of KLLM Transport Services, Inc., a Delaware corporation
(the "Company"). I also beneficially own 539,500 shares of Common Stock.
Pursuant to (S) 220 of the Delaware General Corporation Law, I hereby
demand that at a time not later than the opening of business on April 13, 2000
you make available for inspection and copying the Company's stock ledger and a
list of stockholders dated as of March 17, 2000.
In addition to and as part of the foregoing demand, I hereby request:
(a) A list of the record holders of the Company, dated as of March 17,
2000 and certified by the Company or its transfer agent, showing the names
and addresses of each record holder of the Company and their stockholdings.
22
(b) A magnetic computer tape list of the stockholders of the Company as
of March 17, 2000 showing the names, addresses and number of shares of
Common Stock held by such stockholders, together with such computer
processing data as is necessary for me to make use of such magnetic
computer tape for verification purposes.
(c) All information in or which comes into the Company's possession or
control, or which can reasonably be obtained from brokers, dealers, banks,
clearing agencies or voting trustees or their nominees concerning the
names, addresses and number of shares of Common Stock held by the
participating brokers and banks named in the individual nominee names of
Cede & Co., Pacific & Co., Kray & Co., Philadep, DLJ and other similar
nominees, and a list or lists containing the name, address and number of
shares of Common Stock attributable to any participant in any Company
employee stock ownership or comparable plan in which the decision regarding
the voting of Common Stock held by such plan is made, directly or
indirectly, individually or collectively, by the participants in the plan.
(d) All information in or which comes into the Company's possession or
control, or which can reasonably be obtained from brokers, dealers, banks,
clearing agencies or voting trustees relating to the names of the
beneficial owners of shares of Common Stock ("NOBO's") in the format of a
printout in descending order balance.
I will bear the reasonable costs incurred by the Company (including those of
its transfer agent) in connection with the production of the above information.
The purpose of this demand is to enable me to communicate with my fellow
Company stockholders on matters relating to our mutual interests as
stockholders including the solicitation of written consents for the removal of
the Company's current Board of Directors.
I hereby designate and authorize Steven D. Crawford and Gallop, Johnson &
Neuman, L.C., their respective partners, officers and employees, and any other
persons to be designated by me, acting together, singly or in combination, to
conduct, as my agents, the inspection and copying herein requested.
Please advise Steven D. Crawford (800-848-4560) immediately whether you will
voluntarily supply the requested information or when and where the items
demanded above will be readily available to me.
Very truly yours,
/s/ Robert E. Low
Robert E. Low
On April 6, 2000, Parent received a letter from Mr. John Grayson, of Morgan
Keegan, indicating that the Company would be willing to consider a six-month
standstill agreement. Parent once again reiterated that while he would be
willing to sign a confidentiality agreement to protect any proprietary
information which may be disclosed to Parent during a due diligence review of
the Company, Parent would be unwilling to agree to any form of a standstill
obligation on his part.
Also on April 6, 2000, Parent received a call from Mr. Leland R. Speed, a
director of the Company and Chairman of the Special Committee, urging that
Parent reconsider entering into a short-term standstill agreement of three
months. Parent once again indicated that he would have no interest in entering
into a standstill agreement with the Company of any duration.
On Wednesday, April 12, 2000, Parent filed its Consent Solicitation
materials with the SEC, and Purchaser commenced the Offer.
23
11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY; THE PROPOSED MERGER.
Purpose. The purpose of the Offer is to acquire for cash a majority of the
outstanding Shares of, and ultimately the entire equity interest in, the
Company. Purchaser currently intends, as soon as practicable upon consummation
of the Offer, to propose and seek to have the Company effect the Proposed
Merger, pursuant to which each then outstanding Share (other than Shares held
by the Company in treasury or owned by Parent or Purchaser, or Shares, if any,
that are held by stockholders who are entitled to and who properly exercise
appraisal rights under the DGCL) would be converted pursuant to the terms of
the Proposed Merger into the right to receive an amount in cash equal to the
Per Share Amount.
Stockholders of the Company who tender and sell their Shares in the Offer
will cease to have any equity interest in the Company and any right to
participate in its future earnings and growth. If the Proposed Merger is
consummated, non-tendering stockholders will no longer have an equity interest
in the Company and instead will have only the right to receive cash
consideration equal to the Per Share Amount or to exercise statutory appraisal
rights under Section 262 of the DGCL. Similarly, after selling their Shares in
the Offer or the subsequent Proposed Merger, stockholders of the Company will
not bear the risk of any decrease in the value of the Company.
On April 12, 2000, Parent filed preliminary Consent Solicitation materials
with the SEC, which, in definitive form, will be mailed to stockholders of the
Company after completion of review by the staff of the SEC and receipt from
the Company of a current stockholder list. The Consent Solicitation requests
stockholders of the Company to, among other things, remove the entire Company
Board, reduce the size of the Company Board to four members and fill the newly
created vacancies on the Company Board with the Nominees. Parent and Purchaser
expect that, subject to their fiduciary duties under applicable law, the
Nominees would redeem the Rights (or amend the Rights Agreement to make the
Rights inapplicable to the Offer and the Proposed Merger) and approve the
Offer and the Proposed Merger under Section 203, which would satisfy the
Rights Condition and the Section 203 Condition, and take such other actions as
may be required to permit the prompt consummation of the Offer and the
Proposed Merger. The Consent Solicitation will be made pursuant to separate
consent solicitation materials.
THIS OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES OR CONSENTS. ANY
SUCH SOLICITATION WILL BE MADE PURSUANT TO SEPARATE PROXY OR CONSENT
SOLICITATION MATERIALS COMPLYING WITH THE REQUIREMENTS OF SECTION 14(A) OF THE
EXCHANGE ACT.
Parent and Purchaser are prepared to commence immediate good faith
negotiations with the Company Board regarding the possibility of increasing
the Per Share Amount after appropriate due diligence and access to the
Company's business plan. Accordingly, Purchaser reserves the right to amend
the Offer (including amending the number of Shares to be purchased and the Per
Share Amount) at any time, including in the event it enters into a merger
agreement with the Company or it negotiates a merger agreement with the
Company not involving a tender offer pursuant to which Purchaser would
terminate the Offer and the Shares would, upon consummation of such merger, be
converted into cash.
