SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE TO
(RULE 14D-100)
TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
BOISE CASCADE OFFICE PRODUCTS CORPORATION
(Name of Subject Company)
BOISE CASCADE CORPORATION
BOISE ACQUISITION CORPORATION
(Name of filing persons, Offerors)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
097403 10 9
(CUSIP Number of Class of Securities)
JOHN W. HOLLERAN
SENIOR VICE PRESIDENT
BOISE CASCADE CORPORATION
P.O. BOX 50
BOISE, ID 83728-0001
(208) 384-6161
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Bidders)
COPY TO:
MARGARET A. BROWN
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
ONE BEACON STREET
BOSTON, MA 02108
TELEPHONE: (617) 573-4800
FACSIMILE: (617) 573-4822
CALCULATION OF FILING FEE
- --------------------------------------------------------------- ------------------------------------------------------------
Transaction Valuation* Amount of Filing Fee
- --------------------------------------------------------------- ------------------------------------------------------------
- --------------------------------------------------------------- ============================================================
$237,955,311 $47,591
- --------------------------------------------------------------- ============================================================
* Estimated for purposes of calculating the amount of the filing fee
only. The filing fee calculation assumes the purchase of all 12,415,735
outstanding shares not owned by Boise Cascade Corporation at a purchase
price of $16.50 per share. The transaction value also includes the
offer price of $16.50 per share multiplied by the number of outstanding
options, which is 2,005,798. The amount of the filing fee, calculated
in accordance with rule 0-11 of the Securities Exchange Act of 1934. As
amended, equals 1/50th of one percent of the aggregate value of this
transaction.
/_/ 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: $ Filing party:
Form or registration no.: Schedule TO Date filed:
/_/ 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:
/ / third-party tender offer subject to Rule 14d-1.
/X/ issuer tender offer subject to Rule 13e-4.
/X/ 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 a tender offer: / /
TENDER OFFER
This Tender Offer Statement on Schedule TO (this "Statement")
relates to a tender offer by Boise Acquisition Corporation, a Delaware
corporation ("Purchaser") and a wholly owned subsidiary of Boise Cascade
Corporation, a Delaware corporation ("Parent"), to purchase all outstanding
shares of common stock, par value $0.01 per share (the "Shares"), of Boise
Cascade Office Products Corporation, a Delaware corporation ("BCOP"), which
are not owned by Parent of any of Parent's subsidiaries, at $16.50 per share,
net to the seller in cash, without interest, upon the terms and subject to
the conditions set forth in the Offer to Purchase dated March 22, 2000 (the
"Offer to Purchase"), a copy of which is attached hereto as Exhibit
(a)(1)(A), and in the related Letter of Transmittal, a copy of which is
attached hereto as Exhibit (a)(1)(B) (which, as they may be amended or
supplemented from time to time, together constitute the "Offer").
2
The information in the Offer to Purchase, including all schedules
and exhibits thereto, is hereby incorporated herein by reference in response
to all of the items of this Statement, except as otherwise set forth below.
Item 3. Identity and Background of Filing Person
In partial response to Item 3, during the last five years, neither
Purchaser nor Parent nor, to the best knowledge of Purchaser and Parent, any of
the persons listed in Schedule I to the Offer to Purchase (i) have been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which any such
person was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting activities subject to, federal or state securities
laws or finding any violation of such laws.
Item 12. Materials to be Filed as Exhibits
(a)(1)(A) Offer to Purchase dated March 12, 2000.
(a)(1)(B) Letter of Transmittal.
(a)(1)(C) Notice of Guaranteed Delivery.
(a)(1)(D) Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
(a)(1)(E) Letter to Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(1)(F) Letter to Participants in the Employee Stock Purchase Plan.
(a)(1)(G) Guidelines for Certification of Taxpayer Identification Number
on substitute Form W-9.
(a)(1)(H) Press Release dated March 13, 2000.
(a)(1)(I) Press Release dated March 22, 2000.
(a)(2) Solicitation/Recommendation Statement on Schedule 14D-9 of
BCOP.
(b) 1997 Revolving Credit Agreement Among Boise Cascade
Corporation, Bank of America National Trust and Savings
Association, Chase Manhattan Bank, National Westminster Bank,
PLC, and the Financial Institutions Parties thereto, dated as
of March 11, 1997, incorporated by reference from Exhibit 4.2
to Form 10-K filed on March 17, 1997.
3
(c)(1) Opinion of Credit Suisse First Boston Corporation to the
Special Committee of the Board of Directors of BCOP, dated
March 12, 2000 (included as Exhibit A to the Offer to Purchase
filed herewith as Exhibit (a)(1)(A)).
(c)(2) Materials presented by Credit Suisse First Boston
Corporation to the Special Committee of the Board of Directors
of BCOP, dated March 10, 2000.
(c)(3) Materials presented by Goldman, Sachs & Co. to the Board of
Directors of Boise Cascade Corporation, dated as of
March 9, 2000.
(d)(1) Agreement and Plan of Merger, dated as of March 12, 2000, by
and among Boise Cascade Corporation, Boise Cascade Office
Products Corporation and Boise Acquisition Corporation
(included as Exhibit B to the Offer to Purchase filed herewith
as Exhibit (a)(1)(A)).
(d)(2) Shareholder Agreement dated as of April 1, 1995 between Boise
Cascade Corporation and Boise Cascade Office Products
Corporation.
(e) Not applicable.
(f) Section 262 of the Delaware General Corporation Law (included
as Exhibit C to the Offer to Purchase filed herewith as
Exhibit (a)(1)(A)).
(g) Not applicable.
(h) Not applicable.
SIGNATURES
After due inquiry and to the best of the undersigned's knowledge and
belief, the undersigned certify that the information set forth in this Statement
is true, complete and correct.
BOISE CASCADE CORPORATION
By: /s/ JOHN W. HOLLERAN
--------------------------------
Name: John W. Holleran
Title: Senior Vice President
BOISE ACQUISITION CORPORATION
By: /s/ KAREN E. GOWLAND
--------------------------------
Name: Karen E. Gowland
Title: Secretary
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
(a)(1)(A) Offer to Purchase dated March 22, 2000.
(a)(1)(B) Letter of Transmittal.
(a)(1)(C) Notice of Guaranteed Delivery.
(a)(1)(D) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(1)(E) Letter to Clients for Use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.
(a)(1)(F) Letter to Participants in the Employee Stock Purchase
Plan.
(a)(1)(G) Guidelines for Certification of Taxpayer
Identification Number on substitute Form W-9.
(a)(1)(H) Press Release dated March 13, 2000.
(a)(1)(I) Press Release dated March 22, 2000.
(a)(2) Solicitation/Recommendation Statement on Schedule
14D-9 of BCOP.
(b) 1997 Revolving Credit Agreement Among Boise Cascade
Corporation, Bank of America National Trust and
Savings Association, Chase Manhattan Bank, National
Westminster Bank, PLC, and the Financial Institutions
Parties thereto, dated as of March 11, 1997,
incorporated by reference from Exhibit 4.2 to Form
10-K filed on March 17, 1997.
(c)(1) Opinion of Credit Suisse First Boston Corporation to
the Special Committee of Directors of BCOP, dated
March 12, 2000 (included as Exhibit A to the Offer to
Purchase filed herewith as Exhibit (a)(1)(A)).
(c)(2) Materials presented by Credit Suisse First Boston
Corporation to the Special Committee of the Board of
Directors of BCOP, dated March 10, 2000.
(c)(3) Materials presented by Goldman, Sachs & Co. to the
Board of Directors of Boise Cascade Corporation,
dated as of March 9, 2000.
(d)(1) Agreement and Plan of Merger, dated as of March 12,
2000, by and among Boise Cascade Corporation, Boise
Cascade Office Products Corporation and Boise
Acquisition Corporation (included as Exhibit B to the
Offer to Purchase filed herewith as Exhibit
(a)(1)(A)).
(d)(2) Shareholder Agreement dated as of April 1, 1995
between Boise Cascade Corporation and Boise Cascade
Office Products Corporation.
(e) Not applicable.
(f) Section 262 of the Delaware General Corporation Law
(included as Exhibit C to the Offer to Purchase filed
herewith as Exhibit (a)(1)(A)).
(g) Not applicable.
(h) Not applicable.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE TO
(RULE 14D-100)
TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
BOISE CASCADE OFFICE PRODUCTS CORPORATION
(Name of Subject Company)
BOISE CASCADE CORPORATION
BOISE ACQUISITION CORPORATION
(Name of filing persons, Offerors)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
097403 10 9
(CUSIP Number of Class of Securities)
JOHN W. HOLLERAN
SENIOR VICE PRESIDENT
BOISE CASCADE CORPORATION
P.O. BOX 50
BOISE, ID 83728-0001
(208) 384-6161
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Bidders)
COPY TO:
MARGARET A. BROWN
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
ONE BEACON STREET
BOSTON, MA 02108
TELEPHONE: (617) 573-4800
FACSIMILE: (617) 573-4822
CALCULATION OF FILING FEE
- --------------------------------------------------------------- ------------------------------------------------------------
Transaction Valuation* Amount of Filing Fee
- --------------------------------------------------------------- ------------------------------------------------------------
- --------------------------------------------------------------- ============================================================
$237,955,311 $47,591
- --------------------------------------------------------------- ============================================================
* Estimated for purposes of calculating the amount of the filing fee
only. The filing fee calculation assumes the purchase of all 12,415,735
outstanding shares not owned by Boise Cascade Corporation at a purchase
price of $16.50 per share. The transaction value also includes the
offer price of $16.50 per share multiplied by the number of outstanding
options, which is 2,005,798. The amount of the filing fee, calculated
in accordance with rule 0-11 of the Securities Exchange Act of 1934. As
amended, equals 1/50th of one percent of the aggregate value of this
transaction.
