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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE TO
(Rule 14d-100)
Tender Offer Statement Under Section 14(d)(1)
or Section 13(e)(1) of the Securities Exchange Act of 1934
BUSH BOAKE ALLEN INC.
(Name of Subject Company (Issuer))
B ACQUISITION CORP.
a wholly owned subsidiary of
INTERNATIONAL FLAVORS & FRAGRANCES INC.
(Names of Filing Persons (Offerors))
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COMMON STOCK, PAR VALUE $1.00 PER SHARE
(Title of Class of Securities)
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123162109
(CUSIP Number of Class of Securities)
Stephen A. Block, Esq.
Senior Vice President, General Counsel and Secretary
International Flavors & Fragrances Inc.
521 West 57th Street
New York, New York 10019
Telephone: (212) 765-5500
(Name, address and telephone number of person authorized to receive notices
and communications on behalf of filing persons)
Copy to:
Roger S. Aaron, Esq.
Stephen F. Arcano, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
Telephone: (212) 735-3000
CALCULATION OF FILING FEE
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Amount
of
Transaction Filing
Valuation* Fee
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$969,854,863 $193,971
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* For purposes of calculating amount of filing fee only. This amount assumes
(i) the purchase of all outstanding shares of common stock of Bush Boake
Allen Inc. (19,351,063 shares) at a purchase price of $48.50 per share and
(ii) shares of common stock of Bush Boake Allen Inc. subject to options
that will be vested and exercisable as of the closing of this offer
(1,401,714 shares) at a purchase price of $48.50 per share less the average
exercise price of the outstanding options of $26.15 per share. The amount
of the filing fee calculated in accordance with Rule 0-11 of the Securities
Exchange Act of 1934, as amended, equals 1/50 of 1% of the transaction
value.
[_]Check the box if any part of the fee is offset as provided by Rule 0-
11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number or the Form or Schedule and the date of its filing.
Amount Previously Paid: N/A Form or Registration No.: N/A
Filing party: N/A Date Filed: N/A
[_]Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which
the statement relates:
[X]third-party tender offer subject to Rule 14d-1.
[_]issuer tender offer subject to Rule 13e-4.
[_]going-private transaction subject to Rule 13e-3.
[_]amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the
results of the tender offer: [_]
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Item 1. Summary Term Sheet.
The information set forth in the section of the Offer to Purchase (the
"Offer to Purchase") entitled "Summary Term Sheet" is incorporated herein by
reference.
Item 2. Subject Company Information.
(1) The name of the subject company is Bush Boake Allen Inc., a Virginia
corporation (the "Company"), and the address of its principal executive
offices is 7 Mercedes Drive, Montvale, New Jersey 07645. The telephone number
of the Company is (201) 391-9870.
(2) This Statement relates to an offer by B Acquisition Corp., a Virginia
corporation ("Merger Subsidiary") and a wholly owned subsidiary of
International Flavors & Fragrances Inc., a New York corporation ("Parent"), to
purchase all outstanding shares of common stock of the Company, par value
$1.00 per share (the "Shares"), at $48.50 per Share, net to the seller in
cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase and in the related Letter of Transmittal, copies of which are
attached hereto as Exhibits (a)(l) and (a)(2) (which are herein collectively
referred to as the "Offer"). The information set forth in the introduction
(the "Introduction") to the Offer to Purchase is incorporated herein by
reference.
(3) The information concerning the principal market in which the Shares are
traded and certain high and low sales prices for the Shares in such principal
market are set forth in "Price Range of Shares; Dividends" in the Offer to
Purchase and is incorporated herein by reference.
Item 3. Identity and Background of the Filing Person.
(a), (b), (c) The information set forth in "Certain Information Concerning
Merger Subsidiary and Parent" and Schedule I in the Offer to Purchase is
incorporated herein by reference.
Item 4. Terms of the Transaction.
(a)(1)(i)-(viii), (xii) The information set forth under "Introduction,"
"Acceptance for Payment and Payment for Shares," "Terms of the Offer,"
"Procedures for Accepting the Offer and Tendering Shares," "Withdrawal
Rights," "Certain Federal Income Tax Consequences" and "Background of the
Offer; Purpose of the Offer and the Merger; the Merger Agreement and Certain
Other Agreements" in the Offer to Purchase is incorporated herein by
reference.
(a)(1)(ix) Not applicable
(x) Not applicable
(xi) Not applicable
(a)(2)(i)-(iv), (vii) The information set forth under "Introduction," "Terms
of the Offer," "Certain Federal Income Tax Consequences," "Background of the
Offer; Purpose of the Offer and the Merger; the Merger Agreement and Certain
Other Agreements" and "Plans for the Company; Other Matters" in the Offer to
Purchase is incorporated herein by reference.
(a)(2)(v) Not applicable
(vi) Not applicable
Item 5. Past Contacts, Transactions, Negotiations and Agreements.
The information set forth in "Background of the Offer; Purpose of the Offer
and the Merger; the Merger Agreement and Certain Other Agreements," "Certain
Information Concerning the Company," "Certain
2
Information Concerning Merger Subsidiary and Parent" and "Plans for the
Company; Other Matters" in the Offer to Purchase is incorporated herein by
reference.
Item 6. Purpose of the Tender Offer and Plans or Proposals.
(a), (c)(1), (3-7) The information set forth in "Introduction," "Background
of the Offer; Purpose of the Offer and the Merger; the Merger Agreement and
Certain Other Agreements," "Plans for the Company; Other Matters," "Effects of
the Offer on the Market for the Shares; NYSE Quotation; Exchange Act
Registration; Margin Regulations" and "Dividends and Distributions" in the
Offer to Purchase is incorporated herein by reference.
(c)(2) None
Item 7. Source and Amount of Funds or Other Consideration.
(a), (d) The information set forth in "Sources and Amount of Funds" in the
Offer to Purchase is incorporated herein by reference.
(b) Not applicable
Item 8. Interest in Securities of the Subject Company.
The information set forth in "Introduction," "Certain Information Concerning
the Company," "Certain Information Concerning Merger Subsidiary and Parent,"
"Background of the Offer; Purpose of the Offer and the Merger; the Merger
Agreement and Certain Other Agreements" and Schedule I in the Offer to
Purchase is incorporated herein by reference.
Item 9. Persons/Assets, Retained, Employed, Compensated or Used.
The information set forth in "Introduction" and "Fees and Expenses" of the
Offer to Purchase is incorporated herein by reference.
Item 10. Financial Statements.
Not applicable
Item 11. Additional Information.
The information set forth in "Certain Legal Matters" of the Offer to
Purchase is incorporated herein by reference.
Item 12. Exhibits.
(a)(1) Offer to Purchase, dated October 6, 2000
(a)(2) Letter of Transmittal
(a)(3) Notice of Guaranteed Delivery
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees
3
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9
(a)(7) Joint Press Release issued by Parent and the Company on October 6,
2000
(a)(8) Summary Advertisement as published in The Wall Street Journal on
October 6, 2000
(b)(1) Commitment Letter, dated as of September 21, 2000, among Parent,
Citibank, N.A. and Salomon Smith Barney Inc.
(d)(1) Agreement and Plan of Merger, dated as of September 25, 2000, among
the Company, Parent and Merger Subsidiary
(d)(2) Voting and Tender Agreement, dated as of September 25, 2000, among
International Paper Company, a New York corporation, the Company, Parent and
Merger Subsidiary
(g) Not applicable
(h) Not applicable
4
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
B Acquisition Corp.
/s/ Stephen A. Block
By: _________________________________
Name: Stephen A. Block
Title: Vice President, Secretary
and Treasurer
International Flavors & Fragrances
Inc.
/s/ Stephen A. Block
By: _________________________________
Name: Stephen A. Block
Title: Senior Vice President,
General Counsel and Secretary
Dated: October 6, 2000
5
EXHIBIT INDEX
Exhibit No. Exhibit Name
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(a)(1) Offer to Purchase, dated October 6, 2000
(a)(2) Letter of Transmittal
(a)(3) Notice of Guaranteed Delivery
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9
(a)(7) Joint Press Release issued by Parent and the Company on October 6,
2000
(a)(8) Summary Advertisement as published in The Wall Street Journal on
October 6, 2000
(b)(1) Commitment Letter, dated as of September 21, 2000, among Parent,
Citibank, N.A. and Salomon Smith Barney Inc.
(d)(1) Agreement and Plan of Merger, dated as of September 25, 2000,
among the Company, Parent and Merger Subsidiary
(d)(2) Voting and Tender Agreement, dated as of September 25, 2000, among
International Paper Company, a New York corporation, the Company,
Parent and Merger Subsidiary
(g) Not applicable
(h) Not applicable
Exhibit (A).(1)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Bush Boake Allen Inc.
at
$48.50 Net Per Share
by
B Acquisition Corp.
a wholly owned subsidiary of
International Flavors & Fragrances Inc.
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, NOVEMBER 3, 2000, UNLESS THE OFFER IS EXTENDED.
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THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED AS
OF SEPTEMBER 25, 2000, AMONG BUSH BOAKE ALLEN INC. (THE "COMPANY"),
INTERNATIONAL FLAVORS & FRAGRANCES INC. ("PARENT") AND B ACQUISITION CORP., A
WHOLLY OWNED SUBSIDIARY OF PARENT ("MERGER SUBSIDIARY"). THE OFFER IS
CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED AND NOT
PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED HEREIN) THAT
NUMBER OF SHARES WHICH REPRESENTS MORE THAN 66 2/3% OF THE SHARES OUTSTANDING
(ON A FULLY DILUTED BASIS) ON THE DATE THE SHARES ARE ACCEPTED FOR PAYMENT AND
THE EXPIRATION OR TERMINATION OF ANY APPLICABLE WAITING PERIOD UNDER THE HART-
SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, OR MATERIAL
APPLICABLE FOREIGN ANTITRUST REGULATIONS. THE OFFER IS ALSO SUBJECT TO OTHER
TERMS AND CONDITIONS SET FORTH IN THIS OFFER TO PURCHASE. INTERNATIONAL PAPER
COMPANY, WHICH HOLDS APPROXIMATELY 68% OF THE OUTSTANDING SHARES OF THE
COMPANY, HAS AGREED TO TENDER ITS SHARES IN THE OFFER. SEE SECTIONS 10 AND 13.
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THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY (1) DETERMINED THAT THE
TERMS OF THE OFFER AND THE MERGER (EACH AS DEFINED HEREIN) ARE ADVISABLE AND
IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS, (2) APPROVED THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE
OFFER AND THE MERGER, AND (3) RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER
AND TENDER THEIR SHARES (AS DEFINED HEREIN) PURSUANT TO THE OFFER.
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IMPORTANT
Any shareholder of the Company desiring to tender all or any portion of such
shareholder's Shares must either (1) complete and sign the enclosed Letter of
Transmittal (as defined herein) (or facsimile thereof) in accordance with the
Instructions in the Letter of Transmittal, have such shareholder's signature
thereon guaranteed (if required by Instruction 1 to the Letter of
Transmittal), mail or deliver the Letter of Transmittal (or a facsimile
thereof) and any other required documents to the Depositary (as defined
herein) and either deliver the certificates for such Shares to the Depositary
or tender such Shares pursuant to the procedure for book-entry transfer
discussed in Section 3 of this Offer to Purchase or (2) request such
shareholder's broker, dealer, commercial bank, trust company or other nominee
to effect the transaction for such shareholder. Any shareholder whose Shares
are 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 to tender such Shares.
Any shareholder of the Company who desires to tender Shares and whose
certificates evidencing such Shares are not immediately available, or who
cannot comply with the procedures for book-entry transfer on a timely basis,
or who cannot deliver all required documents to the Depositary prior to the
expiration of the Offer, may tender such Shares by following the procedures
for guaranteed delivery discussed in Section 3 of this Offer to Purchase.
Questions and requests for assistance may be directed to the Dealer Manager
(as defined herein) or the Information Agent (as defined herein) at their
respective addresses and telephone numbers set forth on the back cover of this
Offer to Purchase. Requests for additional copies of this Offer to Purchase,
the Letter of Transmittal, the Notice of Guaranteed Delivery (as defined
herein) and other tender offer materials may also be directed to the
Information Agent (as defined herein). A shareholder may also contact such
shareholder's broker, dealer, commercial bank or trust company for assistance.
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The Dealer Manager for the Offer is:
MORGAN STANLEY DEAN WITTER
October 6, 2000
TABLE OF CONTENTS
Page
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SUMMARY TERM SHEET......................................................... 1
INTRODUCTION............................................................... 6
THE OFFER.................................................................. 8
1. Terms of the Offer.................................................... 8
2. Acceptance for Payment and Payment for Shares......................... 10
3. Procedures for Accepting the Offer and Tendering Shares............... 11
4. Withdrawal Rights..................................................... 14
5. Certain Federal Income Tax Consequences............................... 15
6. Price Range of the Shares; Dividends.................................. 16
7. Certain Information Concerning the Company............................ 16
8. Certain Information Concerning Merger Subsidiary and Parent........... 18
9. Sources and Amount of Funds........................................... 19
Page
----
10. Background of the Offer; Purpose of the Offer and the Merger; the
Merger Agreement and Certain Other Agreements........................ 19
11. Plans for the Company; Other Matters................................. 34
12. Dividends and Distributions.......................................... 36
13. Conditions to the Offer.............................................. 36
14. Effect of the Offer on the Market for Shares; NYSE Quotation;
Exchange Act Registration; Margin Regulations........................ 37
15. Certain Legal Matters; Regulatory Approvals.......................... 38
16. Fees and Expenses.................................................... 41
17. Miscellaneous........................................................ 42
Schedule I--Information Concerning Directors and Executive Officers of
Merger Subsidiary and Parent............................................. I-1
SUMMARY TERM SHEET
B Acquisition Corp. is offering to purchase all of the issued and
outstanding shares of common stock of Bush Boake Allen Inc. for $48.50 per
share in cash. The following are some of the questions you, as a shareholder
of Bush Boake Allen, may have and answers to those questions. We urge you to
read carefully the remainder of this Offer to Purchase and the Letter of
Transmittal because the information in this summary term sheet is not
complete. Additional important information is contained in the remainder of
this Offer to Purchase and the Letter of Transmittal.
Who is Offering to Buy My Securities?
Our name is B Acquisition Corp. We are a Virginia corporation formed for the
purpose of making a tender offer for all of the common stock of Bush Boake
Allen and have carried on no activities other than in connection with the
merger agreement among Bush Boake Allen, International Flavors & Fragrances
Inc. and ourselves. We are a wholly owned subsidiary of International Flavors
& Fragrances, a New York corporation. See the "Introduction" and Section 1.
What are the Classes and Amounts of Securities Sought in the Offer?
We are seeking to purchase all of the issued and outstanding shares of
common stock of Bush Boake Allen. See the "Introduction" and Section 1.
How Much Are You Offering to Pay? What is the Form of Payment? Will I Have to
Pay Any Fees or Commissions?
We are offering to pay $48.50 per share, net to you, in cash. If you are the
record owner of your shares and you tender your shares to us in the offer, you
will not have to pay brokerage fees or similar expenses. If you own your
shares through a broker or other nominee, and your broker tenders your shares
on your behalf, your broker or nominee may charge you a fee for doing so. You
should consult your broker or nominee to determine whether any charges will
apply. See the "Introduction."
Do You Have the Financial Resources to Make Payment?
International Flavors & Fragrances, our parent company, will provide us with
sufficient funds to purchase all shares validly tendered and not withdrawn in
the offer and to provide funding for the merger, which is expected to follow
the successful completion of the offer in accordance with the terms and
conditions of the merger agreement. International Flavors & Fragrances will
obtain its funds under a credit facility from Citibank, N.A. and Salomon Smith
Barney Inc. See Section 9.
Is Your Financial Condition Relevant to my Decision to Tender in the Offer?
We do not think our financial condition is relevant to your decision whether
to tender in the offer because the form of payment consists solely of cash,
and we have already arranged for all of our funding to come from International
Flavors & Fragrances under a credit facility from Citibank and Salomon Smith
Barney. Additionally, the offer is not subject to any financing condition. See
Section 9.
How Long Do I Have to Decide Whether to Tender in the Offer?
You will have at least until 12:00 midnight, New York City time, on Friday,
November 3, 2000, to tender your shares in the offer. Further, if you cannot
deliver everything that is required in order to make a valid tender by that
time, you may be able to use a guaranteed delivery procedure, which is
described later in this Offer to Purchase. See Sections 1 and 3.
1
Can the Offer be Extended and Under What Circumstances?
We have agreed in the merger agreement that:
. Without the consent of Bush Boake Allen, we may extend the offer beyond
the scheduled expiration date from time to time, if at that date any of
the conditions to our obligation to accept for payment and to pay for
the shares are not satisfied or, to the extent permitted by the merger
agreement, waived, for a period of time until such conditions are
satisfied or waived. If any of the conditions are not satisfied or
waived on any scheduled expiration date, we are required to extend the
offer until the conditions are satisfied or waived, unless they could
not reasonably be expected to be satisfied by January 31, 2001.
. Without the consent of Bush Boake Allen, we may extend the offer for any
period required by any rule, regulation, interpretation or position of
the Securities and Exchange Commission or its staff applicable to the
offer or any period required by applicable law.
. Without the consent of Bush Boake Allen, we may extend the offer for one
or more subsequent offering periods up to an additional 20 business days
in the aggregate pursuant to Rule 14d-11 of the Securities Exchange Act
of 1934, as amended. There will be no withdrawal rights during the
subsequent offering period.
See Section 1 of this Offer to Purchase for more details on our ability to
extend the offer.
How Will I be Notified if the Offer is Extended?
If we extend the offer, we will inform The Bank of New York, the depositary
for the offer, of that fact and will make a public announcement of the
extension not later than 9:00 a.m., New York City time, on the next business
day after the day on which the offer was scheduled to expire. See Section 1.
What are the Most Significant Conditions to the Offer?
. We are not obligated to accept for payment or to purchase any shares
that are validly tendered unless the number of shares validly tendered
and not properly withdrawn before the expiration date of the offer
represents more than 66 2/3% of the then outstanding shares on a fully
diluted basis on the date of purchase in the offer. We call this
condition the "minimum condition." For purposes of the offer, "on a
fully diluted basis" means, as of any time, the number of shares
outstanding, together with the shares which Bush Boake Allen may be
required to issue pursuant to warrants, options or obligations
outstanding at that date under any employee benefit arrangements, as
these arrangements are defined in the merger agreement, or otherwise,
whether or not vested or then exercisable. International Paper Company,
which owns approximately 68% of Bush Boake Allen's outstanding shares,
has agreed to tender its shares in the offer. Assuming International
Paper tenders all of the shares of Bush Boake Allen common stock it
beneficially owns in the offer and no additional shares are issued by
Bush Boake Allen, International Flavors & Fragrances will be able to
effect the merger without any other shareholder tendering shares in the
offer. Bush Boake Allen has agreed to consent to a waiver of the minimum
condition if International Paper has tendered its shares, but the total
number of shares tendered does not constitute more than 66 2/3% of the
outstanding shares of Bush Boake Allen on a fully diluted basis.
Moreover, Bush Boake Allen has been advised that each of its directors
and executive officers intends to tender pursuant to the offer all
shares owned of record and beneficially by such directors and executive
officers. To the extent that directors and executive officers of Bush
Boake Allen exercise stock options under Bush Boake Allen's stock option
plans and do not tender the shares underlying the stock options in the
offer, it is possible that we will not receive more than 66 2/3% of the
outstanding shares in the offer, depending on the number of shares
tendered in the offer by shareholders other than International Paper and
the directors and executive officers of Bush Boake Allen. Additionally,
International Paper has entered into a voting and tender agreement with
International Flavors & Fragrances, us and the Company, which grants
International Flavors & Fragrances an option to purchase the shares
owned by International Paper in connection with termination of the
merger agreement under certain circumstances. See Section 10.
2
. We are not obligated to accept for payment or to purchase shares that
are validly tendered if the applicable waiting period under the Hart-
Scott-Rodino Antitrust Improvements Act or under applicable merger
control regulations of foreign governmental entities, individually or in
the aggregate, having jurisdiction over a material portion of Bush Boake
Allen's business or assets have not expired or been terminated by the
expiration date of the offer.
. We are not obligated to accept for payment or to purchase shares that
are validly tendered at any time on or after the date of the merger
agreement and prior to the date shares are first accepted for payment
under the offer if, among other things, an event, change, occurrence or
development of a state of facts or circumstances, subject to certain
exceptions, having a material adverse effect on the business, assets,
liabilities, results of operations or financial condition of Bush Boake
Allen and its subsidiaries has occurred.
. The offer is also subject to a number of other conditions. We can waive
most of the conditions to the offer without Bush Boake Allen's consent.
We cannot waive the minimum condition without such consent; however,
Bush Boake Allen has agreed to consent to a waiver of the minimum
condition if International Paper has tendered its shares, but the total
number of shares tendered does not constitute more than 66 2/3% of the
outstanding shares of Bush Boake Allen on a fully diluted basis.
How Do I Tender My Shares?
To tender shares, you must deliver the certificates representing your
shares, together with a completed letter of transmittal and any other
documents required by the letter of transmittal, to The Bank of New York, the
depositary for the offer, not later than the time the tender offer expires. If
your shares are held in street name, the shares can be tendered by your
nominee through The Bank of New York. If you are unable to deliver any
required document or instrument to the depositary by the expiration of the
tender offer, you may gain some extra time by having a broker, a bank or other
fiduciary that is an eligible institution guarantee that the missing items
will be received by the depositary within three New York Stock Exchange
trading days. For the tender to be valid, however, the depositary must receive
the missing items within that three trading day period. See Section 3.
Until What Time May I Withdraw Previously Tendered Shares?
You may withdraw shares at any time until the offer has expired and, if we
have not accepted your shares for payment by Monday, December 4, 2000, you may
withdraw them at any time after that date until we accept shares for payment.
This right to withdraw, however, will not apply to the subsequent offering
period discussed in Section 1. See Section 4.
How Do I Withdraw Previously Tendered Shares?
To withdraw shares, you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to the depositary while you
still have the right to withdraw the shares. See Section 4.
What Does the Bush Boake Allen Board of Directors Recommend Regarding the
Offer?
We are making the offer pursuant to the merger agreement, which has been
unanimously approved by the Bush Boake Allen board of directors. The board of
directors of Bush Boake Allen unanimously (1) determined that the terms of the
offer and the merger are advisable and in the best interests of Bush Boake
Allen and its shareholders, (2) approved the merger agreement and the
transactions contemplated thereby, including the offer and the merger, and (3)
recommends that Bush Boake Allen's shareholders accept the offer and tender
their shares pursuant to the offer. See the "Introduction."
3
Have Any Bush Boake Allen Shareholders Agreed to Tender Their Shares?
Yes. International Paper, Bush Boake Allen's principal shareholder, owning
approximately 68% of Bush Boake Allen's outstanding shares, has agreed to
tender its shares in the offer. In addition, Bush Boake Allen has been advised
that each of its directors and executive officers intends to tender pursuant
to the offer all shares owned of record and beneficially by such directors and
executive officers. If International Paper tenders its shares in the offer and
such shares at that time constitute more than 66 2/3% of the outstanding
shares, the merger can be effected without a tender of shares by any other
shareholder of Bush Boake Allen.
If More Than 66 2/3% of the Outstanding Shares Are Tendered and Accepted for
Payment, Do You Anticipate that Bush Boake Allen Will Continue as a Public
Company?
No. Following the purchase of shares in the offer, we expect to consummate
the merger. If the merger takes place, Bush Boake Allen will no longer be
publicly owned. Even if for some reason the merger does not take place, if we
purchase all of the tendered shares, there may be so few remaining
shareholders and publicly held shares that Bush Boake Allen common stock will
no longer be eligible to be traded on the New York Stock Exchange; there may
not be a public trading market for Bush Boake Allen common stock; and Bush
Boake Allen may cease making filings with the Securities and Exchange
Commission or otherwise cease being required to comply with the SEC rules
relating to publicly held companies. See Section 14.
Will the Tender Offer Be Followed by a Merger if All of the Bush Boake Allen
Shares Are Not Tendered in the Offer?
Yes. If we accept for payment and pay for more than 66 2/3% of the shares of
Bush Boake Allen on a fully diluted basis, we will be merged with and into
Bush Boake Allen. If that merger takes place, International Flavors &
Fragrances will own all of the issued and outstanding shares of Bush Boake
Allen, and all remaining shareholders of Bush Boake Allen, other than us, will
receive in the merger $48.50 per share in cash, or any higher price per share
that is paid in the offer. See the "Introduction."
If I Decide Not to Tender, How Will the Offer Affect My Shares?
If the merger described above takes place, shareholders not tendering in the
offer will receive the same amount of cash per share that they would have
received had they tendered their shares in the offer. Therefore, if the merger
takes place, the only difference to you between tendering your shares and not
tendering your shares is that you will be paid earlier if you tender your
shares. If the merger does not take place, however, the number of shareholders
and the number of shares of Bush Boake Allen that are still in the hands of
the public may be so small that there no longer will be an active public
trading market, or, possibly, there may not be any public trading market, for
the Bush Boake Allen common stock. Also, as described above, Bush Boake Allen
may cease making filings with the SEC or otherwise may not be required to
comply with the SEC rules relating to publicly held companies. See the
"Introduction" and Sections 11 and 14.
What Is the Market Value of My Shares as of a Recent Date?
On September 22, 2000, the last trading day before we announced the
acquisition, the last sale price of Bush Boake Allen common stock reported on
the New York Stock Exchange was $43.563 per share. On October 5, 2000, the
last trading day before we commenced the tender offer, the last sale price of
Bush Boake Allen common stock reported on the New York Stock Exchange was
$47.875. We encourage you to obtain a recent quotation for shares of Bush
Boake Allen common stock in deciding whether to tender your shares. See
Section 6.
4
Generally, What Are the United States Federal Income Tax Consequences of
Tendering Shares?
The receipt of cash for shares pursuant to the tender offer or the merger
will be a taxable transaction for United States federal income tax purposes
and possibly for state, local and foreign income tax purposes as well. In
general, a shareholder who sells shares pursuant to the tender offer or
receives cash in exchange for shares pursuant to the merger will recognize
gain or loss for United States federal income tax purposes equal to the
difference, if any, between the amount of cash received and the shareholder's
adjusted tax basis in the shares sold pursuant to the tender offer or
exchanged for cash pursuant to the merger. If the shares exchanged constitute
capital assets in the hands of the shareholder, such gain or loss will be
capital gain or loss. In general, capital gains recognized by an individual
will be subject to a maximum United States federal income tax rate of 20% if
the shares were held for more than one year, and if held for one year or less
they will be subject to tax at ordinary income tax rates. See Section 5.
To Whom May I Speak if I Have Questions About the Tender Offer?
You may call Georgeson Shareholder Communications Inc. at (212) 440-9800
(banks and brokers call collect) or (800) 223-2064 (all others call toll free)
or Morgan Stanley & Co. Incorporated at (212) 761-8322 (call collect).
Georgeson is acting as the information agent and Morgan Stanley is acting as
the dealer manager for our tender offer. See the back cover of this Offer to
Purchase.
5
To the Holders of Common Stock of
Bush Boake Allen Inc.:
INTRODUCTION
B Acquisition Corp., a Virginia corporation ("Merger Subsidiary") and a
wholly owned subsidiary of International Flavors & Fragrances Inc., a New York
corporation ("Parent"), hereby offers to purchase all the issued and
outstanding shares (the "Shares") of common stock, par value $1.00 per share
(the "Common Stock"), of Bush Boake Allen Inc., a Virginia corporation (the
"Company"), at a price of $48.50 per Share (the "Offer Price"), net to the
seller in cash, without interest, upon the terms and subject to the conditions
discussed in this Offer to Purchase and in the related Letter of Transmittal
(which, as amended or supplemented from time to time, together constitute the
"Offer").
Tendering shareholders of record who tender Shares directly will not be
obligated to pay brokerage fees or commissions or, except as set forth in
Instruction 6 of the Letter of Transmittal, stock transfer taxes on the
purchase of Shares by Merger Subsidiary pursuant to the Offer. Shareholders
who hold their Shares through a bank or broker should check with such
institution as to whether they will charge any service fees. However, if you
fail to complete and sign the Substitute Form W-9 that is included in the
Letter of Transmittal, you may be subject to a required backup federal income
tax withholding of 31% of the gross proceeds payable in the Offer. Merger
Subsidiary will pay all fees and expenses of Morgan Stanley & Co. Incorporated
("Morgan Stanley"), which is acting as the dealer manager for the Offer (in
such capacity, the "Dealer Manager"), The Bank of New York, which is acting as
the depositary for the Offer (in such capacity, the "Depositary"), and
Georgeson Shareholder Communications Inc., which is acting as information
agent for the Offer (in such capacity, the "Information Agent"), incurred in
connection with the Offer and in accordance with the terms of the agreements
entered into between Merger Subsidiary and/or Parent and each such person. See
Section 16.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of September 25, 2000 (the "Merger Agreement"), among the Company, Parent
and Merger Subsidiary. Pursuant to the Merger Agreement, as soon as
practicable after the completion of the Offer and satisfaction or waiver, if
permissible, of all conditions to the Merger (as defined below), including the
purchase of Shares pursuant to the Offer (sometimes referred to herein as the
"consummation" of the Offer) and the approval of the Merger Agreement by the
shareholders of the Company (if required by applicable law), Merger Subsidiary
will be merged with and into the Company (the "Merger") and the Company will
be the surviving corporation in the Merger (the "Surviving Corporation") in
accordance with the Virginia Stock Corporation Act, as amended (the "VSCA").
At the effective time of the Merger (the "Effective Time"), each Share then
outstanding (other than Shares held by (i) any subsidiaries of the Company and
(ii) Parent or any of its subsidiaries, including Merger Subsidiary), will be
converted into the right to receive $48.50 in cash (the "Merger
Consideration"), without interest. The Merger Agreement is more fully
described in Section 10.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "COMPANY BOARD") UNANIMOUSLY (1)
DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE ADVISABLE AND IN THE
BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS, (2) APPROVED THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND
THE MERGER, AND (3) RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER.
Credit Suisse First Boston Corporation ("CSFB"), financial advisor to the
Company, has delivered to the Company Board its written opinion, dated as of
September 25, 2000, to the effect that as of such date and based upon and
subject to the matters stated in the opinion, the $48.50 per Share cash
consideration to be received in the Offer and the Merger by the holders of
Shares was fair, from a financial point of view, to such holders (other than
Parent and its affiliates). The full text of CSFB's written opinion, dated
September 25, 2000, which describes
6
the assumptions made, procedures followed, matters considered and limitations
on the review undertaken, is attached as an annex to the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-
9"), which has been filed by the Company with the Securities and Exchange
Commission (the "SEC") in connection with the Offer and which is being mailed
to holders of Shares herewith. Holders of Shares are urged to read the full
text of that opinion carefully.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED
HEREIN) THAT NUMBER OF SHARES REPRESENTING MORE THAN 66 2/3% OF THE SHARES
OUTSTANDING (ON A FULLY DILUTED BASIS) ON THE DATE SHARES ARE ACCEPTED FOR
PAYMENT IN THE OFFER (THE "MINIMUM CONDITION") AND THE EXPIRATION OR
TERMINATION OF ANY APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR ACT"), OR MATERIAL
APPLICABLE FOREIGN ANTITRUST REGULATIONS. THE OFFER IS ALSO SUBJECT TO OTHER
TERMS AND CONDITIONS. SEE SECTION 13.
For purposes of the offer, "on a fully diluted basis" means, as of any time,
the number of Shares outstanding, together with the Shares which the Company
may be required to issue pursuant to warrants, options or obligations
outstanding at that date under any Employee Benefit Arrangements (as defined
in the Merger Agreement), or otherwise, whether or not vested or then
exercisable.
The Company has represented to Parent and Merger Subsidiary that, as of the
date of the Merger Agreement, 19,351,063 Shares were issued and outstanding
and 1,401,714 Shares were reserved for issuance upon exercise of stock
options. International Paper Company, a New York corporation and the principal
shareholder of the Company (the "Principal Shareholder"), beneficially owns
13,150,000 Shares and has agreed to tender all of its Shares in the Offer
pursuant to a Voting and Tender Agreement, dated as of September 25, 2000 (the
"Support Agreement"), among the Principal Shareholder, the Company, Parent and
Merger Subsidiary. Assuming the Principal Shareholder tenders all of the
Shares it beneficially owns in the Offer and no additional Shares are issued
by the Company, Parent will be able to effect the Merger without the need for
any other shareholder to tender Shares in the Offer. The Company has agreed to
consent to a waiver of the Minimum Condition to enable Merger Subsidiary to
purchase the Shares owned by the Principal Shareholder if the Principal
Shareholder has tendered its Shares, but the total number of Shares tendered
does not constitute more than 66 2/3% of the outstanding Shares of Common
Stock on a fully diluted basis on the date of purchase in the Offer. Moreover,
the Company has been advised that each of its directors and executive officers
intends to tender pursuant to the Offer all Shares owned of record and
beneficially by such directors and executive officers. To the extent that
directors and executive officers of the Company exercise Stock Options under
the Company Stock Option Plans (each as defined herein) and do not tender the
Shares underlying the Stock Options in the Offer, it is possible that Merger
Subsidiary will not receive more than 66 2/3% of the outstanding Shares in the
Offer, depending on the number of Shares tendered in the Offer by shareholders
other than the Principal Shareholder and the directors and executive officers
of the Company. Additionally, pursuant to the Support Agreement, the Principal
Shareholder has granted Merger Subsidiary an option (the "Option") to purchase
all of the Shares owned by Principal Shareholder at a purchase price per Share
equal to $48.50 (adjustable as described in Section 10, the "Option Price") in
connection with termination of the Merger Agreement under certain
circumstances. See Sections 10 and 13.
The Merger Agreement provides that, upon the acceptance by Merger Subsidiary
for payment of, and payment for, any Shares pursuant to the Offer, Parent
shall be entitled to designate such number of directors, rounded up to the
next whole number, on the Company Board so that the percentage of Parent's
nominees on the Company Board equals the percentage of outstanding Shares
beneficially owned by Parent and its affiliates. The Company will, at such
time, upon the request of Merger Subsidiary, take all reasonable actions to
cause Parent's designees to be elected or appointed to the Company Board, if
necessary, by increasing the size of the Company Board or securing
resignations of incumbent directors or both.
7
Consummation of the Merger is conditioned upon, among other things, the
approval of the Merger Agreement by the requisite vote of shareholders of the
Company, if required by the VSCA. Under the VSCA, the affirmative vote of the
holders of more than 66 2/3% of the outstanding Shares is the only vote of any
class or series of the Company's capital stock that would be necessary to
approve the Merger Agreement and the Merger at any required meeting of the
Company's shareholders. If the Minimum Condition is satisfied, or waived, and
following the purchase of Shares by Merger Subsidiary pursuant to the Offer,
Merger Subsidiary and its affiliates will own more than 66 2/3% of the
outstanding Shares, and Merger Subsidiary will be able to effect the Merger
without the affirmative vote of any other shareholder. The Merger Agreement is
more fully described in Section 10.
Under Section 13.1-719 of the VSCA, if a corporation owns at least 90% of
the outstanding shares of each class of a subsidiary corporation, the
corporation holding such stock may merge such subsidiary into itself, or
itself into such subsidiary, without any action or vote on the part of the
board of directors or the shareholders of such other corporation (a "short-
form merger"). Pursuant to the Merger Agreement, in the event that Merger
Subsidiary acquires at least 90% of the outstanding Shares in the Offer,
Merger Subsidiary and Parent shall take all necessary actions to cause the
Merger to become effective, as soon as practicable after the expiration of the
Offer, without a meeting of the shareholders of the Company. Even if Merger
Subsidiary does not own 90% of the outstanding Shares following consummation
of the Offer, Parent or Merger Subsidiary could seek to purchase additional
Shares in the open market, from the Company or otherwise in order to reach the
90% threshold and effect a short-form merger. The consideration per Share paid
for any Shares so acquired in open market purchases may be greater or less
than the Offer Price. Parent presently intends to effect a short-form merger
of Merger Subsidiary into the Company, if permitted to do so under the VSCA.
See Section 11.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
THE OFFER
1. Terms of the Offer.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of such extension or
amendment), Merger Subsidiary will accept for payment and pay for all Shares
validly tendered prior to the Expiration Date, and not properly withdrawn in
accordance with Section 4. Parent will provide Merger Subsidiary with
sufficient funds to purchase all Shares validly tendered and not withdrawn in
the Offer. The term "Expiration Date" shall mean 12:00 Midnight, New York City
time, on Friday, November 3, 2000, unless and until Merger Subsidiary, in
accordance with the terms of the Merger Agreement, shall have extended the
period of time during which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as
so extended by Merger Subsidiary, shall expire.
The Offer is conditioned upon the satisfaction or waiver of the Minimum
Condition, the expiration or termination of any waiting period imposed by the
HSR Act, or under material applicable foreign antitrust regulations, and the
other conditions discussed in Section 13. If such conditions are not satisfied
prior to the Expiration Date, Merger Subsidiary reserves the right, subject to
the terms of the Merger Agreement and subject to complying with applicable
rules and regulations of the SEC, to (i) decline to purchase any Shares
tendered in the Offer and terminate the Offer and return all tendered Shares
to the tendering shareholders, (ii) waive any or all conditions to the Offer
(except the condition discussed in the following paragraph) and, to the extent
permitted by applicable law, purchase all Shares validly tendered, (iii)
extend the Offer and, subject to the right of shareholders to withdraw Shares
until the Expiration Date, retain all Shares which have been tendered during
the period or periods for which the Offer is extended, or (iv) subject to the
next paragraph, amend the Offer.
The Merger Agreement provides that, without the prior written consent of the
Company, Merger Subsidiary shall not (i) decrease the per Share price or the
number of Shares sought in the Offer, (ii) change the form of the
8
consideration to be paid in the Offer, (iii) make any change which imposes
conditions to the Offer in addition to those discussed in Section 13, (iv)
impose additional conditions to the Offer, (v) make any change that is
otherwise adverse to the holders of Shares or (vi) waive the Minimum
Condition; however, the Company has agreed to consent to the waiver of the
Minimum Condition to allow Merger Subsidiary to purchase the Shares owned by
the Principal Shareholder.
The Merger Agreement requires Merger Subsidiary to accept for payment and
pay for all Shares validly tendered and not withdrawn pursuant to the Offer if
all conditions to the Offer are satisfied on the Expiration Date.
Subject to the terms of the Merger Agreement, Merger Subsidiary may, without
the consent of the Company, extend the Offer beyond the scheduled Expiration
Date (i) from time to time, if at that date any of the conditions to Merger
Subsidiary's obligation to accept for payment and to pay for Shares are not
satisfied or, to the extent permitted by the Merger Agreement, waived, for a
period of time until such conditions are satisfied or waived, however, if any
of the conditions to the Offer are not satisfied or waived on any scheduled
expiration date, Parent and Merger Subsidiary are required to extend the Offer
until the condition or conditions are satisfied or waived, unless the
condition or conditions could not reasonably be expected to be satisfied by
January 31, 2001, (ii) for any period required by any rule, regulation,
interpretation or position of the SEC or its staff applicable to the Offer or
any period required by applicable law or (iii) for one or more subsequent
offering periods of up to an additional twenty (20) business days in the
aggregate (a "Subsequent Offering Period"). Rule 14d-11 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), permits
Merger Subsidiary, subject to certain conditions, to provide a Subsequent
Offering Period following the expiration of the Offer on Friday, November 3,
2000. A Subsequent Offering Period is an additional period of time from three
(3) business days to twenty (20) business days in length, beginning after
Merger Subsidiary purchases Shares tendered in the Offer, during which time
shareholders may tender, but not withdraw, their Shares and receive the Offer
Price.
Pursuant to Rule 14d-7 under the Exchange Act, no withdrawal rights apply to
Shares tendered during a Subsequent Offering Period and no withdrawal rights
apply during the Subsequent Offering Period with respect to Shares tendered in
the Offer and accepted for payment. During a Subsequent Offering Period,
Merger Subsidiary will promptly purchase and pay for all Shares tendered at
the same price paid in the Offer.
Subject to the applicable rules and regulations of the SEC and the
provisions of the Merger Agreement, Merger Subsidiary also expressly reserves
the right, in its sole discretion, at any time or from time to time, to (i)
terminate the Offer if any of the conditions discussed in Section 13 have not
been satisfied and (ii) waive any condition to the Offer or otherwise amend
the Offer in any respect, in each case by giving written notice of such
extension, termination, waiver or amendment to the Depositary and by making a
public announcement thereof. If Merger Subsidiary accepts for payment any
Shares pursuant to the Offer, it will accept for payment all Shares validly
tendered prior to the Expiration Date and not properly withdrawn, and will
promptly pay for all Shares so accepted for payment.
The rights reserved by Merger Subsidiary in the preceding paragraph are in
addition to Merger Subsidiary's rights discussed in Section 13. Any extension,
delay, termination, waiver or amendment will be followed as promptly as
practicable by a public announcement thereof, such announcement in the case of
an extension to be made no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date, in
accordance with the public announcement requirements of Rule 14e-1(d) under
the Exchange Act. Subject to applicable law (including Rules 14d-4(d) and 14d-
6(c) under the Exchange Act, which require that material changes be promptly
disseminated to shareholders in a manner reasonably designed to inform them of
such changes) and without limiting the manner in which Merger Subsidiary may
choose to make any public announcement, Merger Subsidiary shall have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a press release to the Dow Jones News
Service.
If Merger Subsidiary extends the Offer or if Merger Subsidiary is delayed in
its acceptance for payment of, or payment for, Shares or it is unable to pay
for Shares pursuant to the Offer for any reason, then, without
9
prejudice to Merger Subsidiary's rights under the Offer, the Depositary may
retain tendered Shares on behalf of Merger Subsidiary, and such Shares may not
be withdrawn except to the extent tendering shareholders are entitled to
withdrawal rights as described herein under Section 4. However, the ability of
Merger Subsidiary to delay the payment for Shares that Merger Subsidiary has
accepted for payment is limited by (i) 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 shareholders promptly after the
termination or withdrawal of such bidder's offer, unless such bidder elects to
offer a Subsequent Offering Period and pays for Shares tendered during the
Subsequent Offering Period in accordance with Rule 14d-11 under the Exchange
Act and (ii) the terms of the Merger Agreement, which require that Merger
Subsidiary accept for payment Shares that are validly tendered and not
withdrawn pursuant to the Offer as soon as it is legally permitted to do so
under applicable law and promptly pay for such Shares.
If Merger Subsidiary 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, Merger Subsidiary will disseminate additional tender offer
materials and extend the Offer to the extent required by Rules 14d-4(d), 14d-
6(c) and 14e-1 under the Exchange Act. The minimum period during which an
offer must remain open following material changes in the terms of the Offer,
other than a change in price, percentage of securities sought or inclusion of
or changes to a dealer's soliciting fee, will depend upon the facts and
circumstances, including the materiality, of the changes. In the SEC's view,
an offer should remain open for a minimum of five (5) business days from the
date the material change is first published, sent or given to shareholders
and, if material changes are made with respect to information that approaches
the significance of price and share levels, a minimum of ten (10) business
days may be required to allow for adequate dissemination to shareholders.
Accordingly, if, prior to the Expiration Date, Merger Subsidiary decreases the
number of Shares being sought or increases or decreases the consideration
offered pursuant to the Offer in accordance with the terms of the Merger
Agreement, and if the Offer is scheduled to expire at any time earlier than
the tenth (10th) business day from the date that notice of such increase or
decrease is first published, sent or given to shareholders, the Offer will be
extended at least until the expiration of such tenth (10th) business day. For
purposes of the Offer, a "business day" means any day other than a Saturday,
Sunday or a federal holiday and consists of the time period from 12:01 a.m.
through 12:00 midnight, New York City time.
The Company has provided Merger Subsidiary with the Company's shareholder
list and security position listings for the purpose of disseminating this
Offer to Purchase to holders of Shares. This Offer to Purchase, the related
Letter of Transmittal and other relevant materials will be mailed to record
holders of Shares whose names appear on the Company's shareholder list and
will be furnished, for subsequent transmittal to beneficial owners of Shares,
to brokers, dealers, commercial banks, trust companies and similar persons
whose names, or the names of whose nominees, appear on the shareholder list
or, if applicable, who are listed as participants in a clearing agency's
security position listing.
2. Acceptance for Payment and Payment for Shares.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment) and the satisfaction or waiver of all the conditions to the
Offer discussed in Section 13, Merger Subsidiary will accept for payment and
will pay for all Shares validly tendered on or prior to the Expiration Date
and not properly withdrawn pursuant to the Offer as soon as it is permitted to
do so under applicable law. If there is a Subsequent Offering Period following
the Offer, Merger Subsidiary will immediately accept and promptly pay for all
Shares as they are tendered in the Subsequent Offering Period. Subject to the
Merger Agreement and compliance with Rule 14e-1(c) under the Exchange Act,
Merger Subsidiary expressly reserves the right to delay 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 accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) the
certificates evidencing such Shares (the "Share Certificates") or confirmation
(a "Book-Entry Confirmation") of a book-entry transfer of such Shares into the
Depositary's account at The
10
Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the
procedures discussed in Section 3, (ii) the Letter of Transmittal (or a
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 (as defined below) in lieu of the Letter of Transmittal and (iii) any
other documents required by the Letter of Transmittal.
For purposes of the Offer, Merger Subsidiary will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered and not properly
withdrawn as, if and when Merger Subsidiary gives oral or written notice to
the Depositary of Merger Subsidiary's 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 Offer Price therefor with the Depositary, which will
act as agent for tendering shareholders for the purpose of receiving payments
from Merger Subsidiary and transmitting such payments to tendering
shareholders whose Shares have been accepted for payment. If, for any reason
whatsoever, acceptance for payment of any Shares tendered pursuant to the
Offer is delayed, or Merger Subsidiary is unable to accept for payment Shares
tendered pursuant to the Offer, then, without prejudice to Merger Subsidiary's
rights discussed in Section 1, the Depositary may, nevertheless, on behalf of
Merger Subsidiary, retain tendered Shares, and such Shares may not be
withdrawn, except to the extent that the tendering shareholders are entitled
to withdrawal rights as described in Section 4 and as otherwise required by
Rule 14e-1(c) under the Exchange Act.
Under no circumstances will interest on the Offer Price for Shares be paid,
regardless of any delay in making such payment.
If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of the Offer, or if Share Certificates are
submitted evidencing more Shares than are tendered, Share Certificates
evidencing unpurchased Shares will be returned, without expense to the
tendering shareholder (or, in the case of Shares tendered by book-entry
transfer into the Depositary's account at the Book-Entry Transfer Facility
pursuant to the procedure discussed in Section 3, such Shares will be credited
to an account maintained at the Book-Entry Transfer Facility), as promptly as
practicable following the expiration or termination of the Offer.
Merger Subsidiary reserves the right to transfer or assign, in whole or from
time to time in part, to any direct or indirect wholly owned subsidiary 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
Merger Subsidiary of its obligations under the Offer in the event of a breach
by the transferee and will in no way prejudice the rights of tendering
shareholders to receive payment for Shares validly tendered and accepted for
payment pursuant to the Offer.
3. Procedures for Accepting the Offer and Tendering Shares.
Valid Tenders. In order for a shareholder validly to tender Shares pursuant
to the Offer, either (i) the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, together 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 documents required by the
Letter of Transmittal must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase and either the
Share Certificates evidencing tendered Shares must be received by the
Depositary at such address or such Shares must be tendered pursuant to the
procedure for book-entry transfer described below and a Book-Entry
Confirmation must be received by the Depositary, in each case on or prior to
the Expiration Date, or (ii) the tendering shareholder must comply with the
guaranteed delivery procedures described 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, that states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that are the subject of such Book-Entry
Confirmation, that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that Merger Subsidiary may enforce such
agreement against such participant.
11
Book-Entry Transfer. The Depositary will 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 system of the Book-Entry
Transfer Facility may make a book-entry delivery of Shares by causing the
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at the Book-Entry Transfer Facility 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 at the Book-Entry
Transfer Facility, either the Letter of Transmittal (or a 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 received by the Depositary
at one of its addresses set forth on the back cover of this Offer to Purchase
prior to the Expiration Date, or the tendering shareholder must comply with
the guaranteed delivery procedure described below.
Delivery of documents to the Book-Entry Transfer Facility does not
constitute delivery to the Depositary.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (i) if the Letter of Transmittal is signed by the registered
holder of the Shares tendered therewith, unless such holder has completed
either the box entitled "Special Delivery Instructions" or the box entitled
"Special Payment Instructions" on the Letter of Transmittal or (ii) if the
Shares are tendered for the account of a firm that is participating 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" and collectively, "Eligible Institutions").
In all other cases, all signatures on a Letter of Transmittal must be
guaranteed by an Eligible Institution. See Instruction 1 of the Letter of
Transmittal. If a Share Certificate is registered in the name of a person or
persons other than the signer of the Letter of Transmittal, or if payment is
to be made or delivered to, or a Share Certificate not accepted for payment or
not tendered is to be issued, in the name of, a person other than the
registered holder(s), then the Share Certificate must be endorsed or
accompanied by appropriate duly executed stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear on the Share
Certificate, with the signature(s) on such Share Certificate or stock powers
guaranteed by an Eligible Institution as provided in the Letter of
Transmittal. See Instructions 1 and 5 of the Letter of Transmittal.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and the Share Certificates evidencing such shareholder's Shares are
not immediately available or such shareholder cannot deliver the Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date, or such shareholder cannot complete the procedure for
delivery by book-entry transfer on a timely basis, such Shares may
nevertheless be tendered; provided that all of the following conditions are
satisfied:
1. such tender is made by or through an Eligible Institution;
2. a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form made available by Merger Subsidiary, is received
prior to the Expiration Date by the Depositary as provided below; and
3. the Share Certificates (or a Book-Entry Confirmation) evidencing all
tendered Shares, in proper form for transfer, in each case together with
the Letter of Transmittal (or a 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), and any other documents required
by the Letter of Transmittal are received by the Depositary within three
New York Stock Exchange Inc. (the "NYSE") trading days after the date of
such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile transmission or mailed to the Depositary and must include a
guarantee by an Eligible Institution substantially in the form set forth in
the form of Notice of Guaranteed Delivery made available by Merger Subsidiary.