In the event that Parent is unable to negotiate a definitive merger
agreement with the Company and, pursuant to the Offer, Purchaser acquires
Shares which, together with Shares beneficially owned by Purchaser, constitute
at least 90% of the outstanding Shares, Parent currently intends to transfer
(and cause any such affiliates to transfer) the Shares owned by Parent to
Purchaser to permit Purchaser to consummate a "short-form" merger pursuant to
Section 253 of the DGCL. Section 253 of the DGCL provides that if Purchaser
owns at least 90% of the outstanding Shares, Purchaser may merge the Company
into itself by executing, acknowledging and filing, in accordance with Section
103 of the DGCL, a certificate of such ownership and merger setting forth a
copy of the resolution of Purchaser's board of directors to so merge
(including a statement of the terms and conditions of the merger and the
consideration to be paid by Purchaser upon surrender of Shares not owned by
Purchaser) and the date of its adoption. Under Section 253 of the DGCL, such a
merger of the Company with Purchaser would not
24
require the approval or any other action on the part of the Board of Directors
or the stockholders of the Company. Therefore, if at least 90% of the
outstanding Shares are acquired pursuant to the Offer or otherwise, Purchaser
will be able to, and intends to, effect the Proposed Merger without a meeting
of holders of Shares.
If Purchaser purchases a sufficient number of Shares to satisfy the Minimum
Tender Condition, but does not purchase a sufficient number of Shares to
effect a "short-form" merger, Purchaser currently intends to seek to effect a
merger of Purchaser with the Company pursuant to Section 251 of the DGCL.
Under the Company's Certificate of Incorporation and the DGCL, approval of the
Board of Directors of the Company and a vote of at least a majority of the
outstanding Shares of the Company entitled to vote thereon would be required
to approve such a merger. If the Minimum Tender Condition is satisfied
Purchaser would have a sufficient number of votes to effect the stockholder
approval of a merger pursuant to Section 251 of the DGCL, which approval could
be effected by a vote at a meeting of stockholders or by written consent.
Approval of such a merger would nonetheless also require the approval of the
Company Board.
Section 203 of the DGCL. In general, Section 203 of the DGCL prevents an
"Interested Stockholder" (defined generally as a person with 15% or more of a
corporation's outstanding voting stock) of a Delaware corporation from
engaging in a "Business Combination" (defined as a variety of transactions,
including mergers, as set forth below) with such corporation for three years
following the date such person became an Interested Stockholder unless (i)
before such person became an Interested Stockholder, the Board of Directors of
the corporation approved the transaction in which the Interested Stockholder
became an Interested Stockholder or approved the Business Combination; (ii)
upon consummation of the transaction which resulted in the Interested
Stockholder becoming an Interested Stockholder, the Interested Stockholder
owned at least 85% of the voting stock of the corporation outstanding at the
time the transaction commenced (excluding stock held by directors who are also
officers of the corporation and by employee stock ownership plans that do not
provide employees with the rights to determine confidentially whether shares
held subject to the plan will be tendered in a tender or exchange offer); or
(iii) following the transaction in which such person became an Interested
Stockholder, the Business Combination is approved by the Board of Directors of
the corporation and authorized at a meeting of stockholders by the affirmative
vote of the holders of at least two-thirds of the outstanding voting stock of
the corporation not owned by the Interested Stockholder.
Section 203 provides that during such three-year period the corporation may
not merge or consolidate with an Interested Stockholder or any affiliate or
associate thereof, and also may not engage in certain other transactions with
an Interested Stockholder or any affiliate or associate thereof, including
without limitation: (i) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition of assets (except proportionately as a stockholder of the
corporation) having an aggregate market value equal to 10% or more of the
aggregate market value of all assets of the corporation determined on a
consolidated basis or the aggregate market value of all the outstanding stock
of a corporation; (ii) any transaction which results in the issuance or
transfer by the corporation or by certain subsidiaries thereof of any stock of
the corporation or such subsidiaries to the Interested Stockholder, except
pursuant to a transaction which effects a pro rata distribution to all
stockholders of the corporation; (iii) any transaction involving the
corporation or certain subsidiaries thereof which has the effect of increasing
the proportionate share of the stock of any class or series, or securities
convertible into the stock of any class or series, of the corporation or any
such subsidiary which is owned directly or indirectly by the Interested
Stockholder (except as a result of immaterial changes due to fractional share
adjustments); or (iv) any receipt by the Interested Stockholder of the benefit
(except proportionately as a stockholder of such corporation) of any loans,
advances, guarantees, pledges or other financial benefits provided by or
through the corporation.
There can be no assurance that the Company Board will approve the
acquisition of Shares pursuant to the Offer and the Proposed Merger for
purposes of Section 203. If the Nominees are elected, the Nominees will
consider, consistent with their fiduciary duties to the Company and its
stockholders under applicable law, whether to approve the Offer and the
Proposed Merger under Section 203, which would satisfy the Section 203
Condition, and take such other actions as may be required to permit the prompt
consummation of the Offer and the Proposed Merger. Parent and Purchaser expect
that, subject to their fiduciary duties under applicable law, the
25
Nominees would approve the Offer and the Proposed Merger under Section 203,
which would satisfy the Section 203 Condition, and take such other actions as
may be required to permit the prompt consummation of the Offer and the
Proposed Merger. See "Introduction."
The Offer is conditioned upon the acquisition of Shares pursuant to the
Offer and the Proposed Merger being approved pursuant to Section 203 or Parent
being satisfied in his sole discretion that the provisions of Section 203 are
invalid or inapplicable to the acquisition of Shares pursuant to the Offer and
the Proposed Merger.