/_/ 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: $ Filing party:
Form or registration no.: Schedule TO Date filed:
/_/ 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:
/ / third-party tender offer subject to Rule 14d-1.
/X/ issuer tender offer subject to Rule 13e-4.
/X/ 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 a tender offer: / /
TENDER OFFER
This Tender Offer Statement on Schedule TO (this "Statement")
relates to a tender offer by Boise Acquisition Corporation, a Delaware
corporation ("Purchaser") and a wholly owned subsidiary of Boise Cascade
Corporation, a Delaware corporation ("Parent"), to purchase all outstanding
shares of common stock, par value $0.01 per share (the "Shares"), of Boise
Cascade Office Products Corporation, a Delaware corporation ("BCOP"), which
are not owned by Parent of any of Parent's subsidiaries, at $16.50 per share,
net to the seller in cash, without interest, upon the terms and subject to
the conditions set forth in the Offer to Purchase dated March 22, 2000 (the
"Offer to Purchase"), a copy of which is attached hereto as Exhibit
(a)(1)(A), and in the related Letter of Transmittal, a copy of which is
attached hereto as Exhibit (a)(1)(B) (which, as they may be amended or
supplemented from time to time, together constitute the "Offer").
2
The information in the Offer to Purchase, including all schedules
and exhibits thereto, is hereby incorporated herein by reference in response
to all of the items of this Statement, except as otherwise set forth below.
Item 3. Identity and Background of Filing Person
In partial response to Item 3, during the last five years, neither
Purchaser nor Parent nor, to the best knowledge of Purchaser and Parent, any of
the persons listed in Schedule I to the Offer to Purchase (i) have been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which any such
person was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting activities subject to, federal or state securities
laws or finding any violation of such laws.
Item 12. Materials to be Filed as Exhibits
(a)(1)(A) Offer to Purchase dated March 12, 2000.
(a)(1)(B) Letter of Transmittal.
(a)(1)(C) Notice of Guaranteed Delivery.
(a)(1)(D) Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
(a)(1)(E) Letter to Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(1)(F) Letter to Participants in the Employee Stock Purchase Plan.
(a)(1)(G) Guidelines for Certification of Taxpayer Identification Number
on substitute Form W-9.
(a)(1)(H) Press Release dated March 13, 2000.
(a)(1)(I) Press Release dated March 22, 2000.
(a)(2) Solicitation/Recommendation Statement on Schedule 14D-9 of
BCOP.
(b) 1997 Revolving Credit Agreement Among Boise Cascade
Corporation, Bank of America National Trust and Savings
Association, Chase Manhattan Bank, National Westminster Bank,
PLC, and the Financial Institutions Parties thereto, dated as
of March 11, 1997, incorporated by reference from Exhibit 4.2
to Form 10-K filed on March 17, 1997.
3
(c)(1) Opinion of Credit Suisse First Boston Corporation to the
Special Committee of the Board of Directors of BCOP, dated
March 12, 2000 (included as Exhibit A to the Offer to Purchase
filed herewith as Exhibit (a)(1)(A)).
(c)(2) Materials presented by Credit Suisse First Boston
Corporation to the Special Committee of the Board of Directors
of BCOP, dated March 10, 2000.
(c)(3) Materials presented by Goldman, Sachs & Co. to the Board of
Directors of Boise Cascade Corporation, dated as of
March 9, 2000.
(d)(1) Agreement and Plan of Merger, dated as of March 12, 2000, by
and among Boise Cascade Corporation, Boise Cascade Office
Products Corporation and Boise Acquisition Corporation
(included as Exhibit B to the Offer to Purchase filed herewith
as Exhibit (a)(1)(A)).
(d)(2) Shareholder Agreement dated as of April 1, 1995 between Boise
Cascade Corporation and Boise Cascade Office Products
Corporation.
(e) Not applicable.
(f) Section 262 of the Delaware General Corporation Law (included
as Exhibit C to the Offer to Purchase filed herewith as
Exhibit (a)(1)(A)).
(g) Not applicable.
(h) Not applicable.
SIGNATURES
After due inquiry and to the best of the undersigned's knowledge and
belief, the undersigned certify that the information set forth in this Statement
is true, complete and correct.
BOISE CASCADE CORPORATION
By: /s/ JOHN W. HOLLERAN
--------------------------------
Name: John W. Holleran
Title: Senior Vice President
BOISE ACQUISITION CORPORATION
By: /s/ KAREN E. GOWLAND
--------------------------------
Name: Karen E. Gowland
Title: Secretary
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
(a)(1)(A) Offer to Purchase dated March 22, 2000.
(a)(1)(B) Letter of Transmittal.
(a)(1)(C) Notice of Guaranteed Delivery.
(a)(1)(D) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(1)(E) Letter to Clients for Use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.
(a)(1)(F) Letter to Participants in the Employee Stock Purchase
Plan.
(a)(1)(G) Guidelines for Certification of Taxpayer
Identification Number on substitute Form W-9.
(a)(1)(H) Press Release dated March 13, 2000.
(a)(1)(I) Press Release dated March 22, 2000.
(a)(2) Solicitation/Recommendation Statement on Schedule
14D-9 of BCOP.
(b) 1997 Revolving Credit Agreement Among Boise Cascade
Corporation, Bank of America National Trust and
Savings Association, Chase Manhattan Bank, National
Westminster Bank, PLC, and the Financial Institutions
Parties thereto, dated as of March 11, 1997,
incorporated by reference from Exhibit 4.2 to Form
10-K filed on March 17, 1997.
(c)(1) Opinion of Credit Suisse First Boston Corporation to
the Special Committee of Directors of BCOP, dated
March 12, 2000 (included as Exhibit A to the Offer to
Purchase filed herewith as Exhibit (a)(1)(A)).
(c)(2) Materials presented by Credit Suisse First Boston
Corporation to the Special Committee of the Board of
Directors of BCOP, dated March 10, 2000.
(c)(3) Materials presented by Goldman, Sachs & Co. to the
Board of Directors of Boise Cascade Corporation,
dated as of March 9, 2000.
(d)(1) Agreement and Plan of Merger, dated as of March 12,
2000, by and among Boise Cascade Corporation, Boise
Cascade Office Products Corporation and Boise
Acquisition Corporation (included as Exhibit B to the
Offer to Purchase filed herewith as Exhibit
(a)(1)(A)).
(d)(2) Shareholder Agreement dated as of April 1, 1995
between Boise Cascade Corporation and Boise Cascade
Office Products Corporation.
(e) Not applicable.
(f) Section 262 of the Delaware General Corporation Law
(included as Exhibit C to the Offer to Purchase filed
herewith as Exhibit (a)(1)(A)).
(g) Not applicable.
(h) Not applicable.
Exhibit 12(a)(1)(A)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
BOISE CASCADE OFFICE PRODUCTS CORPORATION
AT
$16.50 NET PER SHARE
BY
BOISE ACQUISITION CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
BOISE CASCADE CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON WEDNESDAY, APRIL 19, 2000, UNLESS THE OFFER IS EXTENDED. SHARES
WHICH ARE TENDERED PURSUANT TO THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR
TO THE EXPIRATION DATE.
THIS OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER DATED
AS OF MARCH 12, 2000, BY AND AMONG BOISE CASCADE CORPORATION ("PARENT"), BOISE
ACQUISITION CORPORATION ("PURCHASER") AND BOISE CASCADE OFFICE PRODUCTS
CORPORATION ("BCOP"). THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE
BEING TENDERED, AND NOT WITHDRAWN BEFORE THE OFFER EXPIRES, A MAJORITY OF ALL
OUTSTANDING SHARES OF BCOP'S COMMON STOCK NOT BENEFICIALLY OWNED BY PARENT OR
ANY OF PARENT'S SUBSIDIARIES.
THE BOARD OF DIRECTORS OF BCOP, BASED ON THE UNANIMOUS RECOMMENDATION OF A
COMMITTEE OF ITS INDEPENDENT DIRECTORS, HAS UNANIMOUSLY APPROVED THE OFFER, THE
MERGER AGREEMENT AND THE MERGER AND HAS DETERMINED THAT THE TERMS OF THE OFFER
AND THE MERGER ARE ADVISABLE, FAIR TO AND IN THE BEST INTERESTS OF THE
SHAREHOLDERS OF BCOP (OTHER THAN PARENT AND ITS AFFILIATES), AND RECOMMENDS THAT
THE SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THIS OFFER
TO PURCHASE.
IMPORTANT
Any shareholder who would like to tender their BCOP shares should either:
(i) complete and sign the enclosed letter of transmittal (or an exact copy of
the letter) according to the instructions in the letter of transmittal, mail or
deliver it and any other required documents to the depositary and either deliver
the certificates for such shares to the depositary along with the letter of
transmittal or tender the shares pursuant to the procedure for book-entry
transfer set forth in "THE OFFER--Procedures For Tendering Shares;" or
(ii) request his or her broker, dealer, bank, trust company, or other nominee to
effect the transaction for him or her.
Shareholders having shares registered in the name of a broker, dealer, bank,
trust company, or other nominee must contact the broker, dealer, bank, trust
company, or other nominee if they desire to tender those shares. A shareholder
who desires to tender shares and whose certificates for shares are not
immediately available, or who cannot comply with the procedures for book-entry
transfer described in this offer to purchase on a timely basis, may tender his
or her shares by following the procedure for guaranteed delivery set forth in
"THE OFFER--Procedures For Tendering Shares."