12
In all cases, Shares will not be deemed validly tendered unless a properly
completed and duly executed Letter of Transmittal (or a facsimile thereof) is
received by the Depositary.
The method of delivery of Share Certificates, the Letter of Transmittal and
all other required documents, including delivery through the Book-Entry
Transfer Facility, is at the option and risk of the tendering shareholder, and
the delivery will be deemed made only when actually received by the Depositary
(including, in the case of a book-entry transfer, receipt of a Book-Entry
Confirmation). If delivery is by mail, registered mail with return receipt
requested, properly insured, is recommended. In all cases, sufficient time
should be allowed to ensure timely delivery.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tender of Shares will be determined by Merger Subsidiary in its sole
discretion, which determination shall be final and binding on all parties.
Merger Subsidiary 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
which may, in the opinion of its counsel, be unlawful. Merger Subsidiary also
reserves the absolute right to waive any defect or irregularity in the tender
of any Shares of any particular shareholder, whether or not similar defects or
irregularities are waived in the case of other shareholders. No tender of
Shares will be deemed to have been validly made until all defects and
irregularities have been cured or waived to the satisfaction of Merger
Subsidiary. None of Parent, Merger Subsidiary, the Dealer Manager, 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. Merger Subsidiary's
interpretation of the terms and conditions of the Offer (including the Letter
of Transmittal and the instructions thereto) will be final and binding.
Other Requirements. By executing the Letter of Transmittal as set forth
above, a tendering shareholder irrevocably appoints designees of Merger
Subsidiary as such shareholder's proxies, each with full power of
substitution, in the manner set forth in the Letter of Transmittal, to the
full extent of such shareholder's rights with respect to the Shares tendered
by such shareholder and accepted for payment by Merger Subsidiary (including,
with respect to any and all 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 shall be considered coupled with an interest in
the tendered Shares. Such appointment will be effective when, and only to the
extent that, Merger Subsidiary accepts such Shares for payment. Upon such
acceptance for payment, all prior proxies given by such shareholder with
respect to such Shares (and such other Shares and securities) will be revoked
without further action, and no subsequent proxies may be given nor any
subsequent written consent executed by such shareholder (and, if given or
executed, will not be deemed to be effective) with respect thereto. The
designees of Merger Subsidiary will, with respect to the Shares and other
securities for which the appointment is effective, be empowered to exercise
all voting and other rights of such shareholder as they in their sole
discretion may deem proper at any annual or special meeting of the Company's
shareholders or any adjournment or postponement thereof, by written consent in
lieu of any such meeting or otherwise. Merger Subsidiary reserves the right to
require that, in order for Shares to be deemed validly tendered, immediately
upon Merger Subsidiary's payment for such Shares, Merger Subsidiary must be
able to exercise full voting rights with respect to such Shares.
The tender of Shares pursuant to any one of the procedures described above
will constitute the tendering shareholder's acceptance of the Offer, as well
as the tendering shareholder's representation and warranty that such
shareholder has the full power and authority to tender and assign the Shares
tendered, as specified in the Letter of Transmittal. Merger Subsidiary's
acceptance for payment of Shares tendered pursuant to the Offer will
constitute a binding agreement between the tendering shareholder and Merger
Subsidiary upon the terms and subject to the conditions of the Offer.
Backup Withholding. Under the "backup withholding" provisions of United
States federal income tax law, the Depositary may be required to withhold 31%
of the amount of any payments pursuant to the Offer. In order to prevent
backup federal income tax withholding with respect to payments to certain
shareholders of the Offer Price for Shares purchased pursuant to the Offer,
each such shareholder must provide the Depositary with such shareholder's
correct taxpayer identification number ("TIN") and certify that such
shareholder is not subject to
13
backup withholding by completing the Substitute Form W-9 in the Letter of
Transmittal. Certain shareholders (including, among others, all corporations
and certain foreign individuals and entities) are not subject to backup
withholding. If a shareholder does not provide its correct TIN or fails to
provide the certifications described above, the Internal Revenue Service may
impose a penalty on the shareholder and payment of cash to the shareholder
pursuant to the Offer may be subject to backup withholding. All shareholders
surrendering Shares pursuant to the Offer should complete and sign the
Substitute Form W-9 included in the Letter of Transmittal to provide the
information necessary to avoid backup withholding. Non-corporate foreign
shareholders should complete and sign a Form W-8 (a copy of which may be
obtained from the Depositary) in order to avoid backup withholding. See
Instruction 8 of the Letter of Transmittal.
4. Withdrawal Rights.
Tenders of Shares made pursuant to the Offer are irrevocable, except that
such Shares tendered pursuant to the Offer may be withdrawn at any time prior
to the Expiration Date and, unless theretofore accepted for payment by Merger
Subsidiary pursuant to the Offer, may also be withdrawn at any time after
Monday, December 4, 2000.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover page of this Offer to
Purchase. Any such notice of withdrawal must specify the name, address and TIN
of the person who tendered the Shares to be withdrawn, the number of Shares to
be withdrawn and the name of the registered holder of such Shares, if
different from that of the person who tendered such Shares. If Share
Certificates evidencing Shares to be withdrawn have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
such Share Certificates, the serial numbers shown on such Share Certificates
must be submitted to the Depositary and the signature(s) on the notice of
withdrawal must be guaranteed by an Eligible Institution, unless such Shares
have been tendered for the account of an Eligible Institution. If Shares have
been tendered pursuant to the procedure for book-entry transfer as discussed
in Section 3 hereof, any notice of withdrawal must also specify the name and
number of the account at the Book-Entry Transfer Facility to be credited with
the withdrawn Shares.
If Merger Subsidiary extends the Offer, is delayed in its acceptance for
payment of Shares or is unable to accept Shares for payment pursuant to the
Offer for any reason, then, without prejudice to Merger Subsidiary's rights
under the Offer, the Depositary may, nevertheless, on behalf of Merger
Subsidiary, retain tendered Shares, and such Shares may not be withdrawn
except to the extent that tendering shareholders are entitled to withdrawal
rights as described herein.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by Merger Subsidiary, in its sole
discretion, whose determination will be final and binding. None of Parent,
Merger Subsidiary, the Dealer Manager, the Depositary, the Information Agent
or any other person will be under duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure
to give any such notification.
Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn
will thereafter be deemed not to have been validly tendered for purposes of
the Offer. However, withdrawn Shares may be re-tendered at any time prior to
the Expiration Date or during the Subsequent Offering Period by following one
of the procedures described in Section 3.
No withdrawal rights will apply to Shares tendered during a Subsequent
Offering Period and no withdrawal rights apply during the Subsequent Offering
Period with respect to Shares tendered in the Offer and accepted for payment.
See Section 1.
Merger Subsidiary expressly reserves the right, in its sole discretion, to
delay acceptance for payment of, or payment for, Shares in order to comply in
whole or in part with any applicable law. If Merger Subsidiary is delayed in
its acceptance for payment of, or payment for, Shares or is unable to accept
for payment or pay for
14
Shares pursuant to the Offer for any reason, then, without prejudice to Merger
Subsidiary's rights under the Offer (including such rights as are discussed in
Sections 1 and 13) (but subject to compliance with Rule 14e-1(c) under the
Exchange Act), the Depositary may, nevertheless, on behalf of Merger
Subsidiary, retain tendered Shares, and such Shares may not be withdrawn
except to the extent tendering shareholders are entitled to exercise, and duly
exercise, withdrawal rights as described in Section 4.
5. Certain Federal Income Tax Consequences.
The following is a general summary of certain federal income tax
consequences of the Offer and the Merger relevant to a beneficial holder of
Shares whose Shares are tendered and accepted for payment pursuant to the
Offer or whose Shares are converted to cash in the Merger (a "Holder"). This
discussion is for general information only and does not purport to consider
all aspects of federal income taxation that may be relevant to holders of
Shares. The discussion is based on the provisions of the Internal Revenue Code
of 1986, as amended (the "Code"), existing regulations promulgated thereunder
and administrative and judicial interpretations thereof, all as in effect as
of the date hereof and all of which are subject to change (possibly with
retroactive effect). This discussion applies only to Holders that hold Shares
as "capital assets" within the meaning of Section 1221 of the Code (generally,
property held for investment), and does not apply to Shares acquired pursuant
to the exercise of employee stock options or otherwise as compensation, Shares
held as part of a "straddle," "hedge," "conversion transaction," "synthetic
security" or other integrated investment, or to certain types of Holders
(including, without limitation, financial institutions, insurance companies,
tax-exempt organizations and dealers in securities) that may be subject to
special rules. This discussion does not address the federal income tax
consequences to a Holder that, for federal income tax purposes, is a non-
resident alien individual, a foreign corporation, a foreign partnership or a
foreign estate or trust, nor does it consider the effect of any state, local,
foreign or other tax laws.
EACH HOLDER SHOULD CONSULT ITS TAX ADVISOR AS TO THE PARTICULAR TAX
CONSEQUENCES TO IT OF THE SALE OF ITS SHARES, INCLUDING THE APPLICATION AND
EFFECT OF FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS AND POSSIBLE CHANGES IN
TAX LAWS.
The receipt of cash for Shares pursuant to the Offer or the Merger will be a
taxable transaction for federal income tax purposes and may also be a taxable
transaction under applicable state, local and foreign income and other tax
laws. For federal income tax purposes, a Holder who sells Shares pursuant to
the Offer or receives cash in exchange for Shares pursuant to the Merger will
generally recognize capital gain or loss equal to the difference (if any)
between the amount of cash received and the Holder's adjusted tax basis in
Shares sold or surrendered in the Merger. Gain or loss must be determined
separately for each block of Shares tendered pursuant to the Offer or
surrendered for cash pursuant to the Merger (for example, Shares acquired at
the same cost in a single transaction). Such capital gain or loss will be
long-term capital gain or loss if the Holder has held such Shares for more
than one year at the time of the consummation of the Offer or the Merger. For
federal income tax purposes, net capital gain recognized by individuals (or an
estate or certain trusts) from the sale of property held for more than twelve
months will generally be taxed at a maximum tax rate of 20%. There are
limitations on the deductibility of capital losses.
Payments in connection with the Offer or Merger may be subject to "backup
withholding" at a rate of 31% unless a Holder of Shares (i) provides a correct
taxpayer identification number ("TIN") (which, for an individual Holder, is
the Holder's social security number) and any other required information, or
(ii) is a corporation or comes within certain other exempt categories and,
when required, demonstrates this fact, and otherwise complies with applicable
requirements of the backup withholding rules. A Holder that does not provide a
correct TIN may be subject to penalties imposed by the Internal Revenue
Service (the "IRS"). Shareholders may prevent backup withholding by completing
and signing the Substitute Form W-9 included as part of the Letter of
Transmittal. Any amount paid as backup withholding does not constitute an
additional tax and will be creditable against the Holder's federal income tax
liability, provided that the required information is given to the IRS. Each
Holder should consult its tax advisor as to such Holder's qualification for
exemption from backup withholding and the procedure for obtaining such
exemption.
15
6. Price Range of the Shares; Dividends.
The Shares are traded on the NYSE under the symbol "BOA." The following
table sets forth, for each of the fiscal quarters indicated, the high and low
reported sales prices per Share on the NYSE.
Common Stock
-----------------
High Low
-------- --------
Fiscal Year 1998
First Quarter............................................... $33.8750 $25.4375
Second Quarter.............................................. 33.00 28.00
Third Quarter............................................... 33.6875 26.25
Fourth Quarter.............................................. 35.500 25.00
Fiscal Year 1999
First Quarter............................................... $35.1250 $25.9375
Second Quarter.............................................. 30.375 24.3125
Third Quarter............................................... 29.25 22.125
Fourth Quarter.............................................. 26.25 22.50
Fiscal Year 2000
First Quarter............................................... $28.9375 $24.00
Second Quarter.............................................. 44.50 28.00
Third Quarter (through October 5, 2000)..................... 47.9375 41.5625
On September 22, 2000, the last full trading day prior to the public
announcement of the execution of the Merger Agreement, the last reported sales
price of the Shares on the NYSE was $43.563 per Share. On October 5, 2000, the
last full trading day prior to the commencement of the Offer, the last
reported sales price of the Shares on the NYSE was $47.875 per Share.
Shareholders are urged to obtain a current market quotation for the Shares.
The Company did not declare or pay any cash dividends during any of the
periods indicated in the above table. In addition, under the terms of the
Merger Agreement, the Company is not permitted to declare or pay dividends
with respect to the Shares without the prior written consent of Parent, and
Parent does not intend to consent to any such declaration or payment.
7. Certain Information Concerning the Company.
General. The information concerning the Company contained in this Offer to
Purchase has been furnished by the Company or has been taken from, or based
upon, publicly available documents and records on file with the SEC and other
public sources. Neither Parent, Merger Subsidiary nor the Information Agent
assumes responsibility for the accuracy or completeness of the information
concerning the Company 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, Merger Subsidiary or the Information Agent.
The Company, a Virginia corporation, or its predecessors have been in the
flavor and fragrance business since the mid-1800s. Union Camp Corporation
("Union Camp") acquired the Company in 1982 from Albright & Wilson which was
then a wholly owned subsidiary of Tenneco, Inc. In June 1994, the Company
completed an initial public offering of 6,065,000 Shares which resulted in
31.6% of its outstanding Shares being publicly held with the remaining 68.4%
being held by Union Camp. On April 20, 1999, through the merger of Union Camp
with and into the Principal Shareholder, the Principal Shareholder became the
majority shareholder of the Company.
The Company's business is organized into two operating segments: (i) flavor
(including compound flavors, essential oils, seasonings and spice extracts)
and fragrance and (ii) aroma chemicals. The Company's flavor products impart a
desired taste and smell to a broad range of consumer products including soft
drinks,
16
confections, dietary foods, snack foods, dairy products, pharmaceuticals and
alcoholic beverages. The Company's fragrance products are used in a wide
variety of products including soaps, detergents, air fresheners, cleaners,
cosmetics and toiletries and related products. The Company is also a major
producer of aroma chemicals, products which are primarily used as raw
materials in fragrance compounds. The Company has operations in 38 countries
in North and South America, Europe, Asia, Australia, the Middle East and
Africa.
The Company's principal offices are located at 7 Mercedes Drive, Montvale,
New Jersey and its telephone number at such address is (201) 391-9870.
Certain Projected Financial Data of the Company. Prior to entering into the
Merger Agreement, representatives of Parent conducted a due diligence review
of the Company and in connection with such review received certain projections
of the Company's future operating performance. The projections were not
prepared with a view to public disclosure or compliance with the published
guidelines of the SEC or the guidelines established by the American Institute
of Certified Public Accountants regarding projections and forecasts. The
projections contain forward-looking statements, do not purport to present
results of operations in accordance with generally accepted accounting
principles and have not been audited or examined by the Company's independent
auditors. The summary of projected financial data set forth below is presented
for the limited purpose of giving the shareholders of the Company access to
financial data prepared by the Company's management that were made available
to Parent in connection with its due diligence investigation.
Bush Boake Allen Inc.
($ in millions)
Projected FYE December 31,
----------------------------------
2000 2001 2002 2003 2004
------ ------ ------ ------ ------
Net Sales.................................... $506.0 $546.0 $591.9 $642.3 $694.6
EBITDA....................................... 72.2 78.4 89.5 103.1 113.9
Net Income................................... 28.1 31.6 39.1 48.2 55.7
The foregoing forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from the
projections. The Company has advised Parent and Merger Subsidiary that its
internal financial forecasts (upon which the projections provided to Parent
were based in part) are, in general, prepared solely for internal use and
capital budgeting and other management decisions, and are subjective in many
respects and thus susceptible to interpretations and periodic revision based
on actual experience and business developments. The projections also reflect
numerous assumptions (not all of which were provided to Parent), all made by
management of the Company, with respect to industry performance, general
business, economic, market and financial conditions and other matters,
including effective tax rates consistent with historical levels for the
Company, all of which are difficult to predict, many of which are beyond the
Company's control and none of which were subject to approval by Parent, Merger
Subsidiary or the Principal Shareholder. Accordingly, there can be no
assurance that the assumptions made in preparing the projections will prove
accurate, and actual results may be materially greater or less than those
contained in the projections. The inclusion of the projections herein should
not be regarded as an indication that any of Parent, Merger Subsidiary, the
Company or the Principal Shareholder or their respective affiliates or
representatives considered or consider the projections to be a reliable
prediction of future events, and the projections should not be relied upon as
such. None of Parent, Merger Subsidiary or any of their respective affiliates
assumes any responsibility for the validity, reasonableness, accuracy or
completeness of the projections. None of Parent, Merger Subsidiary, the
Company or the Principal Shareholder or any of their respective affiliates or
representatives has made, or makes, any representation to any person regarding
the information contained in the projections and none of them intends to
update or otherwise revise the projections to reflect circumstances existing
after the date when made or to reflect the occurrence of future events even in
the event that any or all of the assumptions underlying the projections are
shown to be in error.
17
Miscellaneous. For a description of certain business relationships between
the Company and Parent and their respective affiliates, see Section 8.
Financial Information. Certain financial information relating to the Company
is hereby incorporated by reference to the audited financial statements for
the Company's 1998 and 1999 fiscal years set forth in the Company's 1999
Annual Report, incorporated by reference on the Company's Form 10-K for the
fiscal year ended December 31, 1999, beginning on page 35 of such report. The
report may be inspected at, and copies may be obtained from, the same places
and in the same manner set forth under "--Available Information" below.
Available Information. The Shares are registered under the Exchange Act.
Accordingly, the Company is subject to the informational reporting
requirements of the Exchange Act and, in accordance therewith, is required to
file periodic reports, proxy statements 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 and any material interest of such persons in transactions
with the Company is required to be disclosed in proxy statements distributed
to the Company's shareholders and filed with the SEC. Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the SEC at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the SEC's regional offices
located at Seven World Trade Center, Suite 1300, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Information regarding the public reference facilities may be obtained from the
SEC by telephoning 1-800-SEC-0330. The Company's filings are also available to
the public on the SEC's Internet site (http://www.sec.gov). Copies of such
materials may also be obtained by mail from the Public Reference Section of
the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
8. Certain Information Concerning Merger Subsidiary and Parent.
Merger Subsidiary and Parent.
General. Merger Subsidiary is a newly formed Virginia corporation and is a
wholly owned subsidiary of Parent. Merger Subsidiary was organized in
connection with the Offer and the Merger and has not carried on any
significant activities other than in connection with the Offer and the Merger.
Until immediately prior to the time Shares are purchased pursuant to the
Offer, it is not anticipated that Merger Subsidiary will have any significant
assets or liabilities or engage in any significant activities other than those
incident to its formation and capitalization and the transactions contemplated
by the Offer and the Merger.
Parent is a New York corporation and is a leading creator and manufacturer
of flavor and fragrance products used by other manufacturers to impart or
improve flavor or fragrance in a wide variety of consumer products. Fragrance
products are sold principally to manufacturers of perfumes, cosmetics, soaps
and detergents, and flavor products to manufacturers of prepared foods,
beverages, dairy foods, pharmaceuticals and confectionery products.
The principal offices of Merger Subsidiary and Parent are located at 521
West 57th Street, New York, New York 10019-2960. The telephone number of
Merger Subsidiary and Parent at such location is (212) 765-5500.
Except as discussed in this Offer to Purchase, neither Merger Subsidiary nor
Parent 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 securities of the Company, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies.
Except as discussed in this Offer to Purchase, none of Merger Subsidiary,
Parent, any of their respective affiliates, nor, to the best knowledge of
Merger Subsidiary or Parent, any of the persons listed on Schedule I, has had,
since January 1, 1996, any business relationships or transactions with the
Company or any of its executive
18
officers, directors or affiliates that would be required to be reported under
the rules of the SEC. Except as described in this Offer to Purchase, there
have been no contacts, negotiations or transactions between Merger Subsidiary
or Parent, any of their respective affiliates or, to the best knowledge of
Merger Subsidiary or Parent, any of the persons listed on Schedule I and the
Company or its affiliates concerning a merger, consolidation or acquisition,
tender offer or other acquisition of securities, election of directors or a
sale or other transfer of a material amount of assets.
9. Sources and Amount of Funds.
The Offer is not conditioned upon any financing arrangements. The total
amount of funds required by Merger Subsidiary to consummate the Offer and the
Merger, and expected to be incurred by Parent, is estimated to be
approximately $970 million plus any related transaction fees and expenses.
Merger Subsidiary will acquire all such funds from Parent, which intends to
obtain funds in accordance with the terms of a commitment letter, dated
September 21, 2000 (the "Commitment Letter"), among Parent, as borrower,
Citibank, N.A., as underwriter and administrative agent ("Citibank"), and
Salomon Smith Barney Inc., as arranger ("SSB" and, together with Citibank,
"Citi/SSB"). Pursuant to the Commitment Letter, Citi/SSB intend to make
available to Parent a $1,000,000,000 credit facility. Citibank has committed
to underwrite up to $350,000,000 of a bilateral 180-day bridge facility to a
capital markets takeout (the "Bridge Facility") and up to $650,000,000 of a
364-day revolving credit facility (the "364-Day Facility" and together with
the Bridge Facility, the "Facilities") and to act as administrative agent for
the 364-Day Facility. SSB has committed to act as arranger for the 364-Day
Facility. The Commitment Letter provides that Parent and Citi/SSB intend to
enter into a credit agreement (the "Credit Agreement") among Parent, as
borrower, and Citi/SSB, as lenders, for the Facilities. The Commitment Letter
contains, and the Credit Agreement will contain, representations and
warranties, conditions precedent, covenants, events of default and other
provisions customarily found in similar agreements. This summary is not a
complete description of the terms and conditions of the Commitment Letter, and
is qualified in its entirety by reference to the full text of the Commitment
Letter, which is incorporated herein by reference and a copy of which has been
filed with the Commission as an exhibit to a Tender Offer Statement on
Schedule TO (the "Schedule TO"). This Commitment Letter may be examined, and
copies obtained, in the manner described in Section 7 of this Offer to
Purchase.
10. Background of the Offer; Purpose of the Offer and the Merger; the Merger
Agreement and Certain Other Agreements.
Background of the Offer.
As part of their ongoing efforts to develop the business of the Company, the
Company's senior management and the Company Board have from time to time
considered various strategic transactions, including a possible sale or merger
of the Company. In connection with these efforts, the Company consulted with
CSFB, in late May and early June 2000. Throughout this period, various press
reports indicated that the Principal Shareholder, which owns approximately 68%
of the Company's Shares, was considering selling certain of its non-core
assets.
On June 16, 2000, Parent contacted Mr. Julian W. Boyden, Chairman, President
and Chief Executive Officer of the Company, and expressed interest in
acquiring all of the Shares of the Company for up to approximately $40 per
Share. As the Company was still in the process of considering its options,
extensive discussions were not pursued with Parent at that time.
On June 20, 2000, the Company publicly announced that it had retained CSFB
to explore strategic alternatives, including a possible merger or sale of the
Company. After evaluating with senior management of the Company the likely
interest of various strategic buyers in such a transaction, CSFB contacted, on
behalf of the Company, approximately 27 parties. Those parties who indicated a
general interest in pursuing a transaction were asked to enter into a
confidentiality agreement with the Company and 19 of these potential buyers,
including Parent, executed confidentiality agreements.
19
Between June 2000 and July 2000, the parties, including Parent, that
executed confidentiality agreements were sent information concerning the
Company and were asked to submit non-binding and preliminary indications of
the level of their interest by July 28, 2000. On July 27, 2000, Parent engaged
Morgan Stanley to act as its financial advisor in connection with a possible
transaction with the Company. On July 28, 2000, five parties, including
Parent, submitted indications of interest. The values indicated in the
preliminary bids ranged from $30.53 per Share to approximately $47.55 per
Share.
Following the receipt of the indications of interest, a meeting of the
Company Board was convened to review the sale process and the indications of
interest with CSFB. After the meeting, four of the five potential bidders,
including Parent, were provided with access to additional information
regarding the Company, including presentations by the management of the
Company, access to financial and other information of the Company, tours of
certain of the Company's operating facilities and plants and interviews with
certain of the Company's management. One bidder was eliminated from the
process prior to this stage because the price it had preliminarily indicated
it was prepared to pay was significantly lower than that of the other bidders.
The due diligence process described above was conducted by Parent and the
three other potential bidders throughout August and early September 2000. The
Company's legal and financial advisors also had discussions with these bidders
about issues that had arisen in due diligence and possible transaction
structures. The bidders were invited to submit, by not later than September
15, 2000, definitive offers to acquire the Company.
On September 15, 2000, two final bids were received. Parent submitted a cash
offer of $46.15 per Share and a second bidder ("Second Bidder") submitted a
cash offer of approximately $43.70 per Share. The offers received from Parent
and Second Bidder were both fully-financed and subject to customary
conditions. Second Bidder's offer was, however, subject to approval by its
board of directors (which was not expected to meet until September 22, 2000).
Parent and Second Bidder each requested an option to purchase the Principal
Shareholder's Shares as a condition to entering into a transaction with the
Company.
On September 18, 2000, senior executives of the Company met with their legal
and financial advisors to discuss the final bids. After the meeting, CSFB
contacted, on behalf of the Company, Second Bidder and Parent to invite each
party to raise the price of its offer and submit its best price.
Second Bidder responded on September 19, 2000 by orally raising its offer
from $43.70 to approximately $45.50 per Share, subject to approval by its
board of directors. The Company responded that a higher price would be
required to win the auction. On September 20, 2000, Second Bidder conveyed its
interest in acquiring the Company at a price per Share of somewhere in the
range between $46 and $47 and expressed strong doubts about any interest
beyond that range.
On September 20, 2000, Parent increased its offer to $47.15 per Share,
subject to obtaining the Option. The Company consulted with the Principal
Shareholder, and responded that at a price of $47.50, the Company would
consent to, and the Principal Shareholder would be prepared to grant, the
Option, subject to agreement on transaction terms that were acceptable to the
Company Board. Parent agreed orally to raise its bid to $47.50 per Share,
subject to reaching an agreement with Company to negotiate exclusively for a
period of time sufficient to allow the Company Board to consider the
transaction and the Principal Shareholder's board of directors to consider the
Option and the Support Agreement and, if satisfied, give the necessary
approval.
On September 21, 2000, the legal advisors of Parent and Company met to
negotiate the terms of the Merger Agreement, the Support Agreement and an
exclusivity agreement (the "Exclusivity Agreement"). After extensive
negotiations and significant progress with respect to the resolution of
outstanding issues (other than the offer price), the Exclusivity Agreement was
executed. The Principal Shareholder executed a similar exclusivity agreement
with Parent at that time. Also on September 21, the Second Bidder orally
notified the Company that it was prepared to recommend to its own board of
directors that it make an offer to the Company of up to $48.50 per Share.
20
On the morning of September 22, 2000, the Company received an unsolicited
bid of $48.50 per Share from Second Bidder which indicated that its board of
directors had approved the bid. The Company did not respond to the bid in
accordance with the Exclusivity Agreement entered into with Parent.
On the afternoon of September 22, 2000, the Company Board had a meeting by
telephone at which they were informed of the progress that had been made in
negotiations with Parent and that Second Bidder had subsequently submitted a
bid of $48.50 per Share.
The Company and its legal advisors had various discussions with Parent and
its legal advisors on September 23 and 24, 2000.
On September 24, 2000, a meeting of the Company Board was held at the
Company's offices. The Company Board discussed the specifics of the proposed
transaction with Parent, and agreed to reconvene the following day.
On September 25, the board of directors of Parent met to consider the Merger
Agreement and the transactions contemplated thereby and to determine whether
to increase its offer price. After consideration, the board of directors of
Parent authorized the increase of the offer price to $48.50 and voted to
approve the Merger Agreement, the Support Agreement and the transactions
contemplated thereby. Parent thereafter advised the Company that it would
raise its offer price to $48.50 per Share if the Company and the Principal
Shareholder were prepared to approve and enter into the transaction promptly
that day.
At the Company Board meeting later that morning, CSFB reviewed with the
Board and delivered its oral opinion, which opinion was confirmed by delivery
of a written opinion dated September 25, 2000, to the effect that, as of the
date of the opinion and based upon and subject to the matters stated in such
opinion, the $48.50 per Share cash consideration to be received in the Offer
and the Merger by holders of Shares was fair, from a financial point of view,
to such holders (other than Parent and its affiliates). After deliberation,
the Company Board approved the Support Agreement. Members of the Company Board
affiliated with the Principal Shareholder abstained from voting with respect
to the approval of the Support Agreement because the Principal Shareholder was
a party to that agreement. The Company Board then unanimously approved the
Merger Agreement and related agreements, the Offer and the Merger and
authorized the execution of the Merger Agreement and related agreements. The
Principal Shareholder, the Company, Parent and Merger Subsidiary executed the
Support Agreement and the Company, Parent and Merger Subsidiary executed the
Merger Agreement on September 25. Immediately thereafter, the Company and
Parent issued press releases announcing the execution of the Merger Agreement.
On October 6, 2000, Parent and Merger Subsidiary commenced the Offer.
Purpose of the Offer and the Merger. The purpose of the Offer and the Merger
is to enable Parent to acquire control of, and the entire equity interest in,
the Company. The Offer is being made pursuant to the Merger Agreement and is
intended to increase the likelihood that the Merger will be effected. The
purpose of the Merger is to acquire all of the outstanding Shares not
purchased pursuant to the Offer.
Shareholders of the Company who sell their Shares in the Offer will cease to
have any equity interest in the Company or any right to participate in its
earnings and future growth. If the Merger is consummated, non-tendering
shareholders will no longer have an equity interest in the Company and instead
will have only the right to receive cash consideration pursuant to the Merger
Agreement. Similarly, after selling their Shares in the Offer or the
subsequent Merger, shareholders of the Company will not bear the risk of any
decrease in the value of the Company.
The primary benefits of the Offer and the Merger to the shareholders of the
Company are that such shareholders are being afforded an opportunity to sell
all of their Shares for cash at a price which represents a premium of
approximately (i) 42.1% over the closing sales price of the Shares on June 20,
2000, the last full trading day prior to the public announcement that the
Company had engaged CSFB to review strategic
21
alternatives and (ii) 11.3% over the closing sales price of the Shares on
September 22, 2000, the last full trading day prior to the initial public
announcement that the Company, Merger Subsidiary and Parent had executed the
Merger Agreement. The Offer allows shareholders to receive the same cash price
for their Shares, at the same time, as the price to be received by the
Principal Shareholder in the Offer.
Merger Agreement.
The following is a summary of certain provisions of the Merger Agreement.
This summary is not a complete description of the terms and conditions of the
Merger Agreement and is qualified in its entirety by reference to the full
text of the Merger Agreement filed with the SEC as an exhibit to the Schedule
TO and is incorporated herein by reference. Capitalized terms not otherwise
defined below shall have the meanings set forth in the Merger Agreement. The
Merger Agreement may be examined, and copies obtained, as described in Section
7 of this Offer to Purchase.
Representations and Warranties. In the Merger Agreement, the Company has
made customary representations and warranties to Parent and Merger Subsidiary
with respect to, among other things, corporate organization, authority to
enter into the Merger Agreement, no conflicts between the Merger Agreement and
the Company's organizational documents, agreements or applicable law, the
receipt of required consents, capital structure, subsidiaries, filings with
the SEC, financial statements, absence of certain changes or events,
undisclosed liabilities, the accuracy of certain disclosures, litigation,
benefit plans, absence of changes in benefit plans, labor matters, compliance
with applicable laws, tax matters, environmental matters, real property,
leased property, intellectual property, brokers' and finders' fees, receipt of
the opinion of Credit Suisse First Boston, state takeover statutes, votes
required to approve the Merger Agreement, transactions with affiliates,
material contracts and absence of other representations.
In the Merger Agreement, each of Parent and Merger Subsidiary has made
customary representations and warranties to the Company with respect to, among
other things, corporate organization, authority to enter into the Merger
Agreement, no conflicts between the Merger Agreement and Parent's and Merger
Subsidiary's organizational documents and agreements or applicable law, the
receipt of required consents, the accuracy of certain disclosures, financing,
broker's and finder's fees, non-ownership of Shares, litigation and absence of
other representations.
Certain representations and warranties in the Merger Agreement are qualified
as to "materiality" or "Material Adverse Effect." For purposes of the Merger
Agreement and this Offer to Purchase, a "Company Material Adverse Effect"
means any change or effect that is materially adverse to the business, assets,
liabilities, results of operations or financial condition of the Company and
its subsidiaries taken as a whole or adversely affects the ability of such
person to consummate the transactions contemplated by the Merger Agreement in
any material respect or materially impairs or delays the Company's ability to
perform its obligations under the Merger Agreement, however, a Company
Material Adverse Effect does not include (i) changes in or resulting from
general economic or financial or market conditions, including changes in the
trading price of the Company's Shares, (ii) changes in conditions or
circumstances generally affecting the flavor, fragrance and aroma chemical
industries in which the Company and its subsidiaries operate, including any
regulatory changes, or (iii) any effect resulting from the Company's
compliance with the terms of the Merger Agreement. For purposes of the Merger
Agreement and this Offer to Purchase, a "Parent Material Adverse Effect" means
any change or effect that has been or is materially adverse to the business,
assets, liabilities, results of operations or financial condition of Parent
and its subsidiaries taken as a whole or adversely affects the ability of
Parent to consummate the transactions contemplated by the Merger Agreement in
any material respect or materially impairs or delays Parent's ability to
perform its obligations under the Merger Agreement, however, a Parent Material
Adverse Effect does not include (i) changes in or resulting from general
economic, financial or market conditions, (ii) changes in conditions or
circumstances generally affecting the industry in which Parent and its
subsidiaries operate, including regulatory changes, (iii) changes resulting
from the Merger Agreement or from the announcement of the transactions
contemplated by the Merger Agreement or (iv) any effect resulting from
Parent's compliance with the terms of the Merger Agreement.
22
Conditions to the Merger. The respective obligations of each party to effect
the Merger are subject to the satisfaction or written waiver on or prior to
the Closing Date of the following conditions: (i) the Merger Agreement and the
Merger shall have been approved by the requisite vote of the shareholders in
accordance with the VSCA; (ii) Merger Subsidiary shall have accepted for
payment and paid for all Shares validly tendered in the Offer and not
withdrawn; provided, that this condition will be deemed to be satisfied if
Merger Subsidiary shall have failed to purchase Shares so tendered and not
withdrawn in violation of the terms of the Merger Agreement or the Offer;
(iii) the consummation of the Merger shall not be restrained, enjoined or
prohibited by any order, judgment, decree, injunction or ruling of a court of
competent jurisdiction or any Governmental Entity entered; provided that the
party invoking this condition shall have complied with its obligations under
the Merger Agreement; and (iv) any necessary waiting period under the HSR Act
or under foreign antitrust laws applicable to the Merger shall have expired or
been earlier terminated, except that with respect to any foreign antitrust
laws, where the failure to so expire or terminate would not materially
adversely effect the transactions contemplated by the Merger Agreement.
Directors and Officers. Promptly after the purchase of and payment for any
Shares by Merger Subsidiary pursuant to the Offer, Parent shall be entitled to
designate such number of directors, rounded up to the next whole number, on
the Company Board as is equal to at least that number of directors which
equals the product of the total number of directors on the Company Board
(after giving effect to any increase in the size of the Company Board)
multiplied by a fraction, the numerator of which is the number of Shares
beneficially owned by Merger Subsidiary at such time (including Shares so
accepted for payment and for which payment has been made) and the denominator
of which shall be the total number of Shares then outstanding. In furtherance
thereof, the Company shall, upon request of Parent, take all reasonable
actions to cause Parent's designees to be elected or appointed, including
without limitation, increasing the size of its Board of Directors and/or
securing the resignations of incumbent directors. At such time, the Company
shall, if requested by Parent, also take all action reasonably necessary to
cause persons designated by Parent to constitute at least the same percentage
(rounded up to the next whole number) as Parent is entitled to designate on
the Company Board of (i) each committee of the Company Board, (ii) each board
of directors (or similar body) of each subsidiary of the Company and (iii)
each committee (or similar body) of each such board.
The Merger Agreement provides that the Company's obligation to appoint
Parent's designees to the Company Board is subject to Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder. The Company will promptly
take all actions required pursuant to Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder in order to fulfill its obligations under
the Merger Agreement, including mailing to shareholders the information
required by such Section 14(f) and Rule 14f-1 (or including such information
in the Schedule 14D-9 initially filed with the SEC and distributed to the
shareholders of the Company) as is necessary to enable Parent's designees to
be elected to the Company Board. Parent or Merger Subsidiary will supply to
the Company in writing and be solely responsible for any information with
respect to either of them and their nominees, officers, directors and
affiliates required by such Section 14(f) and Rule 14f-1.
Notwithstanding the foregoing, the parties to the Merger Agreement shall use
their respective reasonable best efforts to ensure that at least two of the
members of the Company Board shall, at all times prior to the Effective Time,
be directors of the Company who were directors of the Company on the date of
the Merger Agreement and who are not officers of the Company (the "Continuing
Directors"), provided, that, if there shall be in office less than two
Continuing Directors for any reason, the Company Board shall cause the person
designated by the remaining Continuing Director to fill such vacancy who shall
be deemed to be a Continuing Director for all purposes of the Merger
Agreement. From and after the time, if any, that Parent's designees constitute
a majority of the Company Board and prior to the Effective Time, any
termination of the Merger Agreement by the Company, any amendment of the
Merger Agreement or the Support Agreement, any amendment to the Company's
articles of incorporation or bylaws that adversely affects the shareholders,
any extension of time for performance of any of the obligations of Parent or
Merger Subsidiary under the Merger Agreement, any enforcement of or any waiver
of compliance with any of the agreements or conditions contained in the Merger
Agreement for the benefit of the Company may be effected by the Company Board
only with a majority vote of the directors then in office who were not
designated by Parent.
23
The directors and officers of Merger Subsidiary immediately prior to the
Effective Time shall be the directors and officers, respectively, of the
Surviving Corporation as of the Effective Time until their successors are duly
elected or appointed and qualified in accordance with the articles of
incorporation and bylaws of the Surviving Corporation and applicable law.
Shareholders' Meeting. If required by the Company's articles of
incorporation and/or applicable law in order to consummate the Merger, the
Company shall take all action necessary in accordance with the VSCA and its
articles of incorporation and bylaws to duly call, give notice of, convene and
hold a meeting of the Company's shareholders (the "Shareholders Meeting") as
promptly as practicable following the acceptance for payment of and purchase
of Shares by Parent pursuant to the Offer for purposes of considering and
taking action upon the Merger Agreement. At the Shareholders Meeting, all of
the Shares then owned by Parent, Merger Subsidiary or any other subsidiary of
Parent shall be voted to approve the Merger and the Merger Agreement (subject
to applicable law). Subject to the fiduciary obligations of the Board under
applicable law, the Company Board shall recommend that the Company's
shareholders vote to approve the Merger and the Merger Agreement if such vote
is sought, shall use its reasonable best efforts to solicit from shareholders
of the Company proxies in favor of the Merger and shall take all other action
in its judgment necessary and appropriate to secure the vote of shareholders
required by the VSCA to effect the Merger. The Company shall cause such
recommendation to be included in the Company Proxy Statement.
In the event that Parent, Merger Subsidiary or any other subsidiary of
Parent shall acquire at least 90% of the outstanding shares of each
outstanding class of capital stock of the Company pursuant to the Offer, the
parties agree to take all necessary and appropriate action to cause the Merger
to become effective as soon as practicable after the acceptance for payment of
any payment for shares by Merger Subsidiary pursuant to the Offer without a
meeting of shareholders of the Company, in accordance with Section 13.1-719 of
the VSCA.
Proxy Statement. If required under applicable law, the Company shall
promptly prepare the Company Proxy Statement, file it with the SEC under the
Exchange Act as promptly as practicable after Merger Subsidiary purchases
Shares pursuant to the Offer, and use all reasonable efforts to have the
Company Proxy Statement cleared by the SEC. Parent, Merger Subsidiary and the
Company shall cooperate with each other in the preparation of the Company
Proxy Statement, and the Company shall notify Parent of the receipt of any
comments of the SEC with respect to the Company Proxy Statement and of any
requests by the SEC for any amendment or supplement thereto or for additional
information and shall provide to Parent promptly copies of all correspondence
between the Company or any representative of the Company and the SEC. The
Company shall give Parent and its counsel the opportunity to review the
Company Proxy Statement prior to its being filed with the SEC and shall give
Parent and its counsel the opportunity to review all amendments and
supplements to the Company Proxy Statement and all responses to requests for
additional information and replies to comments prior to their being filed
with, or sent to, the SEC. Each of the Company, Parent and Merger Subsidiary
agrees to use its reasonable best efforts, after consultation with the other
parties hereto to respond promptly to all such comments of and requests by the
SEC. As promptly as practicable after the Company Proxy Statement has been
cleared by the SEC, the Company shall mail the Company Proxy Statement to the
shareholders of the Company.
Stock Options. Immediately following the acceptance for payment and purchase
of Shares by Merger Subsidiary pursuant to the Offer, each outstanding option
to purchase Company Common Stock (a "Stock Option") granted under the
Company's 1994 Stock Option and Stock Award Plan and the Company's 1998
Directors' Stock Option Plan (collectively, the "Company Option Plans") shall
become fully exercisable and vested. Until immediately prior to the Effective
Time, each holder of an outstanding Stock Option may surrender to the Company
such Stock Option, which shall then be cancelled, in exchange for payment to
be made at the time of surrender by Parent or Merger Subsidiary to the holder
of the Stock Option in an amount equal to the product of (x) the Merger
Consideration over the per share exercise price of the Stock Option, and (y)
the number of Shares subject to the Stock Option (such payment to be net of
taxes required to be withheld with respect thereto by applicable law) (the
"Option Consideration"). Immediately prior to the Effective Time, (i) the
Company shall terminate the Company Option Plans and (ii) each Stock Option
which remains outstanding at such time shall be cancelled in consideration of
a payment made at the Effective Time by Parent or Merger
24
Subsidiary to the holder of each then outstanding Stock Option of the relevant
Option Consideration with respect to such Stock Option. Parent, Merger
Subsidiary and the Company shall cooperate and take all steps necessary to
give effect to this paragraph. After the date of the Merger Agreement, the
Company shall not grant any additional Stock Options under the Company Option
Plans. The Company will use its best efforts to obtain all necessary consents
and take any further action necessary to effect the foregoing so that as of
the Effective Time no Stock Options will be exercisable for stock of the
Surviving Corporation.
Employee Benefit Matters. For a period of one year after the Effective Time,
Parent will cause to remain in effect for the benefit of the employees of the
Company and its subsidiaries (and, to the extent applicable, former employees)
all Employee Plans in effect on the date of the Merger Agreement or provide
each employee (and, to the extent applicable, former employees) of the
Surviving Corporation and its subsidiaries who was an employee prior to the
Effective Time with benefits that, with respect to such employee (or former
employee), are at least substantially equivalent on an aggregate basis to the
benefits to which they were entitled under such Employee Plans. Without
limiting the generality of the foregoing, all vacation, holiday, sickness and
personal days accrued by the employees of the Company and its subsidiaries
shall be honored. In the event that any employee of the Surviving Corporation
or one of its subsidiaries is at any time after the Effective Time transferred
to Parent or any affiliate of Parent or becomes a participant in an employee
benefit plan, program or arrangement maintained by or contributed by Parent or
any affiliate of Parent, Parent shall cause such plan, program or arrangement
to treat the prior service of such employee with the Company and its
subsidiaries, to the extent prior service is generally recognized under the
comparable plan, program or arrangement of the Company, as service rendered to
Parent or such affiliates for purposes of eligibility, vesting or entitlement
to early retirement benefits, vacation time or severance benefits under such
plans. Parent shall cause to be waived any pre-existing condition limitation
under their welfare plans that might otherwise apply to such employee or, to
the extent applicable, a former employee, other than limitations that are
already in effect with respect to such employees and that have not been
satisfied or waived as of the Effective Time under any Employee Plan
maintained for such employees immediately prior to the Effective Time. Parent
agrees to recognize (or cause to be recognized) the dollar amount of all
expenses incurred by such employees or, to the extent applicable, former
employees, during the calendar year in which the Effective Time occurs for
purposes of satisfying the calendar year deductibles, contribution obligation
payment limitations and lifetime maximums for such year under the relevant
benefit plans of Parent and its subsidiaries. Parent is not required to
continue any specific Employee Plans or to continue the employment of any
employee; provided, however, that any changes that Parent may make to any such
Employee Plans are consistent with the Merger Agreement and are permitted by
the terms of the Employee Plans and under any applicable law. Notwithstanding
anything contained in the Merger Agreement to the contrary, nothing in the
Merger Agreement shall require the duplication of benefits to any employees or
former employees.
With respect to any Defined Benefit Plan, benefits shall be frozen and cease
to accrue as of the Effective Time. As of the Effective Time, all active
employees of the Company or any subsidiary who were participants in the
Defined Benefit Plans immediately prior to the Effective Time shall become
participants in the tax-qualified Defined Benefit Plan of Parent, which plan
shall recognize service with the Company or any subsidiary prior to the
Effective Time for purposes of eligibility and vesting, but not for purposes
of benefit accrual.
Interim Operations. The Merger Agreement provides that from the date of the
Merger Agreement to the Effective Time, subject to certain exceptions, the
Company shall, and shall cause each of its subsidiaries to, act and carry on
their business in the ordinary course of business consistent with past
practice and, to the extent consistent therewith, use their commercially
reasonable efforts to preserve intact their current business organizations and
relationships with third parties, keep available the services of their present
officers and key employees and preserve the goodwill of those engaged in
material business relationships with the Company. Without limiting the
generality of the foregoing, except as expressly approved in writing by Parent
or provided in the Merger Agreement or as specified in the Company Disclosure
Letter, the Company shall not, and shall not permit any of its subsidiaries
to, without the prior consent of Parent:
(a) adopt or propose any change in its articles of incorporation or
bylaws or other comparable charter or organizational documents;
25
(b) acquire or agree to acquire (i) by merging or consolidating with, or
by purchasing a substantial portion of the equity or assets of any business
or any corporation, partnership, joint venture, association or other
business organization or division thereof that would be material to the
Company and its subsidiaries, taken as a whole, or (ii) any assets except
for purchases of inventory and equipment in the ordinary course of business
consistent with past practice. The Company shall not, and shall not permit
any of its subsidiaries to, directly or indirectly, acquire, make any
investment (other than short term investments in the ordinary course of
business or investments not exceeding $1,000,000 individually or
$10,000,000 in the aggregate) in, or make any capital contributions to, any
person (other than a subsidiary of the Company) other than in the ordinary
course of business;
(c) sell, lease, license, pledge, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its properties or
assets, or stock or other ownership interest in any of its properties or
subsidiaries other than (i) in the ordinary course of business consistent
with past practice, (ii) pursuant to any agreements existing as of the date
of the Merger Agreement and entered into in the ordinary course of business
consistent with past practice, (iii) any Liens for taxes not yet due and
payable or being contested in good faith by appropriate proceedings, (iv)
such mechanics and similar Liens, if any, as do not materially detract from
the value of any material properties or assets or materially interfere with
the present use of any of such properties or assets or (iv) which would not
reasonably be expected to result, individually or in the aggregate, in a
Company Material Adverse Effect;
(d) declare, set aside, or pay any dividends or make any distributions on
shares of capital stock other than dividends or distributions by any wholly
owned subsidiary of the Company to the Company or another wholly owned
subsidiary;
(e) (i) issue, deliver, grant or sell, or authorize or propose the
issuance, delivery, grant or sale of, any capital stock of the Company or
any securities of the Company subsidiaries, or any security, option or
instrument convertible into or exercisable for either of the foregoing,
other than the issuance of Shares upon the exercise of Stock Options, (ii)
split, combine or reclassify any capital stock of the Company or any of its
subsidiaries or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of capital stock of
the Company or any of its subsidiaries or (iii) except as required or
permitted by the Merger Agreement, repurchase, redeem or otherwise acquire
any shares of capital stock of the Company or any of its subsidiaries or
any other securities thereof or any rights, warrants or options to acquire
any such shares or other securities;
(f) incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person in an aggregate principal amount in excess
of $10 million, guarantee any debt securities of another person, enter into
any "keep well" or other agreement to maintain any financial statement
condition of another person, except for borrowings for working capital
purposes and the endorsement of checks in the ordinary course of business
consistent with past practice; or (ii) make any material loans, advances or
capital contributions to, or investments in, any other person, other than
to the Company or any direct or indirect wholly owned subsidiary of the
Company or as otherwise made in the ordinary course of business consistent
with past practice;
(g) (i) increase the compensation payable or to become payable to its
officers, directors or key employees, (ii) grant any severance or
termination pay to officers, directors or key employees (except pursuant to
existing agreements, plans or policies), (iii) enter into any employment,
severance or consulting agreement with any current or former director,
officer or other employee of the Company or any subsidiary or (iv)
establish, adopt, enter into, amend or accelerate the payment, right to
payment or vesting of any collective bargaining, bonus, profit sharing,
thrift, compensation stock option, restricted stock, pension, retirement,
deferred compensation, employment termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any
current or former director, officer or employee (any of the foregoing being
an "Employee Benefit Arrangement") except for (A) increase in wages, salary
and benefits of officers or employees of the Company or its subsidiaries in
accordance with past practice and (B) increases in salary, wages and
benefits granted to officers and employees of the Company or its
subsidiaries
26
in conjunction with promotions or other changes in job status in the
ordinary course of business consistent with past practice; provided,
however, that nothing will be deemed to prohibit (i) the payment of
benefits as they become payable under the terms of the Employee Benefit
Arrangements as in effect on the date of the Merger Agreement or (ii)
entering into any agreement in connection with new hires in the ordinary
course;
(h) plan, announce, implement or effect any reduction in force, lay-off,
early retirement program, severance program or other program or effort
concerning the termination of employment of employees of the Company or its
subsidiaries, provided, however, that routine employee terminations shall
be allowed;
(i) (i) change any of the accounting methods used by it unless required
by GAAP or (ii) make any material election relating to Taxes, change any
material election relating to Taxes already made, adopt or change any
accounting method relating to material Taxes unless required by GAAP, enter
into any closing agreement relating to material Taxes, settle any claim or
assessment relating to material Taxes or consent to any claim or assessment
relating to material Taxes or any waiver of the statute of limitations for
any such claim or assessment;
(j) make any capital expenditure or expenditures in excess of $500,000
individually or $2.5 million in the aggregate, other than as previously
disclosed;
(k) enter into, materially amend or terminate, or release or assign any
material right in, any material contract, other than contracts in the
ordinary course of business consistent with past practice or related to the
purchase or sale of inventory, involving payments to or by the Company of
less than $7 million per year;
(l) other than in connection with the licensing of the Company's
products, enter into any agreement, understanding or commitment that
materially restrains, limits or impedes the Company's ability to compete
with or conduct any material line of business, including, but not limited
to, geographic limitations on the Company's activities;
(m) enter into, or modify any existing transaction with any Affiliate in
a manner materially adverse to the Company;
(n) waive any material non-compete, standstill or non-disclosure
obligations;
(o) adopt any plan of liquidation, dissolution, winding-up or similar
transaction; and
(p) agree or commit to do any of the foregoing.