Appraisal Rights. Holders of Shares do not have appraisal rights as a
result of the Offer. However, if the Proposed Merger is consummated, each
holder of Shares whose Shares are to be converted in the Proposed Merger and
who has neither voted in favor of the Proposed Merger nor consented thereto in
writing will be entitled to an appraisal by the Delaware Court of Chancery of
the fair value of such stockholder's Shares, exclusive of any element of value
arising from the accomplishment or expectation of the Proposed Merger,
together with a fair rate of interest, if any, to be paid. In determining such
fair value, the Court may consider all relevant factors. The value so
determined could be more or less than the consideration to be paid in the
Offer and the Proposed Merger. Any judicial determination of the fair value
could be based upon considerations other than or in addition to the market
value of the Shares, including, among other things, asset values and earning
capacity.
If any holder of Shares who demands appraisal under Section 262 of the DGCL
fails to perfect or effectively withdraws or loses such stockholder's right to
appraisal as provided in the DGCL, the Shares of such stockholder will be
converted into the right to receive the merger consideration pursuant to the
Proposed Merger.
The foregoing discussion is not a complete statement of law pertaining to
appraisal rights under the DGCL and is qualified in its entirety by the full
text of Section 262 of the DGCL.
Failure to follow the steps required by Section 262 of the DGCL for
perfecting appraisal rights may result in the loss of such rights.
Rule 13e-3. The Proposed Merger would have to comply with any applicable
Federal law operative at the time of its consummation. Rule 13e-3 under the
Exchange Act is applicable to certain "going private" transactions. Purchaser
does not believe that Rule 13e-3 will be applicable to the Proposed Merger
unless the Proposed Merger is consummated more than one year after the
termination of the Offer. If applicable, Rule 13e-3 would require, among other
things, that certain financial information concerning the Company and certain
information relating to the fairness of the Proposed Merger and the
consideration offered to minority stockholders be filed with the SEC and
disclosed to minority stockholders prior to consummation of the Proposed
Merger.
Preferred Stock Purchase Rights. The following description of the Right
does not purport to be and is qualified in its entirety by its reference to
the Rights Agreement which is filed as Exhibit 99.1 to the Company's
registration statement on Form 8-A/A filed with the SEC on February 24, 1997.
On February 13, 1997, the Company Board declared a dividend of one Right
for each outstanding share of Common Stock of the Company. Each Right entitles
the registered holder to purchase from the Company one one-hundredth of a
share of Participating Preferred Stock, par value $.01 per share (the
"Preferred Shares"), of the Company, at a price of $41.00 per one one-
hundredth of a Preferred Share (the "Exercise Price"), subject to adjustment.
The Rights Agreement provides that, until the date on which certain events
take place (the "Separation Time"), the Rights will be evidenced by Share
certificates (and not by separate certificates) and will be transferred with
and only with the Shares. The term "Separation Time" means the close of
business on the earlier of (a) the tenth business day (or such earlier or
later date as may be determined by the Company Board) following a public
announcement by the Company that a person or group of affiliated or associated
persons has acquired beneficial ownership of 20% or more of the outstanding
Shares (collectively, an "Acquiring Person") (the "Flip-in Date") or (b) the
tenth business day (or such later date as may be determined by the Company
26
Board) after the date on which any person (or group of affiliated or
associated persons) commences a tender or exchange offer the consummation of
which would result in the beneficial ownership by such person of 20% or more
of such outstanding Shares. As soon as practicable following the Separation
Time, separate certificates evidencing the Rights (the "Right Certificates")
will be mailed to holders of record of Shares as of the close of business on
the Separation Time, and such separate Right Certificates alone will evidence
the Rights.
The Rights are not exercisable until the Separation Time. After the
Separation Time and prior to the Expiration Time, each Right (unless
previously redeemed) will entitle the holder to purchase, for the Exercise
Price, one one-hundredth of a share of the Preferred Shares having the rights
described below. The Rights will expire on the Expiration Time, unless the
Expiration Time is extended, or the Rights are earlier redeemed by the
Company. The term "Expiration Time" is defined in the Rights Agreement and
generally means February 13, 2007, unless the Rights are sooner exchanged or
redeemed, or the date of consummation of a merger of the Company approved by
the Company Board prior to a Flip-in Date.
The Exercise Price payable, and the number of outstanding Rights and the
number of one one-hundredth interests in Preferred Shares issuable upon
exercise of each Right, are subject to adjustment in the event of a stock
split of the shares of Common Stock or a stock dividend on the Shares payable
in shares of Common Stock or subdivisions, consolidations or combinations of
the Shares occurring, in any such case, prior to the Separation Time.
If, prior to the Separation Time, the Company distributes securities or
assets in exchange for Shares (other than regular cash dividends or a dividend
paid solely in shares of Common Stock) whether by dividend, reclassification
or otherwise, the Company shall make such adjustments, if any, in the Exercise
Price, number of Rights and otherwise as the Company Board deems appropriate.
If the Company elects not to issue fractional Preferred Shares, the Company
may (i) evidence such fractional shares by depositary receipts or (ii) sell
such shares and pay the registered holder the appropriate fraction of price
per share received upon sale.
Interests in Preferred Shares purchasable upon exercise of the Rights will
not be redeemable and will not be convertible into any other class of capital
stock. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $10.25 per share but will be entitled to an
aggregate dividend of 100 times the dividend declared per share of Common
Stock. In the event of a liquidation, the holders of the interests in
Preferred Shares will be entitled to a minimum preferential liquidation
payment of $4,100.00 per Preferred Share but will be entitled to an aggregate
payment of 100 times the payment made per share of Common Stock. Each
Preferred share will have 100 votes, voting together with the shares of Common
Stock. Finally, in the event of any merger, consolidation or other transaction
in which Shares are exchanged, each Preferred Share will be entitled to
receive 100 times the amount received per share of Common Stock. These rights
are protected by customary antidilution provisions. Because of the nature of
the Preferred Shares' dividend, liquidation and voting rights, the value of
the one one-hundredth interest in a Preferred Share purchasable upon exercise
of each Right should approximate the value of one share of Common Stock. If
the Company elects not to issue fractional Preferred Shares, the Company may
(i) evidence such fractional shares by depositary receipts or (ii) sell such
shares and pay the registered holder the appropriate fraction of price per
share received upon sale.