Questions and requests for assistance, or for additional copies of this
Offer to Purchase, the letter of transmittal, or other tender offer materials,
may be directed to the information agent or Parent at the addresses and
telephone numbers on the back cover of this offer to purchase. Shareholders may
also contact brokers, dealers, banks, or trust companies for assistance
concerning the offer.
NEITHER THE SECURITIES EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS: APPROVED OR DISAPPROVED OF THIS TRANSACTION, PASSED UPON THE
FAIRNESS OR MERITS OF THIS TRANSACTION, OR PASSED UPON THE ACCURACY OR ADEQUACY
OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE INFORMATION AGENT FOR THE OFFER IS:
D. F. KING & CO., INC.
THE DATE OF THIS OFFER TO PURCHASE IS MARCH 22, 2000.
TABLE OF CONTENTS
PAGE
--------
QUESTIONS AND ANSWERS ABOUT THE OFFER....................... 1
INTRODUCTION................................................ 4
SPECIAL FACTORS............................................. 6
Background of the Transaction....................... 6
Recommendations of the Special Committee and the
Board; Fairness of the Offer and the Merger......... 8
Opinion of Financial Advisor to the Special
Committee........................................... 10
Position of Parent and Purchaser Regarding the
Fairness of the Offer and the Merger................ 13
Analysis by Parent's Financial Advisor.............. 15
Purpose and Structure of and Reasons for the Offer
and the Merger...................................... 19
Plans for BCOP after the Offer and the Merger;
Effects of the Offer and the Merger................. 20
Rights of Shareholders in the Merger................ 21
The Merger Agreement................................ 21
Interests of Persons in the Offer and the Merger.... 25
Beneficial Ownership of Shares, Present Intentions
and Recommendations................................. 26
Litigation Related to the Offer..................... 28
Material United States Federal Income Tax
Consequences........................................ 28
THE OFFER................................................... 30
1. Terms of the Offer.......................................... 30
2. Acceptance for Payment and Payment.......................... 31
3. Procedures for Tendering Shares............................. 32
4. Withdrawal Rights........................................... 35
5. Price Range of the Shares................................... 36
6. Information Concerning BCOP................................. 36
7. Information Concerning Parent and Purchaser................. 38
8. Source and Amount of Funds.................................. 39
9. Transactions between Parent and BCOP........................ 39
10. Dividends and Distributions................................. 40
11. Effects of the Offer on the Market for Shares; NYSE and
Exchange Act Registration................................. 40
12. Conditions of the Offer..................................... 41
13. Legal Matters; Regulatory Approvals......................... 43
14. Fees and Expenses........................................... 44
15. Miscellaneous............................................... 44
Schedule I Directors and Executive Officers of Parent and Purchaser
Exhibit A Opinion of Credit Suisse First Boston Corporation
Exhibit B Agreement and Plan of Merger, dated as of March 12, 2000, by
and among Parent, Purchaser and BCOP
Exhibit C Text of Section 262 of the Delaware General Corporation Law
QUESTIONS AND ANSWERS ABOUT THE OFFER
WHAT ARE BOISE CASCADE AND BOISE CASCADE OFFICE PRODUCTS PROPOSING?
Boise Cascade Corporation ("Parent") currently owns 81% of the outstanding
common stock of Boise Cascade Office Products Corporation ("BCOP"). Parent has
entered into a merger agreement with BCOP pursuant to which Parent is offering,
through its wholly owned subsidiary, Boise Acquisition Corporation
("Purchaser"), to purchase all of the outstanding common stock of BCOP which it
does not own for $16.50 per share in cash. The offer is contingent on, among
other things, there being tendered a majority of BCOP's stock which is not owned
by Parent. The following are some of the questions you may have and our answers
to those questions. Please read carefully the remainder of this offer to
purchase and the enclosed letter of transmittal. The information in this section
is only a summary, is not complete and may not contain all the information that
may be important to you.
WHO IS OFFERING TO BUY MY SECURITIES?
Parent is offering to buy your securities through its wholly owned
subsidiary, Boise Acquisition Corporation, a Delaware corporation formed for the
purpose of making a tender offer for all of the common stock of BCOP not already
owned by Parent.
HOW MUCH ARE YOU OFFERING TO PAY AND WHAT IS THE FORM OF PAYMENT?
We are offering to pay $16.50 per share, net to you, in cash. If you are a
registered shareholder and you tender your shares directly to the depositary,
you will not have to pay brokerage fees or similar expenses. If you hold shares
through a broker or bank, we urge you to consult your broker or bank to
determine whether transaction costs are applicable.
DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
Parent will provide Purchaser with the funds required to pay for the shares.
Parent will use working capital and funds borrowed under its existing borrowing
facilities to finance the purchase. The offer is not contingent on obtaining any
financing. (See page 39)
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
The offer is not subject to any financing condition. Therefore, because the
form of payment consists solely of cash and all of the funding which will be
needed will come from working capital or existing financing arrangements, we do
not think our financial condition is relevant to your decision as to whether to
tender in the offer.
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
You will have until 5:00 P.M., New York City time, on April 19, 2000, to
decide whether to tender your shares in the offer, unless the offer is extended.
If you cannot deliver everything that is required 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 page 33)
CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?
We can extend the offer for any reason through June 30, 2000.
(See page 30)
1
HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
If we extend the offer, we will make a public announcement of the extension,
no later than 9:00 A.M., New York City time, on the day after the day on which
the offer was scheduled to expire.
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
We are not obligated to purchase any tendered shares unless the number of
shares tendered equals a majority of the shares not owned by Purchaser, Parent
or any other subsidiary of Parent. We are also not obligated to purchase shares
if there is a material adverse change in BCOP or its business. Please see
page 41 for a summary of the conditions to the offer.
HOW DO I TENDER MY SHARES?
If you hold your shares in your own name, you tender your shares by:
- completing the enclosed letter of transmittal, and
- mailing your stock certificates along with the letter of transmittal to
the depositary in the enclosed envelope.
If your stock certificates are not immediately available, see the guaranteed
delivery procedures at page 33.
If your shares are held in the name of your broker, bank or other nominee
(including shares held in Boise Cascade's Supplemental Savings and Retirement
Plan), you must instruct your nominee to tender your shares on your behalf by
completing the form sent to you by the nominee and returning the form to it.
If you hold shares through Boise Cascade's Employee Stock Purchase Plan, see
the special instructions enclosed with the letter of transmittal.
UNTIL WHEN CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
In general, you can withdraw your previously tendered shares at any time
before the offer expires. (See page 35)
WHAT IS THE PROCEDURE FOR WITHDRAWING TENDERED SHARES?
You may withdraw tendered shares any time before the offer expires by
mailing or faxing your notice of withdrawal to the depositary if your shares are
held in your name or to your broker or bank if they are held in their name. In
general, for the notice to be effective, the depositary must receive your notice
of withdrawal before the offer expires. (See page 35)
WHAT DOES BCOP'S BOARD OF DIRECTORS THINK OF THE OFFER?
BCOP's board of directors asked a committee of independent directors to
consider the offer. The committee engaged its own legal counsel and its own
financial advisor.
Credit Suisse First Boston, the independent committee's financial advisor,
delivered an opinion to the committee that, subject to the assumptions and
considerations described in the opinion, the offer price of $16.50 per share is
fair, from a financial point of view, to BCOP's public shareholders. The
complete opinion of Credit Suisse First Boston is attached as Exhibit A. We urge
you to read it.
After careful consideration, the committee of independent directors
unanimously determined that the offer, the offer price, and the merger are
advisable, fair to you, and in your best interest. They recommend that you
accept the offer and tender your shares pursuant to the offer. The full board of
2
directors of BCOP unanimously agreed with the conclusion and recommendations of
the committee of independent directors.
The material factors upon which the committee of independent directors and
the full board of directors of BCOP based their determination regarding the
fairness of the Offer Price are contained on pages 8 to 10.
The board of directors of Parent has also concluded that the offer price is
fair to BCOP's shareholders. (See page 13)
WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL BCOP SHARES ARE NOT
TENDERED IN THE OFFER?
If we accept for payment and pay for at least a majority of the publicly
held shares of BCOP, Purchaser will be merged with and into BCOP. BCOP will be
the surviving corporation and will become a wholly owned subsidiary of Parent.
In the merger, shareholders who did not tender their shares will receive $16.50
per share in cash in exchange for their shares.
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
If you don't tender your shares and the merger described above takes place,
your shares will be cancelled. Unless you exercise dissenters' rights under
Delaware law (see page 21), you will receive the same amount of cash per share
which you would have received had you tendered your 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. However, if the merger does not take place,
the number of shareholders and the number of shares of BCOP which are still in
the hands of the public may be so small that there no longer will be an active
public trading market (or, possibly, any public trading market) for BCOP common
stock. Also, BCOP may cease making filings with the SEC or otherwise cease being
required to comply with the SEC rules relating to publicly held companies.
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On November 30, 1999, the day before the announcement of our initial
proposal to purchase the publicly held shares of BCOP, the last sale price of
BCOP stock on the New York Stock Exchange was $11.50. During the 30 trading days
prior to December 1, 1999, the average closing price was $10.56. On March 3,
2000, the last trading day before the announcement of our revised proposal to
purchase the publicly held shares of BCOP, the last sale price of BCOP stock on
the NYSE was $14.875. On March 10, 2000, the last trading day before the
announcement that the merger agreement was signed and that we would be
commencing a tender offer, the closing price was $15.1875. We advise you to
obtain a recent quotation for shares of BCOP common stock in deciding whether to
tender your shares.