No Solicitation. The Merger Agreement provides that the Company shall not,
and shall use its best efforts to cause its subsidiaries and any of its or its
subsidiaries' officers, directors, employees, investment bankers, attorneys,
accountants and other agents and advisors not to, directly or indirectly, (i)
solicit, initiate or knowingly encourage inquiries relating to, or the
submission of, any Acquisition Proposal, (ii) engage in negotiations or
discussions with, or in any other way knowingly cooperate with, any person
(other than Parent, Merger Subsidiary or their respective directors, officers,
employees, agents and representatives) that may be considering making, or has
made, an Acquisition Proposal, (iii) furnish to any person any information or
data with respect to or access to the properties of the Company or any of its
subsidiaries to, or take any action to, facilitate the making of any proposal
that constitutes or may reasonably be expected to lead to, any Acquisition
Proposal or (iv) enter into any agreement with respect to any Acquisition
Proposal or approve or resolve to approve any Acquisition Proposal. The
Company shall as promptly as reasonably practicable (but in no case later than
48 hours after receipt thereof) provide Parent with the identity of such
person and a reasonable description of such Acquisition Proposal. The Company
shall keep Parent fully informed on a current basis of the status and details
of any such Acquisition Proposal. An "Acquisition Proposal" means any offer or
proposal for, or any indication of interest in, (i) a merger, share exchange,
recapitalization, liquidation, reclassification or business combination or
similar transaction, (ii) any sale, lease, exchange, transfer or other
disposition of 10% or more of the assets of the Company and its subsidiaries,
taken as a whole, or (iii) any tender offer or exchange offer that, if
consummated, would result in any person beneficially owning 10% or more of the
outstanding shares of capital stock of the Company involving the Company or
any of its subsidiaries, other than the transactions contemplated by the
Merger Agreement. The Company shall, and shall cause its subsidiaries and the
directors, employees and other
27
agents and representatives of the Company and its subsidiaries to, immediately
cease and cause to be terminated, its existing solicitation activity,
discussions or negotiations with any parties conducted theretofore by the
Company or any of its representatives with respect to an Acquisition Proposal.
Notwithstanding the foregoing, the Company Board (or its authorized
representatives) is not prohibited from, prior to the purchase of Shares
pursuant to the Offer, (i) furnishing non-public information to, or entering
into customary confidentiality agreements on terms, taken as a whole, no less
favorable to the Company than the terms of the Confidentiality Agreement
between Parent and the Company with, or entering into discussions or
negotiations with, any person in connection with an unsolicited Acquisition
Proposal to the Company or its shareholders, but only if the Company Board
determines in good faith that such Acquisition Proposal, if accepted,
constitutes a Superior Proposal, (ii) entering into a definitive agreement
providing for the implementation of a Superior Proposal if the Company is
concurrently terminating the Merger Agreement pursuant to Section 8.1(g)
thereof and paying the Termination Fee (as defined below) and Parent's
Expenses, (iii) taking and disclosing to its shareholders a position with
respect to such Acquisition Proposal contemplated by Rule 14e-2(a) promulgated
under the Exchange Act or (iv) making any disclosure to its shareholders which
the Company Board determines, after consultation with legal counsel, is
required to be taken or made under applicable law.
A "Superior Proposal" means a bona fide Acquisition Proposal on terms which
the Company Board determines in its good faith judgment (after consultation
with a nationally-recognized investment banking firm acting as the Company's
advisor) to be more favorable from a financial point of view to the Company
and its shareholders than the transactions contemplated by the Merger
Agreement, which the Company Board determines in good faith is reasonably
capable of being financed, and the conditions to the consummation of which
are, in the good faith determination of the Company Board, reasonably capable
of being satisfied.
State Takeover Laws. If any "fair price," "business combination" or "control
share acquisition" statute or other similar statute or regulation shall become
applicable to the transactions contemplated by the Merger Agreement or the
Support Agreement, including the purchases of Shares in the Offer, the Merger
or the acquisition of Shares pursuant to the option set forth in the Support
Agreement, the Company and its Board of Directors shall take all such action
as may be reasonably necessary or advisable to obtain such approvals and take
such actions as are necessary or advisable so that the transactions
contemplated by the Merger Agreement and the Support Agreement may be
consummated as promptly as practicable on their terms and otherwise act to
minimize the effects of any such statute or regulation on the transactions
contemplated.
Termination. The Merger Agreement may be terminated and the Offer and the
Merger may be abandoned at any time prior to the Effective Time, whether
before or after approval of matters presented in connection with the Merger by
the shareholders of the Company or Parent:
(a) by the mutual written consent of the Company and Parent;
(b) by either of the Company or Parent if the Offer has not been
consummated on or before January 31, 2001 (the "Termination Date");
provided, however, that the party seeking to terminate the Merger Agreement
shall not have breached in any material respect its obligations under the
Merger Agreement; and provided, further, that the Termination Date shall be
extended for an additional period of up to thirty (30) days, if each of the
conditions to the consummation of the Offer, other than the conditions
described in clauses (A)(y) and (B)(a) described below in Section 13, shall
have been satisfied on or prior to the Termination Date;
(c) by either the Company or Parent, if there shall be any applicable
law, rule or regulation that makes consummation of the Offer or the Merger
illegal or otherwise prohibited or if any judgment, injunction, order or
decree of a court or governmental agency or authority of competent
jurisdiction shall restrain or prohibit the consummation of the Offer or
the Merger, and such judgment, injunction, order or decree shall become
final and nonappealable;
(d) by either Company or Parent, if prior to the completion of the Offer,
(x) there has been a breach by the other party of, or any inaccuracy in,
any representation or warranty (without regard to any Company
28
Material Adverse Effect or Parent Material Adverse Effect, as the case may
be, contained in such representations and warranties) contained in the
Merger Agreement which would reasonably be expected, individually or in the
aggregate, to have a Parent Material Adverse Effect or Company Material
Adverse Effect, as the case may be, or (y) there has been a material breach
of any of the covenants or agreements set forth in the Merger Agreement on
the part of the other party which breach is, in the case of (x) or (y), not
cured within thirty (30) days after written notice of such breach is given
by the terminating party to the other party;
(e) by the Company, if the Offer has not been timely commenced, provided,
that the Company may not so terminate if it is in material breach of its
obligations under the Merger Agreement;
(f) by Parent, if the Company Board shall have failed to recommend, or
shall have withdrawn or modified in a manner adverse to Parent, its
approval or recommendation of the Merger Agreement, the Offer or the Merger
or shall have recommended or announced a neutral position with respect to,
or entered into, or publicly announced its intention to enter into, an
agreement with respect to an Acquisition Proposal (or shall have resolved
to do any of the foregoing);
(g) by the Company concurrently with or following payment of the
Termination Fee and Parent's Expenses, if, prior to the purchase of Shares
pursuant to the Offer, the Company Board shall concurrently approve and the
Company shall concurrently enter into, a definitive agreement providing for
the implementation of a Superior Proposal; provided, however, that (x) the
Company shall have notified Parent in writing that it intends to enter into
such an agreement, attaching the most current version of such agreement to
such notice and (y) during the five (5) business day period after such
notice, the Company shall have offered to negotiate with and, if accepted,
negotiate in good faith with (and shall have caused its legal and financial
advisors to do the same) Parent to attempt to make such commercially
reasonable adjustments as would enable the Company to proceed with the
Merger Agreement in lieu of the Superior Proposal, it being understood that
(A) the Company shall not enter into any such agreement during such five-
day period and (B) the Company agrees to notify Parent promptly if its
intention to enter into a written agreement referred to in its notification
shall change at any time after giving effect to such notification;
(h) by Parent or the Company if as the result of the failure of any of
the conditions discussed in Section 13 to be satisfied, the Offer shall
have terminated or expired in accordance with its terms without Merger
Subsidiary having purchased any Shares pursuant to the Offer; provided,
however, that the right to terminate the Merger Agreement for this reason
shall not be available to any party whose material breach of any of its
obligations under the Merger Agreement results in the failure of any such
condition; and
(i) by Parent, if the Company shall have taken any action to exempt any
acquisition of Shares by any person, other than Parent, Merger Subsidiary
or any of their respective Affiliates, from Article 14 or Article 14.1 of
the VSCA.
Termination Fee. If (i) the Company terminates the Merger Agreement as
described in paragraph (g) under the heading "Termination" above or (ii)
Parent terminates the Merger Agreement as described in paragraphs (f) or (i)
under the heading "Termination" above, then, in each case, the Company will
pay, or cause to be paid to Parent, (i) Parent's Expenses up to a maximum of
$1 million and (ii) an amount equal to $29.1 million (the "Termination Fee").
In addition, so long as Parent has complied with all its material
obligations under the Merger Agreement and the Company is not entitled to
terminate the Merger Agreement as described in paragraphs (c), (d) or (e)
under the heading "Termination" above, if (i) the Merger Agreement is
terminated as described in paragraphs (b) or (h) under the heading
"Termination" above as a result of the non-satisfaction of the Minimum
Condition, (ii) the shareholders of the Company have failed to approve the
Merger Agreement and the Merger by the requisite vote in accordance with the
VSCA or (iii) Parent has terminated the Merger Agreement as described in
paragraph (d) under the heading "Termination" above; and
(1) at the time of the termination of the Offer, termination of the
Merger Agreement, shareholder vote or breach, as the case may be, any
person (other than Parent) shall have publicly announced, and not withdrawn
in good faith, an Acquisition Proposal; and
29
(2) within twelve (12) months after termination of the Merger Agreement,
the Company shall have entered into an agreement with respect to an
Acquisition Proposal or consummated an Acquisition Proposal;
then the Company shall pay to Parent an amount equal to Parent's Expenses (not
in excess of $1 million) and the Termination Fee, in each case prior to or
concurrently with entering into any such agreement or consummating such
Acquisition Proposal, as the case may be.
Indemnification. Pursuant to the Merger Agreement, Parent and Merger
Subsidiary have agreed that the articles of incorporation and bylaws of the
Surviving Corporation shall contain provisions with respect to indemnification
substantially to the same effect as those set forth in the articles of
incorporation and the bylaws of the Company, which provisions shall not be
amended, modified or otherwise repealed for a period of six years after the
Effective Time in any manner that would adversely affect the rights thereunder
of individuals who at the Effective Time were directors, officers, employees
or agents of the Company, unless such modification is required after the
Effective Time by law.
The Merger Agreement also provides that Parent shall cause the Surviving
Corporation, to the fullest extent permitted under applicable law or under the
Surviving Corporation's articles of incorporation or bylaws or any
indemnification agreement in effect as of the date of the Merger Agreement, to
indemnify and hold harmless, each present and former director, officer or
employee of the Company or any of its subsidiaries (collectively, the
"Indemnified Parties") against any costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages, liabilities and
amounts paid in settlement in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative, (x) arising out of or pertaining to the transactions
contemplated by the Merger Agreement or (y) otherwise with respect to any acts
or omissions occurring at or prior to the Effective Time ("Indemnification
Liabilities"), to the same extent as provided in the Company's articles of
incorporation or bylaws or any applicable contract or agreement as in effect
on the date of the Merger Agreement, in each case for a period of six years
after the date of the Merger Agreement. In the event of any such claim,
action, suit, proceeding or investigation (whether arising before or after the
Effective Time) and subject to the specific terms of any indemnification
contract, after the Effective Time, the Surviving Corporation shall assume and
direct all the defense thereof, including settlement, and the Indemnified
Parties shall cooperate in the defense of any such matter. An Indemnified
Party shall have a right to participate in (but not control) the defense of
any such matter with its own counsel and at its own expense. Notwithstanding
the right of the Surviving Corporation to assume and control the defense of
such litigation, claim or proceeding, such Indemnified Party shall have the
right to employ separate counsel and to participate in the defense of such
litigation, claim or proceeding, and the Surviving Corporation shall bear the
reasonable fees, costs and expenses of such separate counsel and shall pay
such fees, costs and expenses promptly after receipt of an invoice from such
Indemnified Party if (i) the use of counsel chosen by the Surviving
Corporation to represent such Indemnified Party would present such counsel
with a conflict of interest, (ii) the defendants in, or targets of, any such
litigation, claim or proceeding shall have been advised by counsel that there
may be legal defenses available to it or to other Indemnified Parties which
are different from or in addition to those available to the Surviving
Corporation, or (iii) the Surviving Corporation shall not have employed
counsel satisfactory to such Indemnified Party, in the exercise of the
Indemnified Party's reasonable judgment, to represent such Indemnified Party
within a reasonable time after notice of the institution of such litigation,
claim or proceeding. The Surviving Corporation shall not settle any such
matter unless (i) the Indemnified Party gives prior written consent, which
shall not be unreasonably withheld or delayed, or (ii) the terms of the
settlement provide that the Indemnified Party shall have no responsibility for
the discharge of any settlement amount and impose no other obligations or
duties on the Indemnified Party and the settlement discharges all rights
against Indemnified Party with respect to such matter. In no event shall the
Surviving Corporation be liable for any settlement effected without its prior
written consent. Any Indemnified Party wishing to claim indemnification, upon
learning of any such claim, action, suit, proceeding or investigation, shall
promptly notify Parent and the Surviving Corporation (but the failure so to
notify shall not relieve the Surviving Corporation from any liability which it
may have except to the extent such failure materially prejudices such
Surviving Corporation). The Indemnified Parties as a group will be represented
by a single law firm (plus no more than one local counsel in any jurisdiction)
with respect to each
30
such matter unless there is, under applicable standards of professional
conduct, a conflict on any significant issue between the positions of any two
or more Indemnified Parties. Notwithstanding anything to the contrary, in the
event (i) that any claim or claims for indemnification are asserted or made
within such six-year period, all rights to indemnification in respect of any
such claim or claims shall continue until the disposition of any and all such
claims and (ii) that any determination required to be made with respect to
whether an Indemnified Party's conduct is entitled to indemnification under
the Merger Agreement, or complies with the standards set forth under the VSCA,
the Company's articles of incorporation or bylaws or any such agreement, as
the case may be, such determination shall be made by independent legal counsel
of national reputation selected by such Indemnified Party and reasonably
acceptable to Parent.
In addition, Parent will provide, or cause the Surviving Corporation to
provide, for a period of not less than six years after the Effective Time, the
Company's current directors and officers an insurance and indemnification
policy that provides coverage for events occurring at or prior to the
Effective Time (the "D&O Insurance") that is no less favorable than the
existing policy pursuant to which such directors and officers are covered or,
if substantially equivalent insurance coverage is unavailable, the best
available coverage; provided, however, that Parent and the Surviving
Corporation shall not be required to pay an annual premium for the D&O
Insurance in excess of two hundred percent (200%) of the annual premium
currently paid by the Company for such insurance, but in such case shall
purchase as much of such coverage as possible for such amount.
The provisions with respect to indemnification survive the consummation of
the Merger, are intended to benefit the Indemnified Parties, are be binding on
all successors and assigns of the Surviving Corporation and are enforceable by
the Indemnified Parties.
Support Agreement.
The following is a summary of certain provisions of the Support Agreement.
This summary is not a complete description of the terms and conditions of the
Support Agreement and is qualified in its entirety by reference to the full
text of the Support Agreement filed with the SEC as an exhibit to the Schedule
TO and is incorporated herein by reference. Capitalized terms not otherwise
defined below shall have the meanings set forth in the Support Agreement. The
Support Agreement may be examined, and copies obtained, as discussed in
Section 7 of this Offer to Purchase.
As a condition to the willingness of Parent and Merger Subsidiary to enter
in the Merger Agreement, Parent and Merger Subsidiary required that the
Principal Shareholder enter into the Support Agreement. The Support Agreement
provides that the Principal Shareholder shall promptly (and in any event
within ten (10) business days) following the commencement of the Offer, tender
(a) the certificates representing all the Shares of Company Common Stock owned
as of the date of the Support Agreement and all the Shares of Company Common
Stock which may hereafter be acquired by, or on behalf of the Principal
Shareholder (the "Principal Shareholder Shares") and (b) all other customary
documents or instruments required to be delivered pursuant to the terms of the
Offer Document.
The Support Agreement provides that the Principal Shareholder shall not,
subject to applicable law, withdraw the tender of the Principal Shareholder
Shares except if there is any amendment that adversely affects the Principal
Shareholder nor may the Principal Shareholder sell, give, assign, hypothecate,
pledge, encumber, grant a security interest in or otherwise dispose of or
transfer (whether by operation of law or by agreement or otherwise), any of
the Principal Shareholder Shares or any right, title or interest therein or
thereto or enter into any contract, option or other agreement or understanding
with respect to any of the foregoing.
Representations and Warranties. In the Support Agreement, the Principal
Shareholder made customary representations and warranties to Parent, including
representations and warranties relating to corporate power and authority to
enter into the Support Agreement, the absence of conflicts, and its title to
the Principal Shareholder Shares. Parent and Merger Subsidiary made customary
representations and warranties to the Principal Shareholder relating to
corporate power and authority to enter into the Support Agreement.
31
Covenants. The Support Agreement contains various covenants of the Principal
Shareholder, including the following:
(a) The Principal Shareholder will not enter into any agreement or take
any other action that would restrict, limit or interfere with the
performance of the Principal Shareholder's obligations under the Merger
Agreement or the Support Agreement or the consummation of the transactions
contemplated by such agreements.
(b) The Principal Shareholder will not by any action or omission cause
any Liens to attach to the Principal Shareholder Shares.
(c) From the date of the Support Agreement until the Effective Time, the
Principal Shareholder, Parent, Merger Subsidiary and the Company will use
their respective reasonable best efforts to consult with each other before
issuing any press release or making any public statement with respect to
the transactions contemplated by the Merger Agreement and the Support
Agreement, and, except as may be required by the applicable law or any
listing agreement with the NYSE, will not issue any such press release or
make any such public statement prior to such consultation.
(d) The Principal Shareholder will, as soon as practicable, file a
Notification and Report Form under the HSR Act with the Federal Trade
Commission (the "FTC") and the Antitrust Division in connection with the
transactions contemplated by the Merger Agreement and the Support Agreement
as the "ultimate parent entity" of the Company, if required under
applicable law, and will make any filing or seek any consent, including any
filings under any applicable foreign antitrust laws as may be required in
connection with the Merger Agreement and the Support Agreement. The
Principal Shareholder will cooperate fully with the Company and Parent and
use its best efforts to respond as promptly as practicable to all inquiries
received from the FTC or the Antitrust Division or any regulatory agencies
for additional information or documentation. The Principal Shareholder will
use its best efforts to take or cause to be taken all actions necessary,
proper or advisable to obtain any consent, waiver, approval or
authorization relating to any antitrust law that is required for the
consummation of the transactions contemplated by the Merger Agreement and
the Support Agreement.
(e) The Principal Shareholder acknowledged that no rights of appraisal
are available to it in connection with the Merger and irrevocably and
unconditionally waived and agreed to prevent the exercise of, any rights of
appraisal, any dissenters' rights and any similar rights relating to the
Merger or any related transaction that the Principal Shareholder may
directly or indirectly have by virtue of the ownership of any Shares.
(f) The Principal Shareholder will, subject to the terms of the Support
Agreement, use its reasonable best efforts to take, or cause to be taken,
all actions, and to do or cause to be done, all things necessary, proper or
advisable under the applicable laws and regulations to consummate and make
effective the transactions contemplated by the Support Agreement.
(g) The Principal Shareholder will, without additional consideration and
at the Principal Shareholder's sole expense, take all actions and execute
all documents or other instruments necessary to carry out and further the
intent of the Support Agreement.
(h) The Principal Shareholder acknowledged that it is aware of the non-
solicitation covenants of the Company contained in the Merger Agreement and
agreed to comply with the terms of such section as if it were an agent of
the Company for all purposes of said section.
Option. Pursuant to the Support Agreement the Principal Shareholder granted
Parent the Option to purchase all of the Principal Shareholder Shares at the
Option Price subject to certain conditions. Subject to the conditions
described below, Parent may exercise the Option, at any time prior to the date
forty (40) days after the expiration or termination of the Merger Agreement
(such fortieth (40th) day being herein called the "Option Expiration Date") if
the Merger Agreement is terminated pursuant to a "Triggering Termination." For
purposes of the Support Agreement, a "Triggering Termination" means a
termination of the Merger Agreement (x) if the Company entered into a
definitive agreement providing for the implementation of a Superior Proposal
as
32
described in paragraph (g) under the heading "Merger Agreement-Termination"
above or (y) as a result of a breach, in any material respect, by the
Principal Shareholder of its obligations to tender the Principal Shareholder
Shares or failure to cooperate with all regulatory filings as described in
clause (d) under the heading "Covenants" above. Parent can exercise the Option
by delivering written notice thereof to the Principal Shareholder (the
"Notice"), specifying the date, time and place for the closing of such
purchase which date shall not be less than three (3) business day nor more
than five (5) business days from the date Parent provides the Notice (the
"Option Closing"). The Option Closing shall take place on the date and at the
time and place specified in such notice; provided, that if at such time any of
the conditions specified below shall not have been satisfied (or waived),
Parent may postpone the Option Closing (but in no event for more than ninety
(90) days) until a date within five (5) business days after such conditions
are satisfied. Upon the exercise of the Option (and subject to the
satisfaction of the conditions discussed below), Parent shall be entitled to
purchase the Principal Shareholder Shares and the Principal Shareholder shall
sell the Principal Shareholder Shares to Parent.
Option Conditions. The obligation of Parent to purchase the Principal
Shareholder Shares at the Option Closing is subject to the following
conditions: (i) the waiting period under the HSR Act and all other foreign
antitrust laws described in clause (d) under the heading "Merger Agreement--
Conditions to the Merger" with respect to the acquisition of such Shares shall
have expired or been terminated and (ii) there shall be no preliminary or
permanent injunction or other order, decree or ruling issued by any foreign,
supranational, federal, state, municipal or other court, administrative
agency, commission or other governmental or regulatory body or authority or
instrumentality or political subdivision, or any official thereof (each a
"Governmental Entity"), nor any statute, rule, regulation or order promulgated
or enacted by any Governmental Entity prohibiting, or otherwise restraining,
such purchase.
Option Price Adjustment. In the event of any change in the Company's capital
stock by reason of any stock dividend, stock split, merger, consolidation,
recapitalization, combination, conversion, exchange of shares, extraordinary
or liquidating dividend or other change in the corporate or capital structure
of the Company which would have the effect of diluting or changing Parent's
rights under the Support Agreement, the number and kind of Principal
Shareholder Shares or other securities subject to the Support Agreement and
the Option Price shall be appropriately and equitably adjusted so that Parent
shall receive pursuant to the exercise of the Option that number and class of
shares or other securities or property that Parent or Merger Subsidiary, as
the case may be, would have received in respect of the Principal Shareholder
Shares purchasable pursuant to the exercise of the Option if such purchase had
occurred immediately prior to such event.
If the Option is exercised and the Option Shares are acquired by Parent,
Parent shall offer to purchase all outstanding shares of the Company Common
Stock or effect a merger or similar business combination at a price per share
not less than the price per share paid for the Option Shares.
Voting Agreement and Proxy. The Support Agreement provides that during the
time the agreement is in effect, at any meeting of the shareholders of the
Company and in any action by written consent of the shareholders of the
Company, the Principal Shareholder shall vote the Principal Shareholder
Shares: (x) in favor of the Merger, the Merger Agreement and the transactions
contemplated by the Merger Agreement and (y) against any (i) Acquisition
Proposal, (ii) action or agreement that would reasonably be expected to result
in a breach of any covenant or any other obligation or agreement of the
Company under the Merger Agreement or which would reasonably be expected to
result in any of the conditions to the Company's obligations under the Merger
Agreement not being fulfilled or (iii) any other action which is intended, or
would reasonably be expected, to impede or materially delay, the consummation
of the transactions contemplated by the Merger Agreement or the Support
Agreement or materially adversely affect the contemplated economic benefits to
Parent of the transactions contemplated by the Merger Agreement or the Support
Agreement.
Pursuant to the Support Agreement, the Principal Shareholder may not (i)
grant any proxy, power-of-attorney or other authorization in or with respect
to any or all of the Principal Shareholder Shares to any person other than
Parent or Merger Subsidiary or (ii) deposit the Principal Shareholder Shares
into a voting trust or enter into a voting agreement or similar arrangement
with respect to such Principal Shareholder Shares.
33
Termination. The Support Agreement terminates upon the earliest of (i) the
Effective Time, (ii) the Option Closing and (iii) the termination of the
Merger Agreement in accordance with its terms, however, if the Merger
Agreement is terminated pursuant to a Triggering Termination, the Support
Agreement will not terminate unless and until the Option expires.
11. Plans for the Company; Other Matters.
Plans for the Company.
If, as and to the extent that Merger Subsidiary acquires control of the
Company, Merger Subsidiary intends to conduct a detailed review of the Company
and its assets, corporate structure, capitalization, operations, properties,
policies, management and personnel and to consider and determine what, if any,
changes would be desirable in light of the circumstances which then exist.
Such changes could include, among other things, changes in the Company's
business, corporate structure, articles of incorporation, bylaws,
capitalization, management or dividend policy. Following the Merger, Parent
will consider whether to pursue any dispositions of certain assets acquired in
the Merger, which may include a portion of the aroma chemicals business.
Assuming Merger Subsidiary purchases Shares pursuant to the Offer, Parent
intends to exercise promptly its rights under the Merger Agreement to obtain
majority representation on, and control of, the Company Board. See "Section
10-Merger Agreement-Directors" above. Parent will exercise such rights by
causing the Company to elect to the Company Board the following individuals:
Richard A. Goldstein, Douglas J. Wetmore, Carlos A. Lobbosco, Stephen A.
Block, William S. Kane, D. Wayne Howard, James P. Huether and Bruce S.
Leskanic. Information with respect to such directors is contained in Schedule
I hereto and in Schedule I to the Schedule 14D-9. The Merger Agreement
provides that, upon the purchase of, and payment for, any Shares by Parent or
any of its subsidiaries pursuant to the Offer, Parent shall be entitled to
designate such number of directors, rounded up to the next whole number, on
the Company Board such that the percentage of its designees on the Company
Board shall equal the percentage of the outstanding Shares beneficially owned
by Parent and its affiliates at such time. The Merger Agreement provides that
the directors and officers of Merger Subsidiary at the Effective Time of the
Merger will, from and after the Effective Time, be the initial directors and
officers, respectively, of the Surviving Corporation. See Section 10.
Merger Subsidiary or an affiliate of Merger Subsidiary may, following the
consummation or termination of the Offer, seek to acquire additional Shares
through open market purchases, privately negotiated transactions, a tender
offer or exchange offer or otherwise, upon such terms and at such prices as it
shall determine, which may be more or less than the price to be paid pursuant
to the Offer. Merger Subsidiary and its affiliates also reserve the right to
dispose of any or all Shares acquired by them, subject to the terms of the
Merger Agreement.
Except as disclosed in this Offer to Purchase, and except as may be effected
in connection with the integration of operations referred to above, none of
Merger Subsidiary, Parent or the Principal Shareholder has any present plans
or proposals that would result in an extraordinary corporate transaction, such
as a merger, reorganization, liquidation, relocation of operations, or sale or
transfer of a material amount of assets, involving the Company or any of its
subsidiaries, or any material changes in the Company's capitalization,
corporate structure, business or composition of its management or the Company
Board.
Other Matters.
Shareholder Approval. Under the VSCA, the approval of the Company Board and
the affirmative vote of the holders of more than two-thirds of the outstanding
Shares are required to approve the Merger Agreement and transactions
contemplated thereby. The Company has represented in the Merger Agreement that
the execution and delivery of the Merger Agreement by the Company and the
consummation by the Company of the transactions contemplated by the Merger
Agreement have been duly authorized by all necessary corporate action on the
part of the Company, subject to the approval of the Merger by the Company's
shareholders in accordance with the VSCA. The Company Board has also approved
the Merger Agreement for purposes of Section 13.1-716 of the VSCA and has
represented to Parent and Merger Subsidiary that the restrictions on
affiliated transactions
34
contained in Article 14 of the VSCA and control share acquisitions contained
in Article 14.1 of the VSCA are inapplicable to the transactions contemplated
by the Merger Agreement and the Support Agreement, including the Offer, the
Merger and any exercise of the Option set forth in the Support Agreement. In
addition, the Company has represented that the affirmative vote of the holders
of more than two-thirds of the outstanding Shares is the only vote of the
holders of any class or series of the Company's capital stock which is
necessary to approve the Merger Agreement and the transactions contemplated
thereby, including the Merger. Therefore, unless the Merger is consummated
pursuant to the short-form merger provisions under the VSCA described below
(in which case no further corporate action by the shareholders of the Company
will be required to complete the Merger), the only remaining required
corporate action of the Company will be the approval of the Merger Agreement
and the transactions contemplated thereby by the affirmative vote of the
holders of more than two-thirds of the Shares. The Merger Agreement provides
that Parent will vote, or cause to be voted, all of the Shares then owned by
Parent, Merger Subsidiary or any of Parent's other subsidiaries and affiliates
in favor of the approval of the Merger and the Merger Agreement. In the event
that Parent, Merger Subsidiary and Parent's other subsidiaries acquire in the
aggregate more than two-thirds of the Shares entitled to vote on the approval
of the Merger and the Merger Agreement, they would have the ability to effect
the Merger without the affirmative votes of any other shareholders.
Short-Form Merger. Section 13.1-719 of the VSCA provides that if a
corporation owns at least 90% of the outstanding shares of each class of
another corporation, the corporation holding such stock may merge itself into
such corporation without any action or vote on the part of the board of
directors or the shareholders of such other corporation. In the event that
Parent, Merger Subsidiary and any other subsidiaries of Parent acquire in the
aggregate at least 90% of the outstanding Shares, pursuant to the Offer, the
Option set forth in the Support Agreement or otherwise, then, at the election
of Parent, a short-form merger could be effected without any approval of the
Company Board or the shareholders of the Company, subject to compliance with
the provisions of Section 13.1-719 of the VSCA. Even if Parent and Merger
Subsidiary do not own 90% of the outstanding Shares following consummation of
the Offer, Parent and Merger Subsidiary could seek to purchase additional
Shares in the open market, from the Company or otherwise in order to reach the
90% threshold and employ a short-form merger. The consideration per Share paid
for any Shares so acquired may be greater or less than that paid in the Offer.
Parent presently intends to effect a short-form merger if permitted to do so
under the VSCA.
Dissenters' Rights. Holders of the Shares are not entitled to dissenters'
rights, rights of appraisal or other similar rights in connection with the
Merger pursuant to Sections 13.1-729 et seq. of the VSCA, unless (i) in the
event a shareholder vote is required to approve the Merger pursuant to the
VSCA, on the record date fixed by the Company Board to determine the
shareholders entitled to receive notice of and vote at a meeting to approve
the Merger, or (ii) in the event a short-form merger is allowed, immediately
prior to the Effective Time, the Common Stock is not either (A) listed on a
national securities exchange or on the NASDAQ or (B) held by at least 2,000
record shareholders. If dissenters' rights are available, Article 15 of the
VSCA provides that dissenting shareholders of the Company who comply with the
applicable statutory procedures will be entitled to receive a judicial
determination of the fair value of their Shares (exclusive of any element of
value arising from the accomplishment or expectation of the Merger) and to
receive payment of such fair value in cash, together with a fair rate of
interest thereon, if any. Any such judicial determination of the fair value of
the Shares could be based upon factors other than, or in addition to, the
price per Share to be paid in the Merger or the market value of the Shares.
The value so determined could be more or less than the price per Share to be
paid in the Merger.
THE FOREGOING SUMMARY OF THE RIGHTS OF DISSENTING SHAREHOLDERS UNDER THE
VSCA DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE
FOLLOWED BY SHAREHOLDERS DESIRING TO EXERCISE ANY APPRAISAL RIGHTS AVAILABLE
UNDER THE VSCA. THE PRESERVATION AND EXERCISE OF APPRAISAL RIGHTS REQUIRE
STRICT ADHERENCE TO THE APPLICABLE PROVISIONS OF THE VSCA.
Rule 13e-3. The SEC has adopted Rule 13e-3 under the Exchange Act which is
applicable to certain "going private" transactions and which may under certain
circumstances be applicable to the Merger or another business combination
following the purchase of Shares pursuant to the Offer in which Merger
Subsidiary seeks
35
to acquire the remaining Shares not held by it. Merger Subsidiary currently
anticipates that Rule 13e-3 will be inapplicable to the Merger. If Rule 13e-3
were applicable to the Merger, it would require, among other things, that
certain financial information concerning the Company, and certain information
relating to the fairness of the proposed transaction and the consideration
offered to minority shareholders in such a transaction, be filed with the SEC
and disclosed to minority shareholders prior to consummation of the
transaction.
12. Dividends and Distributions.
As described above, the Merger Agreement provides that during the period
from the date of the Merger Agreement to the Effective Time, the Company shall
not, and shall not permit any of its subsidiaries to, without the written
consent of Parent, (A) except as provided in the Company Disclosure Letter,
declare, set aside or pay any dividends, or make any distributions on shares
of its outstanding capital stock (other than, with respect to a wholly owned
subsidiary of the Company, to the Company or another wholly owned subsidiary
of the Company), (B) split, combine or reclassify any capital stock of the
Company or any of its subsidiaries or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of
capital stock of the Company or any of its Subsidiaries or (C) except as
required or permitted by the Merger Agreement, repurchase, redeem or otherwise
acquire any shares of capital stock of the Company or any of its subsidiaries
or any other securities thereof or any rights, warrants or options to acquire
any such shares or other securities.
13. Conditions to the Offer.
Notwithstanding any other provision of the Offer, Parent and Merger
Subsidiary shall not be required to accept for payment or purchase or pay for
any tendered Shares, (A) if (x) the Minimum Condition has not been satisfied
by the Expiration Date of the Offer or (y) the applicable waiting period under
the HSR Act or under any other applicable merger control regulations enforced
by Governmental Entities, individually or in the aggregate, having
jurisdiction over a material portion of the Company's business or assets shall
not have expired or been terminated by the expiration date of the Offer, or
(B) at any time on or after the date of the Merger Agreement and prior to the
date Shares are first accepted for payment under the Offer, if any of the
following conditions exist:
(a) any order or preliminary or permanent injunction shall be entered in
any action or proceeding before any court of competent jurisdiction or any
statute, rule, judgment, regulation, legislation, or order shall be
enacted, entered, enforced, promulgated, amended or issued by any United
States Governmental Entity, any other Governmental Entity or Entities
having in the aggregate jurisdiction over a material portion of the
Companys business or assets which shall (i) make illegal, restrain or
prohibit the acceptance for payment of, or payment for, any Shares by
Parent, Merger Subsidiary or any other affiliate of Parent or the
consummation of the Merger; (ii) prohibit or limit materially the ownership
or operation by Parent or Merger Subsidiary or any of their subsidiaries of
all or any material portion of the business or assets of the Company or any
of its subsidiaries (taken as a whole), or compel Parent, on the one hand,
or the Company and its subsidiaries, taken as a whole, on the other hand,
to dispose of or hold separate all or any material portion of their
respective businesses or material assets, (iii) impose or confirm material
limitations on the ability of Parent or Merger Subsidiary or any other
affiliate of Parent to exercise full rights of ownership of any Shares in
any material respect, including, without limitation, the right to vote any
Shares acquired by Merger Subsidiary pursuant to the Offer or otherwise on
all matters properly presented to the Companys shareholders, including,
without limitation, the approval and adoption of the Merger Agreement and
the transactions contemplated by the Merger Agreement; (iv) require
divestiture by Parent, Merger Subsidiary or any other affiliate of Parent
of any Shares; or (v) otherwise would have a Company Material Adverse
Effect; provided that with respect to any injunction issued by a
Governmental Entity in which the lead plaintiffs are not Governmental
Entities, Parent shall first be required to use its best efforts to defend
against any preliminary or permanent injunction;
(b) the Company Board or any committee thereof shall have (i) withdrawn,
modified or changed, in a manner adverse to Parent or Merger Subsidiary,
the recommendation by the Company Board or such committee of the Offer, the
Merger or the Merger Agreement, (ii) approved, recommended or announced a
36
neutral position with respect to, or proposed publicly to approve,
recommend or announce a neutral position with respect to, an Acquisition
Proposal, (iii) provided notice that the Company has entered into an
agreement for the implementation of a Superior Proposal or (iv) resolved to
do any of the foregoing;
(c) there shall have occurred, and continued to exist, (i) any general
suspension of, or limitation on prices for, trading in securities on the
NYSE, (ii) a declaration of a banking moratorium or any general suspension
of payments in respect of banks in the United States, (iii) a commencement
of a war or armed hostilities directly involving the United States (other
than an action involving United Nations' personnel or support of United
Nations' personnel) or (iv) in the case of any of the foregoing clauses (i)
through (iii) existing at the time of the commencement of the Offer, a
material acceleration or worsening thereof;
(d) (i) any of the representations and warranties (other than those
regarding capitalization) made by the Company in the Merger Agreement shall
not have been true and correct when made, or shall thereafter have ceased
to be true and correct as if made as of such later date (other than
representations and warranties made as of a specified date) (without regard
to any Company Material Adverse Effect contained in such representations or
warranties) except to the extent that any such failure to be true and
correct would not have a Company Material Adverse Effect, (ii)
capitalization representations and warranties shall not have been true and
correct, individually or in the aggregate, in all material respects when
made, or (iii) the Company shall not in all material respects have
performed each material obligation and agreement and complied with each
material covenant to be performed and complied with by it under the Merger
Agreement;
(e) the Merger Agreement shall have been terminated in accordance with
its terms; or
(f) there shall have occurred an event, change, occurrence, or
development of a state of facts or circumstances having a Company Material
Adverse Effect
which in the reasonable judgment of Parent or Merger Subsidiary makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment
of, or payment for, Shares.
The foregoing conditions are for the benefit of Parent and Merger Subsidiary
and may, subject to the terms of the Merger Agreement, be waived by Parent and
Merger Subsidiary in whole or in part at any time and from time to time in
their discretion. The failure by Parent or Merger Subsidiary at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right that may
be asserted at any time and from time to time prior to the Effective Time.
14. Effect of the Offer on the Market for the Shares; NYSE Quotation; Exchange
Act Registration; Margin Regulations.
Market for the Shares. The purchase of Shares by Merger Subsidiary pursuant
to the Offer will reduce the number of holders of Shares and the number of
Shares that might otherwise trade publicly and, which, depending upon the
number of Shares so purchased, could adversely affect the liquidity and market
value of the remaining Shares held by the public. Merger Subsidiary cannot
predict whether the reduction in the number of Shares that might otherwise
trade publicly would have an adverse or beneficial effect on the market price
for, or marketability of, the Shares or whether it would cause future market
prices to be greater or less than the Offer Price.
Stock Listing. The Shares are listed on the NYSE. After consummation of the
Offer and depending upon the aggregate market value and the per Share price of
any Shares not purchased pursuant to the Offer, the Shares may no longer meet
the requirements for continued listing on the NYSE. According to the NYSE's
published guidelines, the NYSE may delist the Shares if, among other things:
(i) the number of total shareholders falls below 400; (ii) the number of total
shareholders falls below 1,200 and the average monthly trading volume is less
than 100,000 shares (for the most recent 12 months); or (iii) the number of
publicly held Shares (exclusive
37
of holdings of officers and directors of the Company and their immediate
families and other concentrated holdings of 10% or more) should fall below
600,000. If as a result of the purchase of Shares pursuant to the Offer, the
Shares no longer meet the requirements of the NYSE for continued listing and
the listing of the Shares is discontinued, the market for the Shares could be
adversely affected. According to the Company, as of the date of the Merger
Agreement, there were approximately 162 holders of record of the Shares and
19,351,063 Shares outstanding.
If the NYSE were to delist the Shares, it is possible that the Shares would
continue to trade on other securities exchanges or in the over-the-counter
market and that price quotations would be reported by such exchanges or
through the Nasdaq Stock Market, Inc. or other sources. The extent of the
public market for the Shares and the availability of such quotations would
depend, however, upon such factors as the number of shareholders and/or the
aggregate market value of the publicly traded Shares remaining at such time,
the interest in maintaining a market in the Shares on the part of securities
firms, the possible termination of registration under the Exchange Act as
described below, and other factors. Merger Subsidiary cannot predict whether
the reduction in the number of Shares that might otherwise trade publicly
would have an adverse or beneficial effect on the market price for, or
marketability of, the Shares or whether it would cause future market prices to
be greater or lesser than the Offer Price.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of the Company to the SEC if the Shares are
neither listed on a national securities exchange nor held by 300 or more
holders of record. Termination of registration of the Shares under the
Exchange Act would substantially reduce the information required to be
furnished by the Company to its shareholders and to the SEC and would make
certain provisions of the Exchange Act no longer applicable to the Company,
such as the short-swing profit recovery provisions of Section 16(b), the
requirement of furnishing a proxy statement pursuant to Section 14(a) in
connection with shareholders' meetings and the related requirement of
furnishing an annual report to shareholders and the requirements of Rule 13e-3
under the Exchange Act with respect to "going private" transactions.
Furthermore, the ability of "affiliates" of the Company and persons holding
"restricted securities" of the Company to dispose of such securities pursuant
to Rule 144 or Rule 144A promulgated under the Securities Act of 1933, as
amended (the "Securities Act"), may be impaired or eliminated.
Margin Regulations. The Shares are presently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which status has the effect, among other things, of
allowing brokers to extend credit on the collateral of the Shares. Depending
upon factors similar to those described above regarding stock exchange listing
and market quotations, it is possible that, following the Offer, the Shares
would no longer constitute "margin securities" for the purposes of the margin
regulations of the Federal Reserve Board and, therefore, could no longer be
used as collateral for loans made by brokers. In addition, if registration of
the Shares under the Exchange Act were terminated, the Shares would no longer
constitute "margin securities."
Merger Subsidiary currently intends to seek delisting of the Shares from the
NYSE and the termination of the registration of the Shares under the Exchange
Act promptly after the completion of the Offer, provided that the requirements
for such delisting and termination are met. If the NYSE listing and the
Exchange Act registration of the Shares are not terminated prior to the
Merger, then the Shares will be delisted from the NYSE and the registration of
the Shares under the Exchange Act will be terminated following the
consummation of the Merger.
15. Certain Legal Matters; Regulatory Approvals.
General. Except as described in this Section 15, based on information
provided by the Company, none of the Company, Merger Subsidiary or Parent is
aware of (i) any license or regulatory permit that appears to be material to
the business of the Company and its subsidiaries, taken as a whole, that might
be adversely affected by the acquisition of Shares by Parent or Merger
Subsidiary pursuant to the Offer, the Merger or otherwise, or
38
(ii) except as discussed herein, any approval or other action by any
governmental, administrative or regulatory agency or authority, domestic or
foreign, that would be required prior to the acquisition of Shares by Merger
Subsidiary pursuant to the Offer, the Merger or otherwise. Should any such
approval or other action be required, Merger Subsidiary and Parent presently
contemplate that such approval or other action will be sought, except as
described below under "State Antitakeover Statutes." While Merger Subsidiary
does not presently believe that any competition waiting period or approval
will materially delay the acceptance for payment of, or payment for, Shares
tendered pursuant to the Offer pending the outcome of any such matter, there
can be no assurance that any such approval or other action, if needed, would
be obtained or would be obtained without substantial conditions or that
failure to obtain any such approval or other action might not result in
consequences materially adverse to the Company's business or that material
parts of the Company's business might not have to be disposed of, or other
substantial conditions complied with, in order to obtain any such approval or
other action. If certain types of adverse action are taken with respect to the
matters discussed below, Merger Subsidiary could decline to accept for
payment, or pay for, any Shares tendered. See Section 13 for certain
conditions to the Offer, including conditions with respect to governmental
actions.
State Antitakeover Statutes. Article 14 of the VSCA in general, prohibits a
Virginia corporation, such as the Company, from engaging in an "affiliated
transaction" (defined in Section 13.1-725 of the VSCA to include a variety of
transactions, including mergers) with an "interested shareholder" (defined in
Section 13.1-725 of the VSCA generally as a person that is the beneficial
owner of 10% or more of the outstanding voting stock of the subject
corporation) for a period of three years following the date that such person
became an interested shareholder unless the board of directors of the
corporation and the holders of two-thirds of the voting shares, other than the
shares beneficially owned by the interested shareholder, approved the
affiliated transaction or, prior to the date such person became an interested
shareholder, the board of directors approved the transaction that resulted in
the shareholder becoming an interested shareholder. The provisions of Article
14 of the VSCA are inapplicable to any of the acquisitions of Shares
contemplated by the Merger Agreement and the Support Agreement because the
Merger Agreement, the Support Agreement and the transactions contemplated
thereby were approved by the Company Board prior to the execution thereof.
Article 14.1 of the VSCA provides that shares of an "issuing public
corporation" that are acquired in a "control share acquisition" generally will
have no voting rights unless such rights are conferred on those shares by the
vote of the holders of a majority of all the outstanding shares, other than
the shares beneficially owned by the interested shareholder and shares owned
by certain other affiliates of the corporation. A control share acquisition is
defined, with certain exceptions ("excepted acquisitions"), as the acquisition
of beneficial ownership of voting shares which would cause the acquirer to
have voting power within the following ranges or to move upward from one range
into another: (i) 20% to 33 1/3%; (ii) 33 1/3% to 50%; or (iii) more than 50%.
For the purposes of Article 14.1 of the VSCA an issuing public corporation is
a Virginia corporation with 300 or more shareholders. The provisions of
Article 14.1 of the VSCA are inapplicable to an acquisition of shares of a
publicly held Virginia corporation (i) pursuant to a merger or share exchange
effected in compliance with the VSCA if the issuing public corporation is a
party to the merger or share exchange agreement, (ii) pursuant to a tender or
exchange offer that is made pursuant to an agreement to which the issuing
public corporation is a party, or (iii) directly from the issuing public
corporation, or from any corporation, that before such share acquisition,
beneficially owns shares having at least a majority of the votes entitled to
be cast in the election of directors of the issuing corporation. The
acquisition of beneficial ownership of the Shares pursuant to the transactions
contemplated by the Merger Agreement and the Support Agreement will be
excepted acquisitions for purposes of Article 14.1 of the VSCA.
A number of states have adopted laws and regulations that purport to apply
to attempts to acquire corporations that are incorporated in such states, or
whose business operations have substantial economic effects in such states, or
which have substantial assets, security holders, employees, principal
executive offices or principal places of business in such states. In Edgar v.
MITE Corp., the Supreme Court of the United States (the "Supreme Court")
invalidated on constitutional grounds the Illinois Business Takeover statute,
which, as a matter of state securities law, made certain corporate
acquisitions more difficult. However, in 1987, in CTS Corp. v. Dynamics Corp.
of America, the Supreme Court held that the State of Indiana may, as a matter
of corporate
39
law and, in particular, with respect to those aspects of corporate law
concerning corporate governance, constitutionally disqualify a potential
acquirer from voting on the affairs of a target corporation without the prior
approval of the remaining shareholders. The state law before the Supreme Court
was by its terms applicable only to corporations that had a substantial number
of shareholders in the state and were incorporated there.
Parent and Merger Subsidiary do not believe that the antitakeover laws and
regulations of any state other than the Commonwealth of Virginia will by their
terms apply to the Offer, and, except as discussed above with respect to
Articles 14 and 14.1 of the VSCA, neither Parent nor Merger Subsidiary has
attempted to comply with or become exempted from any state antitakeover
statute or regulation. Merger Subsidiary reserves the right to challenge the
applicability or validity of any state law purportedly applicable to the Offer
and nothing in this Offer to Purchase or any action taken in connection with
the Offer is intended as a waiver of such right. If it is asserted that any
state antitakeover statute is applicable to the Offer and an appropriate court
does not determine that it is inapplicable or invalid as applied to the Offer,
Merger Subsidiary might be required to file certain information with, or to
receive approvals from, the relevant state authorities, and Merger Subsidiary
might be unable to accept for payment or pay for Shares tendered pursuant to
the Offer or may be delayed in consummating the Offer. In such case, Merger
Subsidiary may not be obligated to accept for payment, or pay for, any Shares
tendered pursuant to the Offer. See Section 13.
Pursuant to the terms of the Merger Agreement, if any "fair price,"
"business combination" or "control share acquisition" statute or other similar
statute or regulation shall become applicable to the transactions contemplated
by the Merger Agreement or the Support Agreement, including the purchases of
Shares in the Offer, the Merger or the acquisition of Shares pursuant to the
option set forth in the Support Agreement, the Company and its Board of
Directors shall take all such action as may be reasonably necessary or
advisable to obtain such approvals and take such actions as are necessary or
advisable so that the transactions contemplated by the Merger Agreement and
the Support Agreement may be consummated as promptly as practicable on their
terms and otherwise act to minimize the effects of any such statute or
regulation on the transactions contemplated.
Antitrust. The Offer and the Merger are subject to the HSR Act, which
provides that certain acquisition transactions may not be consummated unless
certain information has been furnished to the Antitrust Division of the
Department of Justice (the "DOJ") and the FTC and certain waiting period
requirements have been satisfied.