Upon the occurrence of a Flip-in Date, Rights owned by the Acquiring Person
or any affiliate or associate thereof or any transferee thereof will
automatically become void and, subject to the Exchange Option summarized
below, each other Right will automatically become a right to buy, for the
Exercise Price, that number of shares of Common Stock or, at the option of the
Company Board, Preferred Shares designed to have economic and voting terms
similar to the shares of Common Stock, in either case, having a market value
of twice the Exercise Price. If any person or group acquires beneficial
ownership of 20% or more of the outstanding Shares without any intent to
acquire or affect control of the Company, that acquisition will not result in
a Flip-in Date if such acquiror immediately enters into an irrevocable
commitment to promptly divest, and thereafter promptly divests, sufficient
Shares so that such 20% or greater beneficial ownership ceases. After a Flip-
in Date occurs,
27
the Company may not consolidate or merge with, or sell 50% or more of its
assets or earning power to, any person, if the Company Board is controlled by
the Acquiring Person, unless proper provision is made so that each Right would
thereafter become a right to buy, for the Exercise Price, that number of
shares of Common Stock of such other person having a market value of twice the
Exercise Price.
At any time after a Flip-in Date occurs and prior to the time a person or
group of persons become the beneficial owner of more than 50% of the
outstanding Shares, the Company Board may elect to exchange all of the
outstanding Rights (other than Rights owned by such person or group which have
become void), for shares of Common Stock at an exchange ratio (subject to
adjustment) of one share of Common Stock per Right (the "Exchange Option").
Also, at its option, the Company Board may substitute interests in Preferred
Shares (or shares of a class or series of the preferred stock having
equivalent rights, preferences and privileges) for shares of Common Stock
exchangeable for Rights at an initial rate (subject to adjustment) of one one-
hundredth interest in a Preferred Share (or equivalent preferred share) for
each share of Common Stock.
At any time prior to a Flip-in Date, 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 any redemption of the Rights, the right
to exercise the Rights will terminate, and the only right of the holders of
Rights will be to receive the Redemption Price.
The Company and the Rights Agent may amend the Rights Agreement in any
respect prior to the occurrence of a Flip-in Date. Thereafter, the Company and
the Rights Agent may amend the Rights Agreement in any respect which shall not
materially adversely affect the interest of holders of Rights generally or to
cure an ambiguity or to correct or supplement any provision which may be
inconsistent with any other provision or otherwise defective.
Until a Right is exercised, the holder thereof, as such, will have no right
as a stockholder of the Company, including, without limitation, the right to
vote or to receive dividends.
12. SOURCE AND AMOUNT OF FUNDS.
Purchaser estimates that the total amount of funds required to purchase all
of the outstanding Shares (other than those already owned by Purchaser) on a
fully diluted basis pursuant to the Offer and the Proposed Merger and to pay
related fees and expenses will be approximately $29 million. Purchaser intends
to obtain all funds needed for the Offer and the Proposed Merger through a
capital contribution from Parent. Parent has possession of, or has readily
available to him, sufficient funds to close the Offer and Proposed Merger.
13. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment and, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c), Purchaser shall not be
required to pay for any Shares, may postpone the acceptance for payment of, or
payment for, tendered Shares, and may, in its sole discretion, extend,
terminate or amend the Offer as to any Shares not then accepted for payment if
the Minimum Tender Condition, the Section 203 Condition, the Rights Condition
or the Antitrust Condition has not been satisfied or, on or after the date of
this Offer to Purchase and at or prior to the Expiration Date, any of the
following events shall occur:
(a) there shall be threatened, instituted or pending any action,
proceeding or application before any court, government or governmental
authority or other regulatory or administrative agency or commission,
domestic or foreign, (i) which challenges the acquisition by Purchaser of
the Shares, seeks to restrain, delay or prohibit the consummation of the
Offer or the transactions contemplated by the Offer, the Proposed Merger or
other subsequent business combination or, seeks to obtain any material
damages or otherwise directly or indirectly relates to the transactions
contemplated by the Offer, the Proposed Merger or other subsequent business
combination, or, seeks to impose voting, procedural, price or other
requirements, in addition to those required by the federal securities laws
or the DGCL (each as in effect on the date of this
28
Offer to Purchase), (ii) which seeks to prohibit or impose material
limitations on Parent's or Purchaser's acquisition, ownership or operation
of all or any portion of their or the Company's business or assets
(including the business or assets of their respective affiliates and
subsidiaries) or of the Shares (including, without limitation, the right to
vote the Shares purchased by them, on an equal basis with all other Shares,
on all matters presented to the stockholders of the Company), or seeks to
compel Parent or Purchaser to dispose of or hold separate all or any
portion of their own or the Company's business or assets (including the
business or assets of their respective affiliates and subsidiaries) as a
result of the transactions contemplated by the Offer, the Proposed Merger
or other subsequent business combination, (iii) which in the sole judgment
of Purchaser is reasonably likely to materially adversely affect the
Company, Parent or Purchaser, or any of their respective affiliates or
subsidiaries (such an effect, an "Adverse Effect"), or result in a material
diminution in the value of the Shares or the benefits expected to be
derived by Parent or Purchaser as a result of the transactions contemplated
by the Offer and the Proposed Merger (such a diminution, a "Diminution in
Value"); or (iv) which seeks to impose any condition to the Offer or the
Proposed Merger unacceptable to Parent or Purchaser; or
(b) other than the waiting periods that must expire or otherwise
terminate in satisfaction of the Antitrust Condition, any statute, rule,
regulation or order or injunction shall be sought, proposed, enacted,
promulgated, entered, enforced or deemed to become applicable to the Offer,
the Proposed Merger or the transactions contemplated by the Offer or other
subsequent business combination that might, directly or indirectly, result
in any of the consequences referred to in clauses (i) through (iv) of
paragraph (a) above; or
(c) any change (or any condition, event or development involving a
prospective change) shall have occurred that has or in the sole judgment of
Purchaser is reasonably likely to have a materially adverse effect on the
business, properties, assets, liabilities, capitalization, stockholders'