WHAT ARE THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF TENDERING SHARES?
The receipt of cash for shares pursuant to the offer or the merger will be a
taxable transaction for United States federal income tax purposes and possibly
for state and local income tax purposes as well. In general, a shareholder who
sells shares pursuant to the 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 offer or exchanged for cash pursuant to the merger. 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. Because individual circumstances may differ, you should consult your
tax advisor to determine the particular tax effects to you. (See page 28)
TO WHOM CAN I TALK IF I HAVE QUESTIONS ABOUT THE OFFER?
You can call the Boise Cascade Corporation Shareholder Services Department
at (800) 544-6473.
3
TO THE HOLDERS OF COMMON STOCK OF BOISE CASCADE OFFICE PRODUCTS CORPORATION:
INTRODUCTION
Boise Acquisition Corporation, a Delaware corporation ("Purchaser") and a
wholly owned subsidiary of Boise Cascade Corporation, a Delaware corporation
("Parent"), hereby offers to purchase all outstanding shares of common stock,
par value $.01 per share (the "Shares"), of Boise Cascade Office Products
Corporation, a Delaware corporation ("BCOP"), which are not owned by Parent or
any of Parent's subsidiaries (the "Public Shares"), upon the terms and subject
to the conditions in this Offer to Purchase and in the enclosed Letter of
Transmittal (which, as they may be amended and supplemented from time to time,
together constitute the "Offer"), at the purchase price of $16.50 per share (the
"Offer Price"), net to the tendering shareholder in cash, without interest.
The Offer is being made pursuant to the terms of the Agreement and Plan of
Merger, dated as of March 12, 2000 (the "Merger Agreement"), by and among
Parent, BCOP, and Purchaser. The Merger Agreement provides, among other things,
for the making of the Offer by Purchaser, and further provides that, following
the purchase of Shares pursuant to the Offer and promptly after the satisfaction
or waiver of certain other conditions, Purchaser will be merged with and into
BCOP (the "Merger"). BCOP will continue as the surviving corporation after the
Merger (the "Surviving Corporation"). At the effective time of the Merger, each
outstanding Share, except for Shares owned by Parent or any subsidiary of Parent
and Shares held by shareholders exercising their appraisal rights under the
Delaware General Corporation Law (the "DGCL"), will be converted into the right
to receive the Offer Price, net to the holder in cash, without interest.
THE BOARD OF DIRECTORS OF BCOP (THE "BCOP BOARD"), BASED ON THE UNANIMOUS
RECOMMENDATION OF A COMMITTEE OF INDEPENDENT DIRECTORS OF BCOP (THE "SPECIAL
COMMITTEE"):
- HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER;
- HAS UNANIMOUSLY DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED BY THE MERGER AGREEMENT, INCLUDING THE OFFER AND THE MERGER,
ARE ADVISABLE, FAIR TO AND IN THE BEST INTERESTS OF BCOP'S SHAREHOLDERS,
OTHER THAN PARENT AND ITS AFFILIATES (THE "PUBLIC SHAREHOLDERS"); AND
- UNANIMOUSLY RECOMMENDS THAT THE PUBLIC SHAREHOLDERS ACCEPT THE OFFER AND
TENDER THEIR SHARES PURSUANT TO THIS OFFER TO PURCHASE.
Credit Suisse First Boston Corporation ("CSFB"), financial advisor to the
Special Committee, has delivered a written opinion to the Special Committee,
dated March 12, 2000 (the "CSFB Opinion"), that, as of that date, the
consideration to be received by the Public Shareholders pursuant to the Offer
and the Merger is fair to them from a financial point of view. See "SPECIAL
FACTORS--Opinion of Financial Advisor to the Special Committee." The full text
of the CSFB Opinion is attached to this Offer to Purchase as Exhibit A. You are
urged to read the entire CSFB Opinion carefully for assumptions made, matters
considered and limits of CSFB's review.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING TENDERED, AND
NOT WITHDRAWN BEFORE THE OFFER EXPIRES, A MAJORITY OF ALL OUTSTANDING SHARES
HELD BY THE PUBLIC SHAREHOLDERS (THE "MINIMUM CONDITION"). SEE "THE TENDER
OFFER--CONDITIONS OF THE OFFER."
The Offer will expire at 5:00 p.m. New York City time, on Wednesday,
April 19, 2000, unless extended.
Shareholders of record who tender Shares directly will not be obligated to
pay brokerage fees or commissions or, except as set forth in Instruction 5 of
the Letter of Transmittal, stock transfer taxes on
4
the purchase of Shares by Purchaser pursuant to the Offer. Shareholders who hold
their Shares through a bank or broker should check with such institution as to
whether they charge any service fees. Purchaser will not pay such service fees.
Purchaser will pay all fees and expenses of D. F. King & Co., Inc., as
Information Agent (the "Information Agent"). The Shareholder Services Department
of Parent, which is the transfer agent for BCOP, will serve as the Depositary
(the "Depositary").
If the Minimum Condition is met and the other conditions to the Offer and
the Merger are satisfied, Purchaser will be merged with and into BCOP which will
be the Surviving Corporation. See "SPECIAL FACTORS--Purpose and Structure of the
Offer and the Merger." If the Minimum Condition is satisfied and Purchaser
purchases the tendered Shares, it will own at least 90% of the outstanding
common stock of BCOP. Therefore, it can consummate the Merger without any action
by or notice to the other shareholders of BCOP pursuant to the short-form merger
provisions of the DGCL.
As of March 17, 2000, there were 65,814,460 Shares issued and outstanding.
Parent owns 53,398,724 Shares, representing 81% of the outstanding Shares and
the balance of 12,415,736 Shares are held by the Public Shareholders. As of
March 17, 2000, all of the executive officers and directors (including directors
nominated by Parent) of BCOP as a group owned 136,787 outstanding Shares. BCOP
has advised Parent that, to the best of BCOP's knowledge, all directors and
executive officers of BCOP presently intend to tender, pursuant to the Offer,
all Shares owned by them. See "SPECIAL FACTORS--Interests of Persons in the
Offer and the Merger."
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH YOU SHOULD READ CAREFULLY BEFORE MAKING ANY DECISION
WITH RESPECT TO THE OFFER.
5
SPECIAL FACTORS
BACKGROUND OF THE TRANSACTION
Prior to April 1995, BCOP was a wholly owned subsidiary of Parent. In
April 1995, approximately 17% of BCOP's stock was sold to the public. At the
present time, Parent owns 53,398,724 shares (approximately 81%) of BCOP's
outstanding common stock. The balance is held by the Public Shareholders.
In the course of the last several years, Parent and BCOP had from time to
time explored various possibilities for expanding BCOP's business, including
various acquisition possibilities. In the summer of 1998, there were
preliminary, exploratory discussions about the possibility of BCOP acquiring a
competing supplier of office products. Although there was never any suggestion
that Parent would consider selling its Shares of BCOP to this competing
supplier, Parent received an unsolicited letter dated September 10, 1998 from
this competing supplier purporting to offer to purchase all of the common stock
of BCOP for $22 per share. On October 1, 1998, Parent advised the competing
supplier that the board of directors of Parent (the "Parent Board") had
concluded that a sale of BCOP was not consistent with Parent's strategy to
increase its investment in the office products business and rejected the
proposal.
In late summer of 1999, Parent's senior management considered various
strategic alternatives for several of its businesses. The alternatives again
included increasing Parent's investment in the office products distribution
business, through, among other possibilities, acquiring the Public Shares.
Goldman, Sachs & Co. ("Goldman Sachs"), which regularly provides investment
banking services to Parent, provided preliminary advice related to various of
the alternatives considered.
At a regularly scheduled meeting of the Parent Board on September 30, 1999,
there was a preliminary discussion concerning various strategic alternatives for
Parent. At the meeting, a representative of Goldman Sachs discussed a number of
strategic alternatives. One alternative included the possibility of acquiring
all of the Public Shares. At the end of the discussion, the Parent Board
requested management to continue to evaluate the possibility of acquiring the
Public Shares.
At a dinner for BCOP's directors held on October 4, 1999, the day prior to a
regularly scheduled meeting of the BCOP Board, Mr. George J. Harad, Chairman and
Chief Executive Officer of Parent, advised BCOP's directors that Parent was
considering whether to make a proposal to acquire the Public Shares at a price
in the neighborhood of $12 per share. Parent's potential interest in acquiring
the Public Shares was discussed at the BCOP Board meeting the following day. The
BCOP Board noted that there was already in existence the Committee of
Independent Directors consisting of directors who are not officers or employees
or former officers or employees of BCOP and who are not officers or directors of
Parent (the "Special Committee"). The BCOP Board concluded that it was
appropriate for this committee to evaluate any proposal by Parent to acquire the
Public Shares and to advise the BCOP Board as to the fairness to the holders of
the Public Shares of any formal offer made by Parent.
Following the meeting of the BCOP Board on October 5, 1999, the Special
Committee met and decided to retain its own financial advisor and its own legal
counsel. Thereafter, the Special Committee retained Shapiro, Forman & Allen LLP
as its legal counsel and Credit Suisse First Boston Corporation ("CSFB") as its
financial advisor.
During the first two weeks of November, informal telephone calls took place
between representatives of Parent and representatives of the Special Committee
relating to various matters pertaining to the potential purchase. Parent was
advised by the chairman of the Special Committee that the $12 per share price
initially mentioned by Mr. Harad was not likely to be acceptable to the Special
Committee. On November 18, 1999, representatives of Goldman Sachs and CSFB met
to discuss valuation methodologies.