Parent filed its Notification and Report Form with respect to the Offer
under the HSR Act on October 6, 2000. On October 6, 2000, the Principal
Shareholder filed, on behalf of the Company, its Notification and Report Form
with respect to the Offer. The waiting period under the HSR Act with respect
to the Offer will expire at 11:59 p.m., New York City time, on October 21,
2000, the fifteenth day after the date Parent's form was filed, unless early
termination of the waiting period is granted. However, the DOJ or the FTC may
extend the waiting period by requesting additional information or documentary
material from Parent or the Company. If such a request is made, such waiting
period will expire at 11:59 p.m., New York City time, on the tenth day after
substantial compliance by Parent with such request. Only one extension of the
waiting period pursuant to a request for additional information is authorized
by the HSR Act. Thereafter, such waiting period may be extended only by court
order or with the consent of Parent. In practice, complying with a request for
additional information or material can take a significant amount of time. In
addition, if the DOJ or the FTC raises substantive issues in connection with a
proposed transaction, the parties frequently engage in negotiations with the
relevant governmental agency concerning possible means of addressing those
issues and may agree to delay consummation of the transaction while such
negotiations continue. Merger Subsidiary will not accept for payment Shares
tendered pursuant to the Offer unless and until the waiting period
requirements imposed by the HSR Act with respect to the Offer have been
satisfied. See Section 13.
The FTC and the DOJ frequently scrutinize the legality of mergers and
acquisitions under U.S. Antitrust Laws (as defined below) of transactions such
as Merger Subsidiary's acquisition of Shares pursuant to the Offer and the
Merger. At any time before or after Merger Subsidiary's acquisition of Shares,
the DOJ or the FTC could take such action under the U.S. 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 otherwise seeking
divestiture of Shares
40
acquired by Merger Subsidiary or divestiture of substantial assets of Parent
or its subsidiaries. Private parties, as well as state governments, may also
bring legal action under U.S. Antitrust Laws under certain circumstances.
Based upon an examination of information provided by the Company relating to
the businesses in which Parent and the Company are engaged, Parent and Merger
Subsidiary believe that the acquisition of Shares by Merger Subsidiary will
not violate U.S. Antitrust Laws. Nevertheless, there can be no assurance that
a challenge to the Offer or other acquisition of Shares by Merger Subsidiary
on antitrust grounds will not be made or, if such a challenge is made, of the
result. See Section 13 for certain conditions to the Offer, including
conditions with respect to litigation and certain governmental actions.
As used in this Offer to Purchase, "U.S. Antitrust Laws" shall mean and
include the Sherman Act, as amended, the Clayton Act, as amended, the HSR Act,
the Federal Trade Commission Act, as amended, and all other Federal and state
statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines, and other laws that are designed or intended to prohibit, restrict
or regulate actions having the purpose or effect of monopolization or
restraint of trade.
Parent and the Company conduct operations in a large number of other
jurisdictions throughout the world, where other antitrust filings or approvals
may be required or advisable in connection with the completion of the Offer
and the Merger. Parent, the Principal Shareholder and the Company currently
intend to make filings or seek approvals in certain other jurisdictions;
however, Parent and the Company do not expect such filings or approvals to
materially delay the consummation of the transactions contemplated by the
Merger Agreement. Parent and the Company believe that the transactions
contemplated by the Merger Agreement should be approved without any conditions
in all countries where approval is required. However, it cannot be ruled out
that any foreign antitrust authority might seek to require remedial
undertakings as a condition to its approval.
Federal Reserve Board Regulations. Regulations T, U and X (the "Margin
Regulations") of the Federal Reserve Board restrict the extension or
maintenance of credit for the purpose of buying or carrying margin stock,
including the Shares, if the credit is secured directly or indirectly by
margin stock. Such secured credit may not be extended or maintained in an
amount that exceeds the maximum loan value of all the direct and indirect
collateral securing the credit, including margin stock and other collateral.
16. Fees and Expenses.
Parent has engaged Morgan Stanley to act as Dealer Manager in connection
with the Offer and Morgan Stanley has provided certain financial advisory
services to Parent in connection with the acquisition of the Company. Parent
will pay Morgan Stanley customary compensation such services in connection
with the Offer and the Merger. Parent has also agreed to reimburse Morgan
Stanley for all reasonable fees, expenses and costs, including reasonable fees
and expenses of legal counsel, and to indemnify Morgan Stanley and certain
related persons against certain liabilities and expenses in connection with
its engagement, including certain liabilities under the federal securities
laws.
Merger Subsidiary and Parent have retained Georgeson Shareholder
Communications Inc. to serve as the Information Agent and The Bank of New York
to serve as the Depositary in connection with the Offer. The Information Agent
may contact holders of Shares by personal interview, mail, telephone, telex,
telegraph and other methods of electronic communication and may request
brokers, dealers, commercial banks, trust companies and other nominees to
forward the Offer materials to beneficial holders. The Information Agent and
the Depositary will each receive reasonable and customary compensation for
their services, be reimbursed for certain reasonable out-of-pocket expenses
and be indemnified against certain liabilities in connection with their
services, including certain liabilities and expenses under the federal
securities laws.
Except as discussed above, neither Parent nor Merger Subsidiary will pay any
fees or commissions to any broker or dealer or other person or entity in
connection with the solicitation of tenders of Shares pursuant to the Offer.
Brokers, dealers, banks and trust companies will be reimbursed by Merger
Subsidiary for customary mailing and handling expenses incurred by them in
forwarding the Offer materials to their customers.
41
17. Miscellaneous.
The Offer is being made solely by this Offer to Purchase and the related
Letter of Transmittal and is being made to holders of Shares. Merger
Subsidiary is not aware of any state where the making of the Offer is
prohibited by administrative or judicial action pursuant to any valid state
statute. If Merger Subsidiary becomes aware of any valid state statute
prohibiting the making of the Offer or the acceptance of the Shares pursuant
thereto, Merger Subsidiary shall make a good faith effort to comply with such
statute or seek to have such statute declared inapplicable to the Offer. If,
after such good faith effort, Merger Subsidiary cannot comply with such state
statute, the Offer will not be made to (nor will tenders be accepted from or
on behalf of) holders of Shares in such state.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR MERGER SUBSIDIARY NOT CONTAINED HEREIN
OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Merger Subsidiary and Parent have filed with the SEC the Schedule TO
pursuant to Rule 14d-3 under the Exchange Act, together with exhibits,
furnishing certain additional information with respect to the Offer. In
addition, the Company has filed with the SEC the Schedule 14D-9 pursuant to
Rule 14d-9 under the Exchange Act, setting forth its recommendation with
respect to the Offer and the reasons for its recommendation and furnishing
certain additional related information. Such Schedules and any amendments
thereto, including exhibits, should be available for inspection and copies
should be obtainable in the same manner described in Section 7 of this Offer
to Purchase (except that such material will not be available at the regional
offices of the SEC).
B Acquisition Corp.
October 6, 2000
42
SCHEDULE I
INFORMATION CONCERNING DIRECTORS AND
EXECUTIVE OFFICERS OF MERGER SUBSIDIARY AND PARENT
1. Directors and Executive Officers of Merger Subsidiary. The following
table sets forth the name and present principal occupation or employment, and
material occupations, positions, offices or employments for the past five
years, of each director and executive officer of Merger Subsidiary. Unless
otherwise indicated, each such person is a citizen of the United States of
America, and the business address of each such person is c/o 521 West 57th
Street, New York, New York 10019-2960. Unless otherwise indicated and except
with respect to Merger Subsidiary, which was formed on September 22, 2000,
each such person has held his or her present occupation as set forth below for
the past five years.
Present Principal Occupation or Employment;
Name Material Positions Held During the Past Five Years
---- ---------------------------------------------------------
Richard A. Goldstein Member, Board of Directors and President of Merger
Subsidiary. Chairman and Chief Executive Officer of
Parent since June 2000. President and Chief Executive
Officer of Unilever United States, Inc., and President of
Unilever North American Foods prior thereto. Member,
Board of Directors of Legacy Hotels and Fiduciary Trust
Company International.
Douglas J. Wetmore Member, Board of Directors and Vice President of Merger
Subsidiary. Member, Board of Directors since 1998 and
Senior Vice President and Chief Financial Officer of
Parent since September 2000. Vice President and Chief
Financial Officer of Parent from April 1998 to September
2000. Controller of Parent prior thereto.
Stephen A. Block Member, Board of Directors, Vice President, Secretary and
Treasurer of Merger Subsidiary. Senior Vice President,
General Counsel and Secretary of Parent since February
2000. Senior Vice President, Law & Regulatory Affairs and
Secretary of Parent from May 1999 to February 2000. Vice
President, Law & Regulatory Affairs and Secretary of
Parent prior thereto.
2. Directors and Executive Officers of Parent. The following table sets
forth the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years, of
each director and executive officer of Parent. Unless otherwise indicated,
each such person is a citizen of the United States of America and the business
address of each such person is c/o 521 West 57th Street, New York, New York
10019-2960. Unless otherwise indicated and except with respect to Merger
Subsidiary, which was formed on September 22, 2000, each such person has held
his or her present occupation as set forth below, or has been an executive
officer at Parent for the past five years.
Present Principal Occupation or Employment;
Name Material Positions Held During the Past Five Years
---- ---------------------------------------------------------
Richard A. Goldstein Chairman and Chief Executive Officer of Parent since June
2000. Member, Board of Directors and President of Merger
Subsidiary. President and Chief Executive Officer of
Unilever United States, Inc., and Business Group
President of Unilever North American Foods prior thereto.
Member, Board of Directors of Legacy Hotels and Fiduciary
Trust Company International.
Douglas J. Wetmore Member, Board of Directors since 1998 and Senior Vice
President and Chief Financial Officer of Parent since
September 2000. Vice President and Chief Financial
Officer of Parent from April 1998 to September 2000.
Member, Board of Directors and Vice President of Merger
Subsidiary. Controller of Parent prior thereto.
Carlos A. Lobbosco Member, Board of Directors since December 1999, Executive
Vice President since September 2000 and President,
Fragrance Division, of Parent since February 1999. Vice
President of Parent prior thereto. Citizen of Argentina.
I-1
Present Principal Occupation or Employment;
Name Material Positions Held During the Past Five Years
---- -----------------------------------------------------
Robert G. Corbett Member, Board of Directors since November 1998 and
Vice President of Parent since May 1997. President,
Flavor Division, of Parent from September 1998 to
October 2000. Area Manager, North America Flavors, of
Parent prior thereto.
D. Wayne Howard Executive Vice President of Parent since September
2000. Vice President, Supply Chain Strategy of
Nordstrom, Inc. from January 2000 to August 2000.
Vice President, Strategic Sourcing Foods North
America, of Unilever from March 1999 to January 2000.
Vice President, Sourcing of Lipton from February 1997
to March 1999. Vice President, Supply Chain of Lipton
Canada, a division of Unilever, from June 1999 to
January 1997. Vice President, Finance and Operations
of Lipton-Monarch, a division of Unilever, prior
thereto.
Stephen A. Block Senior Vice President, General Counsel and Secretary
of Parent since February 2000. Member, Board of
Directors, Vice President, Secretary and Treasurer of
Merger Subsidiary. Senior Vice President, Law &
Regulatory Affairs and Secretary of Parent from May
1999 to February 2000. Vice President, Law &
Regulatory Affairs and Secretary of Parent prior
thereto.
William S. Kane Vice President of Parent since September 1999. Senior
Vice President Human Resources of Channel One Network
from 1997 to 1999. Director of Human Resources,
Frigidaire Division of Electrolux, prior thereto.
Thomas E. Kinlin Vice President of Parent since September 1999.
Employed by Parent in other positions prior thereto.
Jose A. Rodriguez Vice President of Parent since May 1998. Employed by
Parent in other positions prior thereto.
Margaret Hayes Adame Member, Board of Directors of Parent. President,
Fashion Group International. Member, Board of
Directors of North American Watch Corporation.
Richard M. Furlaud Member, Board of Directors of Parent. Chairman and
Chief Executive Officer of Parent from December 1999
to May 2000.
Peter A. Georgescu Member, Board of Directors of Parent. Chairman
Emeritus of Young & Rubicam, Inc. Member, Board of
Directors of Briggs & Stratton Corporation.
George Rowe, Jr. Member, Board of Directors of Parent. Attorney,
member of law firm of Fulton, Rowe, Hart & Coon.
Henry P. van Ameringen Member, Board of Directors of Parent. President of
van Ameringen Foundation, Inc.
William D. Van Dyke, III Member, Board of Directors of Parent. Senior Vice
President of Salomon Smith Barney, Inc.
I-2
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, Share Certificates and
any other required documents should be sent or delivered by each shareholder
of the Company or such shareholder's broker, dealer, commercial bank, trust
company or other nominee to the Depositary, at the applicable address set
forth below:
The Depositary for the Offer is:
The Bank of New York
By Mail: By Facsimile By Hand or Overnight
Transmission: Courier:
Tender & Exchange
Department (212) 815-6213 Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York New York, New York 10286
10286-1248
To Confirm Facsimile Transmissions:
(For Eligible Institutions Only)
(212) 815-6156
Any questions or requests for assistance or additional copies of this Offer
to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and
the other tender offer materials may be directed to the Information Agent at
its address and telephone number set forth below. Shareholders may also
contact their broker, dealer, commercial bank, trust company or other nominee
for assistance concerning the Offer.
The Information Agent for the Offer is:
[LOGO]
17 State Street, 10th Floor
New York, New York 10004
Banks & Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: (800) 223-2064
The Dealer Manager for the Offer is:
MORGAN STANLEY DEAN WITTER
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Call Collect: (212) 761-8322
Exhibit (A).(2)
Letter of Transmittal
to
Tender Shares of Common Stock
of
Bush Boake Allen Inc.
Pursuant to the Offer to Purchase
Dated October 6, 2000
by
B Acquisition Corp.
a wholly owned subsidiary of
International Flavors & Fragrances Inc.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, NOVEMBER 3, 2000, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
The Bank of New York
By Mail: By Facsimile Transmission: By Hand or Overnight Courier:
Tender & Exchange Department (212) 815-6213 Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
To Confirm Facsimile
New York, New York 10286-1248 Transmissions: New York, New York 10286
(For Eligible Institutions Only)
(212) 815-6156
(For Confirmation Only)
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER OTHER THAN AS
SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY. YOU
MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED BELOW,
WITH SIGNATURE GUARANTEE IF REQUIRED, AND COMPLETE THE SUBSTITUTE FORM W-9 SET
FORTH BELOW.
THE INSTRUCTIONS CONTAINED WITHIN THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
DESCRIPTION OF SHARES TENDERED
- -------------------------------------------------------------------------------
Name(s) and Address(es) of
Registered Holder(s) Shares Certificate(s) and Share(s) Tendered
(Please fill in, if blank) (Please attach additional signed list, if necessary)
- --------------------------------------------------------------------------------
Total Number of
Shares
Shares Represented Number
Certificate by of Shares
Number(s)(1) Certificate(s)(1) Tendered(2)
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
Total Shares
Tendered
- -------------------------------------------------------------------------------
(1) Need not be completed by shareholders who deliver Shares by book-entry
transfer ("Book-Entry Shareholders").
(2) Unless otherwise indicated, all Shares represented by certificates
delivered to the Depositary will be deemed to have been tendered. See
Instruction 4.
[_]CHECK HERE IF CERTIFICATES HAVE BEEN LOST OR MUTILATED. SEE INSTRUCTION
11.
The names and addresses of the registered holders of the tendered Shares
should be printed, if not already printed above, exactly as they appear on the
Share Certificates as defined below tendered hereby.
This Letter of Transmittal is to be used by shareholders of Bush Boake Allen
Inc. if certificates for Shares (as defined herein) are to be forwarded
herewith or, unless an Agent's Message (as defined in Section 3 of the Offer
to Purchase) is utilized, if delivery of Shares is to be made by book-entry
transfer, to an account maintained by the Depositary at the Book-Entry
Transfer Facility (as defined in Section 2 of the Offer to Purchase and
pursuant to the procedures set forth in Section 3 thereof).
Holders of Shares whose certificates for such Shares (the "Share
Certificates") are not immediately available, or who cannot complete the
procedure for book-entry transfer on a timely basis, or who cannot deliver all
other required documents to the Depositary prior to the Expiration Date (as
defined in the Offer to Purchase), must tender their Shares according to the
guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.
See Instruction 2. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY
WILL NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
TENDER OF SHARES
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND
COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER
FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution: ___________________________________________
Account Number: __________________________________________________________
Transaction Code Number: _________________________________________________
- -------------------------------------------------------------------------------
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s): _________________________________________
Window Ticket Number (if any): ___________________________________________
Date of Execution of Notice of Guaranteed Delivery: ______________________
Name of Eligible Institution that Guaranteed Delivery: ___________________
2
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF
TRANSMITTAL CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to B Acquisition Corp., a Virginia
corporation ("Merger Subsidiary") and a wholly owned subsidiary of
International Flavors & Fragrances Inc., a New York corporation ("Parent"),
the above-described shares of common stock, par value $1.00 per share, (the
"Shares"), of Bush Boake Allen Inc., a Virginia corporation (the "Company"),
pursuant to Merger Subsidiary's offer to purchase all outstanding Shares, at a
purchase price of $48.50 per Share, net to the seller in cash (the "Offer
Price"), without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated October 6, 2000, and in
this Letter of Transmittal (which together with any amendments or supplements
thereto or hereto, collectively constitute the "Offer"). Receipt of the Offer
is hereby acknowledged.
Upon the terms and subject to the conditions of the Offer (and if the Offer
is extended or amended, the terms of any such extension or amendment), and
effective upon acceptance for payment of the Shares tendered herewith in
accordance with the terms of the Offer, the undersigned hereby sells, assigns
and transfers to or upon the order of Merger Subsidiary all right, title and
interest in and to all of the Shares that are being tendered hereby,
distributions, rights, other Shares or other securities issued or issuable in
respect thereof on or after the date hereof (collectively, "Distributions")
and irrevocably constitutes and appoints The Bank of New York (the
"Depositary") the true and lawful agent and attorney-in-fact of the
undersigned with respect to such Shares (and all Distributions), with full
power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest), to (i) deliver certificates for
such Shares (and any and all Distributions) or transfer ownership of such
Shares (and any and all Distributions) on the account books maintained by the
Book-Entry Transfer Facility, together, in any such case, with all
accompanying evidences of transfer and authenticity, to or upon the order of
Merger Subsidiary, (ii) present such Shares (and any and all Distributions)
for transfer on the books of the Company, and (iii) receive all benefits and
otherwise exercise all rights of beneficial ownership of such Shares (and any
and all Distributions), all in accordance with the terms of the Offer.
By executing this Letter of Transmittal, the undersigned hereby irrevocably
appoints Richard A. Goldstein, Douglas J. Wetmore and Stephen A. Block in
their respective capacities as officers or directors of Merger Subsidiary, and
any individual who shall thereafter succeed to any such office of Merger
Subsidiary, and each of them, and any other designees of Merger Subsidiary,
the attorneys-in-fact and proxies of the undersigned, each with full power of
substitution, to vote at any annual or special meeting of the Company's
shareholders or any adjournment or postponement thereof or otherwise in such
manner as each such attorney-in-fact and proxy or his or her substitute shall
in his or her sole discretion deem proper with respect to, to execute any
written consent concerning any matter as each such attorney-in-fact and proxy
or his or her substitute shall in his or her sole discretion deem proper with
respect to, and to otherwise act as each such attorney-in-fact and proxy or
his or her substitute shall in his or her sole discretion deem proper with
respect to, all of the Shares (and any and all Distributions) tendered hereby
and accepted for payment by Merger Subsidiary. This appointment will be
effective if and when, and only to the extent that, Merger Subsidiary accepts
such Shares for payment pursuant to the Offer. This power of attorney and
proxy are irrevocable and are granted in consideration of the acceptance for
payment of such Shares in accordance with the terms of the Offer. Such
acceptance for payment shall, without further action, revoke any prior powers
of attorney and proxies granted by the undersigned at any time with respect to
such Shares (and any and all Distributions), and no subsequent powers of
attorney, proxies, consents or revocations may be given by the undersigned
with respect thereto (and, if given, will not be deemed effective). Merger
Subsidiary reserves the right to require that, in order for the Shares or
other securities to be deemed validly tendered, immediately upon Merger
Subsidiary's acceptance for payment of such Shares, Merger Subsidiary must be
able to exercise full voting, consent and other rights with respect to such
Shares (and any and all Distributions), including voting at any meeting of the
Company's shareholders.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and all Distributions and that, when the same are accepted for payment
by Merger Subsidiary, Merger Subsidiary will acquire good, marketable and
unencumbered title thereto and to all Distributions, free and clear of all
liens, restrictions, charges and encumbrances and the same will not be subject
to any adverse claims. The
3
undersigned will, upon request, execute and deliver any additional documents
deemed by the Depositary or Merger Subsidiary to be necessary or desirable to
complete the sale, assignment and transfer of the Shares tendered hereby and
all Distributions. In addition, the undersigned shall remit and transfer
promptly to the Depositary for the account of Merger Subsidiary all
Distributions in respect of the Shares tendered hereby, accompanied by
appropriate documentation of transfer, and, pending such remittance and
transfer or appropriate assurance thereof, Merger Subsidiary shall be entitled
to all rights and privileges as owner of each such Distribution and may
withhold the entire purchase price of the Shares tendered hereby or deduct
from such purchase price, the amount or value of such Distribution as
determined by Merger Subsidiary in its sole discretion.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, executors, administrators, personal
representatives, trustees in bankruptcy, successors and assigns of the
undersigned. Except as stated in the Offer, this tender is irrevocable.
The undersigned understands that the valid tender of the Shares pursuant to
any one of the procedures described in Section 3 of the Offer to Purchase and
in the Instructions hereto will constitute a binding agreement between the
undersigned and Merger Subsidiary upon the terms and subject to the conditions
of the Offer (and if the Offer is extended or amended, the terms or conditions
of any such extension or amendment). Without limiting the foregoing, if the
price to be paid in the Offer is amended in accordance with the Merger
Agreement, the price to be paid to the undersigned will be the amended price
notwithstanding the fact that a different price is stated in this Letter of
Transmittal. The undersigned recognizes that under certain circumstances set
forth in the Offer to Purchase, Merger Subsidiary may not be required to
accept for payment any of the Shares tendered hereby.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of all of the Shares purchased and/or
any certificates for the Shares not tendered or accepted for payment in the
name(s) of the registered holder(s) appearing above under "Description of
Shares Tendered." Similarly, unless otherwise indicated under "Special
Delivery Instructions," please mail the check for the purchase price of all of
the Shares purchased and/or any certificates for the Shares not tendered or
not accepted for payment (and any accompanying documents, as appropriate) to
the address(es) of the registered holder(s) appearing above under "Description
of Shares Tendered." In the event that the boxes entitled "Special Payment
Instructions" and "Special Delivery Instructions" are both completed, please
issue the check for the purchase price of all Shares purchased and/or return
any certificates evidencing Shares not tendered or not accepted for payment
(and any accompanying documents, as appropriate) in the name(s) of, and
deliver such check and/or return any such certificates (and any accompanying
documents, as appropriate) to, the person(s) so indicated. Unless otherwise
indicated herein in the box entitled "Special Payment Instructions," please
credit any Shares tendered herewith by book-entry transfer that are not
accepted for payment by crediting the account at the Book-Entry Transfer
Facility designated above. The undersigned recognizes that Merger Subsidiary
has no obligation, pursuant to the "Special Payment Instructions," to transfer
any Shares from the name of the registered holder thereof if Merger Subsidiary
does not accept for payment any of the Shares so tendered.
4
SPECIAL PAYMENT INSTRUCTIONS (See SPECIAL DELIVERY INSTRUCTIONS
Instructions 1, 5, 6 and 7) (See Instructions 1, 5, 6 and 7)
To be completed ONLY if the To be completed ONLY if the
check for the purchase price of check for the purchase price of
Shares accepted for payment Shares accepted for payment
and/or certificates representing and/or certificates representing
Shares not tendered or accepted Shares not tendered or accepted
for payment are to be issued in for payment are to be sent to
the name of someone other than someone other than the under-
the undersigned. signed or to the undersigned at
an address other than that shown
Issue[_] Check under "Description of Shares Ten-
[_] Certificate(s) to: dered."
Name _____________________________ Mail[_] Check
(Please Print) [_] Certificate(s) to:
Address __________________________ Name______________________________
(Please Print)
__________________________________
(Include Zip Code) Address __________________________
__________________________________ __________________________________
(Tax Identification or Social (Include Zip Code)
Security Number)
__________________________________
(Also complete Substitute Form W- (Tax Identification or Social
9 below) Security Number)
(See Subsitute Form W-9 below)
Account
Number: __________________________
5
IMPORTANT
SHAREHOLDER: SIGN HERE
(Please Complete Substitute Form W-9 Included Herein)
-------------------------------------------------------
-------------------------------------------------------
(Signature(s) of Owner(s))
Name(s)________________________________________________
_______________________________________________________
Capacity (Full Title) _________________________________
(See Instructions)
Address________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
(Include Zip Code)
Area Code and Telephone Number ________________________
Taxpayer Identification or
Social Security Number ________________________________
(See substitute Form W-9)
Dated: ______, 2000
(Must be signed by the registered holder(s) exactly as
name(s) appear(s) on stock certificate(s) or on a
security position listing or by the person(s)
authorized to become registered holder(s) by
certificates and documents transmitted herewith. If
signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation
or other person acting in a fiduciary or
representative capacity, please set forth full title
and see Instruction 5.)
GUARANTEE OF SIGNATURE(S)
(If required--See Instructions 1 and 5)
Authorized Signature(s) _______________________________
Name __________________________________________________
Name of Firm __________________________________________
Address _______________________________________________
(Include Zip Code)
Area Code and Telephone Number ________________________
Dated: ______, 2000
6
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this Section, includes any
participant in the Book-Entry Transfer Facility's systems whose name appears
on a security position listing as the owner of the Shares) of Shares tendered
herewith, unless such registered holder(s) has completed either the box
entitled "Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on the Letter of Transmittal or (b) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in
the Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
or by any other "eligible guarantor institution," as such term is defined in
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (each, an
"Eligible Institution"). In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 5.
2. Requirements of Tender. This Letter of Transmittal is to be completed by
shareholders if certificates are to be forwarded herewith or, unless an
Agent's Message is utilized, if tenders are to be made pursuant to the
procedure for tender by book-entry transfer set forth in Section 3 of the
Offer to Purchase. Share Certificates evidencing tendered Shares, or timely
confirmation (a "Book-Entry Confirmation") of a book-entry transfer of Shares
into the Depositary's account at the Book-Entry Transfer Facility, as well as
this Letter of Transmittal (or a facsimile hereof), properly completed and
duly executed, with any required signature guarantees, or an Agent's Message
in connection with a book-entry transfer, and any other documents required by
this Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth herein prior to the Expiration Date (as defined in Section
1 of the Offer to Purchase). Shareholders whose Share Certificates are not
immediately available, or who cannot complete the procedure for delivery by
book-entry transfer on a timely basis or who cannot deliver all other required
documents to the Depositary prior to the Expiration Date, may tender their
Shares by properly completing and duly executing a Notice of Guaranteed
Delivery pursuant to the guaranteed delivery procedure set forth in Section 3
of the Offer to Purchase. Pursuant to such procedure: (i) such tender must be
made by or through an Eligible Institution; (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form made
available by Merger Subsidiary, must be received by the Depositary prior to
the Expiration Date; and (iii) the Share Certificates (or a Book-Entry
Confirmation) evidencing all tendered Shares, in proper form for transfer, in
each case together with the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees
(or, in the case of a book-entry delivery, an Agent's Message) and any other
documents required by this Letter of Transmittal, must be received by the
Depositary within three New York Stock Exchange trading days after the date of
execution of such Notice of the Guaranteed Delivery. If Share Certificates are
forwarded separately to the Depositary, a properly completed and duly executed
Letter of Transmittal must accompany each such delivery.
The method of delivery of this Letter of Transmittal, Share Certificates and
all other required documents, including delivery through the Book-Entry
Transfer Facility, is at the option and the risk of the tendering shareholder
and the delivery will be deemed made only when actually received by the
Depositary (including, in the case of book-entry transfer, receipt of a book-
entry confirmation). If delivery is by mail, registered mail with return
receipt requested, properly insured, is recommended. In all cases, sufficient
time should be allowed to ensure timely delivery.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering shareholders, by execution
of this Letter of Transmittal (or a facsimile hereof), waive any right to
receive any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares and any other required
information should be listed on a separate signed schedule attached hereto.
4. Partial Tenders (not applicable to shareholders who tender by book-entry
transfer). If fewer than all of the Shares evidenced by any Share Certificate
are to be tendered, fill in the number of Shares that are to be tendered in
the box entitled "Number of Shares Tendered." In this case, new Share
Certificates for the Shares that were evidenced by your old Share
7
Certificates, but were not tendered by you, will be sent to you, unless
otherwise provided in the appropriate box on this Letter of Transmittal, as
soon as practicable after the Expiration Date. All Shares represented by Share
Certificates delivered to the Depositary will be deemed to have been tendered
unless indicated.
5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the certificate(s) without alteration, enlargement or any
change whatsoever.
If any of the Shares tendered hereby are held of record by two or more joint
owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations.
If this Letter of Transmittal or any certificates or stock powers are signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of
a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Merger Subsidiary of the authority of such person so to act
must be submitted. If this Letter of Transmittal is signed by the registered
holder(s) of the Shares listed and transmitted hereby, no endorsements of
certificates or separate stock powers are required unless payment is to be
made or certificates for Shares not tendered or not accepted for payment are
to be issued in the name of a person other than the registered holder(s).
Signatures on any such Share Certificates or stock powers must be guaranteed
by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificate(s) listed and transmitted hereby, the
certificate(s) must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name(s) of the registered holder(s)
appear(s) on the certificate(s). Signature(s) on any such Share Certificates
or stock powers must be guaranteed by an Eligible Institution.
6. Stock Transfer Taxes. Except as otherwise provided in this Instruction 6,
Merger Subsidiary will pay all stock transfer taxes with respect to the
transfer and sale of any Shares to it or its order pursuant to the Offer. If,
however, payment of the purchase price is to be made to, or if certificate(s)
for Shares not tendered or not accepted for payment are to be registered in
the name of, any person other than the registered holder(s), or if tendered
certificate(s) are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder(s) or such other person)
payable on account of the transfer to such other person will be deducted from
the purchase price of such Shares purchased unless evidence satisfactory to
Merger Subsidiary of the payment of such taxes, or exemption therefrom, is
submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificate(s) evidencing the Shares
tendered hereby.
7. Special Payment and Delivery Instructions. If a check is to be issued in
the name of, and/or certificates for Shares not tendered or not accepted for
payment are to be issued to, a person other than the signer of this Letter of
Transmittal or if a check and/or such certificates are to be returned to a
person other than the person(s) signing this Letter of Transmittal or to an
address other than that shown in this Letter of Transmittal, the appropriate
boxes on this Letter of Transmittal must be completed.
8. Substitute Form W-9. A tendering shareholder is required to provide the
Depositary with a correct Taxpayer Identification Number ("TIN") on Substitute
Form W-9, which is provided under "Important Tax Information" below, and to
certify, under penalties of perjury, that such number is correct and that such
shareholder is not subject to backup withholding of Federal income tax. If a
tendering shareholder is subject to backup withholding, the shareholder must
cross out Item (y) of Part 3 of the Certification Box of the Substitute Form
W-9. Failure to provide the information on the Substitute Form W-9 may subject
the tendering shareholder to Federal income tax withholding of 31% of any
payments made to the shareholder, but such withholdings will be refunded if
the tendering shareholder provides a TIN within 60 days.
8
Certain shareholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign shareholders should submit an appropriate and properly
completed IRS Form W-8, a copy of which may be obtained from the Depositary,
in order to avoid backup withholding. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
more instructions.
9. Requests for Assistance or Additional Copies. Questions and requests for
assistance or additional copies of the Offer to Purchase, this Letter of
Transmittal, the Notice of Guaranteed Delivery, IRS Form W-8 and the
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 may be directed to the Information Agent or Dealer Manager at the
addresses and phone numbers set forth below, or from brokers, dealers,
commercial banks or trust companies.
10. Waiver of Conditions. Subject to the terms and conditions of the Merger
Agreement (as defined in the Offer to Purchase), Merger Subsidiary reserves
the right, in its sole discretion, to waive, at any time or from time to time,
any of the specified conditions of the Offer, in whole or in part, in the case
of any Shares tendered (other than the Minimum Condition).
11. Lost, Destroyed or Stolen Certificates. If any certificate representing
Shares has been lost, destroyed or stolen, the shareholder should promptly
notify The Bank of New York in its capacity as transfer agent for the shares
(toll-free telephone number: (800) 507-9357). The shareholder will then be
instructed as to the steps that must be taken in order to replace the
certificate. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost or destroyed certificates
have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE
HEREOF) TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A
BOOK-ENTRY TRANSFER, AN AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS,
MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE AND EITHER
CERTIFICATES FOR TENDERED SHARES MUST BE RECEIVED BY THE DEPOSITARY OR SHARES
MUST BE DELIVERED PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH
CASE PRIOR TO THE EXPIRATION DATE, OR THE TENDERING SHAREHOLDER MUST COMPLY
WITH THE PROCEDURES FOR GUARANTEED DELIVERY.
9
IMPORTANT TAX INFORMATION
Under the federal income tax law, a shareholder whose tendered Shares are
accepted for payment is required to provide the Depositary with such
shareholder's correct TIN on the Substitute Form W-9 below. If such
shareholder is an individual, the TIN is such shareholder's Social Security
Number. If a tendering shareholder is subject to backup withholding, such
shareholder must cross out Item (Y) of Part 3 on the Substitute Form W-9. If
the Depositary is not provided with the correct TIN, the shareholder may be
subject to a $50 penalty imposed by the Internal Revenue Service. In addition,
payments that are made to such shareholder may be subject to backup
withholding of 31%.
Certain shareholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit an appropriate and properly completed
IRS Form W-8, attesting to that individual's exempt status. Such a Form W-8
may be obtained from the Depositary. Exempt shareholders, other than foreign
individuals, should furnish their TIN, write "Exempt" in Part 2 of the
Substitute Form W-9 below and sign, date and return the Substitute Form W-9 to
the Depositary. See the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the shareholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to withholding will be
reduced by the amount of tax withheld. If backup withholding results in an
overpayment of taxes, a refund may be obtained from the Internal Revenue
Service.
Purpose of Substitute Form W-9
To prevent backup withholding on payments that are made to a shareholder
with respect to Shares purchased pursuant to the Offer, the shareholder is
required to notify the Depositary of such shareholder's correct TIN by
completing the form below certifying that the TIN provided on Substitute Form
W-9 is correct (or that such shareholder is awaiting a TIN).
What Number to Give the Depositary
The shareholder is required to give the Depositary the Social Security
Number of the record holder of the Shares. If the Shares are in more than one
name, or are not in the name of the actual owner, consult the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for additional guidelines on which number to report. If the tendering
shareholder has not been issued a TIN and has applied for a number or intends
to apply for a number in the near future, the shareholder should check the box
in Part 1(b), sign and date the Substitute Form W-9. If the box in Part 1(b)
is checked, the Depositary will withhold 31% of payments made for the
shareholder, but such withholdings will be refunded if the tendering
shareholder provides a TIN within 60 days.
10
PAYER'S NAME: THE BANK OF NEW YORK
Name ________________________________________________
Address _____________________________________________
SUBSTITUTE _____________________________________________________
Form W-9 (Number and Street)
Department of _____________________________________________________
the Treasury (Zip Code) (City) (State)
Internal Revenue
Service
--------------------------------------------------------
Part 1(a)--PLEASE PROVIDE TIN __________________
YOUR TIN IN THE BOX AT
RIGHT AND CERTIFY BY
SIGNING AND DATING BELOW.
Payer's Request for ----------------------
Taxpayer (Social Security Number
Identification Number (TIN) or Employer
identification Number)
--------------------------------------------------------
Part 1(b)--PLEASE CHECK THE BOX AT RIGHT IF YOU HAVE
APPLIED FOR, AND ARE AWAITING RECEIPT OF, YOUR TIN [_]
--------------------------------------------------------
Part 2--FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING
PLEASE WRITE "EXEMPT" HERE (SEE INSTRUCTIONS)
--------------------------------------------------------
Part 3--CERTIFICATION UNDER PENALTIES OF PERJURY, I
CERTIFY THAT (X) The number shown on this form is my
correct TIN (or I am waiting for a number to be
issued to me) and (Y) I am not subject to backup
withholding because: (a) I am exempt from backup
withholding, or (b) I have not been notified by the
Internal Revenue Service (the "IRS") that I am
subject to backup withholding as a result of a
failure to report all interest or dividends, or (c)
the IRS has notified me that I am no longer subject
to backup withholding.
Sign Here (right SIGNATURE ___________________________________________
arrow) DATE ________________________________________________
Certification of Instructions--You must cross out Item (Y) of Part 3 above
if you have been notified by the IRS that you are currently subject to backup
withholding because of under reporting interest or dividends on your tax
return. However, if after being notified by the IRS that you were subject to
backup withholding you received another notification from the IRS that you are
no longer subject to backup withholding, do not cross out such Item (Y).
11
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART
1(B) OF THE SUBSTITUTE FORM W-9 INDICATING YOU HAVE APPLIED FOR, AND ARE
AWAITING RECEIPT OF, YOUR TIN.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or delivered
an application to receive a taxpayer identification number to the
appropriate Internal Revenue Service Center or Social Security
Administration Office or (2) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a taxpayer
identification number to the Payor by the time of payment, 31 percent of
all reportable payments made to me pursuant to this Offer will be withheld.
------------------------------------ ------------------------------------
Signature Date
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
MANUALLY SIGNED FACSIMILE COPIES OF THE LETTER OF TRANSMITTAL WILL BE
ACCEPTED. THE LETTER OF TRANSMITTAL, CERTIFICATES FOR SHARES AND ANY OTHER
REQUIRED DOCUMENTS SHOULD BE SENT OR DELIVERED BY EACH SHAREHOLDER OF THE
COMPANY OR SUCH SHAREHOLDER'S BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY
OR OTHER NOMINEE TO THE DEPOSITARY AT ONE OF ITS ADDRESSES SET FORTH ON THE
FIRST PAGE.
Questions and requests for assistance or for additional copies of the Offer
to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and
other tender offer materials may be directed to the Information Agent or the
Dealer Manager at their respective telephone numbers and locations listed
below, and will be furnished promptly at Merger Subsidiary's expense. You may
also contact your broker, dealer, commercial bank, trust company or other
nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
[LOGO OF GEORGESON SHAREHOLDER COMMUNICATIONS]
17 State Street, 10th Floor
New York, New York 10004
Banks & Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: (800) 223-2064
The Dealer Manager for the Offer is:
MORGAN STANLEY DEAN WITTER
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Call Collect: (212) 761-8322
12
Exhibit (A).(3)
Notice of Guaranteed Delivery
for
Tender of Shares of Common Stock
of
Bush Boake Allen Inc.
to
B Acquisition Corp.
a wholly owned subsidiary of
International Flavors & Fragrances Inc.
(Not to be used for signature guarantees)
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, NOVEMBER 3, 2000, UNLESS THE OFFER IS EXTENDED.
This Notice of Guaranteed Delivery, or a form substantially equivalent
hereto, must be used to accept the Offer (as defined below) if certificates
for Shares (as defined below) are not immediately available, if the procedure
for book-entry transfer cannot be completed on a timely basis or if time will
not permit all required documents to reach The Bank of New York (the
"Depositary") on or prior to the Expiration Date (as defined in Section 1 of
the Offer to Purchase). This form may be delivered by hand, transmitted by
facsimile transmission or mailed (to the Depositary). See Section 3 of the
Offer to Purchase.
The Depositary for the Offer is:
The Bank of New York
By Mail: By Facsimile Transmission: By Hand or Overnight Courier:
Tender & Exchange Department (212) 815-6213 Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
To Confirm Facsimile
New York, New York 10286-1248 Transmissions: New York, New York 10286
(For Eligible Institutions
Only)
(212) 815-6156
(For Confirmation Only)
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN ONE
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE NUMBER OTHER
THAN THE FACSIMILE NUMBER SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY
TO THE DEPOSITARY.
THIS NOTICE OF GUARANTEED DELIVERY TO THE DEPOSITARY IS NOT TO BE USED TO
GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO
BE GUARANTEED BY AN "ELIGIBLE INSTITUTION" (AS DEFINED IN THE OFFER TO
PURCHASE) UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEES MUST
APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER TO
TRANSMITTAL.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal or an
Agent's Message (as defined in the Offer to Purchase) and certificates for
Shares to the Depositary within the time period shown herein. Failure to do so
could result in a financial loss to such Eligible Institution.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
Ladies and Gentlemen:
The undersigned hereby tenders to B Acquisition Corp., a Virginia
corporation and a wholly owned subsidiary of International Flavors &
Fragrances Inc., a New York corporation, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated October 6, 2000 (the
"Offer to Purchase"), and the related Letter of Transmittal (which, together
with any amendments or supplements thereto, constitute the "Offer"), receipt
of which is hereby acknowledged, the number of shares of common stock, par
value $1.00 per share (the "Shares"), of Bush Boake Allen Inc., a Virginia
corporation, set forth below, pursuant to the guaranteed delivery procedures
set forth in the Offer to Purchase.
Number of Shares Tendered: __________ SIGN HERE
Certificate No(s) (if available): Name(s) of Record Holder(s)
_____________________________________ _____________________________________
_____________________________________ _____________________________________
(please print)
[_]Check if securities will be
tendered by book-entry transfer Address(es);
Name of Tendering Institution: _____________________________________
_____________________________________ _____________________________________
(Zip Code)
Account No.: ________________________
Area Code and Telephone No(s):
Dated: ________________________, 2000
_____________________________________
Signature(s)
_____________________________________
_____________________________________
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a bank, broker, dealer, credit union, savings association
or other entity that is a member in good standing of the Securities Transfer
Agents Medallion Program, (a) represents that the above named person(s)
"own(s)" the Shares tendered hereby within the meaning of Rule 14e-4 under the
Securities Exchange Act of 1934, as amended ("Rule 14e-4"), (b) represents
that such tender of Shares complies with Rule 14e-4 and (c) guarantees to
deliver to the Depositary either the certificates evidencing all tendered
Shares, in proper form for transfer, or to deliver Shares pursuant to the
procedure for book-entry transfer into the Depositary's account at The
Depository Trust Company (the "Book-Entry Transfer Facility"), in either case
together with the Letter of Transmittal (or a facsimile thereof) properly
completed and duly executed, with any required signature guarantees or an
Agent's Message (as defined in the Offer to Purchase) in the case of a book-
entry delivery, and any other required documents, all within three New York
Stock Exchange trading days after the date hereof.
Name of Firm: _______________________ _____________________________________
(Authorized Signature)
Address: ____________________________
Title: ______________________________
_____________________________________
Zip Code Name: _______________________________
Area Code and Tel. No. ______________ _____________________________________
(Please type or print)
Date: _________________________, 2000
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES FOR
SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
Exhibit (A).(4)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Bush Boake Allen Inc.
at
$48.50 Net Per Share
by
B Acquisition Corp.
a wholly owned subsidiary of
International Flavors & Fragrances Inc.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, NOVEMBER 3, 2000, UNLESS THE OFFER IS EXTENDED.
October 6, 2000
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We have been appointed by B Acquisition Corp., a Virginia corporation
("Merger Subsidiary") and a wholly owned subsidiary of International Flavors &
Fragrances Inc., a New York corporation ("Parent"), to act as Dealer Manager
in connection with Merger Subsidiary's offer to purchase all outstanding
shares of common stock, par value $1.00 per share, (the "Shares"), of Bush
Boake Allen Inc., a Virginia corporation (the "Company"), at a purchase price
of $48.50 per Share, net to the seller in cash, without interest thereon, upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated October 6, 2000 (the "Offer to Purchase"), and the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer") enclosed herewith.
Holders of Shares whose certificates for such Shares (the "Share
Certificates") are not immediately available, who cannot complete the
procedures for book-entry transfer on a timely basis, or who cannot deliver
all other required documents to The Bank of New York (the "Depositary") prior
to the Expiration Date (as defined in the Offer to Purchase) must tender their
Shares according to the guaranteed delivery procedures set forth in Section 3
of the Offer to Purchase.
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the Expiration Date that number of Shares
which represents more than 66 2/3% of the then outstanding Shares on a fully
diluted basis and (2) any applicable waiting period under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended, or under any applicable
merger control regulations of foreign governmental entities, individually or
in the aggregate, having jurisdiction over a material portion of the Company's
business or assets having expired or been terminated by the Expiration Date of
the Offer. International Paper Company, the principal shareholder of the
Company (the "Principal Shareholder"), beneficially owns approximately 68% of
the Company's outstanding Shares and has agreed to tender its Shares in the
Offer. See Section 10 of the Offer to Purchase. The Company has agreed to
consent to a waiver of the minimum condition, described in clause (1) above,
to enable Merger Subsidiary to purchase the Shares owned by the Principal
Shareholder if the Principal Shareholder has tendered its Shares, but the
total number of Shares tendered does not constitute more than 66 2/3% of the
outstanding Shares of the Company on a fully diluted basis. The Offer is also
subject to other conditions. See Section 13 of the Offer to Purchase.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares registered in your name or in the name of your
nominee.
1. Offer to Purchase, dated October 6, 2000;
1
2. Letter of Transmittal for your use in accepting the Offer and
tendering Shares and for the information of your clients (manually signed
facsimile copies of the Letter of Transmittal may be used to tender
Shares);
3. Notice of Guaranteed Delivery to be used to accept the Offer if Share
Certificates are not immediately available or if such certificates and all
other required documents cannot be delivered to the Depositary, or if the
procedures for book-entry transfer cannot be completed on a timely basis;
4. A printed form of letter that may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Offer;
5. The letter to shareholders of the Company from Julian W. Boyden,
Chairman, Chief Executive Officer and President of the Company, accompanied
by the Company's Solicitation/Recommendation Statement on Schedule 14D-9
filed with the Securities and Exchange Commission by the Company, which
includes the recommendation of the Board of Directors of the Company (the
"Company Board") that shareholders accept the Offer and tender their Shares
to Merger Subsidiary thereunder; and
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
The Company Board unanimously (i) determined that the terms of the Offer and
the Merger are advisable and in the best interests of the Company and its
shareholders, (ii) approved the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger, and (iii) recommends
that shareholders accept the Offer and tender their Shares pursuant to the
Offer.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of September 25, 2000 (the "Merger Agreement"), among the Company, Parent
and Merger Subsidiary. The Merger Agreement provides for, among other things,
the making of the Offer by Merger Subsidiary, and further provides that Merger
Subsidiary will merge with and into the Company (the "Merger") as soon as
practicable following the satisfaction or waiver of each of the conditions to
the Merger set forth in the Merger Agreement. Following the Merger, the
Company will continue as the surviving corporation, wholly owned by Parent,
and the separate corporate existence of Merger Subsidiary will cease.
In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal and any required signature guarantees, or an
Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry delivery of Shares, and other required documents should be sent to
the Depositary and (ii) Share Certificates representing the tendered Shares
should be delivered to the Depositary, or such Shares should be tendered by
book-entry transfer into the Depositary's account maintained at the Book-Entry
Transfer Facility (as described in the Offer to Purchase), all in accordance
with the instructions set forth in the Letter of Transmittal and the Offer to
Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share Certificates or other required documents prior to the
Expiration Date or to comply with the book-entry transfer procedures on a
timely basis, a tender may be effected by following the guaranteed delivery
procedures specified in Section 3 of the Offer to Purchase.
Merger Subsidiary will not pay any fees or commissions to any broker or
dealer or other person (other than the Depositary, the Information Agent and
the Dealer Manager as described in the Offer to Purchase) for soliciting
tenders of Shares pursuant to the Offer. Merger Subsidiary will, however, upon
request, reimburse you for customary mailing and handling costs incurred by
you in forwarding the enclosed materials to your customers.
Merger Subsidiary will pay or cause to be paid all stock transfer taxes
applicable to its purchase of Shares pursuant to the Offer, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
2
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, NOVEMBER 3, 2000, UNLESS THE OFFER IS EXTENDED.
Any inquiries you may have with respect to the Offer should be addressed to,
and additional copies of the enclosed materials may be obtained from, the
Information Agent or the undersigned at the addresses and telephone numbers
set forth on the back cover of the Offer to Purchase.
Very truly yours,
MORGAN STANLEY & CO.
Incorporated
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS AN AGENT OF PARENT, MERGER SUBSIDIARY, THE COMPANY, THE
DEALER MANAGER, THE INFORMATION AGENT, THE DEPOSITARY OR ANY AFFILIATE OF ANY
OF THE FOREGOING OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR
MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER
THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
3
Exhibit (A).(5)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Bush Boake Allen Inc.
at
$48.50 Net Per Share
by
B Acquisition Corp.
a wholly owned subsidiary of
International Flavors & Fragrances Inc.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, NOVEMBER 3, 2000, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration is the Offer to Purchase, dated October 6,
2000 (the "Offer to Purchase"), and a related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute
the "Offer") in connection with the offer by B Acquisition Corp., a Virginia
corporation (the "Merger Subsidiary") and a wholly owned subsidiary of
International Flavors & Fragrances Inc., a New York corporation ("Parent"), to
purchase all outstanding shares of common stock, par value $1.00 per share
(the "Shares"), of Bush Boake Allen Inc., a Virginia corporation (the
"Company"), at a purchase price of $48.50 per Share, net to the seller in
cash, without interest thereon, upon the terms and subject to the conditions
set forth in the Offer to Purchase and in the Letter of Transmittal enclosed
herewith.
We are the holder of record of Shares for your account. A tender of such
Shares can be made only by us as the holder of record and pursuant to your
instructions. The enclosed Letter of Transmittal is furnished to you for your
information only and cannot be used by you to tender Shares held by us for
your account.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer to Purchase. Your attention is invited to
the following:
1. The offer price is $48.50 per Share, net to you in cash, without
interest.
2. The Offer is being made for all outstanding Shares.
3. The Offer is being made pursuant to an Agreement and Plan of Merger,
dated as of September 25, 2000 (the "Merger Agreement"), among the Company,
Parent and Merger Subsidiary. The Merger Agreement provides, among other
things, that Merger Subsidiary will merge with and into the Company (the
"Merger") following the satisfaction or waiver of each of the conditions to
the Merger set forth in the Merger Agreement.