equity, financial condition, operations, licenses or franchises, results of
operations or prospects of the Company or any of its subsidiaries, or
Parent or Purchaser shall have become aware of any fact that has or in the
sole judgment of Purchaser is reasonably likely to have an Adverse Effect
or results or in the sole judgment of Purchaser is reasonably likely to
result in a Diminution in Value; or
(d) there shall have occurred (i) any general suspension of, or
limitation on times or prices for, trading in securities on any national
securities exchange or in the over-the-counter market, (ii) a declaration
of a banking moratorium or any suspension of payments in respect of banks
in the United States, (iii) the outbreak or escalation of a war, armed
hostilities or other international or national calamity directly or
indirectly involving the United States, (iv) any limitation (whether or not
mandatory) by any governmental authority on, or any other event which might
affect the extension of credit by banks or other lending institutions, (v)
a suspension of or limitation (whether or not mandatory) on the currency
exchange markets or the imposition of, or material changes in, any currency
or exchange control laws in the United States or abroad, (vi) a general
decline in the market prices of securities of publicly-traded United States
companies in the truck transport industry or (vii) in the case of any of
the foregoing existing at the time of commencement of the Offer, a material
acceleration or worsening thereof; or
(e) other than the redemption of the Rights, the Company or any
subsidiary of the Company shall have (i) issued, distributed, pledged, sold
or authorized, or proposed the issuance of or sale, distribution or pledge
to any person of (A) any shares of its capital stock other than sales or
issuances pursuant to employee stock options disclosed in the Company's
publicly available filings with the SEC prior to, and outstanding on, March
24, 2000 (in accordance with the then-existing terms thereof) of any class
(including, without limitation, the Common Stock) or securities convertible
into or exchangeable for any such shares of capital stock, or any rights,
warrants or options to acquire any such shares or convertible securities or
any other securities of the Company, (B) any other securities in respect
of, in lieu of or in substitution for Common Stock outstanding on March 24,
2000 (in accordance with the then-existing terms thereof) or (C) any debt
securities or any securities convertible into or exchangeable for debt
securities or any rights, warrants or options entitling the holder thereof
to purchase or otherwise acquire any debt securities, (ii) purchased or
otherwise acquired, or proposed or offered to purchase or otherwise acquire
any outstanding shares of Common Stock or other securities, (iii) proposed,
recommended, authorized, declared, issued or paid any
29
dividend or distribution on any shares of Common Stock or any other
security, whether payable in cash, securities or other property, (iv)
altered or proposed to alter any material term of any outstanding security,
(v) incurred, agreed to incur or announced its intention to incur any debt
other than in the ordinary course of business and consistent with past
practice, (vi) authorized, recommended, proposed or publicly announced its
intent to enter into any merger, consolidation, liquidation, dissolution,
business combination, acquisition or disposition of assets or securities
other than in the ordinary course of business consistent with past
practice, any material change in its capitalization, any release or
relinquishment of any material contractual or other rights or any
comparable event, or taken any action to implement any such transaction
previously authorized, recommended, proposed or publicly announced or (vii)
entered into any other agreement or otherwise effected any other
arrangement with any other party or with its officers or other employees of
the Company that might, individually or in the aggregate, have an Adverse
Effect or result in a Diminution in Value; or
(f) the Company or any of its subsidiaries shall have amended or
proposed or authorized any amendment to its respective certificate of
incorporation or bylaws or similar organizational documents or Purchaser
shall have learned that the Company or any of its subsidiaries shall have
proposed, adopted or recommended any such amendment which has not
previously been publicly disclosed by the Company and also set forth in
filings with the SEC; or
(g) a tender or exchange offer for some portion or all of the Shares
shall have been commenced or publicly proposed to be made by a person other
than Purchaser or Parent (including the Company or its subsidiaries), or it
shall have been publicly disclosed or Purchaser shall have learned that (i)
any person (including the Company or its subsidiaries), entity or "group"
(as defined in Section 13(d)(3) of the Exchange Act) shall, other than for
bona fide arbitrage purposes, have acquired or proposed to acquire more
than five percent of the outstanding Shares, or shall have been granted any
option or right, conditional or otherwise, to acquire more than five
percent of the outstanding Shares, other than acquisitions by persons or
groups who have publicly disclosed in a Schedule 13D or 13G (or amendments
thereto on file with the SEC) such ownership on or prior to March 15, 2000,
(ii) any such person, entity or group who has publicly disclosed any such
ownership of more than five percent of the outstanding Shares prior to such
date shall have acquired or proposed to acquire additional Shares
constituting more than one percent of the outstanding Shares, or shall have
been granted any option or right to acquire more than one percent of the
outstanding Shares; (iii) any new group was, or is, formed which
beneficially owns more than five percent of the outstanding Shares; (iv)
any person, entity or group shall have entered into a definitive agreement
or an agreement in principal or made a proposal with respect to a tender
offer or exchange offer for some portion or all of the outstanding Shares
or a merger, consolidation or other business combination or sale of assets
(other than in the ordinary course of business consistent with past
practice) with or involving the Company or any of its affiliates or
subsidiaries; or (v) any person shall have filed a Notification and Report
Form under the HSR Act or made a public announcement reflecting an intent
to acquire the Company or assets or securities of the Company; or
(h) the Company and Parent or Purchaser shall have reached an agreement
or understanding that the Offer be terminated or amended or Purchaser or
Parent (or one of their respective affiliates) shall have entered into a
definitive agreement or an agreement in principle to acquire the Company by
merger or similar business combination, or purchase of Shares or assets of
the Company; or
(i) any change (or any condition, event or development involving a
prospective change) shall have occurred or be threatened in the general
economic, financial, currency exchange or market conditions in the United
States or abroad that has or might have an Adverse Effect or results or
might result in a Diminution in Value; or
(j) the Company or any of its subsidiaries shall have transferred into