6
On November 29, 1999, representatives of Parent met in Chicago with the
Special Committee and its legal and financial advisors and had an extended
discussion of valuation methodologies and pricing. No agreement was reached,
although Mr. Harad suggested that Parent would consider paying $13.00 per share
for the Shares owned by the Public Shareholders. Members of the Special
Committee informed Parent's representatives that it was unlikely that the
Special Committee would recommend such a price.
On November 30, 1999, Mr. Harad delivered a letter to James G. Connelly III,
Chairman of the Special Committee, in which he communicated Parent's interest in
acquiring all of the Public Shares at a price of $13.25 per share, which
Mr. Harad noted was a premium of 25% to the closing market price on
November 29, 1999 and a premium of 26% to the prior 30 trading day average
closing price. The letter indicated that any transaction would be conditioned
upon the approval of the Parent Board and upon Parent's ability to acquire a
majority of the minority shares outstanding, as well as the satisfaction of
other customary conditions. Mr. Harad also stated that Parent's ownership
interest in BCOP was not for sale; therefore, there was no realistic likelihood
of a sale of BCOP to a third party. On December 1, 1999, Parent issued a press
release confirming the delivery of the letter to the Special Committee.
Between December 1, 1999 and December 3, 1999, nine purported class
action lawsuits were filed by purported shareholders of BCOP in the Delaware
Court of Chancery against Parent BCOP and BCOP's directors arising out of
Parent's proposal to acquire BCOP's outstanding minority public shares for
$13.25 per share. (See "SPECIAL FACTORS--Litigation Related to the Offer.")
By letter dated December 3, 1999, the Special Committee advised Mr. Harad
that the proposal to purchase the Public Shares for a price of $13.25 per share
was, in its view, not in the best interests of the Public Shareholders and that
it would therefore not recommend that the full BCOP Board or the Public
Shareholders accept such a proposal. On December 6, 1999, Parent issued a press
release disclosing the Special Committee's decision. The Special Committee
did not consider the lawsuits referenced above in making its decision that
the proposal was not in the best interests of the Public Shareholders.
On December 14, 1999, representatives of Goldman Sachs and CSFB discussed by
telephone various valuation methodologies.
On February 15, 2000, the BCOP Board convened for a regularly scheduled
meeting. Following the meeting, Mr. Harad, Mr. Theodore Crumley, Parent's Chief
Financial Officer, and the members of the Special Committee had an informal
discussion as to the different approaches each was taking with respect to the
valuation of the Shares.
On March 3, 2000, Mr. Harad delivered a letter to Mr. Connelly containing a
proposal to purchase all the Public Shares for a price of $16.50 per share.
On March 5, 2000, the Special Committee met with its financial and legal
advisors to consider Parent's proposal. The Special Committee determined to
inquire whether Parent would be willing to increase the price that it was
proposing to pay for the Public Shares. After the meeting, Mr. Connelly called
Mr. Harad and asked that the proposed price be increased to $16.75 per share.
Mr. Harad replied that Parent was not prepared to pay more than $16.50.
On March 6, 2000, the Special Committee held a meeting attended by its three
members and representatives of CSFB and Shapiro, Forman & Allen LLP. CSFB
presented its preliminary analysis of the proposed price of $16.50 per share.
The Special Committee met on March 7, 2000 and determined to ask CSFB to
deliver an opinion regarding the fairness of that proposed price, from a
financial point of view, to the Public Shareholders. The Special Committee also
requested that Shapiro, Forman & Allen LLP complete negotiations relating to an
appropriate merger agreement and determined to reconvene with its legal and
financial advisors on March 10, 2000.
On March 9, 2000, the Parent Board met to consider management's proposal
that Parent offer to purchase all of the Public Shares for $16.50 per share. At
the meeting, representatives of Goldman Sachs presented their report containing
their financial analyses of BCOP and the Shares in relation to the Offer. John
W. Holleran, Parent's Senior Vice President and General Counsel, outlined the
terms
7
of the proposed Merger Agreement and the directors' legal duties and
responsibilities. The Parent Board then unanimously determined that the Merger
Agreement and the transactions contemplated thereby, including the Offer and the
Merger, are advisable, fair to and in the best interests of Parent. The Parent
Board also approved the Merger Agreement in substantially the form as it was
presented and the transactions contemplated thereby, including the Offer and the
Merger, and authorized management to continue to negotiate the final terms of
the Merger Agreement. It also unanimously determined that the Offer, at a price
of $16.50 per share, is fair to the Public Shareholders.
The Special Committee met again on March 10, 2000 with its financial and
legal advisors. A representative of Shapiro, Forman & Allen LLP reviewed the
proposed Merger Agreement. At the meeting, the Special Committee directed its
legal counsel to engage in further negotiations as to the terms of the Merger
Agreement. In a teleconference on March 10, 2000, in which the members of the
Special Committee and representatives of each of Parent, CSFB, Shapiro,
Forman & Allen LLP and Skadden, Arps, Slate, Meagher & Flom LLP, counsel to
Parent, participated, Mr. Harad reviewed the remaining open issues with respect
to the terms of the Merger Agreement and presented Parent's position with
respect to the final terms of the Merger Agreement. As a result of that meeting,
members of the Special Committee concluded that Parent would not offer more than
$16.50 per share for the Shares owned by the Public Shareholders.
On March 11, 2000, the Special Committee, together with representatives of
CSFB and Shapiro, Forman & Allen, LLP, met telephonically and reviewed the final
terms of the Offer and Merger. At the meeting, counsel reviewed the Special
Committee's legal duties and responsibilities and the nature of the decision
that the Special Committee was being asked to make. CSFB then reviewed its
analysis of, and orally delivered its opinion as to, the fairness of the Offer
Price from a financial point of view to the Public Shareholders (which oral
opinion was subsequently confirmed in writing on March 12, 2000). After full
discussion, the Special Committee unanimously determined that (i) the price of
$16.50 per share is fair to the Public Shareholders, (ii) the Offer and the
Merger and the terms of the Merger Agreement are advisable, fair to and in the
best interests of the Public Shareholders, and (iii) it recommended to the BCOP
Board that it approve the Merger Agreement and the transactions contemplated
thereby, including the Offer and the Merger.
A meeting of the BCOP Board was held on March 12, 2000, at which it received
the recommendation of the Special Committee and reviewed the terms of the Merger
Agreement and the reasons for the Special Committee's recommendation. The BCOP
Board unanimously determined that the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger, are advisable, fair to
and in the best interests of the Public Shareholders, approved the Merger
Agreement and the transactions contemplated thereby, including the Offer and the
Merger, and recommended that the Shareholders of BCOP accept the Offer and
tender their shares pursuant to the Offer.
On March 13, 2000, Parent issued a press release announcing the execution of
the Merger Agreement, and on March 22, 2000, Parent and Purchaser commenced the
Offer.
RECOMMENDATIONS OF THE SPECIAL COMMITTEE AND THE BOARD; FAIRNESS OF THE OFFER
AND THE MERGER
THE SPECIAL COMMITTEE.
The Special Committee has determined that the Offer and the Merger are fair
to, and in the best interests of, the Public Shareholders and has recommended to
the BCOP Board that it approve the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger. Each member of the
Special Committee who owns Shares intends to tender their Shares in the Offer.
In evaluating the Offer and the Merger, the members of the Special Committee
relied upon their knowledge of the business, financial condition and prospects
of BCOP as well as the advice of their
8
legal and financial advisors. The material factors considered by the Special
Committee in determining that it would recommend the Merger Agreement and the
transactions contemplated thereby, including the Offer and the Merger, to the
full BCOP Board are as follows:
MARKET PRICE AND PREMIUM. The Special Committee believes that the Offer
Price, which represents a premium of approximately 60% to BCOP's market price
four weeks prior to the announcement by Parent of its interest in acquiring the
Public Shares on December 1, 1999, is attractive and represents a significantly
greater premium than the average premiums paid in recent transactions by
majority shareholders.
SPECIAL COMMITTEE FORMATION AND ARM'S-LENGTH NEGOTIATIONS. The Special
Committee considered the fact that the Merger Agreement and the transactions
contemplated thereby were the product of arm's-length negotiations between
Parent and the Special Committee (and their advisors), none of whose members
were employed by or affiliated with BCOP (except in their capacities as
directors) or would have any equity interest in BCOP following the Merger. The
Special Committee concluded, based on the personal participation of members in
negotiations with Parent, that the Offer Price represents the highest price that
Parent would be willing to pay to acquire the Shares.
TRANSACTION STRUCTURE. The Special Committee evaluated the benefits of the
transaction being structured as an immediate cash tender offer for all of the
outstanding Shares, thereby providing the Public Shareholders of BCOP the
opportunity to obtain cash for all of their Shares at the earliest possible time
and the fact that the per Share consideration to be paid in the Offer and the
Merger is the same.
INABILITY TO CONSIDER ALTERNATIVE TRANSACTIONS. The Special Committee
considered the fact that Parent was unwilling to sell its majority interest in
BCOP and that such majority position would effectively prevent the Public
Shareholders from receiving a "control premium" from any third party.
HISTORICAL AND PROJECTED FINANCIAL PERFORMANCE. The Special Committee
considered BCOP's recent financial performance as well as the financial
projections prepared by BCOP's management (see "THE OFFER--Information
Concerning BCOP--Financial Projections") and certain variations of the
assumptions underlying those projections made by CSFB. The Special Committee
believes that the Offer Price as multiples of 1999 earnings before interest,
taxes, depreciation and amortization ("EBITDA") and of estimated 2000 earnings
compares favorably to most industry peers other than Staples, whose multiples
are significantly higher than other known public companies within BCOP's
industry. The Special Committee also considered the fact that as a result of the
Offer and the Merger, existing BCOP shareholders would be unable to benefit from
any future growth of BCOP.