4. The Board of Directors of the Company unanimously (i) determined that
the terms of the Offer and the Merger are advisable and in the best
interests of the Company and its shareholders, (ii) approved the Merger
Agreement and the transactions contemplated thereby, including the Offer
and the Merger, and (iii) recommends that shareholders accept the Offer and
tender their Shares pursuant to the Offer.
5. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Friday, November 3, 2000 (the "Expiration Date"), unless
the Offer is extended.
6. Any stock transfer taxes applicable to the sale of Shares to Merger
Subsidiary pursuant to the Offer will be paid by Merger Subsidiary, except
as otherwise provided in Instruction 6 of the Letter of Transmittal.
1
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the Expiration Date of the Offer that
number of Shares which represents more than 66 2/3% of the then outstanding
Shares on a fully diluted basis and (2) any applicable waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or under
any applicable merger control regulations of foreign governmental entities,
individually or in the aggregate, having jurisdiction over a material portion
of the Company's business or assets having expired or been terminated by the
Expiration Date of the Offer. International Paper Company, a New York
corporation and the Company's major shareholder (the "Principal Shareholder"),
beneficially owns approximately 68% of the Company's outstanding Shares and
has agreed to tender its Shares in the Offer. See Section 10 of the Offer to
Purchase. The Company has agreed to consent to a waiver of the minimum
condition, described in clause (1) above, to enable Merger Subsidiary to
purchase the Shares owned by the Principal Shareholder if the Principal
Shareholder has tendered its Shares, but the total number of Shares tendered
does not constitute more than 66 2/3% of the outstanding Shares of the Company
on a fully diluted basis. The Offer is also subject to other conditions. See
Section 13 of the Offer to Purchase.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and is being made to all holders of Shares. Merger Subsidiary is
not aware of any state where the making of the Offer is prohibited by
administrative or judicial action pursuant to any valid state statute. If
Merger Subsidiary becomes aware of any valid state statute prohibiting the
making of the Offer or the acceptance of Shares pursuant thereto, Merger
Subsidiary shall make a good faith effort to comply with such state statute or
seek to have such statute declared inapplicable to the Offer. If, after such
good faith effort, Merger Subsidiary cannot comply with such state statute,
the Offer will not be made to (nor will tenders be accepted from or on behalf
of) holders of Shares in such state. In those jurisdictions where the
securities, blue sky or other laws require the Offer to be made by a licensed
broker or dealer, the Offer will be deemed to be made on behalf of Merger
Subsidiary by Morgan Stanley & Co. Incorporated in its capacity as Dealer
Manager for the Offer or one or more registered brokers or dealers licensed
under the laws of such jurisdiction.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form set forth
on the reverse side of this letter. An envelope to return your instructions to
us is also enclosed. If you authorize the tender of your Shares, all such
Shares will be tendered unless otherwise specified on the reverse side of this
letter. Your instructions should be forwarded to us in ample time to permit us
to submit a tender on your behalf prior to the Expiration Date.
2
Instructions with Respect to the
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Bush Boake Allen Inc.
by
B Acquisition Corp.
a wholly owned subsidiary of
International Flavors & Fragrances Inc.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated October 6, 2000, and the related Letter of Transmittal of B
Acquisition Corp., a Virginia corporation and a wholly owned subsidiary of
International Flavors & Fragrances Inc., a New York corporation, all
outstanding shares of common stock, par value $1.00 per share, (the "Shares"),
of Bush Boake Allen Inc., a Virginia corporation, at a purchase price of
$48.50 per Share, net to the seller in cash, without interest thereon, upon
the terms and subject to the conditions set forth in the Offer to Purchase and
the related Letter of Transmittal.
This will instruct you to tender to Merger Subsidiary the number of Shares
indicated below (or, if no number is indicated below, all Shares) that are
held by you for the account of the undersigned, upon the terms and subject to
the conditions set forth in the Offer to Purchase and the related Letter of
Transmittal.
Number of Shares to Be Tendered:*_________
Account No.: ________________________
Dated: ________________________, 2000
SIGN HERE
_____________________________________
_____________________________________
Signature(s)
_____________________________________
_____________________________________
_____________________________________
_____________________________________
Print Name(s)and Address(es)
_____________________________________
_____________________________________
_____________________________________
Area Code and Telephone Number(s)
_____________________________________
Taxpayer Identification or Social
Security Number(s)
- --------
* Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
3
Exhibit (A).(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the
Payer.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
- ------------------------------------- -------------------------------------
Give the
SOCIAL SECURITY
For this type of account: number of--
- -----------------------------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner of
(joint account) the account or, if
combined funds, any
one of the
individuals(1)
3. Husband and wife (joint The actual owner of
account) the account or, if
joint funds, either
person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if
account) the minor is the
only contributor,
the minor(1)
6. Account in the name of The ward, minor, or
guardian or committee incompetent
for a designated ward, person(3)
minor, or incompetent
person
7.a The usual revocable The grantor-
savings trust account trustee(1)
(grantor is also
trustee)
b So-called trust account The actual owner(1)
that is not a legal or
valid trust under State
law
8. Sole proprietorship The owner(4)
account
- -----------------------------------------------
-----
Give the EMPLOYER
IDENTIFICATION
For this type of account: number of--
------
9. A valid trust, estate, The legal entity
or pension trust (Do not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, The organization
or educational
organization account
12. Partnership account The partnership
held in the name of the
business
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or
nominee nominee
15. Account with the The public entity
Department of
Agriculture in the name
of a public entity
(such as a State or
local government,
school district, or
prison) that receives
agricultural program
payments
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension
trust.
Note: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
Obtaining a Number
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification Number, at the local office
of the Social Security Administration or the Internal Revenue Service and
apply for a number.
Payees Exempt from Backup Withholding
Payees specifically exempted from backup withholding on ALL payments include
the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual
retirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a)
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of
1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to nonresident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT
TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS,
ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
Privacy Act Notice.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1993, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer.
Certain penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number.--If you
fail to furnish your taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due
to reasonable cause and not to willful neglect.
(2) Failure to Report Certain Dividend and Interest Payments.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is clear and
convincing evidence to the contrary.
(3) Civil Penalty for False Information With Respect to Withholding.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) Criminal Penalty for Falsifying Information.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
EXHIBIT (a)(7)
INTERNATIONAL FLAVORS & FRAGRANCES COMMENCES TENDER OFFER FOR ALL OF THE
OUTSTANDING SHARES OF BUSH BOAKE ALLEN
COMMON STOCK AT $48.50 PER SHARE
NEW YORK (October 6, 2000) - International Flavors & Fragrances Inc. ("IFF")
(NYSE: IFF) and Bush Boake Allen Inc. ("BBA") (NYSE: BOA) today announced that B
Acquisition Corp., a wholly owned subsidiary of IFF, is commencing today a cash
tender offer for all of the outstanding shares of common stock of BBA at a price
of $48.50 per share. The tender offer is being made pursuant to an Offer to
Purchase, dated October 6, 2000, as provided under the previously announced
Agreement and Plan of Merger, dated as of September 25, 2000. The tender offer
is scheduled to expire at 12:00 midnight, New York City time, on Friday,
November 3, 2000, unless extended.
International Paper Company (NYSE: IP), which owns approximately 68% of the
outstanding common stock of BBA, has agreed with IFF to tender its shares in the
tender offer.
Following completion of the tender offer and receipt of shareholder approval, if
required, IFF intends to consummate a merger in which B Acquisition Corp. will
be merged with and into BBA. BBA will then be a wholly owned subsidiary of IFF.
The remaining BBA shareholders will receive the same cash price paid in the
tender offer.
The Board of Directors of BBA has unanimously approved the Merger Agreement and
recommends that BBA shareholders accept the offer and tender their shares.
The tender offer is subject to conditions, including tender of shares of BBA
common stock representing more than 66 2/3% of the outstanding common stock of
BBA on a fully diluted basis, expiration or termination of any waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or
under applicable foreign merger control regulations, and to other customary
conditions.
The Depositary for the tender offer is The Bank of New York, One Wall Street,
New York, New York 10286.
The Dealer Manager for the tender offer is Morgan Stanley Dean Witter, 1585
Broadway, New York, New York 10036.
(more)
Page 2
The Information Agent for the tender offer is Georgeson Shareholder
Communications Inc., 17 State Street, 10th Floor, New York, New York 10004.
Banks and brokers call collect (212) 440-9800. All others call toll free (800)
223-2064.
IFF is the world's leading creator and manufacturer of flavors and fragrances
used by others to impart or improve flavor or fragrance in a wide variety of
consumer products. IFF has sales, manufacturing and creative facilities in more
than 35 countries worldwide with sales of $1.44 billion in 1999.
BBA, which conducts operations on six continents, has 60 locations in 38
countries worldwide. BBA supplies flavors and fragrances to the world's leading
consumer products companies for use in foods, beverages, soaps and detergents,
cosmetics, toiletries, personal care items and related products. Its aroma
chemicals, natural extracts and essential oils serve as raw materials for a wide
range of compounded flavors and fragrances. BBA had 1999 worldwide sales of
$499 million.
Statements in this release which are not historical facts or information are
"forward-looking statements" within the meaning of the Securities Exchange Act
of 1934, as amended, and are subject to risks and uncertainties that could cause
IFF's actual results to differ materially from those expressed or implied by
such forward-looking statements. Risks and uncertainties with respect to IFF's
business include general economic and business conditions, the price and
availability of raw materials, and political and economic uncertainties,
including the fluctuation or devaluation of currencies in countries in which IFF
does business.
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell securities of BBA. The tender offer is being made pursuant to a tender
offer statement and related materials. Investors and security holders are
strongly advised to read both the tender offer statement and the
solicitation/recommendation statement regarding the tender offer referred to in
this press release, because they contain important information. The tender
offer statement will be filed by IFF with the Securities and Exchange Commission
(SEC), and the solicitation/recommendation statement will be filed by BBA with
the SEC. Investors and security holders may obtain a free copy of these
statements and other documents filed by IFF and BBA at the SEC's website at
www.sec.gov.
The tender offer statement and related materials may be obtained for free by
directing such requests to IFF. The solicitation/recommendation statement and
such other documents may be obtained by directing such requests to BBA.
Contacts for IFF Contacts for BBA
Douglas J. Wetmore Fred W. Brown
212-708-7145 201-782-3363
Joele Frank / Barrett Godsey Kenneth M. McHugh
Joele Frank, Wilkinson Brimmer Katcher 201-782-3364
212-355-4449
# # #
Exhibit (A).(8)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares (as defined below). The Offer (as defined below) is made only by
the Offer to Purchase, dated October 6, 2000, and the related Letter of
Transmittal and any amendments or supplements thereto, and is being made to all
holders of Shares. 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
securities, blue sky or other laws of such jurisdiction. However, Merger
Subsidiary (as defined below) may, in its discretion, take such action as it may
deem necessary to make the Offer in any jurisdiction and extend the Offer to
holders of Shares in such jurisdiction. In those jurisdictions where securities,
blue sky or other laws require the Offer to be made by a licensed broker or
dealer, the Offer shall be deemed to be made on behalf of Merger Subsidiary by
Morgan Stanley & Co. Incorporated (the "Dealer Manager") or one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash All Outstanding Shares of Common Stock of
Bush Boake Allen Inc. at $48.50 Net Per Share by B Acquisition Corp. a wholly
owned subsidiary of International Flavors & Fragrances Inc.
B Acquisition Corp., a Virginia corporation ("Merger Subsidiary") and a wholly
owned subsidiary of International Flavors & Fragrances Inc., a New York
corporation ("Parent"), is offering to purchase all the outstanding shares of
common stock, par value $1.00 per share (the "Shares"), of Bush Boake Allen
Inc., a Virginia corporation (the "Company"), at a purchase price of $48.50 per
Share, net to the seller in cash (the "Offer Price"), without interest thereon,
on the terms and subject to the conditions set forth in the Offer to Purchase,
dated October 6, 2000 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"). Tendering shareholders who have Shares
registered in their names and who tender directly to The Bank of New York (the
"Depositary") will not be charged brokerage fees or commissions or, subject to
Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of
Shares pursuant to the Offer. Shareholders who hold their Shares through a
broker or bank should consult such institution as to whether it charges any
service fees. Merger Subsidiary will pay all charges and expenses of the Dealer
Manager, the Depositary and Georgeson Shareholder Communications Inc., which is
acting as the information agent (the "Information Agent"), incurred in
connection with the Offer. Following the consummation of the Offer, Merger
Subsidiary intends to effect the Merger described below.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, NOVEMBER 3, 2000, UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the Expiration Date (as defined below) of
the Offer that number of Shares which, represents more than 66 2/3% of the then
outstanding Shares on a fully-diluted basis and (2) the expiration or
termination by the Expiration Date of the Offer of any waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or any
applicable merger control regulations enforced by foreign governmental entities,
individually or in the aggregate, having jurisdiction over a material portion of
the Company's business or assets. International Paper Company, a New York
corporation and the principal shareholder of the Company (the "Principal
Shareholder"), beneficially owns approximately 68% of the Company's outstanding
Shares and has agreed to tender its Shares in the Offer pursuant to a Voting and
Tender Agreement, dated as of September 25, 2000, among the Principal
Shareholder, the Company, Parent and Merger Subsidiary. See Section 10 of the
Offer to Purchase. The Company has agreed to consent to a waiver of the minimum
condition described in clause (1) above to enable Merger Subsidiary to purchase
the Shares owned by the Principal Shareholder if the Principal Shareholder has
tendered its Shares, but the total number of Shares tendered does not constitute
more than 66 2/3% of the outstanding Shares of the Company on a fully diluted
basis. The Offer is also subject to other conditions. See Section 13 of the
Offer to Purchase.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of
September 25, 2000 (the "Merger Agreement"), among the Company, Parent and
Merger Subsidiary. The purpose of the Offer is for Parent, through Merger
Subsidiary, to acquire more than 66 2/3% of the outstanding Shares of the
Company as the first step in acquiring the entire equity interest in the
Company. The Merger Agreement provides that, among other things, Merger
Subsidiary will commence the Offer and as promptly as practicable after the
purchase of Shares in the Offer and the satisfaction or waiver of the other
conditions set forth in the Merger Agreement and in accordance with relevant
provisions of the Virginia Stock Corporation Act (the "VSCA"), Merger Subsidiary
will merge with and into the Company (the "Merger"), with the Company continuing
as the surviving corporation. At the effective time of the Merger (the
"Effective Time"), each Share issued and outstanding immediately prior to the
Effective Time (other than Shares owned by Parent, Merger Subsidiary, any of
their respective subsidiaries or any subsidiary of the Company, all of which
will be cancelled and retired and will cease to exist) will automatically be
converted into the right to receive $48.50 in cash, or any higher price that is
paid in the Offer, without interest thereon.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY (1) DETERMINED THAT THE TERMS
OF THE OFFER AND THE MERGER ARE ADVISABLE AND IN THE BEST INTERESTS OF THE
COMPANY AND ITS SHAREHOLDERS, (2) APPROVED THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, AND (3)
RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT
TO THE OFFER.
For purposes of the Offer, Merger Subsidiary will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not properly
withdrawn as, if and when Merger Subsidiary gives oral or written notice to the
Depositary of Merger Subsidiary's acceptance of such Shares for payment pursuant
to the Offer. In all cases, on the terms and subject to the conditions of the
Offer, payment for Shares purchased pursuant to the Offer will be made by
deposit of the purchase price with the Depositary, which will act as agent for
tendering shareholders for the purpose of receiving payment from Merger
Subsidiary and transmitting such payment to tendering shareholders. Under no
circumstances will interest on the purchase price of Shares be paid by Merger
Subsidiary because of any delay in making any payment. Payment for Shares
tendered and accepted for payment pursuant to the Offer will be made only after
timely receipt by the Depositary of (i) certificates for such Shares or
1 of 3
confirmation of a book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility (as defined in the Offer to
Purchase) pursuant to the procedures set forth in the Offer to Purchase, (ii)
the Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, with any required signature guarantees or, in the case of book-entry
transfer, an Agent's Message (as defined in the Offer to Purchase) in lieu of
the Letter of Transmittal, and (iii) any other documents required by the Letter
of Transmittal.
Merger Subsidiary may, without the consent of the Company, extend the Offer
beyond the scheduled Expiration Date (i) from time to time, if at that date any
of the conditions to Merger Subsidiary's obligation to accept for payment and to
pay for Shares are not satisfied or, to the extent permitted by the Merger
Agreement, waived, for a period of time until such conditions are satisfied or
waived; however, if any of the conditions to the Offer are not satisfied or
waived on any scheduled expiration date, Parent and Merger Subsidiary are
required to extend the Offer until such conditions are satisfied or waived,
unless such conditions could not reasonably be expected to be satisfied by
January 31, 2001, (ii) for any period required by any rule, regulation,
interpretation or position of the SEC or its staff applicable to the Offer or
any period required by applicable law or (iii) for one or more subsequent
offering periods of up to an additional 20 business days in the aggregate (a
"Subsequent Offering Period"). Rule 14d-11 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") permits Merger Subsidiary,
subject to certain conditions, to provide a Subsequent Offering Period following
the expiration of the Offer on the Expiration Date. A Subsequent Offering Period
is an additional period of time from 3 to 20 business days in length, beginning
after Merger Subsidiary purchases Shares tendered in the Offer, during which
time shareholders may tender, but not withdraw, their Shares and receive the
Offer Price. The term "Expiration Date" means 12:00 Midnight, New York City
time, on Friday, November 3, 2000, unless Merger Subsidiary shall have extended
the period of time for which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended by Merger Subsidiary, shall expire.
Any extension of the period during which the Offer is open will be followed, as
promptly as practicable, by public announcement thereof, such announcement to be
issued not later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date. During any such extension, all
Shares previously tendered and not withdrawn will remain subject to the Offer,
subject to the rights of a tendering shareholder to withdraw such shareholder's
Shares (except during a Subsequent Offering Period). Without limiting the manner
in which Merger Subsidiary may choose to make any public announcement, Merger
Subsidiary will have no obligation to publish, advertise or otherwise
communicate any such announcement other than by issuing a press release to the
Dow Jones News Service or otherwise as may be required by applicable law.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date (except during a Subsequent Offering Period) and, unless
theretofore accepted for payment pursuant to the Offer, also may be withdrawn at
any time after December 4, 2000. Except as otherwise provided in Section 4 of
the Offer to Purchase, tenders of Shares made pursuant to the Offer are
irrevocable. For a withdrawal of Shares tendered pursuant to the Offer to be
effective, a written, telegraphic 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 the Offer to Purchase. Any notice of withdrawal must specify
the name, address and taxpayer identification number of the person who tendered
the Shares to be withdrawn, the number of Shares to be withdrawn and the name of
the registered holder of such Shares, if different from that of the person who
tendered the Shares. If certificates for Shares to be withdrawn have been
delivered or otherwise identified to the Depositary, then, prior to the physical
release of such certificates, the serial numbers shown on such certificates must
be submitted to the Depositary and, unless such Shares have been tendered for
the account of an Eligible Institution (as defined in the Offer to Purchase),
the signature on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Shares have been tendered pursuant to the procedures for book-
entry transfer as set forth in the Offer to Purchase, any notice of withdrawal
must also specify the name and number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn Shares. All questions as to the form
and validity (including time of receipt) of notices of withdrawal will be
determined by Merger Subsidiary, in its sole discretion, and its determination
will be final and binding on all parties.
The receipt of cash in exchange for Shares pursuant to the Offer or the Merger
will be a taxable transaction for U.S. federal income tax purposes and may also
be a taxable transaction under applicable state, local or foreign tax laws. In
general, a shareholder who receives cash in exchange for Shares pursuant to the
Offer or the Merger will recognize gain or loss for U.S. federal income tax
purposes equal to the difference, if any, between the amount of cash received
and such shareholder's adjusted tax basis in the Shares exchanged therefor.
Provided that such Shares constitute capital assets in the hands of the
shareholder, such gain or loss will be capital gain or loss, and will be long-
term capital gain or loss if the holder has held the Shares for more than one
year at the time of sale. The maximum U.S. federal income tax rate applicable to
individual taxpayers on long-term capital gains is 20%, and the deductibility of
capital losses is subject to limitations. All shareholders should consult with
their own tax advisors as to the particular tax consequences of the Offer and
the Merger to them, including the applicability and effect of the alternative
minimum tax and any state, local or foreign income and other tax laws and of
changes in such tax laws. For a more complete description of certain U.S.
federal income tax consequences of the Offer and the Merger, see Section 5 of
the Offer to Purchase.
The information required to be disclosed by paragraph (d)(1) of Rule 14d-6 of
the General Rules and Regulations under the Exchange Act is contained in the
Offer to Purchase and is incorporated herein by reference.
The Company has provided Merger Subsidiary with its list of shareholders and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase, the related Letter of Transmittal and other
related materials are being mailed to record holders of Shares and will be
furnished to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the shareholder
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.
The Offer to Purchase and the related Letter of Transmittal contain important
information that should be read carefully before any decision is made with
respect to the Offer.
Questions and requests for assistance and copies of the Offer to Purchase, the
Letter of Transmittal and all other tender offer materials may be directed to
the Information Agent or the Dealer Manager at their respective addresses and
telephone numbers set forth below and will be furnished promptly at Merger
Subsidiary's expense. Merger Subsidiary will not pay any fees or commissions to
any broker or dealer or any other person (other than the Dealer Manager and the
Information Agent) for soliciting tenders of Shares pursuant to the Offer.
2 of 3
The Information Agent for the Offer is:
Georgeson Shareholder Communications Inc.
17 State Street, 10th Floor
New York, New York 10004
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
The Dealer Manager for the Offer is:
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Call Collect: (212) 761-8322
October 6, 2000
3 of 3
Exhibit (B)(1)
September 21, 2000
International Flavors & Fragrances Inc.
521 W. 57th Street
New York, NY 10019
Attention: Douglas J. Wetmore
Vice President and Chief Financial Officer
$ 1,000,000,000 Credit Facility comprised by
$ 350,000,000 180-Day Bridge Facility
$650,000,000 364-Day Revolving Credit Facility
Commitment Letter
Ladies and Gentlemen:
Citibank, N.A. ("Citibank") is pleased to inform International Flavors &
Fragrances Inc. (the "Company" or "IFF") of Citibank's commitment to underwrite
up to $350,000,000 of a bilateral 180-Day bridge facility to a capital markets
takeout (the "Bridge Facility") and up to $650,000,0000 of a 364-Day revolving
credit facility (the "364-Day Facility" and together with the Bridge Facility,
the "Facilities") and to act as Administrative Agent for the 364-Day Facility,
subject to the terms and conditions of this letter and the attached Annex I
(collectively, and together with the Fee Letter referred to below, this
"Commitment Letter") for the purpose of IFF's acquisition of Bush Boake Allen
Inc. ("BOA") and for general corporate purposes. In addition, Salomon Smith
Barney Inc. ("SSB" and together with Citibank, "Citi/SSB") is pleased to inform
the Company of its commitment to act as Arranger for the 364-Day Facility.
Section 1. Conditions Precedent. Citi/SSB's commitment hereunder is subject to:
--------------------
(i) the preparation, execution and delivery of mutually acceptable loan
documentation (the "Operative Documents"); (ii) the absence of (A) any material
adverse change in the business, condition (financial or otherwise), operations,
performance, or properties of the Company or the Company and its subsidiaries,
taken as a whole since December 31, 1999, other than as publicly disclosed or
disclosed to Citi/SSB prior to the date hereof and (B) any change in loan
syndication, financial or capital market conditions generally that, in the
reasonable judgment of SSB, would materially impair syndication of the Facility;
(iii) the accuracy and completeness of all representations that the Company
makes to Citi/SSB and all information that the Company furnishes to Citi/SSB and
the Company's compliance with the terms of this Commitment Letter; (iv) the
payment in full of all fees, expenses and other amounts payable under this
Commitment Letter, in each
case in all material respects; and (v) either (a) the acceptance for payment in
the tender offer (pursuant to a signed merger agreement) of BOA shares
representing at least 66 2/3% of the outstanding shares of BOA or (b)
consummation of the merger between the Company (or one of its subsidiaries) and
BOA.
Section 2. Commitment Termination. Citi/SSB's commitment hereunder will
----------------------
terminate on the earlier of (a) the date the Operative Documents become
effective, and (b) December 29, 2000. Before such date, Citi/SSB may terminate
its commitment hereunder if any event occurs or information becomes available
that, in its reasonable judgment, would result in the failure to satisfy any
condition set forth in Section 1.
Section 3. Syndication. Citi/SSB reserves the right, before or after the
-----------
execution of the Operative Documents for the 364-Day Facility, to syndicate all
or a portion of its commitment to one or more other financial institutions
reasonably acceptable to the Company that will become parties to the Operative
Documents pursuant to a syndication to be managed by SSB (the financial
institutions becoming parties to such Operative Documents being collectively
referred to herein as the "Lenders"). SSB will manage all aspects of the
syndication in consultation with the Company, including the timing of all offers
to potential Lenders, the determination of the amounts offered to potential
Lenders, the acceptance of commitments of the Lenders and the compensation to be
provided to the Lenders.
The Company shall take all action as SSB may reasonably request to assist SSB in
forming a syndicate acceptable to SSB and the Company. The Company's assistance
in forming such a syndicate shall include but not be limited to (i) making
senior management and representatives of the Company available to participate in
information meetings with potential Lenders at such times and places as SSB may
reasonably request; (ii) using the Company's reasonable best efforts to ensure
that the syndication efforts benefit from the Company's lending relationships;
and (iii) providing SSB with all information reasonably deemed necessary by it
to successfully complete the syndication.
To ensure an effective syndication of the 364-Day Facility, the Company agrees
that until the termination of the syndication (as determined by SSB), the
Company will not, and will not permit any of its affiliates to, syndicate or
issue, attempt to syndicate or issue, announce or authorize the announcement of
the syndication or issuance of, or engage in discussions concerning the
syndication or issuance of, any debt facility or debt security (including any
renewals thereof) in the commercial bank market, without the prior written
consent of SSB; provided, however, that the foregoing shall not apply to the
-------- -------
Bridge Facility nor limit the Company's ability to issue commercial paper, other
short-term debt programs currently in place, maintain its existing 364-day
revolver, equity or public debt securities or debt securities issued for resale
pursuant to Rule 144A.
Citibank will act as the sole Administrative Agent for the 364-Day Facility and
SSB will act as sole Arranger. No additional agents, co-agents or arrangers will
be appointed, or other titles conferred, without the consent of SSB and
Citibank.
2
SSB reserves the right at any time, after consultation with the Company, to
change any or all of the terms or the pricing (but not the aggregate amount) of
the Facilities if SSB determines that such changes are necessary in order to
ensure a successful syndication of the 364-Day Facility (as determined by SSB).
Section 4. Fees. In addition to the fees described in Annex I,the Company shall
----
also pay the non-refundable fees set forth in that certain letter agreement
dated the date hereof (the "Fee Letter") between the Company and Citi/SSB. The
terms of the Fee Letter are an integral part of Citi/SSB's commitment hereunder
and constitute part of this Commitment Letter for all purposes hereof.
Section 5. Indemnification. The Company shall indemnify and hold harmless
---------------
Citi/SSB, each Lender and each of their respective affiliates and each of their
respective officers, directors, employees, agents, advisors and representatives
(each, an "Indemnified Party") from and against any and all claims, damages,
losses, liabilities and expenses (including, without limitation, fees and
disbursements of counsel), joint or several, that may be incurred by or asserted
or awarded against any Indemnified Party (including, without limitation, in
connection with any investigation, litigation or proceeding or the preparation
of a defense in connection therewith), in each case arising out of or in
connection with or by reason of this Commitment Letter or the Operative
Documents or the transactions contemplated hereby or thereby or any actual or
proposed use of the proceeds of either Facility, except to the extent such
claim, damage, loss, liability or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct. In the case of an
investigation, litigation or other proceeding to which the indemnity in this
paragraph applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by the Company, any of its
directors, security holders or creditors, an Indemnified Party or any other
person or an Indemnified Party is otherwise a party thereto and whether or not
the transactions contemplated hereby are consummated. In connection with any
such investigation, litigation or proceeding, all Indemnified Parties shall
retain only one counsel at the expense of the Company unless there exists or is
likely to exist a conflict of interest that would make it inappropriate for one
counsel to represent all Indemnified Parties in which case each Indemnified
Party with such a conflict of interest may retain its own counsel at the expense
of the Company.
No Indemnified Party shall have any liability (whether in contract, tort or
otherwise) to the Company or any of its security holders or creditors for or in
connection with the transactions contemplated hereby, except for direct damages
(as opposed to special, indirect, consequential or punitive damages (including,
without limitation, any loss of profits, business or anticipated savings))
determined in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct.
3
Section 6. Costs and Expenses. The Company shall pay, or reimburse Citi/SSB on
------------------
demand for, all reasonable out-of-pocket costs and expenses incurred by Citi/SSB
(whether incurred before or after the date hereof) in connection with the
Facility and the preparation, negotiation, execution and delivery of this
Commitment Letter, including, without limitation, the reasonable fees and
expenses of counsel, regardless of whether any of the transactions contemplated
hereby are consummated. The Company shall also pay all costs and expenses of
Citi/SSB (including, without limitation, the reasonable fees and disbursements
of counsel) incurred in connection with the enforcement of any of its rights and
remedies hereunder.
Section 7. Confidentiality. By accepting delivery of this Commitment Letter, the
---------------
Company agrees that this Commitment Letter is for the Company's confidential use
only and that neither its existence nor the terms hereof will be disclosed by
the Company to any person other than (i) the Company's officers, directors,
employees, accountants, attorneys and other advisors, and then only on a
confidential and "need to know" basis in connection with the transactions
contemplated hereby and (ii) BOA or its officers, directors, employees,
accountants, attorneys, advisors and stockholders; provided, however, that the
Company may make such other public disclosures of the terms and conditions
hereof as the Company is required by law, in the opinion of the Company's
counsel, to make.
Section 8. Representations and Warranties of the Company. The Company represents
---------------------------------------------
and warrants that (i) all information that has been or will hereafter be made
available to Citi/SSB, any Lender or any potential Lender by the Company or any
of its representatives in connection with the transactions contemplated hereby
is and will be complete and correct in all material respects and does not and
will not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained therein not
misleading in light of the circumstances under which such statements were or are
made provided that such representation with respect to BOA are to the Company's
knowledge after due inquiry and (ii) all financial projections, if any, that
have been or will be prepared by the Company and made available to Citi/SSB, any
Lender or any potential Lender have been or will be prepared in good faith based
upon assumptions believed by the Company at the time of preparation thereof to
be reasonable (it being understood that such projections are subject to
significant uncertainties and contingencies, many of which are beyond the
Company's control, and that no assurance can be given that the projections will
be realized). The Company agrees to supplement the information and projections
from time to time until the Operative Documents become effective so that the
representations and warranties contained in this paragraph remain correct.
In providing this Commitment Letter, Citi/SSB is relying on the accuracy of the
information furnished to it by or on behalf of the Company and its affiliates
without independent verification thereof.
4
Section 9. No Third Party Reliance, Etc. The agreements of Citi/SSB hereunder
----------------------------
and of any Lender that issues a commitment to provide financing under the
364-Day Facility are made solely for the benefit of the Company and may not be
relied upon by any other person (other than BOA) or enforced by any other
person. Please note that those matters that are not covered or made clear herein
are subject to mutual agreement of the parties. The Company may not assign or
delegate any of its rights or obligations hereunder without Citi/SSB's prior
written consent. This Commitment Letter may not be amended or modified except in
a written agreement signed by all parties hereto. This Commitment Letter is not
intended to create a fiduciary relationship among the parties hereto.
The Company should be aware that Citi/SSB and/or one or more of its affiliates
may be providing financing or other services to parties whose interests may
conflict with the Company's interests. Consistent with Citi/SSB's longstanding
policy to hold in confidence the affairs of its customers, neither Citi/SSB nor
any of its affiliates will furnish confidential information obtained from the
Company to any of Citi/SSB's other customers. Furthermore, neither Citi/SSB nor
any of its affiliates will make available to the Company confidential
information that Citi/SSB obtained or may obtain from any other customer.
Section 10. Governing Law, Etc. This Commitment Letter shall be governed by, and
------------------
construed in accordance with, the law of the State of New York. This Commitment
Letter sets forth the entire agreement between the parties with respect to the
matters addressed herein and supersedes all prior communications, written or
oral, with respect hereto. This Commitment Letter may be executed in any number
of counterparts, each of which, when so executed, shall be deemed to be an
original and all of which, taken together, shall constitute one and the same
Commitment Letter. Delivery of an executed counterpart of a signature page to
this Commitment Letter by telecopier shall be as effective as delivery of an
original executed counterpart of this Commitment Letter. Sections 3 through 8,
10 and 11 hereof shall survive the termination of Citi/SSB's commitment
hereunder.
Section 11. Waiver of Jury Trial. Each party hereto irrevocably waives all right
--------------------
to trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Commitment
Letter or the transactions contemplated hereby or the actions of the parties
hereto in the negotiation, performance or enforcement hereof.
Please indicate the Company's acceptance of the provisions hereof by signing the
enclosed copy of this Commitment Letter and returning it to Robert Wetrus,
Director, Salomon Smith Barney Inc., 390 Greenwich Street (fax: 212-723-8548) at
or before 5:00 p.m. (New York City time) on September 22, 2000, the time at
which Citi/SSB's commitment hereunder (if not so accepted prior thereto) will
terminate. Upon the Company's acceptance of this Commitment Letter, the prior
commitment and fee letters dated September 20, 2000 are automatically cancelled
and are of no further force and
5
effect. If the Company elects to deliver this Commitment Letter by telecopier,
please arrange for the executed original to follow by next-day courier.
Very truly yours,
SALOMON SMITH BARNEY INC.
By /s/ Robert D. Wetrus
--------------------------
Name: Robert D. Wetrus
Title: Director
CITIBANK, N.A.
By /s/ Robert D. Wetrus
--------------------------
Name: Robert D. Wetrus
Title: Vice President
ACCEPTED AND AGREED
on September 22, 2000:
International Flavors & Fragrances Inc.
By /s/ Douglas S. Wetmore
--------------------------
Name: Douglas S. Wetmore
Title: Senior Vice President; Chief Financial Officer
6
ANNEX I
Summary of Terms and Conditions
$ 1,000,000,000 Credit Facility comprised by
$ 350,000,000 180-Day Bridge Facility
$650,000,000 364-Day Revolving Credit Facility
Borrower:
International Flavors & Fragrances Inc. (the "Borrower").
Type of Facility and Amount:
A: $350,000,000 bilateral 180-Day Bridge Facility (the "Bridge Facility")
B: $650,000,000 syndicated 364-Day Revolving Credit Facility (the "364-Day
Facility").
Purpose:
Acquisition of the shares of Bush Boake Allen Inc. and general corporate
purposes.
Administrative Agent for the 364-Day Facility:
Citibank, N.A. (the "Agent").
Arranger for the 364-Day Facility:
Salomon Smith Barney Inc.
Lenders:
A: Citibank, N.A.
B: Citibank, N.A. ("Citibank"), and other financial institutions acceptable to
the Borrower and the Agent.
Closing Date:
Initial funding (the "Closing Date") to occur on or before December 29, 2000, or
such other date as may be agreed upon by the Borrower and Citibank (in the case
of the Bridge Facility) or by the Agent (in the case of the 364-Day Facility).
Commitment Termination Date:
A: 180 days from the Closing Date
B: 364 days from the Closing Date.
Upfront Participation to Market Fees:
A: Flat fees payable on the US dollar amount of the Bridge Facility on the
following corresponding days after the Closing Date:
Days Fees Payable
- ---- ------------
Up to 90 days None
91 day 2.0 basis points
121 day 3.0 basis points
151 day 4.0 basis points
B: Depending upon Borrower's senior debt rating, 7.5 to 20.0 basis points, based
on initial commitments, and paid on final allocations.
Facility Fee:
7.0 basis points per annum irrespective of usage. The Facility Fee will be
subject to a Pricing Grid, based on the Borrower's long-term senior unsecured
non-credit-enhanced debt ratings.
ANNEX I
Interest Rates and Interest Periods:
At the Borrower's option, any Advance that is made to it will be available at
the rates and for the Interest Periods stated below:
1) Base Rate: a fluctuating rate equal to Citibank's Base Rate plus the
Applicable Margin.
2) Eurodollar Rate: a periodic fixed rate equal to LIBOR plus the Applicable
Margin.
The Eurodollar Rate will be fixed for Interest Periods of 1, 2, 3 or 6 months.
Upon the occurrence and during the continuance of any Event of Default, each
Eurodollar Rate Advance will convert to a Base Rate Advance at the end of the
Interest Period then in effect for such Eurodollar Rate Advance.
Applicable Margin:
The Applicable Margin means:
1) For Base Rate Advances, zero basis points per annum; and
2) For Eurodollar Rate Advances, 43.0 basis points per annum, subject to a
Pricing Grid, based on the Borrower's long-term senior unsecured
non-credit-enhanced debt ratings.
Upon the occurrence and during the continuance of any monetary Event of Default,
the Applicable Margin will increase by 100 basis points per annum.
Utilization Fee:
12.5 basis points per annum. The Utilization Fee will be added to the Applicable
Margin for any date where outstanding Advances exceed 33% of commitments. The
Utilization Fee will be calculated on a 360-day basis and will be payable on the
same basis as interest. The Utilization Fee will be subject to a Pricing Grid,
based on the Borrower's long-term senior unsecured non-credit-enhanced debt
ratings.
Availability:
From the Closing Date and prior to the Commitment Termination Date, the Borrower
may, subject to the terms of the applicable Facility, borrow, repay and
reborrow.
Annual Agency Fee:
A: None
B: As agreed between the Agent and the Borrower.
Repayment:
The Borrower will repay each Advance no later than on the Commitment Termination
Date.
Loan Documentation:
The commitments will be subject to preparation, execution and delivery of
mutually acceptable loan documentation which will contain conditions precedent,
representations and warranties, covenants, events of default and other
provisions customary for facilities of this nature, including, but not limited
to, those noted
ANNEX I
below.
Conditions Precedent
Customary for facilities of this nature and substantially similar to the
existing $300,000,000 364-Day Credit Agreement dated June 1, 1999 and amended as
of May 30, 2000 (the "Credit Agreement").
Representations and Warranties:
Customary for facilities of this nature and substantially similar to the
existing Credit Agreement.
Financial Covenants:
1) Maximum Debt to EBITDA of 3.0:1.0.
2) Limitation on Subsidiary Debt with exceptions and baskets to be agreed
upon.
Covenants:
Customary for facilities of this nature and substantially similar to the
existing Credit Agreement.
Events of Default:
Customary for facilities of this nature and substantially similar to the
existing Credit Agreement.
Other:
Loan documentation will include:
1) Indemnification of the Agent and Lenders and their respective affiliates,
officers, directors, employees, agents and advisors for any liabilities and
expenses arising out of either Facility or the use or proposed use of
proceeds.
2) Normal agency language in 364-Day Facility.
3) Majority Lenders defined as those holding greater than 50% of outstanding
Advances (excluding Competitive Bid Advances) or, if none, commitments. The
consent of all the Lenders will be required to increase the size of the
364-Day Facility, to extend the maturity or to decrease interest rates or
fees.
Assignments and Participations:
Customary for facilities of this nature and substantially similar to the
existing Credit Agreement.
Yield Protection, Taxes, and Other Deductions:
1) The loan documents will be substantially similar to existing Credit
Agreement and will contain yield protection provisions, customary for
facilities of this nature, protecting the Lenders in the event of
unavailability of funding, funding losses, and reserve and capital adequacy
requirements.
2) All payments to be free and clear of any present or future taxes,
withholdings or other deductions whatsoever (other than income taxes in the
jurisdiction of the Lender's applicable lending office). The Lenders will
use reasonable efforts to minimize to the extent
ANNEX I
possible any applicable taxes and the Borrower will indemnify the Lenders
and the Agent for such taxes paid by the Lenders or the Agent. Terms will
be substantially similar to the existing Credit Agreement.
Governing Law:
State of New York.
Counsel to the Agent:
TBD.
Expenses:
The Borrower will reimburse Citibank, the Arranger and the Agent, as the case
may be, for all reasonable out-of-pocket expenses (including fees and expenses
of counsel to the Agent) incurred by them in the negotiation, syndication and
execution of the Facilities. Such expenses will be reimbursed by the Borrower
upon presentation of a statement of account, regardless of whether the
transaction contemplated is actually completed or the loan documents are signed.
Exhibit (D)(1)
AGREEMENT AND PLAN OF MERGER
dated as of
September 25, 2000
among
BUSH BOAKE ALLEN INC.,
INTERNATIONAL FLAVORS & FRAGRANCES INC.
and
B ACQUISITION CORP.
Table of Contents
-----------------
Page #
------
ARTICLE I DEFINITIONS ................................................. 2
SECTION 1.01. Certain Defined Terms ................................ 2
SECTION 1.02. Cross-References ..................................... 5
ARTICLE II THE OFFER ................................................... 7
SECTION 2.01. The Offer ............................................. 7
SECTION 2.02. Company Actions ....................................... 8
SECTION 2.03. Board of Directors Representation ..................... 9
ARTICLE III THE MERGER ................................................. 11
SECTION 3.01. The Merger ........................................... 11
SECTION 3.02. Conversion of Shares ................................. 11
SECTION 3.03. Surrender and Payment ................................ 12
SECTION 3.04. Stock Options ........................................ 14
SECTION 3.05. Withholding Rights ................................... 14
SECTION 3.06. Lost Certificates .................................... 14
SECTION 3.07. Articles of Incorporation ............................ 15
SECTION 3.08. Bylaws ............................................... 15
SECTION 3.09. Directors and Officers ............................... 15
SECTION 3.10. Closing .............................................. 15
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY .............. 15
SECTION 4.01. Corporate Existence and Power ........................ 15
SECTION 4.02. Corporate Authorization .............................. 16
SECTION 4.03. Governmental Authorization ........................... 16
SECTION 4.04. Non-Contravention .................................... 17
SECTION 4.05. Capitalization ....................................... 17
SECTION 4.06. Subsidiaries ......................................... 18
SECTION 4.07. SEC Reports .......................................... 19
SECTION 4.08. Financial Statements ................................. 19
SECTION 4.09. Proxy Statement; Schedule 14D-9 ...................... 20
SECTION 4.10. Absence of Certain Changes or Events ................. 21
SECTION 4.11. Litigation ........................................... 22
SECTION 4.12. Employee Benefit Plans ............................... 22
SECTION 4.13. Labor Relations ...................................... 25
SECTION 4.14. Compliance with Laws; Permits ........................ 25
SECTION 4.15. Taxes ................................................ 26
SECTION 4.16. Environmental Matters ................................ 28
SECTION 4.17. Real Property ........................................ 28
SECTION 4.18. Intellectual Property ................................ 30
i
Page #
------
SECTION 4.19. Finders and Investment Bankers ....................... 32
SECTION 4.20. Opinion of Financial Advisor ......................... 32
SECTION 4.21. State Takeover Statutes; Required Vote ............... 32
SECTION 4.22. Affiliate Transactions ............................... 32
SECTION 4.23. Contracts ............................................ 32
SECTION 4.24. No Other Representations ............................. 33
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT .................... 33
SECTION 5.01. Corporate Existence and Power ........................ 33
SECTION 5.02. Corporate Authorization .............................. 34
SECTION 5.03. Governmental Authorization ........................... 34
SECTION 5.04. Non-Contravention .................................... 34
SECTION 5.05. Disclosure Documents ................................. 35
SECTION 5.06. Financing ............................................ 35
SECTION 5.07. Brokers .............................................. 35
SECTION 5.08. Parent Not an Interested Shareholder ................. 36
SECTION 5.09. Litigation ........................................... 36
SECTION 5.10. No Other Representations ............................. 36
ARTICLE VI COVENANTS ................................................... 36
SECTION 6.01. Conduct of the Company ............................... 36
SECTION 6.02. Access to Information ................................ 39
SECTION 6.03. No Solicitation ...................................... 40
SECTION 6.04. Notices of Certain Events ............................ 42
SECTION 6.05. Merger Subsidiary .................................... 42
SECTION 6.06. Indemnification and Insurance ........................ 43
SECTION 6.07. Employee Benefits .................................... 45
SECTION 6.08. Meeting of the Company's Shareholders ................ 46
SECTION 6.09. Proxy Statement ...................................... 46
SECTION 6.10. Reasonable Best Efforts .............................. 47
SECTION 6.11. Public Announcements ................................. 47
SECTION 6.12. Further Assurances ................................... 47
SECTION 6.13. Filings, Other Action ................................ 48
SECTION 6.14. Confidentiality ...................................... 49
SECTION 6.15. State Takeover Laws .................................. 49
ARTICLE VII CONDITIONS TO THE MERGER .................................... 49
SECTION 7.01. Conditions to the Obligations of Each Party........... 49
ii
Page #
------
ARTICLE VIII TERMINATION ................................................. 50
SECTION 8.01. Termination .......................................... 50
SECTION 8.02. Effect of Termination ................................ 52
ARTICLE IX MISCELLANEOUS ............................................... 52
SECTION 9.01. Notices .............................................. 52
SECTION 9.02. Survival of Representations and Warranties and
Agreements ........................................... 53
SECTION 9.03. Amendments; No Waivers ............................... 53
SECTION 9.04. Fees and Expenses .................................... 54
SECTION 9.05. Successors and Assigns ............................... 55
SECTION 9.06. Governing Law ........................................ 55
SECTION 9.07. Jurisdiction ......................................... 55
SECTION 9.08. Counterparts; Effectiveness .......................... 55
SECTION 9.09. Entire Agreement; Third Party Beneficiaries .......... 56
SECTION 9.10. Headings ............................................. 56
SECTION 9.11. Severability ......................................... 56
SECTION 9.12. WAIVER OF JURY TRIAL ................................. 56
Exhibit A: Voting and Tender Agreement
iii
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of September 25, 2000 (the
"Agreement"), among BUSH BOAKE ALLEN INC., a Virginia corporation (the
---------
"Company"), INTERNATIONAL FLAVORS & FRAGRANCES INC., a New York corporation
-------
("Parent"), and B ACQUISITION CORP., a Virginia corporation and a wholly owned
------
subsidiary of Parent ("Merger Subsidiary").
-----------------
The respective Boards of Directors of Parent, Merger Subsidiary and the
Company have each approved the acquisition of the Company by Parent on the terms
and subject to the conditions set forth in this Agreement.
In furtherance of such acquisition, Parent proposes to cause Merger
Subsidiary to commence a tender offer to purchase all of the issued and
outstanding shares of common stock, par value $1.00 per share, of the Company
(the "Common Stock" or the "Shares"), at a price of $48.50 per share net to the
------------ ------
seller in cash, without interest, upon the terms and subject to the conditions
set forth in this Agreement (such tender offer, as it may be amended and
supplemented from time to time as permitted under this Agreement, the "Offer").
-----
The respective Boards of Directors of Parent, Merger Subsidiary and the
Company, and Parent, as sole shareholder of Merger Subsidiary, have each
approved, upon terms and subject to the conditions set forth in this Agreement,
the merger of Merger Subsidiary, with and into the Company (the "Merger"),
------
whereby each issued and outstanding Share not owned directly or indirectly by
Parent or the Company will be converted into the right to receive per share
consideration paid pursuant to the Offer.
The Board of Directors of the Company has unanimously (i) approved and
adopted this Agreement, (ii) found the Agreement fair to, and in the best
interest of, the Company and its shareholders and (iii) resolved to recommend
that the shareholders approve the Merger.
The Board of Directors of Parent has approved and adopted this Agreement
and the Merger and, in its capacity as the sole shareholder of Merger
Subsidiary, has approved this Agreement.
As a condition and further inducement to Parent and Merger Subsidiary to
enter into this Agreement and incurring the obligations set forth herein,
International Paper Company, a New York corporation (the "Principal
---------
Shareholder"), concurrently herewith is entering into a Voting and Tender
- -----------
Agreement (the "Support Agreement"), dated as of the date hereof, with Parent,
-----------------
Merger Subsidiary and the Company, in the form attached hereto as Exhibit A,
pursuant to which the Principal Shareholder has
2
agreed, among other things, to tender its Shares in the Offer and to vote such
Shares in favor of the Merger upon the terms and subject to the conditions set
forth therein.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. Definitions shall apply equally to
---------------------
both the singular and plural forms of the terms defined. Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. All references herein to Articles, Sections and Exhibits shall be
deemed to be references to Articles and Sections of, and Exhibits to, this
Agreement unless the context shall otherwise require. All Exhibits attached
hereto shall be deemed incorporated herein as if set forth in full herein and,
unless otherwise defined therein, all terms used in any Exhibit shall have the
meaning ascribed to such term in this Agreement. The words "include," "includes"
and "including" shall be deemed to be followed by the phrase "without
limitation." The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. Unless otherwise expressly
provided herein, any statute referred to herein means such statute as from time
to time amended, modified or supplemented. For the purposes of this Agreement,
the following terms have the following meanings:
"Affiliate" means, when used with respect to any Person, any other Person
---------
directly or indirectly through one or more intermediaries controlling,
controlled by, or under common control with such Person. As used in the
definition of "Affiliate," the term "control" means possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"business day" shall have the meaning given such term in Rule 14d-1(g)(3)
------------
of the Exchange Act.
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Company Disclosure Letter" means the disclosure letter from the Company to
-------------------------
Parent, dated the date hereof.
3
"Environment" means navigable waters, waters of the contiguous zone, ocean
-----------
waters, natural resources, surface waters, ground water, drinking water supply,
land surface, subsurface strata, ambient air, both inside and outside of
buildings and structures, man-made buildings and structures, and plant and
animal life on earth.
"Environmental Claims" means any written notice of lawsuit, claim,
--------------------
investigation or other notification by any Person, pursuant to Environmental
Laws or principles of common law relating to pollution, protection of the
Environment or health and safety, that any of the current or past operations of
the Company or any of its Subsidiaries, or any by-product thereof or Hazardous
Substance used thereat, or any of the property currently or formerly owned,
leased or operated by the Company or any of its Subsidiaries, or the operations
or property of any predecessor or affiliates of the Company or any of its
Subsidiaries is subject to or may be implicated in any proceeding, action,
investigation, claim, lawsuit or order, by any Governmental Entity or any other
person.