trust, escrow or similar arrangement any amounts required to fund any
existing benefit, employment or severance agreements with any of its
employees or shall have entered into or otherwise affected with its
officers or any other employees any additional benefit, employment,
severance or similar agreements, arrangements or plans other than in the
ordinary course of business consistent with past practice or entered into
or amended any agreements,
30
arrangements or plans so as to provide for increased benefits to such
employee or employees as a result of or in connection with the transactions
contemplated by the Offer or the Proposed Merger; or
(k) (i) any material contractual right of the Company or any of its
subsidiaries or affiliates shall be impaired or otherwise adversely
affected or any material amount of indebtedness of the Company or any of
its subsidiaries, joint ventures or partnerships shall become accelerated
or otherwise become due before its started due date, in either case, with
or without notice or the lapse of time or both, as a result of the
transactions contemplated by the Offer or the Proposed Merger or (ii) any
covenant, term or condition in any of the Company's or any of its
subsidiaries', joint ventures' or partnerships' instruments, licenses, or
agreements is or may have an Adverse Effect or a Diminution In Value
(including, but not limited to, any event of default that may ensue as a
result of the consummation of the Offer or the Proposed Merger or the
acquisition by Parent of control of the Company); which in the sole
judgment of Parent and Purchaser with respect to each and every matter
referred to above makes it inadvisable to proceed with the Offer or with
such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Parent and Purchaser
and may be asserted by Parent or Purchaser regardless of the circumstances
(including any action or inaction by Parent or Purchaser) giving rise to any
such conditions or may be waived by Parent or Purchaser in whole or in part at
any time and from time to time in its sole discretion. The determination as to
whether any condition has occurred shall be in the sole judgment of Parent and
Purchaser and will be final and binding on all parties. The failure by Parent
or Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right and each such right shall be deemed an
ongoing right which may be asserted at any time and from time to time.
A public announcement shall be made of a material change in, or waiver of,
such conditions, and the Offer may, in certain circumstances, be extended in
connection with any such change or waiver.
14. DIVIDENDS AND DISTRIBUTIONS.
If, on or after the date of this Offer to Purchase, the Company should (1)
split, combine or otherwise change the Shares or its capitalization, (2)
acquire currently outstanding Shares or otherwise cause a reduction in the
number of outstanding Shares or (3) issue or sell additional Shares, shares of
any other class of capital stock, other voting securities or any securities
convertible into, or rights, warrants or options, to acquire any of the
foregoing, other than Shares issued pursuant to the exercise of stock options
outstanding as of the date of the Offer to Purchase, then, subject to the
provisions of Section 13 above, Purchaser, in its sole discretion, may make
such adjustments as it deems appropriate in the price per Share to be paid
pursuant to the Offer and other terms of the Offer, including, without
limitation, the number or type of securities offered to be purchased.
If, on or after the date of this Offer to Purchase, the Company should
declare or pay any cash dividend on the Shares or other distribution on the
Shares, or issue with respect to the Shares any additional Shares, shares of
any other class of capital stock, other voting securities or any securities
convertible into, or rights, warrants or options, conditional or otherwise, to
acquire, any of the foregoing, payable or distributable to stockholders of
record on a date prior to the transfer of the Shares purchased pursuant to the
Offer to Purchaser or its nominee or transferee on the Company's stock
transfer records, then, subject to the provisions of Section 13 above, (1) the
offer price may, in the sole discretion of Purchaser, be reduced by the amount
of any such cash dividend or cash distribution and (2) the whole of any such
non-cash dividend, distribution or issuance to be received by the tendering
stockholders will (a) be received and held by the tendering stockholders for
the account of Purchaser and will be required to be promptly remitted and
transferred by each tendering stockholder to the Depositary for the account of
Purchaser, accompanied by appropriate documentation of transfer, or (b) at the
direction of Purchaser, be exercised for the benefit of Purchaser, in which
case the proceeds of such exercise will promptly be remitted to Purchaser.
Pending such remittance and subject to applicable law, Purchaser will be
entitled to all rights and privileges as owner of any such noncash dividend,
distribution, issuance or proceeds and may withhold the entire offer price or
deduct from the offer price the amount or value thereof, as determined by
Purchaser in its sole discretion.
31
15. CERTAIN LEGAL MATTERS.
General. Except as otherwise disclosed herein, based upon an examination of
publicly available filings with respect to the Company, Parent and Purchaser
are not aware of any licenses or other regulatory permits which appear to be
material to the business of the Company and which might be adversely affected
by the acquisition of Shares by Purchaser pursuant to the Offer or of any
approval or other action by any governmental, administrative or regulatory
agency or authority which would be required for the acquisition or ownership
of Shares by Purchaser pursuant to the Offer. Should any such approval or
other action be required, it is currently contemplated that such approval or
action would be sought or taken. There can be no assurance that any such
approval or action, if needed, would be obtained or, if obtained, that it will
be obtained without substantial conditions or that adverse consequences might
not result to the Company's or Parent's business or that certain parts of the
Company's or Parent's business might not have to be disposed of in the event
that such approvals were not obtained or such other actions were not taken,
any of which could cause Purchaser to elect to terminate the Offer without the
purchase of the Shares thereunder. Purchaser's obligation under the Offer to
accept for payment and pay for Shares is subject to certain conditions. See
Section 13.
Antitrust Compliance. Under the HSR Act and the rules that have been
promulgated thereunder by the Federal Trade Commission ("FTC"), certain
acquisition transactions may not be consummated unless certain information has
been furnished to the Antitrust Division of the Department of Justice (the
"Antitrust Division") and the FTC and certain waiting period requirements have
been satisfied. The acquisition of Shares by Purchaser is subject to these
requirements.
Pursuant to the HSR Act, Parent expects to file a Notification and Report
Form with respect to the acquisition of Shares pursuant to the Offer and the
Proposed Merger with the Antitrust Division and the FTC by April 17, 2000.