POSSIBLE DECLINE IN MARKET PRICE OF COMMON STOCK. The Special Committee
considered the possibility that if the Merger was not consummated and BCOP
remained a publicly owned corporation, it was likely that, either because of a
decline in the market price of the Shares or in the stock market in general, the
price that might be received by the holders of the Shares in the open market
might be less than the Offer Price to be received by the Public Shareholders in
connection with the Offer and the Merger.
MINIMUM CONDITION. The Special Committee considered the fact that Parent
would not be able to purchase any Shares in the Offer unless a majority of the
Shares owned by the Public Shareholders accepted the Offer by tendering their
Shares.
AVAILABILITY OF DISSENTERS' RIGHTS. The Special Committee also considered
the fact that dissenters' rights of appraisal will be available to non-tendering
shareholders under Delaware law in connection with the Merger.
9
CSFB FAIRNESS OPINION AND PRESENTATION. Prior to making its determination,
the Special Committee also considered the financial presentation of CSFB and
received the opinion of CSFB that, from a financial point of view, the Offer was
fair to the Public Shareholders. A summary of the CSFB Opinion is set forth at
pages 10 to 13, below, and the full text of the CSFB Opinion is attached hereto
as Exhibit A.
BOOK VALUE AND LIQUIDATION VALUE. Because of the nature of BCOP's business,
the Special Committee did not consider the book value or the liquidation value
of BCOP as meaningful indicators of fair value.
PRIOR OFFER. In reaching its determination as to fairness, the Special
Committee did not consider as important the offer made by a competing supplier
in September 1998 because (i) factors identified to the Special Committee
indicated issues as to the financial ability of such offeror to consummate the
offer and (ii) the offer implied a significant control premium which is not
available to the Public Shareholders because the Parent has expressed an
unwillingness to sell its interest in BCOP.
The foregoing discussion is not exhaustive of all factors considered by the
Special Committee. In analyzing the transaction, the committee members did not
view any single factor as determinative and did not quantify or assign weight to
any of the factors. Rather, the committee made its determination based upon the
total mix of information available to it. In addition, individual members may
have given different weight to different factors.
THE BCOP BOARD.
In reaching its determination, the BCOP Board considered and relied upon the
conclusions and unanimous recommendations of the Special Committee that the BCOP
Board approve the Merger Agreement and the transactions contemplated thereby,
including the Offer and the Merger, and the considerations referred to above as
having been taken into account by the Special Committee, as well as the BCOP
Board's own familiarity with BCOP's business, financial condition, results of
operations and prospects and the nature of the industry in which BCOP operates.
The members of the BCOP Board and the Special Committee believe that the
Offer and the Merger are procedurally fair because, among other things: (i) the
Special Committee consisted of independent, disinterested directors who
represented the interests of the Public Shareholders; (ii) the Special Committee
retained and was advised by independent legal counsel who, among other things,
assisted it in negotiating the terms of the Merger Agreement; (iii) the Special
Committee retained Credit Suisse First Boston as its independent financial
advisor to assist it in evaluating the potential transaction with Parent and
Purchaser; (iv) the inclusion of the Minimum Condition has the effect of
requiring a majority of the Shares held by the Public Shareholders to be
tendered in order for the Offer and the Merger to be consummated; (v) extensive
deliberations occurred in which the Special Committee evaluated the Offer and
the Merger; and (vi) the $16.50 per share price and the other terms of the
Merger Agreement resulted from active arms' length bargaining between
representatives of the Special Committee, on the one hand, and representatives
of Parent and Purchaser, on the other.
OPINION OF FINANCIAL ADVISOR TO THE SPECIAL COMMITTEE
CSFB acted as financial advisor to the Special Committee in connection with
the Offer. The Special Committee selected CSFB based on CSFB's experience and
expertise. CSFB is an internationally recognized investment banking firm and, as
a customary part of its business, evaluates businesses and securities in
connection with mergers and acquisitions, leveraged buyouts, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for corporate and other
purposes.
10
In connection with CSFB's engagement, the Special Committee requested that
CSFB evaluate the fairness, from a financial point of view, to the Public
Shareholders of the consideration to be received by the Public Shareholders in
the Offer and in the Merger. On March 11, 2000, CSFB rendered to the Special
Committee an oral opinion, subsequently confirmed by delivery of a written
opinion dated March 12, 2000, the date of the Merger Agreement, to the effect
that, as of the date of the opinion and based on and subject to the matters
stated in the opinion, the consideration to be received by the Public
Shareholders was fair to the Public Shareholders from a financial point of view.
THE FULL TEXT OF CSFB'S WRITTEN OPINION TO THE SPECIAL COMMITTEE DATED
MARCH 12, 2000, WHICH DESCRIBES THE PROCEDURES FOLLOWED, ASSUMPTIONS MADE,
MATTERS CONSIDERED AND LIMITATIONS ON THE REVIEW UNDERTAKEN, IS ATTACHED AS
EXHIBIT A TO THIS OFFER TO PURCHASE AND IS INCORPORATED HEREIN BY REFERENCE. A
COPY OF SUPPLEMENTARY MATERIALS PRESENTED TO THE SPECIAL COMMITTEE BY CSFB HAS
BEEN FILED AS EXHIBIT (C)(2) TO THE STATEMENT ON SCHEDULE TO FILED BY PARENT AND
PURCHASER. CSFB'S OPINION IS ADDRESSED TO AND EXPRESSLY INTENDED FOR THE USE AND
BENEFIT OF THE SPECIAL COMMITTEE AND RELATES ONLY TO THE FAIRNESS, FROM A
FINANCIAL POINT OF VIEW, OF THE CONSIDERATION TO BE RECEIVED BY THE PUBLIC
SHAREHOLDERS, DOES NOT ADDRESS ANY OTHER ASPECT OF THE PROPOSED OFFER OR ANY
RELATED TRANSACTION AND DOES NOT CONSTITUTE A RECOMMENDATION TO ANY SHAREHOLDER
AS TO WHETHER TO TENDER IN THE OFFER OR HOW SUCH SHAREHOLDER SHOULD VOTE OR ACT
ON ANY MATTER RELATING TO THE OFFER OR THE MERGER. THE OFFER PRICE WAS
DETERMINED THROUGH NEGOTIATIONS BETWEEN PARENT AND SPECIAL COMMITTEE AND NOT
PURSUANT TO RECOMMENDATIONS OF CSFB. THE SUMMARY OF CSFB'S OPINION INCLUDED IN
THIS OFFER TO PURCHASE IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL
TEXT OF THE OPINION.
In arriving at its opinion, CSFB reviewed certain publicly available
business and financial information relating to BCOP, as well as the Merger
Agreement. CSFB also reviewed certain other information, including financial
forecasts, provided to or discussed with CSFB by BCOP, and met with BCOP's
management to discuss the business and prospects of BCOP.
CSFB also considered certain financial and stock market data of BCOP and
compared that data with similar data for other publicly held companies in
businesses similar to BCOP and considered, to the extent publicly available, the
premiums paid in certain other going private transactions effected by a
controlling stockholder and other transactions recently proposed or effected.
CSFB also considered other information, financial studies, analyses and
investigations and financial, economic and market criteria that it deemed
relevant.
In connection with its review, CSFB did not assume any responsibility for
independent verification of any of the information provided to or otherwise
reviewed by CSFB and relied on the information being complete and accurate in
all material respects. With respect to financial forecasts, CSFB was advised,
and assumed, that the forecasts were reasonably prepared on bases reflecting the
best currently available estimates and judgments of BCOP's management as to the
future financial performance of BCOP.
CSFB was not requested to, and did not, make an independent evaluation or
appraisal of the assets or liabilities, contingent or otherwise, of BCOP, and
was not furnished with any evaluations or appraisals. CSFB's opinion was
necessarily based on information available to, and financial, economic, market
and other conditions as they existed, and could be evaluated by CSFB, on the
dates of its opinion. CSFB was not requested to, and did not, solicit third
party indications of interest in acquiring all or any part of BCOP.
In preparing its opinion to the Special Committee, CSFB performed a variety
of financial and comparative analyses, including those described below. The
summary of CSFB's analyses described below is not a complete description of its
analyses. The preparation of a fairness opinion is a complex analytic process
involving various determinations as to the most appropriate and relevant methods
of financial analysis and the application of those methods to the particular
circumstances and, therefore, a fairness opinion is difficult to summarize. In
arriving at its opinion, CSFB made qualitative judgments
11
as to the significance and relevance of each analysis and factor considered by
it. Accordingly, CSFB believes that its analyses must be considered as a whole
and that selecting portions of its analyses and factors, without considering all
analyses and factors, could create a misleading or incomplete view of the
processes underlying its analyses and opinion.
In its analyses, CSFB considered industry performance, regulatory, general
business, economic, market and financial conditions and other matters. Many of
these factors are beyond the control of BCOP. No company, transaction or
business used in CSFB's analyses as a comparison is identical to BCOP or the
proposed Offer and Merger, nor is an evaluation of the results of those analyses
entirely mathematical. Rather, the analyses involve complex considerations and
judgments concerning financial and operating characteristics and other factors
that could affect the acquisition, public trading or other values of the
companies, business segments or transactions being analyzed.
The estimates contained in CSFB's analyses and the ranges of valuations
resulting from any particular analysis do not necessarily reflect actual values
or predict future results or values, which may be significantly more or less
favorable than those suggested by the analyses. In addition, analyses relating
to the value of businesses or securities do not purport to be appraisals or to
reflect the prices at which businesses or securities actually may be sold.