"Environmental Laws" means all Laws and orders relating to pollution,
------------------
protection of the Environment, or the emission, discharge, Release or threatened
Release of Hazardous Substances into the Environment or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Substances, including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C.ss.9601 et seq., the Resource Conservation and Recovery Act, 42
U.S.C.ss.6901 et seq., the Toxic Substances Control Act, 15 U.S.C.ss.2601 et
seq., the Federal Water Pollution Control Act, 33 U.S.C.ss.1251 et seq., the
Clean Air Act, 42 U.S.C.ss.7401 et seq., the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C.ss.121 et seq., the Safe Drinking Water Act, 42
U.S.C.ss. 300f et seq., the Oil Pollution Act of 1990 and analogous material
state, local and foreign laws and orders.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
------------
the rules and regulations promulgated thereunder.
"facilities" means any real property or leaseholds, or other interests
----------
currently owned or operated by the Company or any of its Subsidiaries and any
buildings, plants, structures, or equipment (including motor vehicles) currently
owned or operated by the Company or any of its Subsidiaries.
"Governmental Entity" means any foreign, supranational, federal, state,
-------------------
municipal or other court, administrative agency, commission or other
governmental or regulatory body or authority or instrumentality or political
subdivision, or any official thereof.
4
"Hazardous Substance" means any toxic waste, pollutant, contaminant,
-------------------
hazardous substance, toxic substance, hazardous waste, special waste, industrial
substance or waste, petroleum or petroleum-derived substance or waste,
radioactive substance or waste, or any other substance regulated under or
defined by any Environmental Law.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
-------
"Knowledge" means the actual knowledge of the chief executive officer,
---------
chief financial officer, chief accounting officer, treasurer, officer primarily
responsible for human resources and safety, controller and general counsel of
the Company.
"Lien" means, with respect to any asset or right, any mortgage, deed of
----
trust, lien (statutory or other), pledge, hypothecation, assignment, claim,
charge, security interest, conditional sale agreement, title, exception, or
encumbrance, option, right of first offer or refusal, easement, servitude,
voting or transfer restriction, or any other right of another to or adverse
claim of any kind in respect of such asset or right, including, without
limitation, under any shareholder agreement.
"NYSE" means the New York Stock Exchange Inc.
----
"Parent Disclosure Letter" means the disclosure letter from Parent to the
------------------------
Company, dated the date hereof.
"Person or person" means any natural person, firm, corporation, business
------ ------
trust, joint venture, joint stock company, incorporated or unincorporated
association, company, partnership, limited liability company or other entity, or
any Governmental Entity, or any agency or political subdivision thereof, and
shall include any successor (by merger or otherwise) of such entity.
"Proceeding" means any action, arbitration, hearing, litigation, suit
----------
(whether civil, criminal, administrative, investigative, or informal) or similar
proceeding commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Entity or arbitrator.
"Release" means any release, spill, emission, discharge, placing, leaking,
-------
pumping, injection, deposit, disposal, dispersal, leaching or migration into the
Environment or into or out of any property, including the movement of Hazardous
Substances through or in the Environment.
"Remedial Action" means all actions, whether voluntary or involuntary,
---------------
reasonably necessary to comply with, or discharge any obligation under,
5
Environmental Laws or required by a Governmental Entity to clean up, remove,
treat, cover or in any other way adjust Hazardous Substances in the indoor or
outdoor Environment; or perform remedial studies, investigations, restoration
and post-remedial studies, investigations and monitoring on, about or in any
real property.
"SEC" means the Securities and Exchange Commission.
---
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations promulgated thereunder.
"Subsidiary" means, as of the relevant date of determination, with respect
----------
to any Person, each entity as to which such Person directly or indirectly owns
beneficially or of record or has the power to vote or control a majority of the
voting securities of such entity or of any class of equity interests of such
entity the holders of which are ordinarily entitled to vote for the election of
the members of the board of directors or other persons performing similar
functions.
"Superior Proposal" means a bona fide Acquisition Proposal on terms which
-----------------
the Board of Directors of the Company determines in its good faith judgment
(after consultation with a nationally-recognized investment banking firm acting
as the Company's advisor) to be more favorable from a financial point of view to
the Company and its shareholders than the transactions contemplated by this
Agreement, which the Board of Directors determines in good faith is reasonably
capable of being financed, and the conditions to the consummation of which are,
in the good faith determination of the Board of Directors, reasonably capable of
being satisfied.
"VSCA" means the Virginia Stock Corporation Act.
----
SECTION 1.02. Cross-References. The following terms shall have the
----------------
meanings ascribed thereto in the Section set forth opposite such term:
Acquisition Proposal.................................................... 6.03(a)
Agreement.............................................................. Recitals
Antitrust Laws.......................................................... 6.13(b)
Articles of Merger...................................................... 3.01(b)
Certificates............................................................ 3.03(b)
Closing.................................................................... 3.10
CO...................................................................... 4.17(a)
Common Stock........................................................... Recitals
Company................................................................ Recitals
Company Disclosure Documents............................................ 4.09(a)
Company Material Adverse Effect............................................ 4.01
Company Option Plans....................................................... 3.04
6
Company Proxy Statement................................................. 4.09(a)
Company SEC Reports........................................................ 4.07
Company Subsidiary Securities........................................... 4.06(b)
Confidentiality Agreement.................................................. 6.02
Continuing Directors.................................................... 2.03(b)
CSFB....................................................................... 4.19
D&O Insurance........................................................... 6.06(c)
Defined Benefit Plan.................................................... 6.07(b)
Disbursing Agent........................................................ 3.03(a)
Effective Time.......................................................... 3.01(b)
Employee Benefit Arrangements........................................... 6.01(g)
Employee Plan........................................................... 4.12(a)
ERISA................................................................... 4.12(c)
Exchange Fund........................................................... 3.03(a)
Expenses................................................................ 9.04(b)
fully-diluted basis..................................................... Annex A
GAAP....................................................................... 4.08
Indemnification Liabilities............................................. 6.06(b)
Indemnified Parties..................................................... 6.06(b)
Intellectual Property...................................................... 4.18
Leased Real Property.................................................... 4.17(b)
Merger................................................................. Recitals
Merger Consideration.................................................... 3.02(b)
Merger Subsidiary...................................................... Recitals
Minimum Condition....................................................... Annex A
Offer.................................................................. Recitals
Offer Documents......................................................... 2.01(b)
Option..................................................................... 3.04
Options.................................................................... 3.04
Option Consideration....................................................... 3.04
Owned Real Property..................................................... 4.17(a)
Parent................................................................. Recitals
Parent Material Adverse Effect............................................. 5.01
PBGC.................................................................... 4.12(f)
Permitted Owned Real Property Exceptions................................ 4.17(a)
Preferred Stock........................................................ Recitals
Principal Shareholder.................................................. Recitals
Real Property........................................................... 4.17(b)
Real Property Leases.................................................... 4.17(b)
Schedule TO............................................................. 2.01(b)
Schedule 14D-9.......................................................... 2.02(b)
Shares................................................................. Recitals
Shareholders Meeting....................................................... 6.08
7
Subsequent Period....................................................... 2.01(c)
Support Agreement...................................................... Recitals
Surviving Corporation................................................... 3.01(a)
Tax Authority........................................................... 4.15(b)
Tax Returns............................................................. 4.15(b)
Taxes................................................................... 4.15(b)
Termination Date........................................................ 8.01(b)
Termination Fee......................................................... 9.04(b)
Title IV Plans.......................................................... 4.12(f)
ARTICLE II
THE OFFER
Section 2.01. The Offer. (a) Subject to the provisions of this Agreement,
---------
as promptly as practicable following the date hereof, and in any event not later
than 10 business days after the date hereof, Merger Subsidiary shall, and Parent
shall cause Merger Subsidiary to, commence, within the meaning of Rule l4d-2
under the Exchange Act, the Offer. The obligation of Merger Subsidiary to, and
of Parent to cause Merger Subsidiary to, commence and consummate the Offer and
accept for payment and pay for any Shares tendered shall be subject only to the
satisfaction of the conditions set forth in Annex A and to the terms and
conditions of this Agreement; provided that except for the Minimum Condition (as
defined in Annex A), which may not be waived by Parent and Merger Subsidiary
without the Company's consent, which consent may be withheld in the Company's
sole judgment, (provided the Company shall consent to a waiver of the Minimum
Condition to enable Merger Subsidiary to purchase all Shares owned by the
Principal Shareholder and tendered into the Offer) Parent and Merger Subsidiary
may waive any other conditions to the Offer and may make changes in the terms
and conditions of the Offer except that, without the prior written consent of
the Company, no decrease in the per share price or the number of Shares sought
in the Offer may be made and no change may be made (i) to the form of
consideration to be paid, (ii) which imposes conditions to the Offer in addition
to those set forth in Annex A or (iii) that is otherwise adverse to the holders
of Shares.
(b) On the date of commencement of the Offer, Parent and Merger Subsidiary
shall file with the SEC a Tender Offer Statement on Schedule TO (as amended and
supplemented from time to time, the "Schedule TO"), which shall comply with the
-----------
provisions of applicable federal securities laws, and shall contain or
incorporate by reference the offer to purchase relating to the Offer and forms
of the related letter of transmittal and other appropriate documents (which
documents, as amended or supplemented from time to time, are referred to herein
collectively as the "Offer Documents"). The Company will promptly supply to
---------------
Parent and Merger
8
Subsidiary in writing, for inclusion in the Offer Documents, all information
concerning the Company required under the Exchange Act and the rules and
regulations thereunder or otherwise appropriate to be included in the Offer
Documents. The Company and its counsel shall be given a reasonable opportunity
to review and comment on the Offer Documents before their being filed with the
SEC. Parent and Merger Subsidiary agree to provide the Company and its counsel
any comments or communications, written or oral, which Parent, Merger Subsidiary
or their counsel may receive from the staff of the SEC with respect to the Offer
Documents promptly upon receipt thereof. Each of Parent and Merger Subsidiary,
on the one hand, and the Company, on the other hand, shall promptly correct any
information provided by either of them for use in the Offer Documents if and to
the extent that it shall become false or misleading, and Parent and Merger
Subsidiary shall take all steps necessary to cause the Offer Documents as so
corrected to be filed with the SEC and disseminated to the shareholders of the
Company as and to the extent required by applicable laws.
(c) The initial scheduled expiration date of the Offer shall be 20 business
days after the date of its commencement. Notwithstanding the foregoing, Parent
and Merger Subsidiary shall have the right, without the consent of the Company,
to extend the Offer, (i) from time to time if, at the scheduled or extended
expiration date of the Offer, any of the conditions to the Offer shall not have
been satisfied or waived, for a period of time until such conditions are
satisfied or waived; provided that notwithstanding anything to the contrary, if
any of the conditions to the Offer is not satisfied or waived on any scheduled
expiration date of the Offer, Parent and Merger Subsidiary shall be required to
extend the Offer until such condition or conditions are satisfied or waived
unless such condition or conditions could not reasonably be expected to be
satisfied by the Termination Date, (ii) for any period required by any rule,
regulation, interpretation or position of the SEC or the staff thereof
applicable to the Offer or any period required by applicable law and (iii) for
one or more subsequent offering periods of up to an additional 20 business days
in the aggregate (a "Subsequent Period") pursuant to Rule 14d-11 of the Exchange
-----------------
Act.
(d) Subject to the terms and conditions of the Offer and this Agreement,
Merger Subsidiary shall, and Parent shall cause Merger Subsidiary to, accept for
payment for Shares validly tendered and not withdrawn pursuant to the Offer as
soon as it is legally permitted to do so under applicable law and to promptly
pay for such Shares; provided that Merger Subsidiary shall, and Parent shall
cause Merger Subsidiary to, accept immediately and pay promptly for all Shares
as they are tendered during a Subsequent Period. Parent shall provide or cause
to be provided to Merger Subsidiary on a timely basis the funds necessary to
purchase any Shares that Merger Subsidiary becomes obligated to purchase
pursuant to the Offer.
SECTION 2.02 Company Actions. (a) The Company hereby approves of and
---------------
consents to the Offer and represents that the Board of Directors of the Company,
at a meeting duly called and held, has (i) determined as of the date hereof that
this Agreement and the Offer and the Merger are fair to and in the best
interests of the Company's shareholders, (ii) approved and adopted this
Agreement, the Support
9
Agreement and the transactions contemplated hereby and thereby (including the
Offer and Merger), (iii) has taken all other actions necessary to render Article
14 (Affiliated Transactions) and Article 14.1 (Control Share Acquisitions) of
the VSCA not applicable to the transactions contemplated by this Agreement and
the Support Agreement, including the Merger and the Offer and any exercise of
the option set forth in the Support Agreement, and (iv) recommended acceptance
of the Offer and approval and adoption of this Agreement and the Merger by the
Company's shareholders; provided, however, that such recommendation and approval
-------- -------
may be withdrawn, modified or amended to the extent that the Board of Directors
of the Company determines in good faith, after having received the advice of
outside counsel, that it is required to do so in order to comply with its
fiduciary obligations. Subject to the foregoing provisions of this Section
2.02(a), the Company hereby consents to the inclusion in the Offer Documents of
the recommendation of the Board of Directors of the Company described in the
first sentence of this Section 2.02(a) and represents that it has obtained all
necessary consents to permit the inclusion in its entirety of the fairness
opinion of Credit Suisse First Boston Corporation ("CSFB") in the Schedule 14D-9
----
and, if necessary, the Company Proxy Statement (as defined in Section 4.09). The
Company has been advised that each of its directors and executive officers
intends to tender pursuant to the Offer all Shares owned of record and
beneficially by such director and executive officer.
(b) The Company shall file or cause to be filed with the SEC on the date of
commencement of the Offer a Solicitation/Recommendation Statement on Schedule
14D-9 (as amended and supplemented from time to time, the "Schedule 14D-9") that
--------------
shall reflect the recommendation of the Company's Board of Directors referred to
above, and shall disseminate the Schedule 14D-9 to shareholders of the Company
as required by Rule 14d-9 promulgated under the Exchange Act. To the extent
practicable, the Company shall cooperate with Parent and Merger Subsidiary in
mailing or otherwise disseminating the Schedule 14D-9 with the appropriate Offer
Documents to the Company's shareholders. The Schedule 14D-9 shall comply in all
material respects with the provisions of applicable federal securities laws.
Parent and its counsel shall be given a reasonable opportunity to review and
comment on the Schedule 14D-9 before the filing thereof with the SEC. The
Company agrees to provide Parent and its counsel any comments or communications,
written or oral, which the Company or its counsel may receive from the staff of
the SEC with respect to the Schedule 14D-9 promptly upon receipt thereof. Each
of the Company, on the one hand, and Parent and Merger Subsidiary, on the other
hand, shall promptly correct any information provided by either of them for use
in the Schedule 14D-9, if and to the extent that it shall become false or
misleading, and the Company shall take all steps necessary to cause the Schedule
14D-9 as so corrected to be filed with the SEC and disseminated to the
shareholders of the Company as and to the extent required by applicable laws.
10
(c) In connection with the Offer, the Company shall promptly furnish
Parent, or cause Parent to be furnished, with, mailing labels, security position
listings and any available listing or computer file containing the names and
addresses of the record holders of the Shares as of a recent date, and of those
persons becoming record holders after such date, and shall furnish Parent with
such information and assistance as Parent or its agents may reasonably request
in communicating the Offer to the shareholders of the Company.
SECTION 2.03. Board of Directors Representation. (a) Effective upon the
---------------------------------
acceptance for payment of, and payment for, any Shares pursuant to the Offer,
Parent shall be entitled to designate such number of directors, rounded up to
the next whole number, to serve on the Board of Directors of the Company as will
give Merger Subsidiary, subject to compliance with Section 14(f) of the Exchange
Act, representation on the Board of Directors of the Company equal to at least
that number of directors which equals the product of (i) the total number of
directors on the Board of Directors (giving effect to the election of any
additional directors pursuant to this section) and (ii) a fraction, the
numerator of which shall be the number of Shares beneficially owned by Parent
and/or Merger Subsidiary (including Shares accepted for payment and for which
payment has been made) and the denominator of which shall be the number of
Shares then outstanding. The Company shall, upon request of Parent, take all
reasonable actions to cause Parent's designees to be elected or appointed to the
Company's Board of Directors, including without limitation, increasing the size
of the Board of Directors and/or securing the resignations of incumbent
directors. At such time, the Company shall, if requested by Parent, also take
all action reasonably necessary to cause persons designated by Parent to
constitute at least the same percentage (rounded up to the next whole number) as
is on the Company's Board of Directors of (i) each committee of the Company's
Board of Directors, (ii) each board of directors (or similar body) of each
Subsidiary of the Company and (iii) each committee (or similar body) of each
such board. At the request of Parent, the Company shall take, at its expense,
all action required pursuant to Section 14(f) and Rule 14(f)-1 of the Exchange
Act in order to fulfill its obligations under this Section 2.03 and shall
include in the originally filed Schedule 14D-9 and otherwise timely mail to its
shareholders all necessary information to comply therewith. Parent and Merger
Subsidiary will supply to the Company, and will be solely responsible for, all
information with respect to themselves and their officers, directors and
affiliates required by such Section and such Rule.
(b) Following the election or appointment of Parent's designees pursuant to
Section 2.03(a) and until the Effective Time, the parties shall use their
respective reasonable best efforts to ensure that the Company's Board of
Directors shall have at least two directors who are directors on the date of
this Agreement and who are not officers of the Company (the "Continuing
----------
Directors"); provided that in the event that the number of the Continuing
- --------- --------
Directors shall be reduced below two for any reason
11
whatsoever, any remaining Continuing Directors (or Continuing Director, if there
shall be only one remaining) shall be entitled to designate persons to fill such
vacancies who shall be deemed to be Continuing Directors for purposes of this
Agreement. The approval of a majority of the directors of the Company then in
office who were not designated by Parent shall be required to authorize (i) any
termination of this Agreement by the Company, (ii) any amendment of this
Agreement or the Support Agreement, (iii) any extension of time for performance
of any obligation of or action by Parent or Merger Subsidiary hereunder, (iv)
any enforcement of or any waiver of compliance with any of the agreements or
conditions contained herein for the benefit of the Company or (v) any amendment
to the Company's articles of incorporation or by-laws that adversely affects the
shareholders of the Company.
ARTICLE III
THE MERGER
SECTION 3.01. The Merger. (a) Upon the terms and subject to the conditions
----------
hereof, and in accordance with the applicable provisions of this Agreement and
the VSCA, Merger Subsidiary shall be merged with and into the Company as soon as
practicable following the satisfaction or waiver, if permissible, of the
conditions set forth in Article VII. Following the Merger, the Company shall
continue as the surviving corporation (the "Surviving Corporation") and shall
---------------------
continue its existence under the laws of the Commonwealth of Virginia, and the
separate corporate existence of Merger Subsidiary shall cease.
(b) As soon as practicable following the satisfaction or waiver of the
conditions set forth in Article VII, the Merger shall be consummated by filing
with the State Corporation Commission of the Commonwealth of Virginia, articles
of merger incorporating this Agreement (the "Articles of Merger"), in accordance
------------------
with the VSCA. The Merger shall become effective upon the issuance of a
certificate of merger by the State Corporation Commission of the Commonwealth of
Virginia or as provided in the Articles of Merger (the time the Merger becomes
effective being the "Effective Time").
--------------
(c) The Merger shall have the effects set forth in Section 13.1-721 of the
VSCA. As of the Effective Time, the Company shall be a direct or indirect wholly
owned subsidiary of Parent and, without limiting the generality of the
foregoing, and subject thereto, all property, rights, privileges, powers and
franchises of the Company and Merger Subsidiary shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and Merger
Subsidiary shall become the debts, liabilities and duties of the Surviving
Corporation.
12
SECTION 3.02. Conversion of Shares. At the Effective Time, by virtue of the
--------------------
Merger and without any action on the part of Parent, Merger Subsidiary, the
Company or the holders of any of the following securities:
(a) each Share held by any wholly owned Subsidiary of the Company and each
Share owned by Parent, Merger Subsidiary or any other Subsidiary of Parent shall
be canceled and retired, and no payment or consideration shall be delivered with
respect thereto;
(b) each issued and outstanding Share, other than Shares referred to in
paragraph (a) above, shall be converted into the right to receive from the
Surviving Corporation an amount in cash, without interest, equal to the price
per share of Common Stock paid pursuant to the Offer (the "Merger
------
Consideration"). When so converted at the Effective Time, all such Shares shall
- -------------
no longer be outstanding and shall automatically be canceled and retired, and
each holder of a certificate representing any such Shares shall cease to have
any rights with respect thereto, except the right to receive the Merger
Consideration therefor, without interest, upon the surrender of such
certificate; and
(c) each issued and outstanding share of capital stock of Merger Subsidiary
shall be converted into one validly issued, fully paid and nonassessable share
of common stock of the Surviving Corporation and shall constitute the only
outstanding shares of capital stock of the Surviving Corporation.
SECTION 3.03. Surrender and Payment. (a) Prior to the Effective Time,
---------------------
Parent shall appoint a bank or trust company organized under the laws of the
United States or any state thereof with capital, surplus and undivided profits
of at least $500,000,000 and reasonably acceptable to the Company to act as
disbursing agent (the "Disbursing Agent") for the payment of the Merger
----------------
Consideration upon surrender of certificates representing the Shares. Parent
will enter into a disbursing agent agreement with the Disbursing Agent, in form
and substance reasonably acceptable to the Company, and Parent shall at or prior
to the Effective Time deposit or cause to be deposited with the Disbursing Agent
cash in an aggregate amount sufficient to make all of the payments pursuant to
Section 3.02 to holders of Shares (such amounts being hereinafter referred to as
the "Exchange Fund").
-------------
(b) Promptly after the Effective Time, Parent and the Surviving Corporation
shall cause the Disbursing Agent to mail to each person who was a record holder
as of the Effective Time of an outstanding certificate or certificates which
immediately prior to the Effective Time represented Shares (the "Certificates")
------------
and whose Shares were converted into the right to receive Merger Consideration
pursuant to Section 3.02, a form of letter of transmittal, in form and substance
reasonably satisfactory to the Company (which shall specify that delivery shall
be effected, and risk
13
of loss and title to the Certificates shall pass, only upon proper delivery of
the Certificates to the Disbursing Agent), and instructions for use in effecting
the surrender of the Certificates in exchange for payment of the Merger
Consideration. Upon surrender to the Disbursing Agent of a Certificate, together
with such letter of transmittal duly executed and such other customary documents
as may be required, the holder of such Certificate shall be paid promptly in
exchange therefor cash in an amount equal to the product of the number of Shares
represented by such Certificate multiplied by the Merger Consideration, and such
Certificate shall forthwith be canceled. No interest will be paid or accrued on
the cash payable upon the surrender of the Certificates.
(c) If payment is to be made to a person other than the person in whose
name the Certificate surrendered is registered, it shall be a condition of
payment that the Certificate so surrendered be properly endorsed or otherwise be
in proper form for transfer and that the person requesting such payment pay any
transfer or other taxes required by reason of the payment to a person other than
the registered holder of the Certificate surrendered or establish to the
satisfaction of the Surviving Corporation that such tax has been paid or is not
applicable.
(d) Until surrendered in accordance with the provisions of this Section
3.03, each Certificate (other than Certificates representing Shares owned by
Parent, Merger Subsidiary or any other Subsidiary of Parent, or any wholly owned
Subsidiary of the Company) shall represent for all purposes only the right to
receive the Merger Consideration in cash multiplied by the number of Shares
evidenced by such Certificate, without any interest thereon.
(e) At and after the Effective Time, there shall be no registration of
transfers of Shares which were outstanding immediately prior to the Effective
Time on the stock transfer books of the Surviving Corporation. From and after
the Effective Time, all Shares issued and outstanding prior to the Effective
Time shall cease to be outstanding and shall automatically be cancelled and
cease to exist, and, the holders of Shares outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such Shares except
as otherwise provided in this Agreement or by applicable law. All cash paid upon
the surrender of Certificates in accordance with the terms of this Article III
shall be deemed to have been paid in full satisfaction of all rights pertaining
to the Shares previously represented by such Certificates. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for any
reason, such Certificates shall be canceled and exchanged for cash as provided
in this Article III. At the close of business on the day of the Effective Time,
the stock ledger of the Company shall be closed.
(f) At any time more than 12 months after the Effective Time, the
Disbursing Agent shall upon demand of Parent deliver to it any funds which had
been
14
made available to the Disbursing Agent and not disbursed in exchange for
Certificates (including, without limitation, all interest and other income
received by the Disbursing Agent in respect of all such funds). Thereafter,
holders of Certificates shall look only to Parent (subject to the terms of this
Agreement, abandoned property, escheat and other similar laws) as general
creditors thereof with respect to any Merger Consideration that may be payable,
without interest, upon due surrender of the Certificates held by them. None of
Parent, the Company, the Surviving Corporation nor the Disbursing Agent shall be
liable to any holder of a Certificate for any Merger Consideration delivered in
respect of such Certificate of Shares to a public official pursuant to any
abandoned property, escheat or other similar law. Subject to applicable law and
public policy, if any Certificates shall not have been surrendered prior to
three years after the Effective Time (or immediately prior to such earlier date
on which any Merger Consideration in respect of such Certificate would otherwise
escheat to or become the property of any Governmental Entity), any amounts
payable in respect of such Certificate shall, to the extent permitted by
applicable law and public policy, become the property of the Surviving
Corporation, free and clear of all claims or interest of any person previously
entitled thereto.
SECTION 3.04. Stock Options. Immediately following the acceptance for
-------------
payment and purchase of Shares by Merger Subsidiary pursuant to the Offer, each
outstanding option to purchase Company Common Stock (an "Option") granted under
the Company's 1994 Stock Option and Stock Award Plan and the Company's 1998
Directors' Stock Option Plan (collectively, the "Company Option Plans") shall
become fully exercisable and vested. On and after such time, until immediately
prior to the Effective Time, each holder of an outstanding Option may surrender
to the Company such Option, which shall then be cancelled and of no further
force and effect, in exchange for payment to be made at the time of surrender by
Parent or Merger Subsidiary to the holder of the Option in an amount equal to
the product of (x) the Merger Consideration over the per share exercise price of
the Option, and (y) the number of Shares subject to the Option (such payment to
be net of taxes required to be withheld with respect thereto by applicable law)
(the "Option Consideration"). Immediately prior to the Effective Time, (i) the
Company shall terminate the Company Option Plan and (ii) each Option which
remains outstanding at such time shall be cancelled in consideration of a
payment made at the Effective Time by Parent or Merger Subsidiary to the holder
of each then outstanding Option of the relevant Option Consideration with
respect to such Option. Parent, Merger Subsidiary and the Company shall
cooperate and take all steps necessary to give effect to the foregoing
provisions of this Section 3.04. On and after the date hereof, the Company shall
grant no additional Options under the Company Option Plans. The Company will use
its best efforts to obtain all necessary consents and take any further action
necessary to effect the foregoing so that as of the Effective Time no Options
will be exercisable for stock of the Surviving Corporation.
15
SECTION 3.05. Withholding Rights. Each of the Surviving Corporation and
------------------
Parent shall be entitled to deduct and withhold, or cause the Disbursing Agent
to deduct or withhold, from the consideration otherwise payable to any Person
pursuant to this Article such amounts as it is required to deduct and withhold
with respect to the making of such payment under any provision of federal, state
or local tax law. If the Surviving Corporation or Parent, as the case may be, so
withholds amounts, such amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Shares in respect of which
the Surviving Corporation or Parent, as the case may be, made such deduction and
withholding.
SECTION 3.06. Lost Certificates. If any Certificate shall have been lost,
-----------------
stolen or destroyed, upon the making of an affidavit of that fact by the
recordholder claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such Person of a bond, in
such reasonable amount as the Surviving Corporation may direct, as indemnity
against any claim that may be made against it with respect to such Certificate,
the Disbursing Agent will pay, in exchange for such affidavit claiming such
Certificate is lost, stolen or destroyed, the Merger Consideration to be paid in
respect of the Shares represented by such Certificate, as contemplated by this
Article.
SECTION 3.07. Articles of Incorporation. The parties shall take all steps
-------------------------
reasonably necessary so that the Articles of Incorporation of the Company shall
be amended in the form of the Articles of Incorporation of Merger Subsidiary, as
in effect immediately prior to the Effective Time, shall be amended to change
the name of Merger Subsidiary to "Bush Boake Allen Inc." and, as so amended,
shall be the Articles of Incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law.
SECTION 3.08. Bylaws. The bylaws of Merger Subsidiary, as in effect
------
immediately prior to the Effective Time, shall be the bylaws of the Surviving
Corporation until thereafter changed or amended as provided therein or in the
Articles of Incorporation and by applicable law.
SECTION 3.09. Directors and Officers. The directors and officers of
----------------------
Merger Subsidiary immediately prior to the Effective Time shall be the directors
and officers, respectively, of the Surviving Corporation as of the Effective
Time until their successors are duly elected or appointed and qualified in
accordance with the certificate of incorporation and bylaws of the Surviving
Corporation and applicable law.
SECTION 3.10. Closing. The closing of the transactions contemplated by this
-------
Agreement (the "Closing") shall take place at the offices of Skadden, Arps,
-------
Slate, Meagher & Flom LLP, 4 Times Square, New York, New York 10036-6522, at
10:00 a.m., local time, as soon as practicable following the satisfaction or
waiver of the
16
conditions set forth in Article VII hereof or at such other time and place as
Parent, Merger Subsidiary and the Company shall agree.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
Except as disclosed in the Company's most recent Form 10-K, all subsequent
Form 10-Qs and most recent proxy statement, in each case filed prior to the date
hereof, the Company represents and warrants to Parent and Merger Subsidiary
that:
SECTION 4.01. Corporate Existence and Power. The Company is a corporation
-----------------------------
duly incorporated, validly existing and in good standing under the laws of the
Commonwealth of Virginia, and has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business substantially
as now conducted. The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the character of
the property owned or leased by it or the nature of its activities makes such
qualification necessary, except for those jurisdictions where the failure to be
so qualified or in good standing would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. For
purposes of this Agreement, the term "Company Material Adverse Effect" means any
-------------------------------
change or effect that is materially adverse to the business, assets,
liabilities, results of operations or financial condition of the Company and its
Subsidiaries taken as a whole or adversely affects the ability of the Company to
consummate the transactions contemplated by this Agreement in any material
respect or materially impairs or delays the Company's ability to perform its
obligations hereunder; provided, however, that a Company Material Adverse Effect
-------- -------
shall not include (i) changes in or resulting from general economic or financial
or market conditions, including changes in the trading price of the Company's
Shares, (ii) changes in conditions or circumstances generally affecting the
flavor, fragrance and aroma chemical industries in which the Company and its
Subsidiaries operate, including any regulatory changes, or (iii) any effect
resulting from the Company's compliance with the terms of this Agreement.
SECTION 4.02. Corporate Authorization. The execution, delivery and
-----------------------
performance by the Company of this Agreement and the Support Agreement, and the
consummation by the Company of the transactions contemplated hereby and thereby
are within the Company's corporate power and authority and, except for any
required approval by the Company's shareholders in accordance with the VSCA in
connection with the consummation of the Merger, have been duly authorized by all
necessary
17
corporate action on the part of the Company. This Agreement and the Support
Agreement have been duly executed and delivered by the Company and, assuming the
due authorization, execution and delivery thereof by Parent and Merger
Subsidiary, constitute legal, valid and binding agreements of the Company
enforceable against it in accordance with their terms. The Company has
heretofore furnished or otherwise made available to Parent complete and correct
copies of the certificates of incorporation and the bylaws or the equivalent
organizational documents, in each case as amended or restated, of the Company
and each of its Subsidiaries.
SECTION 4.03. Governmental Authorization. Except as described in Section
--------------------------
4.03 of the Company Disclosure Letter, the execution, delivery and performance
by the Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby do not require any consent, approval,
compliance, exemption, authorization or permit of or other action by, or filing
with, any Governmental Entity, other than (i) the filing of articles of merger
in accordance with the VSCA, (ii) compliance with the applicable requirements of
the HSR Act or any foreign antitrust laws, the Exchange Act, and any applicable
state securities or "blue sky" laws, (iii) filings and approvals which are not
required prior to the consummation of the Merger or where the failure to take
such action or make such filing would not be materially adverse to the Company
and (iv) any other consent, approval, authorization or permit or action by or
filing with any Governmental Entity the failure of which to be made or obtained
would not be materially adverse to the Company.
SECTION 4.04. Non-Contravention. Assuming compliance with the matters
-----------------
referred to in Section 4.03, the execution, delivery and performance by the
Company of this Agreement and the Support Agreement, and the consummation of the
other transactions contemplated hereby and thereby do not and will not (i)
subject to satisfaction of the condition referred to in Section 7.01(a),
contravene or conflict with or result in any violation or breach of any
provision of the articles of incorporation or bylaws of the Company, or other
organizational documents of the Company or any material Subsidiary, (ii)
contravene or conflict with or result in a violation or breach of any provision
of any law, rule, regulation, judgment, injunction, order or decree binding upon
or applicable to the Company or any of its Subsidiaries, (iii) require any
consent or other action by any Person under, constitute a default under or
violation of or give rise to a right of termination, cancellation, or
acceleration of any right or obligation (including an increase in the price paid
by, or cost to, the Company or any of its Subsidiaries or any other loss of
benefit) of, or under any provision of any agreement or other instrument to
which the Company or any of its Subsidiaries is a party or that is binding upon
the Company or any of its Subsidiaries or their properties or assets or any
license, franchise, permit or other similar authorization held by the Company or
any of its Subsidiaries, or (iv) result in the creation or imposition of any
Lien on any asset of the Company or any of its Subsidiaries, except with respect
to clauses (ii), (iii) and (iv) as set forth in Section 4.04 of the Company
Disclosure Letter
18
and except for any occurrences or results referred to in clauses (ii), (iii),
and (iv) that would not reasonably be expected to have a Company Material
Adverse Effect.
SECTION 4.05. (a) Capitalization. The authorized capital stock of the
--------------
Company consists of 50,000,000 shares of Common Stock and 5,000,000 shares of
Preferred Stock. As of the date hereof, 19,351,063 shares of Common Stock and no
shares of Preferred Stock were issued and outstanding and 1,401,714 shares of
Common Stock were reserved for issuance upon exercise of Options issued pursuant
to the Company Option Plans. Except as described in this Section 4.05 or in
Section 4.05 of the Company Disclosure Letter, no shares of capital stock of the
Company are reserved for issuance for any purpose. Except as disclosed in this
Section 4.05 or as set forth in Section 4.05 of the Company Disclosure Letter,
the Company has not granted any options for, or other rights to purchase, any
shares of capital stock of the Company or any securities convertible into or
exchangeable for capital stock of the Company. All of the outstanding shares of
capital stock of the Company have been, and all Shares that may be issued
pursuant to the exercise of Options will be, when issued and paid for in
accordance with the respective terms thereof, duly authorized, validly issued
and fully paid and nonassessable, and have not been (and will not be) issued in
violation of (nor are any of the authorized shares of capital stock subject to)
any preemptive or similar rights created by statute, the articles of
incorporation or bylaws of the Company, or any agreement to which the Company is
a party or by which it is bound.
(b) Except as set forth in paragraph (a) above, as of the date hereof there
are no options, warrants or other rights, agreements, arrangements or
commitments of any character to which the Company is a party which obligate the
Company to grant, issue or sell any shares of the capital stock, or any
securities convertible into or exchangeable for capital stock, of the Company.
As of the date hereof, there are no obligations, contingent or otherwise, of the
Company to (i) repurchase, redeem or otherwise acquire any Shares or other
capital stock or securities of the Company, or the capital stock or other equity
interests or securities of any Subsidiary of the Company or any other Person; or
(ii) (other than advances to Subsidiaries in the ordinary course of business)
provide material funds to, or make any material investment in (in the form of a
loan, capital contribution or otherwise), or provide any guarantee with respect
to the obligations of, any Subsidiary of the Company or any other Person. Except
for the Support Agreement, there are no voting trusts, proxies or similar
agreements or understandings to which the Company or any Subsidiary is a party
or to which any of them are bound with respect to the voting or transfer of any
shares of capital stock of the Company or any interest in any Subsidiary. There
are no outstanding profit sharing or participation interests, stock appreciation
rights or similar equity-based awards, derivative securities or rights of the
Company or any of its Subsidiaries. There are no bonds, debentures, notes or
other securities or indebtedness of the Company having the right to vote (or
convertible into, or
19
exchangeable for, securities having the right to vote) on any matters on which
shareholders of the Company may vote.
(c) The Company has delivered or otherwise made available to Parent
complete and correct copies of the Company Option Plans and all forms of Options
issued pursuant to the Company Option Plans, including all amendments thereto.
SECTION 4.06. (a) Subsidiaries. Each Subsidiary of the Company, other than
------------
any immaterial Subsidiary, is a corporation, partnership or limited liability
company duly incorporated or organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, has all requisite
corporate, partnership or limited liability company power and authority to carry
on its business as now conducted and is duly qualified to do business as a
foreign corporation or partnership and is in good standing in each jurisdiction
where the character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except where failure to be so
qualified would not have, individually or in the aggregate, a Company Material
Adverse Effect. All Subsidiaries of the Company are set forth in Section 4.06(a)
of the Company Disclosure Letter.
(b) Except as set forth in Section 4.06(b) of the Company Disclosure
Letter, each Subsidiary of the Company is wholly-owned by the Company, directly
or indirectly, free and clear of any Lien. Except as set forth in Section 4.06
of the Company Disclosure Letter, there are no outstanding (i) securities of the
Company or any of its Subsidiaries convertible into or exchangeable for shares
of capital stock or other voting securities or ownership interests in any such
Subsidiary of the Company, or (ii) options, warrants or other rights to acquire
from the Company or any of its Subsidiaries, and no other obligation of the
Company or any of its Subsidiaries to issue, any capital stock, voting
securities or other ownership interests in, or any securities convertible into
or exchangeable for any capital stock, voting securities or ownership interests
in, any such Subsidiary of the Company (the items in clauses (i) and (ii) being
referred to collectively as the "Company Subsidiary Securities"). There are no
-----------------------------
outstanding material obligations of the Company or any of such Subsidiaries to
repurchase, redeem or otherwise acquire any outstanding Company Subsidiary
Securities.
(c) Except as disclosed in Section 4.06(c) of the Company Disclosure
Letter, the Company does not directly or indirectly own any equity or similar
interest in, or any interest convertible into or exchangeable or exercisable for
any equity or similar interest in, any Person other than its Subsidiaries.
SECTION 4.07. SEC Reports. Since January 1, 1998, the Company has filed all
-----------
forms, reports, schedules, statements and other documents required to be
20
filed with the SEC, including (1) all Annual Reports on Form 10-K, (2) all
Quarterly Reports on Form 10-Q, (3) all proxy statements relating to meetings of
shareholders (whether annual or special), (4) all Current Reports on Form 8-K
and (5) all registration statements (collectively referred to as the "Company
-------
SEC Reports"). The Company SEC Reports were prepared in all material respects in
- -----------
accordance with the requirements of the Securities Act or the Exchange Act, as
the case may be, and did not at the time they were filed contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. No
Subsidiary of the Company is subject to periodic reporting requirements of the
Exchange Act or is otherwise required to file documents with the SEC or any
national securities exchange or quotation service.
SECTION 4.08. Financial Statements. The audited consolidated financial
--------------------
statements and unaudited consolidated interim financial statements of the
Company and its consolidated Subsidiaries included or incorporated by reference
in the Company SEC Reports, including reports on Forms 10-K and 10-Q, comply in
all material respects with applicable accounting requirements and rules and
regulations published by the SEC, were prepared in accordance with generally
accepted accounting principles in the United States ("GAAP") applied on a
----
consistent basis (except as may be indicated in the notes thereto), and fairly
present in all material respects the consolidated financial position of the
Company and its consolidated Subsidiaries as of the dates thereof and their
consolidated results of operations and cash flows for the respective periods
then ended (subject, in the case of any unaudited interim financial statements,
to normal year-end adjustments). There are no material liabilities or
obligations of the Company or any of its Subsidiaries which are required to be
recorded or reflected on a balance sheet under GAAP of any nature, whether
accrued, contingent, absolute or otherwise, other than (i) liabilities or
obligations disclosed and provided for in the consolidated balance sheet of the
Company as of December 25, 1999 in the Company's Form 10-K for the fiscal year
ended December 25, 1999, (ii) liabilities and obligations incurred since
December 25, 1999 in the ordinary course of business or (iii) liabilities and
obligations that would not reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect.
SECTION 4.09. Proxy Statement; Schedule 14D-9. (a) Each document filed by
-------------------------------
the Company with the SEC or distributed or otherwise disseminated by the Company
to the Company's shareholders in connection with the transactions contemplated
by this Agreement or the Support Agreement (the "Company Disclosure Documents"),
----------------------------
including the Schedule 14D-9, the proxy or information statement of the Company
(the "Company Proxy Statement"), if any, to be filed with the SEC in connection
-----------------------
with the Merger, and any amendments or supplements thereto, when filed,
distributed or disseminated, as applicable, will comply as to form in all
material respects with the applicable requirements of the Exchange Act.
21
(b) (i) The Company Proxy Statement, as supplemented or amended, if
applicable, at the time such Company Proxy Statement or any amendment or
supplement thereto is first mailed to shareholders of the Company and at the
time such shareholders vote on adoption of this Agreement and at the Effective
Time, and (ii) any Company Disclosure Documents (other than the Company Proxy
Statement), at the time of the filing of such Company Disclosure Documents or
any supplement or amendment thereto and at the time of any distribution or
dissemination thereof, will not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading. The representations and warranties contained in this Section 4.09(b)
will not apply to any financial projection that may be included in the Proxy
Statement, Company Disclosure Documents or Offer Documents or any statements or
omissions included in the Company Disclosure Documents based upon information
furnished to the Company by or on behalf of Parent intended for inclusion or
incorporation by reference, or which may be deemed incorporated by reference,
therein.
(c) The information with respect to the Company or any of its Subsidiaries
that the Company furnishes to Parent in writing specifically for use in the
Offer Documents, at the time of the filing thereof, at the time of any
distribution or dissemination thereof and at the time of the consummation of the
Offer, will not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.
SECTION 4.10 Absence of Certain Changes or Events. (a) Except as set forth
------------------------------------
in Section 4.10 of the Company Disclosure Letter, since December 25, 1999, there
has not occurred or arisen any change, effect, event or occurrence that would
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
(b) Except as set forth in Section 4.10 of the Company Disclosure Letter or
as permitted pursuant to Section 6.01, since December 25, 1999 and through the
date hereof, the Company and its Subsidiaries have conducted their respective
businesses only in the ordinary course, consistent with past practice, and
without limitation, there has not been:
(i) any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of capital stock of the Company, or any
repurchase, redemption or other acquisition by the Company or any Company
Subsidiary of any Company securities;
22
(ii) (A) any incurrence or assumption by the Company or any of its
Subsidiaries of any indebtedness for borrowed money or other long-term
indebtedness in excess of $5 million in the aggregate or (B) any guarantee,
endorsement or other incurrence or assumption of material liability (whether
directly, contingently or otherwise) by the Company or any Company Subsidiary
for the obligations of any other person, other than with respect to any
wholly-owned Subsidiary or in the ordinary course of business consistent with
past practice;
(iii) any creation or assumption by the Company or any of its
Subsidiaries of any Lien on any asset of the Company or any of its Subsidiaries,
which is material to the business of the Company and its Subsidiaries, taken as
a whole, other than in the ordinary course of business, consistent with past
practice and which would not reasonably be expected to have a Company Material
Adverse Effect;
(iv) any making of any loan, advance or capital contribution to or
investment in any Person (other than a Subsidiary of the Company) by the Company
or any Company Subsidiary, other than in the ordinary course of business,
consistent with past practice not in excess of $500,000 individually or $5
million in the aggregate;
(v) (A) any contract or agreement entered into by the Company or any
of its Subsidiaries on or prior to the date hereof relating to any material
acquisition or disposition of any capital assets or business having a value of
$500,000 individually or $5 million in the aggregate, (B) any modification,
amendment, assignment or termination of or relinquishment by the Company or any
Company Subsidiary of any rights under any material contract or (C) any
modification, amendment, assignment or termination of or relinquishment by the
Company or any Company Subsidiary of any rights under any other contract
(including any insurance policy naming it as a beneficiary or a loss payable
payee) that does or would reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect;
(vi) any change in any method of accounting or accounting principles
or practice by the Company, except for any such change required by reason of a
change in GAAP; or
(vii) any (A) grant of any severance or termination pay to (or
amendment of any such existing arrangement with) any director, officer or
employee of the Company or any of its Subsidiaries; (B) entering into of any
employment, deferred compensation or other similar agreement (or any amendment
to any such existing agreement) with any director, officer or employee of the
Company or any of its Subsidiaries; (C) increase in benefits payable under any
existing severance or termination pay policies or employment agreements; or (D)
increase in compensation, bonus or other benefits payable to directors, officers
or employees of the Company or
23
or any of its Subsidiaries, other than, in the case of clauses (A) through (D),
with respect to any directors, officers and employees that are not parties to
employment agreements with the Company or any Company Subsidiary, in the
ordinary course of business consistent with past practices or, in the case of
clauses (A) through (D) with respect to any directors, officers or employees who
are parties to employment agreements, in accordance with their respective
employment agreements.
SECTION 4.11. Litigation. Except as described in Section 4.11 of the
----------
Company Disclosure Letter, there is (i) no action, suit, investigation or
Proceeding pending against or to the Company's Knowledge, threatened against the
Company or any of its material Subsidiaries, before any court or arbitrator or
any Governmental Entity which would reasonably be expected to have a Company
Material Adverse Effect or (ii) which, as of the date hereof, challenges or
seeks to prevent or delay the transactions contemplated hereby.
SECTION 4.12. Employee Benefit Plans.
----------------------
(a) The Company has furnished or made available to Parent copies or
descriptions of each written employment, severance or similar contract or
arrangement or any plan, policy, fund, program or contract (whether in written
form or otherwise) providing for compensation, bonus, profit-sharing, stock
option, or other equity related rights or other forms of incentive or deferred
compensation, vacation benefits, insurance coverage (including any self-insured
arrangements), health or medical benefits, disability benefits, workers'
compensation, supplemental unemployment benefits, severance benefits and
post-employment or retirement benefits (including compensation, pension, health,
medical or life insurance or other benefits) that (i) is entered into,
maintained, administered or contributed to, as the case may be, by the Company
or any Subsidiary, (ii) covers any employee or former employee of any Company or
Subsidiary (whether employed in the United States or otherwise) (each, an
"Employee Plan") and (iii) is material to the Company and its Subsidiaries taken
-------------
as a whole.
(b) The Company has furnished or made available to Parent copies or current
summaries of the Employee Plans (and, if applicable, related trust agreements)
and all amendments thereto and written interpretations thereof. The Company has
furnished or made available the most recent determination letter with respect to
each Employee Plan intended to qualify under Section 401 of the Code.
(c) Except as set forth in Section 4.12(c) of the Company Disclosure
Letter, no Employee Plan is a multiemployer plan as defined in Section 3(37) of
ERISA or is a plan subject to Title IV of ERISA.
24
(d) Except as set forth in Section 4.12(d) of the Company Disclosure
Letter, neither the Company nor any Subsidiaries has any current or projected
material liability in respect of post-employment or post-retirement health or
medical or life insurance benefits for retired, former or current employees of
the Company, except as required to avoid excise tax under Section 4980B of the
Code.
(e) Other than as described in Section 4.12(e) of the Company Disclosure
Letter or otherwise made available to Parent, no employee or former employee of
the Company or any Subsidiary will become entitled to any material bonus,
retirement, severance, job security or similar benefit or an enhancement of such
benefit (including acceleration of vesting or exercise of an incentive award)
under any Employee Plan in connection with the transactions contemplated hereby
or by the Support Agreement.
(f) No material liability under Title IV or section 302 of ERISA has been
incurred by the Company or any ERISA Affiliate that has not been satisfied in
full, and no condition exists that presents a material risk to the Company or
any ERISA Affiliate of incurring any such liability, other than liability for
premiums due the Pension Benefit Guaranty Corporation (the "PBGC") (which
----
premiums have been paid when due). Insofar as the representation made in this
section (f) applies to sections 4064, 4069 or 4204 of Title IV of ERISA, it is
made with respect to any employee benefit plan, program, agreement or
arrangement subject to Title IV of ERISA (such plans, the "Title IV Plans") to
--------------
which the Company or any ERISA Affiliate made, or was required to make,
contributions during the five (5)-year period ending on the last day of the most
recent plan year ended prior to the Closing.
(g) The PBGC has not instituted proceedings to terminate any Title IV Plan
and, to the Knowledge of the Company, no condition exists that presents a
material risk that such proceedings will be instituted.
(h) With respect to each Title IV Plan, the present value of accrued
benefits under such plan, based upon the actuarial assumptions used for funding
purposes in the most recent actuarial report prepared by such plan's actuary
with respect to such plan did not exceed, as of its latest valuation date, the
then current value of the assets of such plan allocable to such accrued benefits
by a material amount.
(i) No Title IV Plan or any trust established thereunder has incurred any
"accumulated funding deficiency" (as defined in section 302 of ERISA and section
412 of the Code), whether or not waived, as of the last day of the most recent
fiscal year of each Title IV Plan ended prior to the Closing.
(j) All contributions required to be made with respect to any Employee Plan
on or prior to the Effective Time have been timely made. There has
25
been no amendment to, written interpretation of or announcement (whether or not
written) by the Company or any Affiliate of the Company relating to, or change
in employee participation or coverage under, any Employee Plan that would
increase materially the expense of maintaining such Employee Plan above the
level or expense incurred in respect thereof for the most recent fiscal year
ended prior to the date hereof.
(k) No Title IV Plan is a "multiemployer pension plan," as defined in
section 3(37) of ERISA, nor is any Title IV Plan a plan described in section
4063(a) of ERISA.
(l) Neither the Company nor any Subsidiary, any Employee Plan, any trust
created thereunder, nor any trustee or administrator thereof has engaged in a
transaction in connection with which the Company or any Subsidiary, any Employee
Plan, any such trust, or any trustee or administrator thereof, or any party
dealing with any Employee Plan or any such trust could be subject to either a
civil penalty assessed pursuant to section 409 or 502(i) of ERISA or a tax
imposed pursuant to section 4975 or 4976 of the Code.