Under the provisions of the HSR Act applicable to the purchase of Shares
pursuant to the Offer, such purchases may not be made until the expiration of
a 15-calendar day waiting period following the filing by Parent. Accordingly,
the waiting period under the HSR Act is expected to expire at 11:59 p.m., New
York City time, on May 3, 2000, unless early termination of the waiting period
is granted or Parent receives a request for additional information or
documentary material prior thereto. Pursuant to the HSR Act, Parent may
request early termination of the waiting period applicable to the Offer. There
can be no assurances given, however, that the 15-day HSR Act waiting period
will be terminated early. If either the FTC or the Antitrust Division were to
request additional information or documentary material from Parent, the
waiting period would expire at 11:59 p.m., New York City time, on the tenth
calendar day after the date of substantial compliance by Parent with such
request unless the waiting period is sooner terminated by the FTC or the
Antitrust Division. Thereafter, the waiting period could be extended only by
agreement or by court order. Only one extension of such waiting period
pursuant to a request for additional information is authorized by the rules
promulgated under the HSR Act, except by agreement or by court order. Any such
extension of the waiting period will not give rise to any withdrawal rights
not otherwise provided for by applicable law. See Section 4. Although the
Company is required to file certain information and documentary material with
the Antitrust Division and the FTC in connection with the Offer, neither the
Company's failure to make such filings nor a request from the Antitrust
Division or the FTC for additional information or documentary material made to
the Company will extend the waiting period.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares
by Purchaser pursuant to the Offer. At any time before or after Purchaser's
purchase of Shares, the Antitrust Division or the FTC could take such action
under the antitrust laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the acquisition of Shares pursuant to
the Offer or seeking divestiture of Shares acquired by Purchaser or the
divestiture of substantial assets of Parent, the Company or any of their
respective subsidiaries. Private parties and state attorneys general may also
bring legal action under the antitrust laws under certain circumstances. There
can be no assurance that a challenge to the Offer on antitrust grounds will
not be made or, if a challenge is made, what the result will be. See Section
13 for certain conditions to the Offer that could become applicable in the
event of such a challenge.
32
The acquisition of Shares by Purchaser pursuant to the Offer may be subject
to antitrust laws or merger control regulations in Canada, Mexico, and other
foreign jurisdictions. Such laws or regulations may require notification with
respect to the Offer and impose a mandatory waiting period similar to or in
excess of the requirements of the HSR Act.
Foreign Approvals. The Company Form 10-K indicates that the Company,
through its sole subsidiary, conducts business in Canada and Mexico. In
connection with the acquisition of the Shares pursuant to the Offer, the laws
of those foreign countries and jurisdictions may require the filing of
information with, or the obtaining of the approval of, governmental
authorities in such countries and jurisdictions. The governments in such
countries and jurisdictions might attempt to impose additional conditions on
the Company's operations conducted in such countries and jurisdictions as a
result of the acquisition of the Shares pursuant to the Offer. There can be no
assurance that Parent will be able to cause the Company or its subsidiary to
satisfy or comply with such laws or that compliance or non-compliance will not
have a material adverse effect on the financial condition, properties,
business, results of operations or prospects of the Company and its subsidiary
taken as a whole or impair Parent, Purchaser or the Company or any of their
respective affiliates, following consummation of the Offer or Proposed Merger,
to conduct any material business or operations in any jurisdiction where they
are now being conducted. See Section 13 for certain conditions to the Offer
that could become applicable in the event that any such foreign approvals give
rise to such effects.
State Takeover Laws. A number of states have adopted laws and regulations
applicable to offers to acquire securities of corporations which are
incorporated in such states and/or which have substantial assets,
stockholders, principal executive offices or principal places of business
therein. In Edgar v. MITE Corporation, the Supreme Court of the United States
held that the Illinois Business Takeover Statute, which made the takeover of
certain corporations more difficult, imposed a substantial burden on
interstate commerce and was therefore unconstitutional. In CTS Corporation v.
Dynamics Corporation of America, the Supreme Court held that as a matter of
corporate law, and in particular, those laws concerning corporate governance,
a state may constitutionally disqualify an acquiror of "Control Shares" (ones
representing ownership in excess of certain voting power thresholds: e.g.,
20%, 33% or 50%) of a corporation incorporated in its state and meeting
certain other jurisdictional requirements from exercising voting power with
respect to those shares without the approval of a majority of the
disinterested stockholders. In BNS Inc. v. Koppers Co., the United States
District Court for the District of Delaware upheld the constitutionality of
Section 203, finding that it did not impermissibly impede interstate commerce
in violation of the Commerce Clause.
Section 203 of the DGCL limits the ability of a Delaware corporation to
engage in business combinations with "interested stockholders" (defined
generally as any beneficial owner of 15% or more of the outstanding voting
stock of the corporation) unless, among other things, the corporation's board
of directors has given its prior approval to either the business combination
or the transaction which resulted in the stockholder becoming an "interested
stockholder." The Company Board has not approved the acquisition of Shares by
Parent or Purchaser pursuant to the Offer or the Proposed Merger and,
therefore, Section 203 of the DGCL could be applicable to the Offer and the
Proposed Merger. See Section 11.
The Company, through its subsidiary, conducts business in a number of
states throughout the United States, some of which have enacted takeover laws.
Purchaser reserves the right to challenge the applicability or validity of any
state law purportedly applicable to the Offer or the Proposed Merger and
nothing in this Offer to Purchase or any action taken in connection with the
Offer or the Proposed Merger is intended as a waiver of such right. If it is
asserted that any state takeover statute is applicable to the Offer or the
Proposed Merger and if an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer or the Proposed Merger,
Purchaser might be required to file certain information with, or to receive
approvals from, the relevant state authorities, and Purchaser might be unable
to accept for payment or pay for Shares tendered pursuant to the Offer, or be
delayed in consummating the Offer or the Proposed Merger. In such case,
Purchaser may not be obligated to accept for payment or pay for any Shares
tendered pursuant to the Offer. See Section 13.