Accordingly, CSFB's analyses and estimates are inherently subject to substantial
uncertainty.
CSFB's opinion and financial analyses were not the only factors considered
by the Special Committee in its evaluation of the proposed transaction and
should not be viewed as determinative of the views of the Special Committee with
respect to the Offer and Merger or the consideration to be received in the
transaction.
The following is a summary of the material analyses underlying CSFB's
opinion to the Special Committee in connection with the transaction and
presented to the Special Committee at its March 11, 2000 telephonic meeting (and
as confirmed in writing on March 12, 2000):
DISCOUNTED CASH FLOW ANALYSIS. CSFB estimated the present value of the
unlevered after-tax free cash flows that BCOP could produce. CSFB evaluated
BCOP's projected free cash flows under two cases, each of which were based on
financial projections through 2004 which were then extrapolated through 2009.
Material differences in assumptions between the two cases were as follows:
COMPOUND ANNUAL GROWTH RATE FOR 1999-2004 CASE #1 CASE #2
- ----------------------------------------- -------- --------
Sales...................................................... 10.4% 8.2%
EBITDA..................................................... 12.5% 8.0%
EBIT....................................................... 14.6% 8.3%
Ranges of terminal values were estimated using multiples of terminal year
earnings before interest, taxes, depreciation and amortization, commonly
referred to as EBITDA, of 5.0x to 7.0x. The free cash flow streams and terminal
values were then discounted to present value using discount rates ranging from
10 percent to 12 percent. This analysis indicated implied enterprise reference
ranges for BCOP of approximately $1.48 billion to $1.90 billion for Case #1 and
approximately $1.25 billion to $1.55 billion for Case #2, and implied equity
values per share of $16.45 to $22.79 for Case #1 and $13.11 to $17.59 for Case
#2.
COMPARABLE COMPANY ANALYSIS. To provide contextual data and comparative
market information, CSFB analyzed the operating performance of BCOP relative to
publicly traded companies that are in related office products distribution
channels with similar growth and operating characteristics and are deemed by
CSFB to be reasonably comparable to BCOP. These companies include Contract
Stationers--Buhrmann NV and U.S. Office Products Company; Retail
Superstores--Staples, Inc., Office Depot, Inc. and OfficeMax, Inc.; and
Distributors--United Stationers, Inc. (the "Comparable Companies"). CSFB
compared, among other things, current stock prices as multiples of last twelve
12
months' ("LTM") earnings per share, 2000 estimated earnings per share based upon
consensus estimates reported by I/B/E/S International, Inc. ("IBES") and
selected brokerage reports, and enterprise values (equity market value, plus
total debt, preferred stock and minority interests, less cash and cash
equivalents) as multiples of LTM EBITDA and estimated 2000 EBITDA based upon
publicly available research estimates. IBES is a data service that monitors and
publishes compilations of earning estimates by selected research analysts
regarding companies of interest to institutional investors. CSFB determined that
the relevant range of multiples for the Comparable Companies were:
- Market price as a multiple of LTM earnings per share, 11.5x to 14.0x
- Market price as a multiple of 2000 estimated earnings per share, 10.0x to
12.0x
- Enterprise value as a multiple of LTM EBITDA, 5.0x to 7.0x
- Enterprise value as a multiple of 2000 estimated EBITDA, 4.5x to 6.5x
CSFB then calculated implied enterprise values and implied per share equity
values of BCOP by applying BCOP's LTM and 2000 estimated EBITDA and earnings per
share to the multiples derived from its analysis of the Comparable Companies,
generating an implied enterprise value of $1.10 billion to $1.40 billion and an
implied equity value range per share of $10.88 to $15.37.
PREMIUMS PAID ANALYSIS. CSFB analyzed the premiums paid relative to the
prevailing public market prices four weeks prior to public announcement of going
private transactions effected by controlling shareholders over the past five
years. Premiums from the 25(th) percentile to the 75(th) percentile ranged from
21% to 58%. The average and median for all transactions analyzed were 42% and
35%, respectively. CSFB compared this date to the Offer Price, which represents
a 60% premium to BCOP's market price four weeks prior to the announcement by
Parent of its interest in acquiring the outstanding public shares of BCOP.
CSFB REFERENCE RANGE. Based on the discounted flow analysis, comparable
company analysis and premiums paid analysis, CSFB derived an enterprise value
range of $1.30 billion to $1.60 billion, which implied a per share value range
of $13.85 to $18.34.
MISCELLANEOUS. Pursuant to the terms of CSFB's engagement, the Special
Committee has agreed to pay CSFB for its financial advisory services a fee of
$200,000 payable upon such engagement and a fee of $1,800,000 payable upon
delivery of CSFB's opinion. The Special Committee also has agreed to reimburse
CSFB for its out-of-pocket expenses, including the fees and expenses for legal
counsel and any other advisor retained by CSFB, and to indemnify CSFB and
related persons and entities against liabilities, including liabilities under
the federal securities laws, arising out of CSFB's engagement. In the ordinary
course of business, CSFB and its affiliates may actively trade the debt and
equity securities of both BCOP and Parent for their own accounts and for the
accounts of customers and, accordingly, may at any time hold long or short
positions in such securities.
POSITION OF PARENT AND PURCHASER REGARDING THE FAIRNESS OF THE OFFER AND THE
MERGER
Because Parent currently owns a majority of the Shares, Parent and Purchaser
are deemed "affiliates" of BCOP under Rule 12b-2 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). Accordingly, in compliance with
Rule 13e-3 under the Exchange Act, the boards of directors of Parent and
Purchaser have considered the fairness of the Offer to the Public Shareholders.
The boards of directors of Parent and Purchaser have unanimously determined
that the Offer and the Merger are fair to the Public Shareholders. Although
Goldman Sachs did not deliver and was not requested to deliver an opinion as to
the fairness of the transaction, it presented to the directors of Parent and
Purchaser an analysis relating to the Offer which is summarized below (see
"SPECIAL
13
FACTORS--Analysis of Investment Banker to Parent"). The material factors
considered by the boards of directors of Parent and Purchaser in making their
determinations are as follows:
(i) The analysis made by Goldman Sachs.
(ii) The Offer Price represents a 56% premium over the average closing price
for the Shares for the 30-day trading period ended November 30, 1999,
the last full trading day before Parent announced that it had made a
proposal to the Special Committee to acquire the outstanding minority
public shares of BCOP.
(iii) The Offer Price is within the ranges of implied values derived from the
analysis performed by Goldman Sachs and described below.
(iv) The Offer is an all cash offer for all publicly held Shares which the
holders thereof can accept or reject voluntarily, and is not subject to
a financing condition.
(v) The Offer is contingent upon an approval of holders of a majority of the
publicly held Shares.
(vi) The Offer provides shareholders who are considering selling their
Shares with the opportunity to sell all of their Shares at the Offer
Price without incurring the transaction costs typically associated with
market sales.
(vii) The terms of the Merger Agreement were determined through arm's-length
negotiations between the Special Committee and its legal and financial
advisors, on the one hand, and representatives of Parent, on the other,
and the other factors relating to the fairness of the procedure which
are identified above as being considered by the Special Committee (See
"Recommendations of the Special Committee and the Board; Fairness of
the Offer and the Merger").
(viii) The ability of Public Shareholders to obtain "fair value" for their
Shares if they exercise and perfect their appraisal rights under the
DGCL.
The net book value of BCOP is substantially below its market value and was
not considered by the Parent Board as a relevant factor. Since there was no
consideration given to liquidating BCOP, its liquidation value was not deemed to
be relevant. The Parent Board are aware of the letter dated September 10, 1998
from a competing supplier of office products, which is summarized in "SPECIAL
FACTORS--Background of the Transaction." However, they concluded that it was not
an appropriate benchmark for determining the Offer Price. Their reasons for that
conclusion include the following: (i) the purported offer, which was for all
Shares, including those held by Parent, was received over 18 months ago;
(ii) issues existed as to the financial ability of the competing supplier to
consummate such offer; and (iii) there had been significant changes in the
market valuations for companies in this industry in general, and for BCOP in
particular, since the purported offer was received, as reflected in the range of
values suggested by the analysis of Goldman Sachs summarized above.
The foregoing discussion is not exhaustive of all factors considered by the
Parent Board. In analyzing the transaction, the Parent Board members did not
view any single factor as determinative and did not quantify or assign weight to
any of the factors. Rather, the directors made their determination based upon
the total mix of information available to them. In addition, individual members
may have given different weight to different factors.
14
ANALYSIS BY PARENT'S FINANCIAL ADVISOR
Parent has retained Goldman Sachs as its financial advisor in connection
with the Offer. Goldman Sachs was requested to review data relating to BCOP
which was supplied by Parent and BCOP, as well as published financial and market
information. At a meeting between representatives of Goldman Sachs, the Parent
Board and Parent counsel on March 9, 2000, Goldman Sachs discussed certain
financial analyses regarding BCOP, a summary of which is set forth below, and is
referred to herein as the "Goldman Sachs Materials."