(m) Each Employee Plan has been operated and administered in all material
respects in accordance with its terms and applicable law, including ERISA and
the Code.
(n) Each Employee Plan intended to be "qualified" within the meaning of
section 401(a) of the Code is so qualified and the trusts maintained thereunder
are exempt from taxation under section 501(a) of the Code. Each Employee Plan
intended to satisfy the requirements of Section 501(c)(9) has satisfied such
requirements.
(o) Except as set forth in section 4.12(o) of the Company Disclosure
Letter, no Employee Plan provides medical, surgical, hospitalization, death or
similar benefits (whether or not insured) for employees or former employees of
the Company or any Subsidiary for periods extending beyond their retirement or
other termination of service, other than (i) coverage mandated by applicable
law, (ii) death benefits under any "pension plan," or (iii) benefits the full
cost of which is borne by the current or former employee (or his beneficiary).
No condition exists that would prevent the Company or any Subsidiary from
amending or terminating any Employee Plan providing health or medical benefits
in respect of any active employee of the Company or any Subsidiary other than
limitations imposed under the terms of a collective bargaining agreement.
(p) There are no pending, threatened or anticipated material claims by or
on behalf of any Employee Plan, by any employee or beneficiary covered under
26
any such Employee Plan, or otherwise involving any such Employee Plan (other
than routine claims for benefits).
SECTION 4.13. Labor Relations. Except as set forth in Section 4.13 of the
---------------
Company Disclosure Letter, there is no unfair labor practice complaint or charge
against the Company or any of its Subsidiaries pending, or to the Knowledge of
the Company, threatened, before the National Labor Relations Board, the Equal
Employment Opportunity Commission or any other similar state or federal agency,
and there is no labor strike, dispute, slowdown, stoppage, lock out, or any
union organizing campaign, actually pending or, to the Knowledge of the Company,
threatened against or, involving the Company or any of its Subsidiaries. Except
as set forth in Section 4.13 of the Company Disclosure Letter, neither the
Company nor any of its material Subsidiaries is a party to, or bound by, any
collective bargaining agreement, contract or other agreement or understanding
with a labor union, labor organization, trade union or works council. To the
Knowledge of the Company, there are no organizational efforts with respect to
the formation of a collective bargaining unit being made or threatened, as of
the date hereof, involving employees of the Company or any of its Subsidiaries.
Except as set forth in Section 4.13 of the Company Disclosure Letter, there is
no material grievance or pending arbitration arising out of any collective
bargaining agreement. True and correct copies of all material written personnel
policies, rules or procedures applicable to all employees of the Company and its
Subsidiaries have been made available to Parent. Except as set forth in Section
4.13 of the Company Disclosure Letter, to the Knowledge of the Company, no union
claims to represent the employees of the Company or any of its Subsidiaries with
respect to any facilities or operations which are material to the Company and
its Subsidiaries, taken as a whole. Except as set forth in Section 4.13 of the
Company Disclosure Letter, no trade union, work council or similar group
representing employees of the Company or any Subsidiary working at any material
facilities or involved with material operations of the Company or any Subsidiary
is entitled to any right of notification, consent or advice in connection with
this Agreement and the consummation of the transactions contemplated hereby.
SECTION 4.14. Compliance with Laws; Permits. The Company and its
-----------------------------
Subsidiaries are in compliance with all laws, regulations and orders of any
Governmental Entity applicable to it or such Subsidiaries, except for such
failures to so comply which would not result in criminal liability or otherwise
reasonably be expected to have a Company Material Adverse Effect. Each of the
Company and its Subsidiaries is in possession of, and in compliance with, all
franchises, grants, authorizations, licenses, permits, easements, variances,
exemptions, consents, certificates, approvals and orders (collectively,
"Permits") necessary to own, lease and operate its properties and to carry on
-------
its business as it is now being conducted, except for any such Permits the
failure of which to possess, individually or in the aggregate, would not
reasonably be expected to have a Company Material Adverse Effect. There are no
proceedings
27
pending or to the Knowledge of the Company threatened, which are likely to
result in the revocation, cancellation or suspension of any Permit, except
Permits, the absence of which individually or in the aggregate, would not have a
Company Material Adverse Effect. The parties acknowledge and agree that the
representations contained in this Section 4.14 are not intended to address any
compliance issues related to environmental, tax or employee benefit matters.
SECTION 4.15 Taxes. Except as set forth in Section 4.15(a) of the Company
-----
Disclosure Letter or as would not reasonably be expected to have a Company
Material Adverse Effect:
(i) The Company and each of its Subsidiaries have timely filed (or
have had timely filed on their behalf) or, with respect to Tax Returns not yet
due, will file or cause to be timely filed, all material Tax Returns required by
applicable Law to be filed by any of them prior to or as of the Effective Time.
All such Tax Returns and amendments thereto are, or with respect to Tax Returns
not yet due, will be, true, complete and correct in all material respects.
(ii) The Company and each of its Subsidiaries have paid (or have had
paid on their behalf), or have established (or have had established on their
behalf and for their sole benefit and recourse), or where payment is not yet
due, will establish or cause to be established on or before the Effective Time,
an adequate accrual for the payment of, all Taxes due, with respect to any
period ending prior to or as of the Effective Time.
(iii) No federal, state, local or foreign audits, assessments,
collections, investigations or other administrative proceedings or court
proceedings are presently pending or have been threatened in writing with regard
to any Taxes or Tax Returns of the Company or its Subsidiaries.
(iv) No deficiency or adjustment for any Taxes has been proposed,
asserted or assessed against the Company or any Company Subsidiary that has not
been paid or otherwise discharged or for which the Company has taken adequate
reserves. There are no material Liens for Taxes upon the assets of the Company
or any Company Subsidiary, except Liens for current Taxes not yet due.
(v) Neither the Company nor any of its Subsidiaries is a party to
any Tax sharing agreement, Tax indemnity agreement or similar contract,
arrangement or agreement to with respect to Taxes of the Company or any of its
Subsidiaries.
(vi) Neither the Company nor any Subsidiary has constituted either a
"distributing corporation" or a "controlled corporation" (within the meaning of
28
Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for
tax-free treatment under Section 355 of the Code (i) in the two years prior to
the date of this Agreement or (ii) in a distribution which could otherwise
constitute part of a "plan" or "series of related transactions" (within the
meaning of Section 355(e) of the Code) in conjunction with the Merger.
(vii) The Company has, prior to the date hereof, provided Parent with
copies of all federal Tax Returns for the tax years since 1997.
(viii) There are no outstanding agreements extending or waiving the
statutory period of limitation applicable to any claim for, or the period for
the collection or assessment of, Taxes due for any taxable period with respect
to any Tax for which the Company may be subject or liable. The federal income
tax years of the Company (or any consolidated group of which the Company has
been a member) are closed through December, 1996.
(ix) The Company has not agreed, nor is it required to make, any
material adjustment under sections 446(e) or 481(a) of the Code nor has it
entered into any closing agreement pursuant to section 7121 of the Code or any
other agreement with similar Tax purposes.
(x) The Company and each of its Subsidiaries has complied in all
material respects with the provisions of the Code relating to the payment and
withholding of Taxes.
(b) For purposes of this Agreement, the following terms shall have the
following meanings:
(i) "Tax" or "Taxes" shall mean any tax, custom, duty, governmental
--- -----
fee or other like assessment or charge of any kind whatsoever imposed by any
Taxing Authority (including, but not limited to, any federal, state, local,
foreign or provincial income, gross receipts, property, sales, use, gains,
license, excise, franchise, employment, social security, withholding, payroll,
alternative or added minimum, ad valorem, transfer or exercise tax or any
disability insurance contributions, unemployment insurance contributions or
workers' compensation contributions) together with any interest, addition or
penalty imposed thereon.
(ii) "Tax Authority" shall mean the Internal Revenue Service and any
-------------
other domestic or foreign governmental authority responsible for the
administration of any Taxes.
29
(iii) "Tax Returns" shall mean all Federal, state, local and foreign
-----------
tax returns, declarations, statements, reports, schedules, forms and information
returns and any amended tax return relating to Taxes.
SECTION 4.16. Environmental Matters. Except as set forth in Section 4.16 of
---------------------
the Company disclosure letter, and except as would not reasonably be expected to
have a Company Material Adverse Effect, (i) the Company and its Subsidiaries are
in compliance with all applicable Environmental Laws (which compliance includes
the possession by the Company and each of its Subsidiaries of all permits and
other governmental authorizations required under applicable Environmental Laws,
and compliance with the terms and conditions thereof); (ii) there is no
Environmental Claim pending or threatened in writing against the Company or any
of its Subsidiaries; (iii) there is no civil, criminal or administrative
judgment against the Company or any of its Subsidiaries or, to the Knowledge of
the Company or any of its Subsidiaries, against any person or entity whose
liability for any Environmental Claim the Company or any of its Subsidiaries has
contractually or by operation of law retained or assumed pursuant to
Environmental Laws; (iv) the Company and its Subsidiaries have all Permits
required pursuant to Environmental Laws and the Company and its Subsidiaries are
in compliance with all terms and conditions thereof; (v) the Company and its
Subsidiaries have filed all notices required under Environmental Laws indicating
the past and present Release, generation, treatment, storage or disposal of
Hazardous Substances; (vi) there is not at, on or in any of the real properties
owned or leased by the Company or any of its Subsidiaries any generation, use,
handling, Release, treatment, recycling, storage or disposal of any Hazardous
Substances in a manner not in compliance with Environmental Laws; and (vii) to
the Knowledge of the Company, there are no past or present actions, activities,
circumstances, conditions, events or incidents, including the Release or
presence of any Hazardous Substances, which are reasonably likely to form the
basis of any Environmental Claim against the Company or any of its Subsidiaries
or against any person or entity whose liability for any Environmental Claim, the
Company or any of its Subsidiaries has retained or assumed either contractually
or by operation of law.
SECTION 4.17 Real Property. (a) Ownership of the Premises. The Company or a
------------- -------------------------
Subsidiary has good and marketable title to the real property described on
Schedule 4.17(a) of the Company Disclosure Letter and to all of the buildings,
structures and other improvements located thereon (collectively, the "Owned Real
----------
Property") free and clear of all Liens, except for (i) the Liens described in
- --------
said Schedule 4.17(a), (ii) Liens for taxes not yet due and payable, or Liens
for Taxes being contested in good faith which are not material or for which
adequate reserves have not been taken in accordance with GAAP, (iii) mechanics'
and materialmens' liens and similar lien for amounts not more than 60 days
overdue or which are being contested in good faith for which final judgments
have not been entered and (iv) easements, rights-of-way and other non-monetary
encumbrances and other title defects that do not,
30
individually or in the aggregate, materially diminish the value of the Owned
Real Property as currently used, occupied and operated, or interfere in any
material respect with, or materially increase the cost of, the use, occupancy or
operation of the applicable parcel of Owned Real Property as currently used,
occupied and operated (collectively, the "Permitted Owned Real Property
-----------------------------
Exceptions"). The Owned Real Property constitutes all of the real property owned
- ----------
by the Company and its Subsidiaries, other than real property, the ownership of
which is not material to the business of the Company and its Subsidiaries, taken
as a whole. Except as would not reasonably be expected to have a Company
Material Adverse Effect, (i) neither the Company nor any of its Subsidiaries is
in violation of any building code, special use permit, zoning ordinance, deed
restriction, covenant, subdivision or urban redevelopment plans, or other
applicable law, rule or regulation relating to the Owned Real Property; (ii) the
Company and each of its Subsidiaries, as the case may be, has a current, valid
certificate of occupancy or the equivalent thereof in the applicable
jurisdiction ("CO"), for each of the Owned Real Property where a CO is required
--
and the use of the Owned Real Property is in conformity with the relevant CO and
(iii) no proceeding is currently pending or, to the Knowledge of the Company,
threatened regarding the revocation or limitation of any CO issued for the Owned
Real Property or the Leased Real Property (as defined below), and there is no
reasonable basis or ground for any such revocation for any of the Owned Real
Property or Leased Real Property. To the Knowledge of the Company, no written
notice from any city, county or other Governmental Entity in the United States
has been received by the Company or any of its Subsidiaries requiring or calling
attention to the need for any material work, repair, construction, alteration or
installation on, or in connection with, the Owned Real Property.
(b) Leased Properties. Schedule 4.17(b) of the Company Disclosure Letter is
-----------------
a true, correct and complete schedule of all leases, subleases, licenses and
other agreements (collectively, the "Real Property Leases") under which the
--------------------
Company or any Subsidiary uses or occupies or has the right to use or occupy
real property that is material to the business of the Company and its
Subsidiaries, taken as a whole, and that is not Owned Real Property (the land,
buildings and other improvements covered by the Real Property Leases being
herein called the "Leased Real Property"). Each Real Property Lease is valid,
--------------------
binding and in full force and effect and, to the Knowledge of the Company, no
notice of default or termination under any Real Property Lease is outstanding.
Except in each case where the failure would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, to
the Knowledge of the Company all rent and other sums and charges payable by the
Company or its Subsidiaries as tenants under the Real Property Leases are
current. The Company or a Subsidiary owns the leasehold interest under each Real
Property Lease free and clear of all Liens, except as described in Schedule
4.17(b) of the Company Disclosure Letter or which would not materially affect
the use of such Leased Real Property. A true, correct and complete copy of each
Real Property Lease has been
31
made available to Parent. The Leased Real Property and the Owned Real Property
are hereinafter collectively referred to as the "Real Property."
-------------
(c) Condemnation and Casualty. There is not any pending, or to the best
-------------------------
Knowledge of the Company, threatened or contemplated condemnation proceeding
affecting the Real Property or any part thereof, and no sale or other
disposition of the Real Property or any part thereof in lieu of condemnation. No
portion of the Real Property has suffered any material damage by fire or other
casualty which has not heretofore been repaired and restored.
SECTION 4.18 Intellectual Property. (a) To the Knowledge of the Company,
---------------------
the Company and each of its Subsidiaries owns, is licensed or otherwise has the
legal right to use all Intellectual Property free and clear of all Liens that is
material to the conduct of the business of the Company and its Subsidiaries,
taken as a whole.
(b) To the Knowledge of the Company, no person is challenging or
questioning the validity or effectiveness of any Intellectual Property, or of
any license or agreement relating to the Intellectual Property, or infringing
on, misappropriating, diluting or otherwise violating any right of the Company
or its Subsidiaries, except for such items that, individually or in the
aggregate, have not had or would not reasonably be expected to have a Company
Material Adverse Effect.
(c) Neither the Company nor any of its Subsidiaries has received any
written notice of any pending claim with respect to any Intellectual Property
and the Company and its Subsidiaries have no Knowledge of any basis for such a
claim.
(d) The Company and its Subsidiaries have taken all actions reasonably
necessary to maintain and protect each item of Intellectual Property.
(e) No settlement agreements, consents, judgments, orders, forbearance to
sue or similar obligations limit or restrict the Company's or any Subsidiaries'
rights in and to any Intellectual Property, except as would not reasonably be
expected to have a Company Material Adverse Effect.
(f) To the Knowledge of the Company, the conduct of the businesses of the
Company and its Subsidiaries does not infringe, violate or dilute any
intellectual property rights of any Person, except as would not reasonably be
expected to have a Company Material Adverse Effect.
(g) The Company and its Subsidiaries are not, nor will be, as a result of
the consummation of this Agreement, in violation in any material respect of any
agreement relating to any Intellectual Property.
32
(h) The Company and its Subsidiaries have taken all reasonable precautions
to protect the secrecy, confidentiality, and value of its trade secrets and the
proprietary nature and value of the Intellectual Property.
(i) Except as would not reasonably be expected to have a Company Material
Adverse Effect, the consummation of the transactions contemplated hereby will
not result in the loss or impairment of the Company's and its Subsidiaries'
rights to own or use any of the Intellectual Property, nor will such
consummation require the consent of any third party in respect of any
Intellectual Property.
(j) For the purposes of this Agreement, "Intellectual Property" means all
of the following as they exist in any jurisdiction throughout the world, in each
case, to the extent owned by, licensed to, or otherwise used or held for use by
the Company or its Subsidiaries:
(i) patents, patent applications and the inventions, designs and
improvements described and claimed therein, patentable inventions, and other
patent rights (including any provisional applications, divisions, continuations,
continuations-in-part, substitutions, reexaminations, renewal, extensions or
reissues thereof, whether or not patents are issued on any such applications and
whether or not any such applications are amended, modified, withdrawn, or
refiled);
(ii) trademarks, service marks, trade dress, trade names, brand names,
Internet domain names, designs, logos, slogans or corporate names (including, in
each case, the goodwill associated therewith), whether registered or
unregistered, and all registrations and applications for registration thereof;
(iii) copyrights, including all renewals and extensions, copyright
registrations and applications for registration, and non-registered copyrights;
(iv) trade secrets, formulae, confidential business information,
concepts, ideas, designs, research or development information, processes,
procedures, techniques, technical information, specifications, operating and
maintenance manuals, engineering drawings, methods, know-how, data, mask works,
discoveries, inventions, modifications, extensions, improvements, and
proprietary rights (whether or not patentable or subject to copyright,
trademark, or trade secret protection); and
(v) all licenses, and sublicenses, and other agreements or permissions
related to the Intellectual Property.
(k) Section 4.18 of the Company Disclosure Letter sets forth a list of
material trademarks, patents and patent applications owned, applied for and/or
registered by the Company and its Subsidiaries.
33
SECTION 4.19. Finders and Investment Bankers. Except for CSFB, there is no
------------------------------
investment banker, broker, finder or other intermediary which has been retained
by or is authorized to act on behalf of the Company or any of its Subsidiaries
who might be entitled to any fee or commission in connection with the
transactions contemplated by this Agreement. The terms of the engagement of
CSFB, including the fee payable thereto, have previously been disclosed to
Parent.
SECTION 4.20. Opinion of Financial Advisor. The Board of Directors of the
----------------------------
Company has received the opinion of CSFB, to the effect that, as of the date of
this Agreement, the consideration to be received in the Offer and the Merger, by
the holders of Shares (other than Parent) is fair from a financial point of view
to such holders.
SECTION 4.21. State Takeover Statutes; Required Vote.
--------------------------------------
Except for Articles 14 (Affiliated Transactions) and 14.1 (Control Share
Acquisitions) of the VSCA (which have been rendered inapplicable to the
transactions contemplated by this Agreement and the Support Agreement, including
the Offer, the Merger and any purchase of Shares pursuant to the Support
Agreement as described in Section 2.02), no Virginia takeover statute or similar
statute applies or purports to apply to the Offer or the Merger, or to this
Agreement or the Support Agreement or the transactions contemplated hereby or
thereby. In the event the Shareholders Meeting is required to approve the Merger
and this Agreement, the approval by the holders of more than two-thirds of the
outstanding Shares is the only vote of shareholders of the Company required to
approve the Merger and this Agreement.
SECTION 4.22. Affiliate Transactions. Except as set forth in Section 4.22
----------------------
of the Company Disclosure Letter, there are no current contracts, agreements,
arrangements or transactions between the Company and its Subsidiaries, on the
one hand, and the Principal Shareholder, on the other hand, that are material to
the Company and its Subsidiaries, taken as a whole.
SECTION 4.23. Contracts. There is no contract, agreement or understanding
---------
required to be described in or filed as an exhibit to any Company SEC Report
that is not described in or filed as required by the Securities Act or the
Exchange Act, as the case may be. Except as set forth in Section 4.23 of the
Company Disclosure Letter, neither the Company nor any of its Subsidiaries is a
party to or bound by any contract, agreement or arrangement (including any lease
of real property) (i) materially restricting the ability of the Company or any
of its Subsidiaries (or after the Merger, Parent or any of its Subsidiaries) to
compete in or conduct any line of business or to engage in business in any
geographic area, (ii) containing covenants of any other Person not to compete in
any material respect with the Company or any of its Subsidiaries, (iii) relating
to the pending purchase or sale of any material amount of
34
capital assets of the Company or any of its Subsidiaries or (iv) involving the
pending acquisition, merger or purchase of all or substantially all of the
assets or the business of a third party involving aggregate consideration of
$100,000 per transaction or $1 million in the aggregate.
SECTION 4.24. No Other Representations. Except as specifically set forth in
------------------------
this Article IV, the Company has not made, and neither Parent nor Merger
Subsidiary has relied upon, any other representations or warranties, whether
express or implied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT
Parent and Merger Subsidiary represent and warrant to the Company that:
SECTION 5.01. Corporate Existence and Power. Parent is a corporation and
-----------------------------
duly incorporated and is validly existing under the laws of New York and has all
requisite power and authority to own, lease and operate its properties and
conduct its business as now conducted by it and is qualified to carry on
business under the laws of each jurisdiction in which it carries on a material
portion of its business, and Merger Subsidiary is a corporation duly
incorporated, validly existing and in good standing under the laws of the
Commonwealth of Virginia, and has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business substantially
as now conducted, except where the failure of Parent to be so qualified to do
business would not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect. For purposes hereof, the term
"Parent Material Adverse Effect" means any change or effect that has been or is
------------------------------
materially adverse to the business, assets, liabilities, results of operations
or financial condition of Parent and its Subsidiaries taken as a whole or
adversely affects the ability of Parent to consummate the transactions
contemplated by this Agreement in any material respect or materially impairs or
delays Parent's ability to perform its obligations hereunder; provided, however,
that a Parent Material Adverse Effect shall not include (i) changes in or
resulting from general economic, financial or market conditions, (ii) changes in
conditions or circumstances generally affecting the industry in which Parent
(and its Subsidiaries) operate, including regulatory changes, (iii) changes
resulting from this Agreement or from the announcement of the transactions
contemplated hereby or (iv) any effect resulting from Parent's compliance with
the terms of this Agreement. Merger Subsidiary was formed for the purpose of
consummating the transactions contemplated hereby. Merger Subsidiary does not
directly or indirectly own any equity
35
or similar interest in, or any interest convertible into or exchangeable or
exercisable for, any equity or similar interest in any corporation, partnership,
joint venture or other business association, entity or person. Merger Subsidiary
has not engaged and will not engage in any activities other than in connection
with or as contemplated by this Agreement, the Support Agreement, and the
transactions contemplated hereby and thereby.
SECTION 5.02. Corporate Authorization. This Agreement has been duly
-----------------------
authorized, executed and delivered by each of Parent and Merger Subsidiary and
constitutes a legal, valid and binding obligation of each of Parent and Merger
Subsidiary enforceable against each of them in accordance with its terms. The
execution, delivery and performance by each of Parent and Merger Subsidiary of
this Agreement and the consummation of the Offer and the Merger by each of
Parent and Merger Subsidiary are within each of their corporate powers and
authority and have been duly authorized by all necessary corporate action on the
part of Parent and Merger Subsidiary. Parent, as sole shareholder of Merger
Subsidiary, and the Board of Directors of Merger Subsidiary have approved the
Merger and no further corporate or shareholder action is required on the part of
Merger Subsidiary in connection with the consummation of the Merger other than
the filing of the Articles of Merger as contemplated by this Agreement. This
Agreement has been duly executed and delivered by Merger Subsidiary and,
assuming the due authorization, execution and delivery thereof by the Company,
constitutes a legal, valid and binding agreement of Merger Subsidiary.
SECTION 5.03. Governmental Authorization. The execution, delivery and
--------------------------
performance by Parent and Merger Subsidiary of this Agreement and the
consummation by Parent and Merger Subsidiary of the transactions contemplated by
this Agreement (including the Merger) do not require any consent, approval,
authorization or permit of or other action by or filing with, any Governmental
Entity other than (i) the filing of appropriate merger documents in accordance
with the VSCA, (ii) compliance with any applicable requirements of the HSR Act
and any applicable foreign antitrust laws, the Exchange Act, the Securities Act,
any applicable state securities or "blue sky" laws and (iii) any other consent,
approval, authorization or permit or action by or filing with any Governmental
Entity, the failure to make or obtain which would not, individually or in the
aggregate, reasonably be expected to have a Parent Material Adverse Effect.
SECTION 5.04. Non-Contravention. The execution, delivery and performance by
-----------------
Parent and Merger Subsidiary of this Agreement and the consummation of the other
transactions contemplated hereby do not and will not (i) contravene or conflict
with or result in any violation or breach of any provision of the articles of
incorporation or bylaws of Parent or Merger Subsidiary or other documents of
Parent or Merger Subsidiary (ii) assuming compliance with the matters referred
to in
36
Section 5.03, contravene or conflict with or result in a violation or breach of
any provision of any law, rule, regulation, judgment, injunction, order or
decree binding upon or applicable to Parent or to Merger Subsidiary or any of
their respective assets, (iii) require any consent or other action by any Person
under, constitute a default under or violation of or give rise to a right of
termination, cancellation or acceleration of any right or obligation or to the
loss of any benefit or otherwise result in any adverse modification of the
effect (including an increase in the price paid by, or cost to, Parent or to
Merger Subsidiary or any other loss of benefit) of, or under any provision of
any agreement or other instrument to which Parent or Merger Subsidiary is a
party or that is binding upon Parent or Merger Subsidiary or their respective
properties or assets or any license, franchise, permit or other similar
authorization held by Parent or Merger Subsidiary, or (iv) result in the
creation or imposition of any Lien on any asset of Parent, except for any
occurrences or results referred to in clauses (ii), (iii), and (iv) that would
not reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect or prevent or materially delay consummation of the
Merger or prevent or materially delay Parent or Merger Subsidiary from
performing their obligations under this Agreement in any material respect.
SECTION 5.05. Disclosure Documents. The information with respect to Parent
--------------------
and Merger Subsidiary that Parent and/or Merger Subsidiary, as the case may be,
furnishes to the Company in writing specifically for use in the Company
Disclosure Documents (including the Company Proxy Statement), at the respective
times of the filing thereof with the SEC or such other Governmental Entity, and
at the time of any distribution or dissemination thereof, and in the case of the
Company Proxy Statement, at the date it or any amendment or supplement is mailed
to shareholders and at the time of the Shareholders Meeting, will not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The Offer Documents
will comply as to form in all material respects with the requirements of the
Exchange Act, except that no representation or warranty is made by Parent or
Merger Subsidiary as to any information supplied by the Company to Parent or to
Merger Subsidiary intended for inclusion or incorporation by reference, or which
may be deemed to be incorporated by reference, therein.
SECTION 5.06. Financing. Parent and Merger Subsidiary have received a
---------
commitment letter from Citibank N.A. and Salomon Smith Barney, a copy of which
is attached to Section 5.06 of the Parent Disclosure Letter, whereby Citibank
N.A. has committed, upon the terms and subject to the conditions set forth
therein, to provide financing, the proceeds of which would be sufficient funds
to enable them to consummate the Offer and the Merger on the terms contemplated
by this Agreement.
SECTION 5.07. Brokers. None of Parent, Merger Subsidiary, or any of their
-------
respective subsidiaries, officers, directors or employees, has employed any
37
investment banker, broker, finder or other intermediary or incurred any
liability for any brokerage fees, commissions or finder's fees in connection
with the transactions contemplated by this Agreement for or with respect to
which the Company or any Subsidiary is or might be liable.
SECTION 5.08. Parent Not an Interested Shareholder. Prior to the execution
------------------------------------
of this Agreement and the Support Agreement, neither Parent nor any of its
Affiliates "beneficially owns" any Shares or is an "interested shareholder" of
----------------------
the Company as such terms are defined in Section 13.1-725 of the VSCA.
SECTION 5.09. Litigation. As of the date hereof, there is no action, suit,
----------
Proceeding or investigation pending, or to the Knowledge of Parent and Merger
Subsidiary, threatened involving Parent or any of its affiliates, at law or in
equity, by or before any court of governmental entity which would reasonably be
expected to have a material adverse effect on the ability of Parent or Merger
Subsidiary to consummate the transactions contemplated this Agreement.
SECTION 5.10. No Other Representations. Except as specifically set forth
------------------------
in this Article V and the Support Agreement, none of Parent, Merger Subsidiary
nor any Person on behalf of Parent or Merger Subsidiary, has made, and the
Company has not relied upon, any other representations or warranties, whether
express or implied.
ARTICLE VI
COVENANTS
SECTION 6.01. Conduct of the Company. Except as expressly contemplated by
----------------------
this Agreement, from the date hereof until the Effective Time, the Company and
its Subsidiaries shall conduct their business in the ordinary course consistent
with past practice and shall use their commercially reasonable efforts to
preserve intact their business organizations and relationships with third
parties and to keep available the services of their present officers and key
employees and preserve the goodwill of those engaged in material business
relationships with the Company. Except as otherwise approved in writing by
Parent or as expressly contemplated by this Agreement or as disclosed in Section
6.01 of the Company Disclosure Letter, and without limiting the generality of
the foregoing, from the date hereof until the Effective Time:
(a) the Company shall not, and shall not permit any of its Subsidiaries to,
adopt or propose any change in its articles of incorporation or bylaws or
comparable charter or other organization documents;
38
(b) the Company shall not, and shall not permit any of its
Subsidiaries to, acquire or agree to acquire (i) by merging or
consolidating with, or by purchasing a substantial portion of the equity or
assets of any business or any corporation, partnership, joint venture,
association or other business organization or division thereof that would
be material to the Company and its Subsidiaries, taken as a whole, or (ii)
any assets except for purchases of inventory and equipment in the ordinary
course of business consistent with past practice. The Company shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly,
acquire, make any investment (other than short term investments in the
ordinary course of business or investments not exceeding $1,000,000
individually or $10,000,000 in the aggregate) in, or make any capital
contributions to, any Person (other than a Subsidiary of the Company) other
than in the ordinary course of business.
(c) the Company shall not, and shall not permit its Subsidiaries to,
sell, lease, license, pledge, mortgage or otherwise encumber or subject to
any Lien or otherwise dispose of any of its properties or assets, or stock
or other ownership interest in any of its properties or subsidiaries other
than (i) in the ordinary course of business consistent with past practice,
(ii) pursuant to any agreements existing as of the date hereof and entered
into in the ordinary course of business consistent with past practice,
(iii) any Liens for taxes not yet due and payable or being contested in
good faith by appropriate proceedings, such mechanics and similar Liens, if
any, as do not materially detract from the value of any material properties
or assets or materially interfere with the present use of any of such
properties or assets or (iv) which would not reasonably be expected to
result, individually or in the aggregate, in a Company Material Adverse
Effect;
(d) the Company shall not and shall not permit any of its Subsidiaries
to declare, set aside, or pay any dividends or make any distributions on
shares of capital stock other than dividends or distributions by any
wholly-owned Subsidiary of the Company to the Company or another
wholly-owned Subsidiary;
(e) the Company shall not, and shall not permit any of its
Subsidiaries to, (i) issue, deliver, grant or sell, or authorize or propose
the issuance, delivery, grant or sale of, any capital stock of the Company
or any Company Subsidiary Securities, or any security, option or instrument
convertible into or exercisable for either of the foregoing, other than the
issuance of Shares upon the exercise of Options, (ii) split, combine or
reclassify any capital stock of the Company or any of its Subsidiaries or
issue or authorize the issuance of any other securities in respect of, in
lieu of or in substitution for shares of capital stock of the Company or
any of its Subsidiaries or (iii) except
39
as required or permitted by this Agreement, repurchase, redeem or otherwise
acquire any shares of capital stock of the Company or any of its
Subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities;
(f) (i) except as contemplated by Section 6.01(f) of the Company
Disclosure Letter, the Company shall not, and shall not permit any of its
Subsidiaries to, incur any indebtedness for borrowed money or guarantee any
such indebtedness of another Person in an aggregate principal amount in
excess of $10 million, guarantee any debt securities of another person,
enter into any "keep well" or other agreement to maintain any financial
statement condition of another person, except for borrowings for working
capital purposes and the endorsement of checks in the ordinary course of
business consistent with past practice; or (ii) make any material loans,
advances or capital contributions to, or investments in, any other Person,
other than to the Company or any direct or indirect wholly owned Subsidiary
of the Company or as otherwise made in the ordinary course of business
consistent with past practice;
(g) except for (A) increase in wages, salary and benefits of officers
or employees of the Company or its Subsidiaries in accordance with past
practice and (B) increases in salary, wages and benefits granted to
officers and employees of the Company or its Subsidiaries in conjunction
with promotions or other changes in job status in the ordinary course of
business consistent with past practice, the Company shall not, and shall
not permit any of its Subsidiaries to, (i) increase the compensation
payable or to become payable to its officers, directors or key employees,
(ii) grant any severance or termination pay to officers, directors or key
employees (except pursuant to existing agreements, plans or policies),
(iii) enter into any employment, severance or consulting agreement with any
current or former director, officer or other employee of the Company or any
Subsidiary or (iv) establish, adopt, enter into, amend or accelerate the
payment, right to payment or vesting (other than as permitted under this
Agreement) of any collective bargaining, bonus, profit sharing, thrift,
compensation stock option, restricted stock, pension, retirement, deferred
compensation, employment termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any current or former
director, officer or employee (any of the foregoing being an "Employee
--------
Benefit Arrangement"); provided, however, that nothing herein will be
------------------- -------- -------
deemed to prohibit (i) the payment of benefits as they become payable under
the terms of the Employee Benefit Arrangements as in effect on the date
hereof or (ii) entering into any agreement in connection with new hires in
the ordinary course; and
40
(h) the Company shall not, and shall not permit any of its
Subsidiaries to, plan, announce, implement or effect any reduction in
force, lay-off, early retirement program, severance program or other
program or effort concerning the termination of employment of employees of
the Company or its Subsidiaries, provided, however, that routine employee
terminations shall not be considered subject to this clause (h);
(i) the Company shall not, and shall not permit any of its
Subsidiaries to, (i) change any of the accounting methods used by it unless
required by GAAP or (ii) make any material election relating to Taxes,
change any material election relating to Taxes already made, adopt or
change any accounting method relating to material Taxes unless required by
GAAP, enter into any closing agreement relating to material Taxes, settle
any claim or assessment relating to material Taxes or consent to any claim
or assessment relating to material Taxes or any waiver of the statute of
limitations for any such claim or assessment;
(j) the Company shall not, and shall not permit any of its
Subsidiaries to, make any capital expenditure or expenditures in excess of
$500,000 individually or $2.5 million in the aggregate, other than as set
forth in the Company's budget for capital expenditures disclosed to Parent
prior to the date hereof;
(k) the Company shall not, and shall not permit any of its
Subsidiaries to, enter into, materially amend or terminate, or release or
assign any material right in, any material contract, other than contracts
in the ordinary course of business consistent with past practice or related
to the purchase or sale of inventory, involving payments to or by the
Company of less than $7 million per year;
(l) other than in connection with the licensing of the Company's
products, the Company shall not, and shall not permit any of its
Subsidiaries to, enter into any agreement, understanding or commitment that
materially restrains, limits or impedes the Company's ability to compete
with or conduct any material line of business, including, but not limited
to, geographic limitations on the Company's activities;
(m) the Company shall not enter into, or modify any existing,
transaction with any Affiliate in a manner materially adverse to the
Company;
(n) the Company shall not, and shall not permit any of its
Subsidiaries to, waive any material non-compete, standstill or
non-disclosure obligations;
41
(o) except as contemplated by Section 6.01(o) of the Company
Disclosure Letter, the Company shall not, and shall not permit any of its
Subsidiaries to, adopt any plan of liquidation, dissolution, winding-up or
similar transaction; and
(p) the Company shall not, and shall not permit any of its
Subsidiaries to, agree or commit to do any of the foregoing.
SECTION 6.2 Access to Information. (a) From the date hereof until the
---------------------
Effective Time, the Company shall, and shall cause each of its Subsidiaries to,
(i) give Parent, its counsel, financial advisors, auditors and other authorized
representatives prompt and reasonable access during normal business hours and,
with reasonable advance notice to the Company's general counsel, to the offices,
properties, personnel, books and records of the Company and its Subsidiaries as
such Persons may reasonably request, (ii) furnish to Parent, its counsel,
financial advisors, auditors and other authorized representatives such financial
and operating data and other information as such Persons may reasonably request
and (iii) instruct the Company's employees, counsel and financial advisors to
cooperate with Parent in its investigation of the business of the Company and
its Subsidiaries. All nonpublic information provided to, or obtained by, Parent
pursuant to this Section 6.02 in connection with the transactions contemplated
hereby shall be treated in accordance with the terms of the Confidentiality
Agreement previously executed by or on behalf of Parent and the Company (the
"Confidentiality Agreement"). Notwithstanding the foregoing, the Company shall
-------------------------
not be required to provide any information which it reasonably believes it may
not provide to Parent by reason of applicable law, rules or regulations, which
constitutes information protected by attorney/client privilege, or which the
Company or any Subsidiary is required to keep confidential by reason of
contract, agreement or understanding with third parties entered into prior to
the date hereof, provided, that the fact of its nondisclosure is communicated to
the general counsel of Parent, in which case the Company shall only disclose
such information to appropriate representatives of Parent under appropriate
arrangements, if available, which would not reasonably be expected to result in
a violation of applicable law, rules, regulations, waive attorney/client
privilege or violate any contract, agreement or understanding.
(b) Notwithstanding Section 6.02(a) and in addition to the
restrictions imposed on Parent pursuant to the Confidentiality Agreement, from
the date hereof through the earlier of the Effective Time or the termination of
this Agreement, Parent and Merger Subsidiary and any of their Affiliates shall
not, directly or indirectly, (i) solicit or cause others to solicit any employee
of the Company or its Subsidiaries or attempt to influence, persuade or induce
any such employee to terminate his employment with the Company or its
Subsidiaries, or (ii) hire or make any offer of employment, or cause others to
hire or make any offer of employment, to any such employee, other than the
hiring, making any offer of employment to or causing others
42
to hire or make any offer of employment to, any employee who seeks employment on
an unsolicited basis or in response to a general advertisement or solicitation.
SECTION 6.03. No Solicitation. (a) From the date hereof until the
---------------
termination of this Agreement, except as permitted hereby, the Company shall
not, and shall use its best efforts to cause its Subsidiaries and any of its or
its Subsidiaries' officers, directors, employees, investment bankers, attorneys,
accountants and other agents and advisors not to, directly or indirectly, (i)
solicit, initiate or knowingly encourage inquiries relating to, or the
submission of, any Acquisition Proposal, (ii) engage in negotiations or
discussions with, or in any other way knowingly cooperate with, any Person
(other than Parent, Merger Subsidiary or their respective directors, officers,
employees, agents and representatives) that may be considering making, or has
made, an Acquisition Proposal, (iii) furnish to any person any information or
data with respect to or access to the properties of the Company or any of its
Subsidiaries to, or take any other action to, facilitate the making of any
proposal that constitutes or may reasonably be expected to lead to, any
Acquisition Proposal or (iv) enter into any agreement with respect to any
Acquisition Proposal or approve or resolve to approve any Acquisition Proposal.
The Company shall as promptly as reasonably practicable (but in no case later
than 48 hours after receipt thereof) provide Parent with the identity of such
Person and a reasonable description of such Acquisition Proposal. The Company
shall keep Parent fully informed on a current basis of the status and details of
any such Acquisition Proposal. For purposes of this Agreement, "Acquisition
-----------
Proposal" means any offer or proposal for, or any indication of interest in, (i)
- --------
a merger, share exchange, recapitalization, liquidation, reclassification or
business combination or similar transaction, (ii) any sale, lease, exchange,
transfer or other disposition of 10% or more of the assets of the Company and
its Subsidiaries, taken as a whole, or (iii) any tender offer or exchange offer
that, if consummated, would result in any Person beneficially owning 10% or more
of the outstanding shares of capital stock of the Company involving the Company
or any of its Subsidiaries, other than the transactions contemplated by this
Agreement. The Company shall, and shall cause its Subsidiaries and the
directors, employees and other agents and representatives of the Company and its
Subsidiaries to, immediately cease and cause to be terminated, its existing
solicitation activity, discussions or negotiations with any parties conducted
heretofore by the Company or any of its representatives with respect to an
Acquisition Proposal.
(b) Subject to the Company's compliance with Section 6.03(a), nothing
contained in this Agreement shall prevent the Board of Directors of the Company
(or its authorized representatives) from, prior to the purchase of Shares
pursuant to the Offer, (i) furnishing non-public information to, or entering
into customary confidentiality agreements on terms, taken as a whole, no less
favorable to the Company than the terms of the Confidentiality Agreement with,
or entering into discussions or negotiations with, any Person in connection with
an unsolicited
43
Acquisition Proposal to the Company or its shareholders, but only if the Board
of Directors of the Company determines in good faith that such Acquisition
Proposal, if accepted, constitutes a Superior Proposal, (ii) entering into a
definitive agreement providing for the implementation of a Superior Proposal if
the Company is concurrently terminating this Agreement pursuant to Section
8.1(g) and paying the Termination Fee and Expenses as required to be paid
pursuant to Section 9.04(b), (iii) taking and disclosing to its shareholders a
position with respect to such Acquisition Proposal contemplated by Rule 14e-2(a)
promulgated under the Exchange Act or (iv) making any disclosure to its
shareholders which the Board of Directors of the Company determines, after
consultation with legal counsel, is required to be taken or made under
applicable law.
SECTION 6.04. Notices of Certain Events. (a) The Company shall as promptly
-------------------------
as is reasonably practicable notify Parent of (i) any notice or other
communication from any Person alleging that the consent of such Person (or
another Person) is or may be required in connection with the transactions
contemplated by this Agreement, (ii) any notice or other communication from any
governmental or regulatory agency or authority in connection with the
transactions contemplated by this Agreement, (iii) any actions, suits, claims,
investigations or proceedings commenced or, to the best of its Knowledge
threatened against, the Company or any of its Subsidiaries that, if pending on
the date of this Agreement, would reasonably be expected to have been required
to have been disclosed pursuant to Section 4.11 or which would have a material
adverse effect on the consummation of the transactions contemplated by this
Agreement and (iv) any fact or the occurrence or non-occurrence of any event (in
each case of which the Company is aware) between the date of this Agreement and
the Effective Time which would reasonably be expected to cause (A) any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at or prior to the Effective Time or (B) any
material failure of the Company to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that no such notification shall affect the representations or
- -------- -------
warranties of any party or the conditions to the obligations of any party
hereunder.
(b) Each of Parent and Merger Subsidiary shall as promptly as is reasonably
practicable notify the Company of (i) any notice or other communication from any
Person alleging that the consent of such Person (or other Person) is or may be
required in connection with the transactions contemplated by this Agreement,
(ii) any notice or other communication from any governmental or regulatory
agency or authority in connection with the transactions contemplated by this
Agreement, and (iii) any fact or occurrence or non-occurrence of any event (in
each case of which Parent or Merger Subsidiary is aware) between the date of
this Agreement and the Effective Time which would cause (x) any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect at or prior to the Effective
44
Time or (y) any material failure of Parent or Merger Subsidiary to comply with
or satisfy any covenant, condition or agreement to be complied with or satisfied
by each of them hereunder; provided, however, that no such notification shall
-------- -------
affect the representations or warranties of any party or the conditions to the
obligations of any party hereunder.
SECTION 6.05. Merger Subsidiary. Parent will take all action necessary (a)
-----------------
to cause Merger Subsidiary to perform its obligations under this Agreement and
to commence the Offer and consummate the Merger on the terms and subject to the
conditions set forth in this Agreement and in accordance with the VSCA as
promptly as is reasonably practicable following completion of the Offer and (b)
to ensure that, prior to the Effective Time, Merger Subsidiary shall not conduct
any business or make any investments other than in connection with the
transactions contemplated by this Agreement.
SECTION 6.06. Indemnification and Insurance. (a) The articles of
-----------------------------
incorporation and by-laws of the Surviving Corporation shall contain provisions
with respect to indemnification substantially to the same effect as those set
forth in the articles of incorporation and the by-laws of the Company on the
date hereof, which provisions shall not be amended, modified or otherwise
repealed for a period of six years after the Effective Time in any manner that
would adversely affect the rights thereunder as of the Effective Time of
individuals who at the Effective Time were directors, officers, employees or
agents of the Company, unless such modification is required after the Effective
Time by law.
(b) Parent shall cause the Surviving Corporation, to the fullest extent
permitted under applicable law or under the Surviving Corporation's articles of
incorporation or by-laws or any indemnification agreement in effect as of the
date hereof, to indemnify and hold harmless, each present and former director,
officer or employee of the Company or any of its Subsidiaries (collectively, the
"Indemnified Parties") against any costs or expenses (including reasonable
-------------------
attorneys' fees), judgments, fines, losses, claims, damages, liabilities and
amounts paid in settlement in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative, (x) arising out of or pertaining to the transactions contemplated
by this Agreement or (y) otherwise with respect to any acts or omissions
occurring at or prior to the Effective Time ("Indemnification Liabilities"), to
the same extent as provided in the Company's articles of incorporation or
by-laws or any applicable contract or agreement as in effect on the date hereof,
in each case for a period of six years after the date hereof. In the event of
any such claim, action, suit, proceeding or investigation (whether arising
before or after the Effective Time) and subject to the specific terms of any
indemnification contract, (i) after the Effective Time, the Surviving
Corporation shall assume and direct all the defense thereof, including
settlement, and the Indemnified Parties shall cooperate in the defense of any
45
such matter. An Indemnified Party shall have a right to participate in (but not
control) the defense of any such matter with its own counsel and at its own
expense. Notwithstanding the right of the Surviving Corporation to assume and
control the defense of such litigation, claim or proceeding, such Indemnified
Party shall have the right to employ separate counsel and to participate in the
defense of such litigation, claim or proceeding, and the Surviving Corporation
shall bear the reasonable fees, costs and expenses of such separate counsel and
shall pay such fees, costs and expenses promptly after receipt of an invoice
from such Indemnified Party if (i) the use of counsel chosen by the Surviving
Corporation to represent such Indemnified Party would present such counsel with
a conflict of interest, (ii) the defendants in, or targets of, any such
litigation, claim or proceeding shall have been advised by counsel that there
may be legal defenses available to it or to other Indemnified Parties which are
different from or in addition to those available to the Surviving Corporation,
or (iii) the Surviving Corporation shall not have employed counsel satisfactory
to such Indemnified Party, in the exercise of the Indemnified Party's reasonable
judgment, to represent such Indemnified Party within a reasonable time after
notice of the institution of such litigation, claim or proceeding. The Surviving
Corporation shall not settle any such matter unless (i) the Indemnified Party
gives prior written consent, which shall not be unreasonably withheld or
delayed, or (ii) the terms of the settlement provide that the Indemnified Party
shall have no responsibility for the discharge of any settlement amount and
impose no other obligations or duties on the Indemnified Party and the
settlement discharges all rights against Indemnified Party with respect to such
matter. In no event shall the Surviving Corporation be liable for any settlement
effected without its prior written consent. Any Indemnified Party wishing to
claim indemnification under this Section 6.06(b), upon learning of any such
claim, action, suit, proceeding or investigation, shall promptly notify Parent
and the Surviving Corporation (but the failure so to notify shall not relieve
the Surviving Corporation from any liability which it may have under this
Section 6.06(b) except to the extent such failure materially prejudices such
Surviving Corporation). The Indemnified Parties as a group will be represented
by a single law firm (plus no more than one local counsel in any jurisdiction)
with respect to each such matter unless there is, under applicable standards of
professional conduct, a conflict on any significant issue between the positions
of any two or more Indemnified Parties. Notwithstanding anything to the
contrary, in the event (i) that any claim or claims for indemnification are
asserted or made within such six-year period, all rights to indemnification in
respect of any such claim or claims shall continue until the disposition of any
and all such claims and (ii) that any determination required to be made with
respect to whether an Indemnified Party's conduct is entitled to indemnification
hereunder, or complies with the standards set forth under the VSCA, the
Company's articles of incorporation or by-laws or any such agreement, as the
case may be, such determination shall be made by independent legal counsel of
national reputation selected by such Indemnified Party and reasonably acceptable
to Parent.
46
(c) In addition, Parent will provide, or cause the Surviving Corporation to
provide, for a period of not less than six years after the Effective Time, the
Company's current directors and officers an insurance and indemnification policy
that provides coverage for events occurring at or prior to the Effective Time
(the "D&O Insurance") that is no less favorable than the existing policy
-------------
pursuant to which such directors and officers are covered or, if substantially
equivalent insurance coverage is unavailable, the best available coverage;
provided, however, that Parent and the Surviving Corporation shall not be
- -------- -------
required to pay an annual premium for the D&O Insurance in excess of two hundred
percent (200%) of the annual premium currently paid by the Company for such
insurance, but in such case shall purchase as much of such coverage as possible
for such amount.
(d) This Section shall survive the consummation of the Merger at the
Effective Time, is intended to benefit the Indemnified Parties, shall be binding
on all successors and assigns of the Surviving Corporation and shall be
enforceable by the Indemnified Parties.
SECTION 6.07. Employee Benefits. For a period of one year after the
-----------------
Effective Time, Parent will cause to remain in effect for the benefit of the
employees of the Company and its Subsidiaries (and, to the extent applicable,
former employees) all Employee Plans in effect on the date of this Agreement or
(b) provide each employee (and, to the extent applicable, former employees) of
the Surviving Corporation and its Subsidiaries who was an employee prior to the
Effective Time with benefits that, with respect to such employee (or former
employee), are at least substantially equivalent on an aggregate basis to the
benefits to which they were entitled under such Employee Plans. Without limiting
the generality of the foregoing, all vacation, holiday, sickness and personal
days accrued by the employees of the Company and its Subsidiaries shall be
honored. In the event that any employee of the Surviving Corporation or one of
its Subsidiaries is at any time after the Effective Time transferred to Parent
or any affiliate of Parent or becomes a participant in an employee benefit plan,
program or arrangement maintained by or contributed by Parent or any affiliate
of Parent, Parent shall cause such plan, program or arrangement to treat the
prior service of such employee with the Company and its Subsidiaries, to the
extent prior service is generally recognized under the comparable plan, program
or arrangement of the Company, as service rendered to Parent or such affiliates
for purposes of eligibility, vesting or entitlement to early retirement
benefits, vacation time or severance benefits under such plans. Parent shall
cause to be waived any pre-existing condition limitation under their welfare
plans that might otherwise apply to such employee or, to the extent applicable,
a former employee, other than limitations that are already in effect with
respect to such employees and that have not been satisfied or waived as of the
Effective Time under any Employee Plan maintained for such employees immediately
prior to the Effective Time. Parent agrees to recognize (or cause to be
recognized) the dollar amount of all expenses incurred by such employees
47
or, to the extent applicable, former employees, during the calendar year in
which the Effective Time occurs for purposes of satisfying the calendar year
deductibles, Contribution Obligation payment limitations and lifetime maximums
for such year under the relevant benefit plans of Parent and its Subsidiaries.