33
16. FEES AND EXPENSES.
Purchaser has retained MacKenzie Partners, Inc., to act as the Information
Agent 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 and other nominee stockholders to forward materials
relating to the Offer to beneficial owners of Shares. The Information Agent
will receive reasonable and customary compensation for such services, plus
reimbursement of out-of-pocket expenses. Purchaser will also indemnify the
Information Agent against certain liabilities and expenses in connection with
the Offer, including liabilities under the federal securities laws.
Purchaser will pay the Depositary reasonable and customary compensation for
its services in connection with the Offer, plus reimbursement for out-of-
pocket expenses, and will indemnify the Depositary against certain liabilities
and expenses in connection therewith, including liabilities under the federal
securities laws.
Neither Purchaser nor Parent will pay any fees or commissions to any broker
or dealer or other persons for soliciting tenders of Shares pursuant to the
Offer (other than the fees of the Information Agent and the Depositary).
Brokers, dealers, commercial banks and trust companies will be reimbursed by
Purchaser for customary mailing and handling expenses incurred by them in
forwarding material to their customers.
17. MISCELLANEOUS.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of
such jurisdiction. However, Purchaser may, in its sole discretion, take such
action as it may deem necessary to make the Offer in any such jurisdiction and
extend the Offer to holders of Shares in such jurisdiction.
Neither Purchaser nor Parent is aware of any jurisdiction in which the
making of the Offer or the acceptance of Shares in connection therewith would
not be in compliance with the laws of such jurisdiction.
Purchaser and Parent have filed with the SEC a Statement on Schedule TO
pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange
Act, furnishing certain additional information with respect to the Offer, and
may file amendments thereto. Such Statement and any amendments thereto,
including exhibits, may be examined and copies may be obtained from the
principal office of the SEC in Washington, D.C. in the manner set forth in
Section 8.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR PURCHASER NOT CONTAINED IN THIS OFFER TO
PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
Neither the delivery of the Offer to Purchase nor any purchase pursuant to
the Offer will, under any circumstance, create any implication that there has
been no change in the affairs of Purchaser, Parent or the Company since the
date as of which information is furnished or the date of this Offer to
Purchase.
Low Acquisition, Inc.
April 12, 2000
34
SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS
AND EXECUTIVE OFFICERS OF PARENT AND PURCHASER
Robert E. Low is the sole shareholder of Purchaser and is the sole director
and the president and chief executive officer, secretary and treasurer of
Purchaser. There are no other officers of Purchaser.
Mr. Low, age 50, is and has been the sole stockholder, president and chief
executive officer of New Prime, Inc., a Nebraska corporation for more than the
past five years. New Prime, Inc. is an interstate truckload carrier providing
transportation services for both temperature controlled and dry commodities.
The principal business address of New Prime, Inc. is located at 2740 North
Mayfair, Springfield, Missouri 65803, and its telephone number is (800) 848-
4560.
Mr. Low, during the past five years, has not been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors).
Mr. Low, during the past five years, has not been a party to a civil
proceeding of a traditional or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
Mr. Low is a United States citizen, residing in Springfield, Missouri.
35
SCHEDULE II
TRANSACTIONS EFFECTED DURING THE PAST TWO YEARS
BY ROBERT E. LOW
Number of Average
Shares Price Purchase
Quarterly Period Purchased Range/Quarter Price/Quarter
- ---------------- --------- ------------- -------------
7/1/99-9/30/99............................ 9,900 $4.39-$4.63 $4.50
10/1/99-12/30/99.......................... 231,300 $4.26-$5.00 $4.82
1/1/00-3/31/00............................ 298,400 $4.88-$6.06 $5.88
36
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (1) complete and sign the Letter of Transmittal (or a
facsimile thereof) in accordance with the Instructions in the Letter of
Transmittal, including any required signature guarantees, and mail or deliver
the Letter of Transmittal or such facsimile with such stockholder's
certificate(s) evidencing the tendered Shares and any other required documents
to the Depositary (as defined herein), (2) follow the procedure for book-entry
tender of Shares set forth in Section 3, or (3) request such stockholder's
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for such stockholder. Stockholders having Shares registered in the
name of a broker, dealer, commercial bank, trust company or other nominee must
contact such broker, dealer, commercial bank, trust company or other nominee
if such stockholder desires to tender such Shares so registered.
The Rights are presently evidenced by the certificates for the Common Stock
and a tender by a stockholder of such stockholder's shares of Common Stock
will also constitute a tender of the associated Rights. If separate
certificates representing the Rights are issued to the holders of Common
Stock, certificates representing a number of Rights equal to the number of
shares of Common Stock tendered must be delivered by following the procedures
set forth in Section 3. A stockholder who desires to tender Shares and whose
certificates for such Shares are not immediately available, or who cannot
comply with the procedure for book-entry transfer on a timely basis, may
tender such Shares by following the procedures for guaranteed delivery set
forth in Section 3.
Manually signed facsimile copies of the Letter of Transmittal, properly
completed and duly signed, will be accepted. The Letter of Transmittal,
certificates for the Shares (and, if appropriate, Rights) and any other
required documents should be sent by each stockholder of the Company or such
stockholder's broker-dealer, commercial bank, trust company or other nominee
to the Depositary as follows:
The Depositary for the Offer is:
Wilmington Trust Company
Facsimile 302-651-1079
For Confirmation Telephone: 302-651-8869
By Mail: By Hand/Overnight Courier:
Corporate Trust Operations Wilmington Trust Company
Wilmington Trust Company 1105 North Market Street, First Floor
Rodney Square North Wilmington, DE 19801
1100 North Market Street Attn: Corporate Trust Operations
Wilmington, DE 19890-0001
Any questions and requests for assistance or additional copies of the Offer
to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery
may be directed to the Information Agent at its telephone number and location
listed below. You may also contact your broker, dealer, commercial bank or
trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
MacKenzie Partners, Inc.
156 Fifth Avenue
New York, NY 10010
(212) 929-5000 (call collect)
CALL TOLL-FREE (800) 322-2885