Nothing contained in this Section 6.07 shall be construed as requiring Parent to
continue any specific Employee Plans or to continue the employment of any
employee; provided, however, that any changes that Parent may make to any such
-------- -------
Employee Plans are consistent with the prior parts of this Section 6.07 and are
permitted by the terms of the Employee Plans and under any applicable law.
Notwithstanding anything contained herein to the contrary, nothing in this
Section 6.07 shall require the duplication of benefits to any employees or
former employees.
(b) With respect to any Employee Plan which is intended to be a
tax-qualified defined benefit pension plan (a "Defined Benefit Plan"), benefits
--------------------
under each such Defined Benefit Plan shall be frozen and cease to accrue as of
the Effective Time. As of the Effective Time, all active employees of the
Company or any Subsidiary who were participants in the Defined Benefit Plans
immediately prior to the Effective Time, shall become participants in the
tax-qualified Defined Benefit Plan of Parent, which plan shall recognize service
with the Company or any Subsidiary prior to the Effective Time for purposes of
eligibility and vesting, but not for purposes of benefit accrual.
SECTION 6.08. Meeting of the Company's Shareholders. (a) If required by the
-------------------------------------
Company's articles of incorporation and/or applicable law in order to consummate
the Merger, the Company shall take all action necessary in accordance with the
VSCA and its articles of incorporation and bylaws to duly call, give notice of,
convene and hold a meeting of the Company's shareholders (the "Shareholders
------------
Meeting") as promptly as practicable following the acceptance for payment of and
- -------
purchase of Shares by Parent pursuant to the Offer for purpose of considering
and taking action upon this Agreement. At the Shareholders Meeting, all of the
Shares then owned by Parent, Merger Subsidiary or any other subsidiary of Parent
shall be voted to approve the Merger and this Agreement (subject to applicable
law). Subject to the fiduciary obligations of the Board under applicable law,
the Board of Directors of the Company shall recommend that the Company's
shareholders vote to approve the Merger and this Agreement if such vote is
sought, shall use its reasonable best efforts to solicit from shareholders of
the Company proxies in favor of the Merger and shall take all other action in
its judgment necessary and appropriate to secure the vote of shareholders
required by the VSCA to effect the Merger. The Company shall cause such
recommendation to be included in the Company Proxy Statement.
(b) Notwithstanding Section 6.08(a), in the event that Parent, Merger
Subsidiary or any other subsidiary of Parent shall acquire at least 90% of the
outstanding shares of each outstanding class of capital stock of the Company
pursuant to the Offer, the parties hereto agree to take all necessary and
appropriate action to
48
cause the Merger to become effective as soon as practicable after the acceptance
for payment of any payment for shares by Merger Subsidiary pursuant to the Offer
without a meeting of shareholders of the Company, in accordance with Section
13.1-719 of the VSCA.
SECTION 6.09. Proxy Statement. If required under applicable law, the
---------------
Company shall promptly prepare the Company Proxy Statement, file it with the SEC
under the Exchange Act as promptly as practicable after Merger Subsidiary
purchases Shares pursuant to the Offer, and use all reasonable efforts to have
the Company Proxy Statement cleared by the SEC. Parent, Merger Subsidiary and
the Company shall cooperate with each other in the preparation of the Company
Proxy Statement, and the Company shall notify Parent of the receipt of any
comments of the SEC with respect to the Company Proxy Statement and of any
requests by the SEC for any amendment or supplement thereto or for additional
information and shall provide to Parent promptly copies of all correspondence
between the Company or any representative of the Company and the SEC. The
Company shall give Parent and its counsel the opportunity to review the Company
Proxy Statement prior to its being filed with the SEC and shall give Parent and
its counsel the opportunity to review all amendments and supplements to the
Company Proxy Statement and all responses to requests for additional information
and replies to comments prior to their being filed with, or sent to, the SEC.
Each of the Company, Parent and Merger Subsidiary agrees to use its reasonable
best efforts, after consultation with the other parties hereto to respond
promptly to all such comments of and requests by the SEC. As promptly as
practicable after the Company Proxy Statement has been cleared by the SEC, the
Company shall mail the Company Proxy Statement to the shareholders of the
Company.
SECTION 6.10. Reasonable Best Efforts. Subject to the terms and conditions
-----------------------
of this Agreement, each party will use its reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, and to assist and
cooperate with other parties hereto in doing, as promptly as practicable, all
things necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement and to ensure that
the conditions set forth in Article VII and Annex A are satisfied.
In addition, if at any time prior to the Effective Time any event or
circumstance relating to either the Company or Parent or any of their respective
subsidiaries, should be discovered by the Company or Parent, as the case may be,
and which should be set forth in an amendment to the Offer Documents or Schedule
14D-9, the discovering party will promptly inform the other party of such event
or circumstance. If at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, including
the execution of additional instruments, the proper officers and directors of
each party to this Agreement shall take all such necessary action.
49
SECTION 6.11. Public Announcements. So long as this Agreement is in
--------------------
effect, Parent, Merger Subsidiary and the Company will use reasonable efforts to
consult with each other before issuing any press release or making any public
statement with respect to this Agreement and the transactions contemplated
hereby and, except as may be required by applicable law or any listing agreement
with the NYSE, will not issue any such press release or make any such public
statement prior to such consultation.
SECTION 6.12. Further Assurances. At and after the Effective Time, the
------------------
officers and directors of the Surviving Corporation shall be authorized to
execute and deliver, in the name and on behalf of the Company or Merger
Subsidiary, any deeds, bills of sale, assignments or assurances and to take and
do, in the name and on behalf of the Company or Merger Subsidiary, any other
actions and things to vest, perfect or confirm of record or otherwise in the
Surviving Corporation any and all right, title and interest in, to and under any
of the rights, properties or assets of the Company acquired or to be acquired by
the Surviving Corporation as a result of, or in connection with, the Merger.
SECTION 6.13 Filings, Other Action. (a) Subject to the terms and conditions
---------------------
herein provided, the Company, Parent and Merger Subsidiary shall (i) cooperate
with one another in (x) determining which filings are required to be made prior
to the Effective Time, and which consents, approvals, permits or authorizations
are required to be obtained prior to the Effective Time from governmental or
regulatory authorities of the United States, the several states and foreign
jurisdictions in connection with the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby and (y) timely
making all such filings and timely seeking all such consents, approvals, permits
or authorizations, and (ii) use all reasonable efforts to take, or cause to be
taken, all other action and do, or cause to be done, all other things necessary,
proper or appropriate to consummate and make effective the transactions
contemplated by this Agreement, subject to the proviso to the first sentence of
Section 6.13(b).
(b) In furtherance and not in limitation of the foregoing, Parent shall use
its reasonable best efforts to resolve such objections, if any, as may be
asserted with respect to the transactions contemplated by this Agreement under
any antitrust, competition or trade regulatory laws, rules or regulations of any
domestic or foreign government or governmental authority ("Antitrust Laws");
--------------
provided, however, that Parent shall not be required to agree to dispose of or
- -------- -------
hold separate any asset which is material to Parent, on the one hand, or the
Company and its Subsidiaries, taken as a whole, on the other hand.
(c) Any party hereto shall promptly inform the others of any material
communication from the Federal Trade Commission, the Department of Justice, or
any
50
other domestic or foreign government or governmental authority regarding any of
the transactions contemplated by this Agreement. If any party or any Affiliate
thereof receives a request for additional information or documentary material
from any such government or authority with respect to the transactions
contemplated by this Agreement, then such party will endeavor in good faith to
make, or cause to be made, as soon as reasonably practicable and after
consultation with the other parties, an appropriate response in compliance with
such request. Parent will advise the Company promptly in respect of any
understandings, undertakings or agreements (oral or written) which Parent
proposes to make or enter into with the Federal Trade Commission, the Department
of Justice, or any other domestic or foreign government or governmental
authority in connection with the transactions contemplated by this Agreement.
(d) Promptly after the date hereof, Parent, Merger Subsidiary and the
Company (as may be required pursuant to the HSR Act) will complete all documents
required to be filed with the Federal Trade Commission and the Department of
Justice in order to comply with the HSR Act and, not later than 10 business days
after the date hereof, together with the Persons who are required to join in
such filings, shall file the same with the appropriate Governmental Entities.
Parent, Merger Subsidiary and the Company shall promptly furnish all materials
thereafter required by any of the Governmental Entities having jurisdiction over
such filings, and shall take all reasonable actions and shall file and use all
reasonable efforts to have declared effective or approved all documents and
notifications with any such Governmental Entities, as may be required under the
HSR Act or any other federal and applicable foreign antitrust laws for the
consummation of the Offer, the Merger and any other transactions contemplated
hereby, subject to the proviso to the first sentence of Section 6.13(b).
SECTION 6.14. Confidentiality. Parent and Merger Subsidiary acknowledge
---------------
and agree that all information received from or on behalf of the Company or any
of the Company's Subsidiaries in connection with the Merger shall be deemed
received pursuant to the Confidentiality Agreement and Parent and Merger
Subsidiary shall, and shall cause their respective Affiliates and
representatives, to comply with the provisions of the Confidentiality Agreement
with respect to such information and the provisions of the Confidentiality
Agreement are hereby incorporated herein by reference with the same effect as if
fully set forth herein.
SECTION 6.15. State Takeover Laws. If any "fair price," "business
-------------------
combination" or "control share acquisition" statute or other similar statute or
regulation shall become applicable to the transactions contemplated hereby or by
the Support Agreement, including the purchases of Shares in the Offer, the
Merger or the acquisition of Shares pursuant to the option set forth in the
Support Agreement, the Company and its Board of Directors shall take all such
action as may be reasonably necessary or advisable to obtain such approvals and
take such actions as are necessary or advisable so that the transactions
contemplated hereby and by the Support Agreement
51
may be consummated as promptly as practicable on the terms contemplated hereby
and thereby and otherwise act to minimize the effects of any such statute or
regulation on the transactions contemplated hereby and thereby.
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Obligations of Each Party. The obligations
-------------------------------------------
of the Company, Parent and Merger Subsidiary to consummate the Merger are
subject to the satisfaction of the following conditions:
(a) Shareholder Approval. If approval of the Merger by the holders of
--------------------
Shares is required by applicable law, this Agreement and the Merger shall have
been approved by the requisite vote of the shareholders of the Company in
accordance with the VSCA;
(b) Purchase of Shares. Merger Subsidiary shall have accepted for payment
------------------
and paid for Shares pursuant to the Offer in accordance with the terms hereof;
provided, that this condition shall be deemed to have been satisfied with
- --------
respect to Parent and Merger Subsidiary if Merger Subsidiary fails to accept for
payment or pay for Shares pursuant to the Offer in violation of the terms of the
Offer.
(c) Injunctions; Illegality. The consummation of the Merger shall not be
-----------------------
restrained, enjoined or prohibited by any order, judgment, decree, injunction or
ruling of a court of competent jurisdiction or any Governmental Entity entered;
provided that the party invoking this condition shall have complied with its
- --------
obligations under Sections 6.10 and 6.13.
(d) Antitrust Waiting Periods. All necessary waiting periods under the HSR
-------------------------
Act and any foreign antitrust laws applicable to the Merger shall have expired
or been earlier terminated except, with respect to any foreign antitrust laws,
where the failure to so expire or terminate would not materially adversely
affect the transactions contemplated hereby.
52
ARTICLE VIII
TERMINATION
SECTION 8.01. Termination. This Agreement may be terminated and the Offer
-----------
and the Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of this Agreement by the shareholders of the
Company or Parent):
(a) by mutual written consent of the Company and Parent;
(b) by either the Company or Parent, if the Offer has not been consummated
on or before January 31, 2001 (the "Termination Date"); provided, however, that
-------- -------
the party seeking to terminate this Agreement pursuant to this Section 8.01(b)
shall not have breached in any material respect its obligations under this
Agreement; and provided, further, that the Termination Date shall be extended
-------- -------
for an additional period of up to 30 days, if each of the conditions to the
consummation of the Offer, other than the conditions set forth in clause (B)(a)
of Annex A or clause (A)(y) of Annex A, shall have been satisfied on or prior to
the Termination Date;
(c) by either the Company or Parent, if there shall be any applicable law,
rule or regulation that makes consummation of the Offer or the Merger illegal or
otherwise prohibited or if any judgment, injunction, order or decree of a court
or governmental agency or authority of competent jurisdiction shall restrain or
prohibit the consummation of the Offer or the Merger, and such judgment,
injunction, order or decree shall become final and nonappealable;
(d) prior to the completion of the Offer, by either party, if (x) there has
been a breach by the other party of, or any inaccuracy in, any representation or
warranty (without regard to any Company Material Adverse Effect or Parent
Material Adverse Effect, as the case may be, contained in such representations
or warranties) contained in this Agreement which would reasonably be expected to
have, individually or in the aggregate, a Parent Material Adverse Effect or
Company Material Adverse Effect, as the case may be, or (y) there has been a
material breach of any of the covenants or agreements set forth in this
Agreement on the part of the other party which breach is, in the case of (x) or
(y), not cured within 30 days after written notice of such breach is given by
the terminating party to the other party;
(e) by the Company, if the Offer has not been timely commenced as provided
in Section 1.01 hereof, provided that the Company may not so terminate if it is
--------
in material breach of its obligations hereunder;
53
(f) by Parent, if the Board of Directors of the Company shall have failed
to recommend, or shall have withdrawn or modified in a manner adverse to Parent,
its approval or recommendation of this Agreement, the Offer or the Merger or
shall have recommended or announced a neutral position with respect to, or
entered into, or publicly announced its intention to enter into, an agreement
with respect to an Acquisition Proposal (or shall have resolved to do any of the
foregoing);
(g) by the Company concurrently with or following payment of the
Termination Fee and Expenses pursuant to Section 9.04, if, prior to the purchase
of Shares pursuant to the Offer, the Board of Directors of the Company shall
concurrently approve and the Company shall concurrently enter into, a definitive
agreement providing for the implementation of a Superior Proposal; provided,
--------
however, that (x) the Company shall have notified Parent in writing that it
- -------
intends to enter into such an agreement, attaching the most current version of
such agreement to such notice and (y) during the 5 business day period after
such notice, the Company shall have offered to negotiate with and, if accepted,
negotiate in good faith with (and shall have caused its legal and financial
advisors to do the same) Parent to attempt to make such commercially reasonable
adjustments as would enable the Company to proceed with this Agreement in lieu
of the Superior Proposal, it being understood that (A) the Company shall not
enter into any such agreement during such five-day period and (B) the Company
agrees to notify Parent promptly if its intention to enter into a written
agreement referred to in its notification shall change at any time after giving
effect to such notification;
(h) by Parent or the Company if as the result of the failure of any of the
conditions set forth in Annex A hereto to be satisfied, the Offer shall have
terminated or expired in accordance with its terms without Merger Subsidiary
having purchased any Shares pursuant to the Offer; provided, however, that the
-------- -------
right to terminate this Agreement pursuant to this Section 8.01(h) shall not be
available to any party whose material breach of any of its obligations under
this Agreement results in the failure of any such condition; and
(i) by Parent, if the Company shall have taken any action to exempt any
acquisition of Shares by any Person, other than Parent, Merger Subsidiary or any
of their respective Affiliates, from Article 14 (Affiliated Transactions) or
Article 14.1 (Control Share Acquisitions) of the VSCA.
SECTION 8.02. Effect of Termination. If this Agreement is terminated
---------------------
pursuant to Section 8.01, this Agreement shall become void and of no force and
effect with no liability on the part of any party (or any shareholder, director,
officer, employee, agent, consultant or representative of such party) to the
other party hereto;
54
provided that, if such termination shall result from the (i) willful failure of
- --------
either party to perform a material covenant or agreement of such party hereunder
or (ii) a material breach by either party hereto of any representation or
warranty contained herein, such party shall be fully liable for any and all
liabilities and damages incurred or suffered by the other party as a result of
such failure or breach. Notwithstanding the foregoing, the provisions of
Sections 6.14, 8.02 and Article IX hereof shall survive any termination hereof.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other communications to any
-------
party hereunder shall be in writing (including telecopy or similar writing) and
shall be given,
if to Parent or Merger Subsidiary, to:
International Flavors & Fragrances Inc.
521 West 57th Street
New York, New York 10019
Telephone: (212) 765-5500
Telecopy: (212) 708-7132
Attention: Stephen A. Block, Esq.
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, New York 10036-6522
Telephone: (212) 735-3000
Telecopy: (212) 735-2000
Attention: Roger S. Aaron, Esq.
Stephen F. Arcano, Esq.
if to the Company, to:
Bush Boake Allen Inc.
7 Mercedes Drive
Montvale, New Jersey 07645
Telephone: (201) 391-9870
Telecopy: (201) 782-3339
55
Attention: Dennis M. Meany, Esq.
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019
Telephone: (212) 373-3000
Telecopy: (212) 757-3990
Attention: Robert B. Schumer, Esq.
or such other address or telecopy number as such party may hereafter specify for
the purpose by notice to the other parties hereto. Each such notice, request or
other communication shall be effective when delivered personally or sent by
overnight courier (providing proof of delivery) at the address specified in this
Section, or if by telecopy, upon confirmation of receipt.
SECTION 9.02. Survival of Representations and Warranties and Agreements.
---------------------------------------------------------
The representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Effective Time, except Sections 6.06, 6.07 and 6.12 and Articles II, III and IX.
SECTION 9.03. Amendments; No Waivers. (a) Any provision of this Agreement
----------------------
may be amended or waived prior to the Effective Time if, and only if, such
amendment or waiver is in writing and signed, in the case of an amendment, by
the Company, Parent and Merger Subsidiary or, in the case of a waiver, by the
party against whom the waiver is to be effective; provided that (i) any waiver
--------
or amendment shall be effective against a party only if the Board of Directors
of such party approves such waiver or amendment and (ii) no such amendment or
waiver following the vote of shareholders at the Shareholders Meeting shall,
without the approval of the Company's shareholders and each party's Board of
Directors alter or change (A) the amount or kind of consideration to be received
in exchange for any shares of capital stock of the Company, (B) any term of the
articles of incorporation of the Surviving Corporation or (C) any of the terms
or conditions of this Agreement if such alteration or change would adversely
affect the holders of any shares of capital stock of the Company.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
56
SECTION 9.04. Fees and Expenses. (a) Except as otherwise provided in this
-----------------
Section, all costs and expenses incurred in connection with this Agreement shall
be paid by the party incurring such cost or expense.
(b) In the event that the Company terminates this Agreement pursuant to
Section 8.01(g), or Parent terminates this Agreement pursuant to Section 8.01(f)
or Section 8.01(i), then, in each case, the Company will pay, or cause to be
paid, at or prior to the time of termination in the case of a termination
pursuant to Section 8.01(g) or as promptly as is reasonably practicable (but in
no event later than one business day) following in the case of a termination
pursuant to Section 8.01(f) or Section 8.01(i) in same day funds to Parent (i)
Parent's Expenses (as defined below) up to a maximum amount of $1 million and
(ii) an amount (the "Termination Fee") equal to $29,100,000. In addition, so
---------------
long as Parent has complied with all its material obligations under this
Agreement and the Company is not entitled to terminate the Agreement pursuant to
Section 8.01(c), 8.01(d) or 8.01(e), if (X) this Agreement shall have been
terminated pursuant to Section 8.01(b) or Section 8.01(h) as a result of the
non-satisfaction of the Minimum Condition (as defined in Annex A), (Y) the
shareholders shall have failed to approve the Agreement and the Merger by the
requisite vote in accordance with VSCA or (Z) Parent shall have terminated this
Agreement pursuant to Section 8.01(d); and
(1) at the time of the termination of the Offer, termination of this
Agreement, shareholder vote or breach, as the case may be, any Person (other
than Parent) shall have publicly announced, and not withdrawn in good faith, an
Acquisition Proposal; and
(2) within 12 months after termination of this Agreement, the Company
shall have entered into an agreement with respect to an Acquisition Proposal or
consummated an Acquisition Proposal;
then the Company shall pay to Parent (x) an amount equal to Parent's Expenses
(not in excess of $1 million) and (y) the Termination Fee in each case prior to
or concurrently with entering into any such agreement or consummating such
Acquisition Proposal, as the case may be. "Expenses" means documented
out-of-pocket fees and expenses incurred or paid by or on behalf of Parent in
connection with the Merger or the consummation of any of the transactions
contemplated by this Agreement, including without limitation all regulatory
filing fees, fees and expenses of counsel, commercial banks, investment banking
firms, accountants, experts, environmental consultants, and other consultants to
Parent.
(c) Any payments required to be made pursuant to this Section 9.04 shall be
made by wire transfer of same day funds to an account designated by the
recipient.
57
SECTION 9.05. Successors and Assigns. The provisions of this Agreement
----------------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
--------
or otherwise transfer any of its rights or obligations under this Agreement, in
whole or in part, by operation of law or otherwise by any of the parties,
without the consent of the other parties hereto; provided that Merger Subsidiary
--------
may assign this Agreement or any of its rights or obligations hereunder to any
direct or indirect wholly owned Subsidiary of Parent without the prior consent
of the Company, so long as such assignment will not adversely affect the rights
of and benefits to the Company and its shareholders hereunder; (and which
transfer shall not relieve Parent and Merger Subsidiary of their obligations
hereunder in the event of a breach by their transferee).
SECTION 9.06. Governing Law. This Agreement shall be construed in
-------------
accordance with and governed by the laws of the State of New York except that
matters governed or affected by the VSCA shall be governed by the laws of the
Commonwealth of Virginia.
SECTION 9.07. Jurisdiction. Each party to this Agreement hereby
------------
irrevocably agrees that any legal action or proceeding arising out of or
relating to this Agreement or any agreements or transactions contemplated hereby
shall be brought exclusively in the United States District Court for the
Southern District of New York and hereby expressly submits to the personal
jurisdiction and venue of such courts for the purposes thereof and expressly
waives any claim of improper venue and any claim that such courts are an
inconvenient forum. Each party hereby irrevocably consents to the service of
process of any of the aforementioned courts in any such suit, action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the address set forth or referred to in Section 9.01, such
service to become effective 10 days after such mailing.
SECTION 9.08. Counterparts; Effectiveness. This Agreement may be signed in
---------------------------
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
SECTION 9.09. Entire Agreement; Third Party Beneficiaries. This Agreement,
-------------------------------------------
the Support Agreement and the Confidentiality Agreement constitute the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior agreements, understandings and negotiations, both written
and oral, between the parties with respect to the subject matter of this
Agreement. No representation, inducement, promise, understanding, condition or
warranty not set forth herein has been made or relied upon by either party
hereto. Neither this Agreement nor any provision hereof is intended to confer
upon any Person other than the parties
58
hereto any rights or remedies hereunder except for the provisions of Section
3.04, which are intended for the benefit of the Company's optionees, Section
6.06, which are intended for the benefit of the Indemnified Parties, and Section
6.07 (but only as Section 6.07 relates to severance), which are intended for the
benefit of the Company's former and present officers, directors and employees,
in each such case as third party beneficiaries of the provisions indicated.
SECTION 9.10. Headings. The headings contained in this Agreement are for
--------
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
SECTION 9.11. Severability. If any term or other provision of this
------------
Agreement is invalid, illegal or unenforceable, all other provisions of this
Agreement shall remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party.
SECTION 9.12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
--------------------
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
59
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
BUSH BOAKE ALLEN INC.
By: /s/ Julian W. Boyden
----------------------------------
Name: Julian W. Boyden
Title: Chairman, President & CFO
INTERNATIONAL FLAVORS & FRAGRANCES INC.
By: /s/ Stephen A. Block
----------------------------------
Name: Stephen A. Block
Title: Senior Vice President,
General Counsel and
Secretary
B ACQUISITION CORP.
By: /s/ Stephen A. Block
----------------------------------
Name: Stephen A. Block
Title: Vice President, Secretary
and Treasurer
A-1
ANNEX A
-------
Notwithstanding any other provision of the Offer, Parent and Merger Subsidiary
shall not be required to accept for payment or purchase or pay for any tendered
Shares, (A) if (x) the Minimum Condition (as defined below) has not been
satisfied by the expiration date of the Offer as required to be extended
pursuant to Section 2.01(c) or (y) the applicable waiting periods under the HSR
Act and any applicable foreign merger control regulations enforced by
Governmental Entities, individually or in the aggregate, having jurisdiction
over a material portion of the Company's business or assets shall not have
expired or been terminated by the expiration date of the Offer, or (B) at any
time on or after the date of this Agreement and prior to the date Shares are
first accepted for payment under the Offer, if any of the following conditions
exist:
(a) any order or preliminary or permanent injunction shall be entered
in any action or proceeding before any court of competent jurisdiction or
any statute, rule, judgment, regulation, legislation, or order shall be
enacted, entered, enforced, promulgated, amended or issued by any United
States Governmental Entity, any other Governmental Entity or Entities
having in the aggregate jurisdiction over a material portion of the
Company's business or assets which shall (i) make illegal, restrain or
prohibit the acceptance for payment of, or payment for, any Shares by
Parent, Merger Subsidiary or any other Affiliate of Parent or the
consummation of the Merger; (ii) prohibit or limit materially the ownership
or operation by Parent or Merger Subsidiary or any of their Subsidiaries of
all or any material portion of the business or assets of the Company or any
of its Subsidiaries (taken as a whole), or compel Parent, on the one hand,
or the Company and its Subsidiaries, taken as a whole, on the other hand,
to dispose of or hold separate all or any material portion of their
respective businesses or material assets, (iii) impose or confirm material
limitations on the ability of Parent or Merger Subsidiary or any other
Affiliate of Parent to exercise full rights of ownership of any Shares in
any material respect, including, without limitation, the right to vote any
Shares acquired by Merger Subsidiary pursuant to the Offer or otherwise on
all matters properly presented to the Company's shareholders, including,
without limitation, the approval and adoption of this Agreement and the
transactions contemplated by this Agreement; (iv) require divestiture by
Parent, Merger Subsidiary or any other Affiliate of Parent of any Shares;
or (v) otherwise would have a Company Material Adverse Effect; provided
that with respect to any injunction issued by a Governmental Entity in
which the lead plaintiffs are not Governmental Entities, Parent shall first
be required to use its best efforts to defend against any preliminary or
permanent injunction;
(b) the Board of Directors of the Company or any committee thereof
shall have (i) withdrawn, modified or changed, in a manner adverse to
Parent or
A-2
Merger Subsidiary, the recommendation by such Board of Directors or such
committee of the Offer, the Merger or this Agreement, (ii) approved,
recommended or announced a neutral position with respect to, or proposed
publicly to approve, recommend or announce a neutral position with respect
to, an Acquisition Proposal, (iii) provided notice to Parent pursuant to
Section 8.01(g)(x) or (iv) resolved to do any of the foregoing;
(c) there shall have occurred, and continued to exist, (i) any
general suspension of, or limitation on prices for, trading in securities
on the New York Stock Exchange, (ii) a declaration of a banking moratorium
or any general suspension of payments in respect of banks in the United
States, (iii) a commencement of a war or armed hostilities directly
involving the United States (other than an action involving United Nations'
personnel or support of United Nations' personnel) or (iv) in the case of
any of the foregoing clauses (i) through (iii) existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof.
(d) (i) any of the representations and warranties (other than Section
4.05) made by the Company in the Agreement shall not have been true and
correct when made, or shall thereafter have ceased to be true and correct
as if made as of such latter date (other than representations and
warranties made as of a specified date) (without regard to any Company
Material Adverse Effect contained in such representations or warranties)
except to the extent that any such failure to be true and correct,
individually or in the aggregate, would not have a Company Material Adverse
Effect, (ii) Section 4.05 shall not have been true and correct in all
material respects when made, or (iii) the Company shall not in all material
respects have performed each material obligation and agreement and complied
with each material covenant to be performed and complied with by it under
the Agreement;
(e) this Agreement shall have been terminated in accordance with its
terms; or.
(f) there shall have occurred an event, change, occurrence, or
development of a state of facts or circumstances having a Company Material
Adverse Effect.
which in the reasonable judgment of Parent or Merger Subsidiary makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment
of, or payment for, Shares.
For purposes of this Annex A, the term "Minimum Condition" means that
there shall have been validly tendered and not withdrawn prior to the expiration
of
A-3
the Offer that number of Shares that would constitute more than 662/3% of the
voting power (determined on a fully-diluted basis) on the date of purchase in
the Offer of all the securities of the Company. For purposes of this Agreement,
the term "fully-diluted basis" shall mean the number of Shares outstanding,
together with the Shares which the Company may be required to issue pursuant to
warrants, options or obligations outstanding at that date under any Employee
Benefit Arrangements or otherwise, whether or not vested or then exercisable.
The foregoing conditions are for the benefit of Parent and Merger
Subsidiary and may, subject to the terms of this Agreement, be waived by Parent
and Merger Subsidiary in whole or in part at any time and from time to time in
their discretion. The failure by Parent or Merger Subsidiary at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time prior to the Effective Time.
The capitalized terms used in this Annex A but not defined herein
shall have the meanings set forth in the Agreement to which it is annexed.
Exhibit (D)(2)
VOTING AND TENDER AGREEMENT
VOTING AND TENDER AGREEMENT, dated as of September 25, 2000 (this
"Agreement"), between INTERNATIONAL PAPER COMPANY, a New York corporation (the
"Principal Shareholder"), BUSH BOAKE ALLEN INC., a Virginia corporation (the
"Company"), INTERNATIONAL FLAVORS & FRAGRANCES INC., a New York corporation
("Parent"), and B ACQUISITION CORP., a Virginia corporation and wholly-owned
subsidiary of Parent ("Merger Subsidiary").
WHEREAS, the Company, Parent and Merger Subsidiary propose to enter
into an Agreement and Plan of Merger, dated as of the date hereof (as amended
from time to time in accordance with the terms thereof, the "Merger Agreement"),
which provides for, among other things, an offer to purchase by Merger
Subsidiary all of the outstanding shares of common stock, par value $1.00 per
share, of the Company ("Company Common Stock") followed by the merger of Merger
Subsidiary with and into the Company (the "Merger");
WHEREAS, as of the date hereof, the Principal Shareholder owns
13,150,000 shares of Company Common Stock; and
WHEREAS, as a condition to the willingness of Parent and Merger
Subsidiary to enter into the Merger Agreement, each of Parent and Merger
Subsidiary has required that the Principal Shareholder agree, and in order to
induce Parent and Merger Subsidiary to enter into the Merger Agreement, the
Principal Shareholder has agreed, to enter into this Agreement with respect to
(a) all the shares of Company Common Stock now owned and all the Shares of
Company Common Stock which may hereafter be acquired by, or on behalf of, the
Principal Shareholder (the "Shares") and (b) certain other matters as set forth
herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE 1
Section 1.1 Tender Agreement. (a) The Principal Shareholder hereby
----------------
agrees that it shall promptly (and in any event within ten business days)
following the commencement of the Offer, tender pursuant to the letter of
transmittal included in the Offer Documents, the certificates representing all
of the Shares. The Principal Shareholder shall also deliver in connection
therewith all other customary documents or instruments required to be delivered
pursuant to the terms of the Offer Documents.
2
The Principal Shareholder shall not, subject to applicable law, withdraw the
tender of Shares effected in accordance with this Section 1.1 except if there is
any amendment that adversely affects the Principal Shareholder.
(b) Except as provided in clause (a) above, during the time
this Agreement is in effect, the Principal Shareholder hereby agrees that it
shall not sell, give, assign, hypothecate, pledge, encumber, grant a security
interest in or otherwise dispose of or transfer (whether by operation of law or
by agreement or otherwise), any Shares, or any right, title or interest therein
or thereto or enter into any contract, option or other agreement or
understanding with respect to any of the foregoing.
Section 1.2 Voting Agreement. (a) The Principal Shareholder hereby
----------------
agrees that during the time this Agreement is in effect, at any meeting of the
shareholders of the Company, however called, and in any action by consent of the
shareholders of the Company, the Principal Shareholder shall vote the Shares:
(x) in favor of the Merger, the Merger Agreement and the transactions
contemplated by the Merger Agreement and (y) against any (i) Acquisition
Proposal, (ii) action or agreement that would reasonably be expected to result
in a breach of any covenant or any other obligation or agreement of the Company
under the Merger Agreement or which would reasonably be expected to result in
any of the conditions to the Company's obligations under the Merger Agreement
not being fulfilled or (iii) any other action which is intended, or would
reasonably be expected, to impede or materially delay, the consummation of the
transactions contemplated hereby or by the Merger Agreement or materially
adversely affect the contemplated economic benefits to Parent of the
transactions contemplated hereby or by the Merger Agreement.
(b) Except as otherwise provided herein, the Principal Shareholder
hereby agrees that it will not (i) grant any proxy, power-of-attorney or other
authorization in or with respect to any or all of the Shares to any person other
than Parent or Merger Subsidiary or (ii) deposit such Shares into a voting trust
or enter into a voting agreement or similar arrangement with respect to such
Shares.
Section 1.3 Option. The Principal Shareholder hereby irrevocably
------
grants Parent an option (the "Option") to purchase all of the Shares at a
purchase price per share equal to $48.50 (as adjusted pursuant to Section
1.3(e), the "Option Price") on the terms and subject to the conditions set forth
in this Section 1.3.
(b) Subject to the conditions set forth in Section 1.3(d), Parent
may exercise the Option, at any time prior to the date 40 days after the
expiration or termination of the Merger Agreement (such 40th day being herein
called the "Option Expiration Date") if the Merger Agreement is terminated
pursuant to a "Triggering Termination." For purposes of this Agreement, a
"Triggering Termination" means a termination of the Merger Agreement (x)
pursuant to Section 8.01(g) or (y) as a result
3
of a breach by the Principal Shareholder of its obligations under Section 1.1 or
Section 3.4 hereof in any material respect. Parent shall exercise the Option by
delivering written notice thereof to the Principal Shareholder (the "Notice"),
specifying the date, time and place for the closing of such purchase which date
shall not be less than three business days nor more than five business days from
the date Parent provides the Notice (the "Option Closing"). The Option Closing
shall take place on the date and at the time and place specified in such notice;
provided, that if at such time any of the conditions specified in Section 1.3(d)
- --------
shall not have been satisfied (or waived), Parent may postpone the Option
Closing (but in no event for more than 90 days) until a date within five
business days after such conditions are satisfied. Upon the exercise of the
Option (and subject to the satisfaction of the conditions set forth in Section
1.3(d)), Parent shall be entitled to purchase the Shares under the Option (the
"Option Shares") and the Principal Shareholder shall sell the Option Shares to
Parent.
(c) At the Option Closing, the Principal Shareholder will deliver to
Parent (in accordance with Parent's instructions) the certificates representing
the Option Shares being purchased pursuant to this Section 1.3, duly endorsed or
accompanied by stock powers duly executed in blank. At such Option Closing,
Parent shall deliver to the Principal Shareholder, by bank wire transfer of
immediately available funds, an amount equal to the number of Option Shares
being purchased from the Principal Shareholder as specified in the Notice
multiplied by the Option Price.
(d) The obligation of Parent to purchase the Option Shares at the
Option Closing is subject to the following conditions: (i) the waiting period
under the HSR Act and all other foreign antitrust laws covered by Section
7.01(d) of the Merger Agreement with respect to the acquisition of such Shares
shall have expired or been terminated and (ii) there shall be no preliminary or
permanent injunction or other order, decree or ruling issued by any Governmental
Entity, nor any statute, rule, regulation or order promulgated or enacted by any
Governmental Entity prohibiting, or otherwise restraining, such purchase.
(e) In the event of any change in the Company's capital stock by
reason of any stock dividend, stock split, merger, consolidation,
recapitalization, combination, conversion, exchange of shares, extraordinary or
liquidating dividend or other change in the corporate or capital structure of
the Company which would have the effect of diluting or changing Parent's rights
hereunder, the number and kind of Option Shares or other securities subject to
this Agreement and the Option Price shall be appropriately and equitably
adjusted so that Parent shall receive pursuant to the exercise of the Option
that number and class of shares or other securities or property that Parent or
Merger Subsidiary, as the case may be, would have received in respect of the
Option Shares purchasable pursuant to the exercise of the Option if such
purchase had occurred immediately prior to such event.
4
(f) If the Option is exercised and the Option Shares are acquired by
Parent (or its permitted assigns), Parent shall offer to purchase all
outstanding shares of the Company's Common Stock or effect a merger or similar
business combination at a price per share not less than the price per share paid
for the Option Shares.
Section 1.4 Acknowledgment. The Principal Shareholder acknowledges
--------------
receipt and review of a copy of the Merger Agreement.
Section 1.5 Board Duties. Notwithstanding the foregoing, nothing in
------------
this Agreement shall prohibit any person affiliated with the Principal
Shareholder from fulfilling his or her fiduciary duties as a member of the Board
of Directors of the Company.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF THE PRINCIPAL SHAREHOLDER
The Principal Shareholder hereby represents and warrants to Parent, as
of the date hereof and any Option Closing, as follows:
Section 2.1 Authority Relative to This Agreement. The Principal
------------------------------------
Shareholder has all necessary power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Principal Shareholder and the consummation by the Principal Shareholder
of the transactions contemplated hereby have been duly and validly authorized by
the Principal Shareholder, and no other proceedings on the part of the Principal
Shareholder are necessary to authorize this Agreement, to perform such
obligations or to consummate such transactions. This Agreement has been duly and
validly executed and delivered by the Principal Shareholder and, assuming the
due authorization, execution and delivery by Parent and Merger Subsidiary,
constitutes a legal, valid and binding obligation of the Principal Shareholder,
enforceable against the Principal Shareholder in accordance with its terms.
Section 2.2 No Conflict. (a) The execution and delivery of this
-----------
Agreement by the Principal Shareholder do not, and the performance of its
obligations under this Agreement by the Principal Shareholder and the
consummation of the transactions contemplated hereby shall not, (i) conflict
with or violate the certificate of incorporation, by-laws or other
organizational documents of the Principal Shareholder, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to the
Principal Shareholder or by which the Shares are bound or affected or (iii)
result in any breach of or constitute a default (or an event that with notice or
lapse
5
or time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the Shares pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Principal Shareholder
is a party or by which the Principal Shareholder or the Shares are bound or
affected, except, in the case of clauses (ii) and (iii), for any such conflicts,
violations, breaches, defaults or other occurrences which would not prevent or
delay the performance by the Principal Shareholder of its obligations under this
Agreement.
(b) The execution and delivery of this Agreement by the Principal
Shareholder do not, and the performance of its obligations under this Agreement
by the Principal Shareholder shall not, require any consent, approval,
authorization or permit of, or filing with or notification to, any court or
arbitrator or any Governmental Entity, agency or official except for applicable
requirements, if any, of the Securities Exchange Act and except where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not prevent or delay the performance
by the Principal Shareholder of its obligations under this Agreement.
Section 2.3 Title to the Shares. As of the date hereof, the Principal
-------------------
Shareholder is the sole record and beneficial owner of 13,150,000 shares of
Company Common Stock. Such Shares are all the securities of the Company owned,
either of record or beneficially, by the Principal Shareholder and the Principal
Shareholder owns no other rights or interests exercisable for or convertible
into any securities of the Company. The Principal Shareholder has sole voting
power and sole power to issue instructions with respect to the matters set forth
herein, sole power of disposition, sole power (if any) to demand dissenters'
rights and sole power to agree to all of the matters set forth in this
Agreement, in each case with respect to all of the Shares with no limitations,
qualifications or restrictions on such rights, subject to applicable law. The
Shares are owned free and clear of all Liens. The transfer of the Shares to
Parent or Merger Subsidiary upon consummation of the Offer, or upon exercise of
the Option, will constitute a transfer of valid title to Parent or Merger
Subsidiary, as the case may be, free and clear of all Liens, other than Liens
which may be created by Parent or Merger Subsidiary. The Principal Shareholder
has not appointed or granted any proxy, which appointment or grant is still
effective, with respect to the Shares.
6
ARTICLE 3
COVENANTS OF THE PRINCIPAL SHAREHOLDER
Section 3.1 No Inconsistent Agreement. The Principal Shareholder
-------------------------
hereby covenants and agrees that the Principal Shareholder shall not enter into
any agreement or take any other action that would restrict, limit or interfere
with the performance of the Principal Shareholder's obligations hereunder, under
the Merger Agreement or the consummation of the transactions contemplated hereby
or thereby.
Section 3.2 No Encumbrances. The Principal Shareholder hereby
---------------
covenants and agrees that the Principal Shareholder shall not by any action or
omission cause any Liens to attach to the Shares.
Section 3.3 Publicity. The Principal Shareholder hereby covenants and
---------
agrees that from the date hereof until the Effective Time, the Principal
Shareholder, Parent, Merger Subsidiary and the Company shall use their
respective reasonable best efforts to consult with each other before issuing any
press release or making any public statement with respect to this Agreement and
the transactions contemplated hereby and by the Merger Agreement, and, except as
may be required by the applicable law or any listing agreement with the NYSE,
will not issue any such press release or make any such public statement prior to
such consultation.
Section 3.4 Regulatory Filings. The Principal Shareholder hereby
------------------
covenants and agrees that it will, as soon as practicable, file a Notification
and Report Form under the HSR Act with the FTC and the Antitrust Division in
connection with the transactions contemplated hereby and by the Merger Agreement
as the "ultimate parent entity" of the Company, if required under applicable
law, and will make any filing or seek any consent, including any filings under
any applicable foreign antitrust laws, as may be required in connection with
this Agreement, the Merger Agreement or the transactions contemplated thereby.
The Principal Shareholder shall cooperate with the Company and Parent and use
its best efforts to respond as promptly as practicable to all inquiries received
from the FTC or the Antitrust Division or any regulatory agencies for additional
information or documentation concerning the Principal Shareholder, the Company
or the transactions contemplated hereby or by the Merger Agreement. The
Principal Shareholder shall use its best efforts to take or cause to be taken
all actions necessary, proper or advisable to obtain any consent, waiver,
approval or authorization relating to any antitrust law that is required for the
consummation of the transactions contemplated hereby and by the Merger
Agreement.
Section 3.5 Waiver of Appraisal Rights. The Principal Shareholder
--------------------------
hereby acknowledges that no rights of appraisal are available to it in
connection with the Merger and hereby irrevocably and unconditionally waives,
and agrees to prevent the exercise of, any rights of appraisal, any dissenters'
rights and any similar rights
7
relating to the Merger or any related transaction that the Principal Shareholder
may directly or indirectly have by virtue of the ownership of any Shares.
Section 3.6 Reasonable Best Efforts. The Principal Shareholder hereby
-----------------------
covenants and agrees, subject to the terms and conditions of this Agreement, to
use its reasonable best efforts to take, or cause to be taken, all actions, and
to do or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated hereby.
Section 3.7 Further Assurances. The Principal Shareholder hereby
------------------
covenants and agrees that, from time to time and without additional
consideration, the Principal Shareholder shall (at the Principal Shareholder's
sole expense) execute and deliver, or cause to be executed and delivered, such
additional transfers, assignments, endorsements, proxies, consents and other
instruments (which shall be reasonably satisfactory in form and substance to
Parent) and shall, at the Principal Shareholder's sole expense, take such
further actions, as Parent may reasonably request for the purpose of carrying
out and furthering the intent of this Agreement.
Section 3.8 No Solicitation. The Principal Shareholder acknowledges
---------------
that it is aware of the covenants of the Company contained in Section 6.03 of
the Merger Agreement and hereby agrees to comply with the terms of such section
as if it were an "agent" of the Company for all purposes of said section.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT
Each of Parent and Merger Subsidiary has all necessary power and
authority to execute, deliver and perform its obligations under this Agreement
and this Agreement has been duly authorized, executed and delivered by each of
Parent and Merger Subsidiary and is a valid and binding agreement of each of
Parent and Merger Subsidiary enforceable against each of Parent and Merger
Subsidiary in accordance with its terms.
ARTICLE 5
MISCELLANEOUS
Section 5.1 Termination. Except as set forth below, this Agreement
-----------
shall terminate upon the earliest of (i) the Effective Time, (ii) the Option
Closing and (iii) the termination of the Merger Agreement in accordance with its
terms; provided, however, that this Agreement shall not terminate under this
-------- -------
clause (iii) if the Merger
8
Agreement is terminated pursuant to a Triggering Termination unless and until
the Option expires in accordance with Section 1.3. Notwithstanding the
foregoing, the Principal Shareholder's representation contained in Section 2.3
and covenant set forth in Section 3.7 shall survive any termination occasioned
by clause (ii) of the preceding sentence.
Section 5.2 Fees and Expenses. Except as otherwise provided herein,
-----------------
all costs and expenses incurred in connection with the transactions contemplated
by this Agreement shall be paid by the party incurring such costs and expenses.
Section 5.3 Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, registered
or certified mail (postage prepaid, return receipt requested) or courier
service, or by facsimile (and shall be deemed to have been given upon proof of
receipt), to the other party as follows:
(a) If to the Principal Shareholder, to:
International Paper Company
2 Manhattanville Road
Purchase, New York 10577
Telephone: (914) 397-1500
Telecopy: (914) 397-1909
Attention: General Counsel
with a copy to:
O'Melveny & Myers LLP
Citicorp Center
153 East 53rd Street
New York, New York 10022-4611
Telephone: (212) 326-2000
Telecopy: (212) 326-2061
Attention: Jeffrey J. Rosen, Esq.
(b) if to the Company, to:
Bush Boake Allen Inc.
7 Mercedes Drive
Montvale, New Jersey 07645
Telephone: (201) 391-9870
Telecopy: (201) 782-3339
Attention: Dennis M. Meany, Esq.
9
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019
Telephone: (212) 373-3000
Telecopy: (212) 757-3990
Attention: Robert B. Schumer, Esq.;
(c) if to Parent or Merger Subsidiary, to:
International Flavors & Fragrances Inc.
521 West 57th Street
New York, New York 10019
Telephone: (212) 765-5500
Telecopy: (212) 708-7132
Attention: Stephen A. Block, Esq.
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, New York 10036-6522
Telephone: (212) 735-3000
Telecopy: (212) 735-2000
Attention: Roger S. Aaron, Esq.
Stephen F. Arcano, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above.
Section 5.4 Assignment. Neither this Agreement nor any of the rights,
----------
interests or obligations hereunder shall be assigned, delegated or transferred,
in whole or in part, by any of the parties hereto (whether by operation of law
or otherwise) without the prior written consent of the other parties hereto (and
which transfer shall not relieve the transferor of its obligations hereunder in
the event of a breach by the transferee) provided that Parent or Merger
--------
Subsidiary may assign this Agreement to any wholly-owned Subsidiary of Parent
without the prior written consent of the other parties hereto.
Section 5.5 No Third-Party Beneficiaries. This Agreement shall be
----------------------------
binding upon and inure solely to the benefit of each party hereto and its
respective successors and permitted assigns, and nothing in this Agreement,
express or implied, is
10
intended to or shall confer upon any other person any right, benefits or
remedies of any nature whatsoever.
Section 5.6 Specific Performance. The parties hereto agree that
--------------------
irreparable damage would occur in the event that the provisions of this
Agreement were not performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or in equity.
Section 5.7 Entire Agreement. This Agreement constitutes the entire
----------------
agreement among Parent, Merger Subsidiary, the Company and Principal Shareholder
with respect to the subject matter hereof (other than the Merger Agreement) and
supersedes all prior agreements and understandings, both written and oral, among
Parent, Merger Subsidiary, the Company and the Principal Shareholder with
respect to the subject matter hereof.
Section 5.8 Amendment. This Agreement may not be modified, amended,
---------
altered or supplemented except by an instrument in writing signed by each of the
parties hereto.
Section 5.9 Severability. If any term or other provision of this
------------
Agreement is invalid, illegal or incapable of being enforced by any rule or law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of this Agreement is not affected in any manner materially adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereby shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible to the fullest extent permitted by applicable law
in a mutually acceptable manner in order that the terms of this Agreement remain
as originally contemplated.
Section 5.10 Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the laws of the State of New York regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law.
Section 5.11 Consent to Jurisdiction. Each party to this Agreement
-----------------------
hereby irrevocably agrees that any legal action or proceeding arising out of or
relating to this Agreement or any agreements or transactions contemplated hereby
shall be brought in the United States District Court for the Southern District
of New York or any appropriate state court in the State of New York and hereby
expressly submits to the personal jurisdiction and venue of such courts for the
purposes thereof and expressly waives any claim of improper venue and any claim
that such courts are an inconvenient forum. Each party hereby irrevocably
consents to the service of process of any of the aforementioned courts in any
such suit, action or proceeding by the
11
mailing of copies thereof by registered or certified mail, post prepaid, to the
address set forth in Section 5.3, such service to become effective ten days
after such mailing.
SECTION 5.12 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
--------------------
IRREVOCABLY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE
PRINCIPAL SHAREHOLDER, THE COMPANY, PARENT OR MERGER SUBSIDIARY IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.
Section 5.13 Defined Terms. Capitalized terms used herein but not
-------------
defined herein shall have the meanings ascribed to them in the Merger Agreement.
Section 5.14 Counterparts. This Agreement may be executed in any
------------
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the Principal Shareholder, the Company, Parent and
Merger Subsidiary have caused this Agreement to be duly executed on the date
hereof.
INTERNATIONAL PAPER COMPANY
By: /s/ C. Wesley Smith
-------------------------------------
Name: C. Wesley Smith
Title: Executive Vice President
BUSH BOAKE ALLEN INC.
By: /s/ Julian W. Boyden
------------------------------------
Name: Julian W. Boyden
Title: Chairman, President & CEO
12
INTERNATIONAL FLAVORS & FRAGRANCES INC.
By: /s/ Stephen A. Block
---------------------------------
Name: Stephen A. Block
Title: Senior Vice President, General
Counsel and Secretary
B ACQUISITION CORP.
By: /s/ Stephen A. Block
----------------------------------
Name: Stephen A. Block
Title: Vice President, Secretary
and Treasurer