A COPY OF THE GOLDMAN SACHS MATERIALS HAS BEEN FILED AS EXHIBIT (C)(3) TO
THE STATEMENT ON SCHEDULE TO FILED BY PARENT AND PURCHASER AND IS INCORPORATED
HEREIN BY REFERENCE. THE GOLDMAN SACHS MATERIALS WERE PROVIDED FOR THE
INFORMATION AND ASSISTANCE OF THE PARENT BOARD IN CONNECTION WITH ITS
CONSIDERATION OF THE OFFER AND DOES NOT CONSTITUTE A RECOMMENDATION AS TO
WHETHER ANY HOLDER OF SHARES SHOULD TENDER THEIR SHARES IN CONNECTION WITH THE
OFFER. THE OFFER PRICE WAS DETERMINED THROUGH NEGOTIATIONS BETWEEN PARENT AND
THE SPECIAL COMMITTEE AND NOT PURSUANT TO RECOMMENDATIONS OF GOLDMAN SACHS. THE
SUMMARY OF THE GOLDMAN SACHS MATERIALS AND THE DESCRIPTIONS OF THE ANALYSES SET
FORTH BELOW IS QUALIFIED BY THE FULL TEXT OF THE GOLDMAN SACHS MATERIALS.
HOLDERS OF SHARES SHOULD READ THE GOLDMAN SACHS MATERIALS IN THEIR ENTIRETY.
In preparing the Goldman Sachs Report, Goldman Sachs, among other things:
- reviewed certain publicly available business and financial information
relating to BCOP that Goldman Sachs deemed to be relevant;
- reviewed certain internal financial analyses and forecasts for BCOP
prepared by BCOP's management, including BCOP' s management projections as
of December 15, 1999;
- held discussions with members of the senior management of Parent and BCOP
regarding the past and current business operations, financial condition,
and future prospects of BCOP;
- reviewed the reported price and trading activity for the Shares;
- compared certain financial and stock market information for BCOP with
similar information for certain other companies the securities of which
are publicly traded; and
- reviewed the financial terms of certain recent business combinations and
performed such other studies and analyses as it considered appropriate.
In preparing its presentation, Goldman Sachs assumed and relied on the
accuracy and completeness of all information supplied by Parent, BCOP, or
obtained through other sources. Goldman Sachs did not assume any responsibility
for independently verifying such information or undertaking any independent
evaluation or appraisal of the assets or liabilities of BCOP. Additionally,
Goldman Sachs was not requested to perform any independent examination or
investigation of BCOP's businesses or assets nor was any independent examination
or investigation of the assets and liabilities of BCOP supplied to Goldman
Sachs.
THE FOLLOWING SUMMARIES OF FINANCIAL ANALYSES MAY INCLUDE INFORMATION
PRESENTED IN TABULAR FORMAT. YOU SHOULD READ THESE TABLES TOGETHER WITH THE TEXT
OF EACH SUMMARY.
HISTORICAL STOCK PRICE AND TRADING VOLUME ANALYSES. Goldman Sachs reviewed
the historical trading performance of the Shares and two composite indices
comprised of certain publicly traded office products companies for the period
from April 7, 1995 to March 7, 2000. The first composite index consisted of
Staples, Inc., OfficeMax, Inc. and Office Depot, Inc. The second composite
consisted of US Office Products Company and Corporate Express, Inc. These
companies were chosen because they are, or in the case of Corporate Express,
were, publicly-traded companies with operations that for purposes of analysis
may be considered similar to BCOP. These analyses indicated that the Shares
15
generally underperformed the first composite index and outperformed the second
composite during the examined period of time.
HISTORICAL FORWARD PRICE/EARNINGS ANALYSIS. Goldman Sachs analyzed the
twelve-month moving forward price/estimated earnings multiples for BCOP for the
period from April 7, 1995 to March 8, 2000. Goldman Sachs noted that the average
forward price/estimated earnings multiples for the periods three months, six
months and one year ending on November 30, 1999 (the last day prior to initial
offer by Parent of $13.25 per BCOP share) were 8.9x, 9.0x, and 10.2x,
respectively. Since the announcement of the initial offer by Parent of $13.25
per BCOP share on December 1, 1999, the average forward price/estimated earnings
multiple was 11.3x. The Offer Price represented a 13.7x forward price/ estimated
earnings multiple.
SELECTED COMPARABLE PUBLICLY TRADED COMPANIES ANALYSIS. Using publicly
available information and estimates of future financial results published by
IBES and selected brokerage firms, Goldman Sachs reviewed and compared certain
financial information, ratios, and public market multiples relating to BCOP to
corresponding financial information, ratios and public market multiples for the
following publicly traded office products companies:
BUSINESS DIRECT RETAIL
--------------- ------
Buhrmann NV Office Depot, Inc.
US Office Products Company OfficeMax, Inc.
Staples, Inc.
In conducting its analysis, Goldman Sachs calculated and compared, as of
March 8, 2000, various financial multiples, specifically:
- the levered market capitalization as a multiple of last twelve months
("LTM") sales;
- the levered market capitalization as a multiple of LTM EBITDA;
- the levered market capitalization as a multiple of LTM EBIT;
- the levered market capitalization as a multiple of estimated 2000 EBITDA;
- the levered market capitalization as a multiple of estimated 2001 EBITDA;
- the equity market capitalization as a multiple of estimated 2000 earnings
per share; and
- the equity market capitalization as a multiple of estimated 2001 earnings
per share.
The results of the analyses were as follows:
LEVERED
LEVERED EBITDA
LTM MULTIPLES MULTIPLES P/E
PRICE AS OF --------------------------------- ------------------- -------------------
COMPANY 3/08/000 SALES EBITDA EBIT 2000E 2001E 2000E 2001E
- ------- ----------- -------- ----------- -------- -------- -------- -------- --------
BUSINESS DIRECT
Boise Cascade Office Products....... $15.63 0.4x 6.5x 9.2x 5.7x 5.2x 12.5x 10.5x
Buhrmann NV......................... $24.89 0.6 12.2 18.1 8.0 7.1 14.4 12.2
US Office Products.................. 2.25 0.5 18.4 N.M. N.A. N.A. N.M. N.A.
RETAIL
Office Depot........................ $10.69 0.4x 5.7x 9.5x 4.7x 4.2x 9.7x 8.3x
OfficeMax........................... 6.31 0.2 4.2 7.6 3.3 3.6 10.5 9.2
Staples............................. 19.13 1.0 13.1 17.4 12.2 7.0 22.2 16.3
DISCOUNTED CASH FLOW ANALYSIS. Goldman Sachs performed a discounted cash
flow analysis for the shares of BCOP on a standalone basis based upon BCOP
management forecasts. Goldman Sachs
16
calculated a range of values for the Shares based on the sum of (i) the
discounted present value of the five-year (2000-2004) stream of projected
after-tax cash flows of BCOP, using a range of weighted average cost of capital
("WACC") discount rates between 10% and 14%; and (ii) the present value per
share of the terminal value of BCOP in 2004, assuming an EBITDA exit multiple
range between 4.5x and 6.5x and a WACC discount rate range between 10% and 14%.
The above financial analysis yielded per share values as of January 1, 2000
ranging from $11.10 to $21.19. Goldman Sachs also examined the sensitivity of
the discounted cash flow value of Shares to changes in operating assumptions.
Using for illustration purposes a WACC discount rate of 12% and an EBITDA exit
multiple of 5.5x, the increase or decrease of up to 5% in the growth of sales
and the increase or decrease of up to 1% in operating margin of BCOP's five-year
financial projections yielded per share values as of January 1, 2000 ranging
between $9.63 and $23.99.
In performing its discounted cash flow analysis, Goldman Sachs used discount
rates based upon BCOP's estimated average cost of capital, including debt.
Goldman Sachs calculated BCOP's estimated weighted average cost of capital based
upon the expected return on a weighted average of all of BCOP's debt and equity
securities.
SELECTED TRANSACTIONS ANALYSIS. Goldman Sachs compared information for
selected buyout transactions in the U.S. contract stationery industry for the
years 1998 and 1999, specifically, the acquisitions by:
- Buhrmann NV of Corporate Express, Inc. (October 1999);
- Clayton, Dubilier & Rice Inc. of US Office Products Company (investment of
$270 million in June 1998);
- Koninklijke KNP BT NV of BT Office Products International, Inc.
(acquisition of remaining 30% stake in September 1998); and
- Clayton, Dubilier & Rice Inc. of US Office Products Company (investment of
an additional $51 million in May 1999).
Goldman Sachs reviewed the aggregate consideration paid as a multiple of LTM
Sales, EBITDA and EBIT for the selected buyout transactions. Based on
information provided by Securities Data Corporation and other publicly available
data, the results of these analyses were:
LEVERED MARKET SELECTED
CAPITALIZATION TRANSACTIONS
AS A MULTIPLE OF: RANGE
- ----------------- -------------------
LTM Sales................................................... 0.3x- 0.7x
LTM EBITDA.................................................. 6.2x- 9.9x
LTM EBIT.................................................... 10.2x-13.7x
In the case of the Buhrmann NV acquisition of Corporate Express, the
analysis of aggregate consideration paid as a multiple of LTM EBITDA and EBIT
adjusted to include publicly announced annual expected synergies yielded
multiples of 6.7x and 8.4x, respectively.
ANALYSIS OF PREMIUMS PAID IN SELECTED COMPARABLE ACQUISITIONS OF MINORITY
INTERESTS. Goldman Sachs analyzed publicly available information for certain
selected transactions involving the purchase of a minority interest, which were
deemed by Goldman Sachs to be relevant. The final premium paid in such
transactions over the target company stock price four weeks prior to initial
announcement of the buyout ranged from (9.9)% to 76.0% with a median of 28.8%,
as compared to the 60% premium offered by Parent on March 6, 2000 ($16.50 per
share) over the market price of the Shares four calendar weeks prior to the
initial offer by Parent of $13.25 per share on December 1, 1999.
17
The preparation of the Goldman Sachs Materials was a complex process and is
not necessarily susceptible to partial analysis or summary description.
Selecting portions of the analyses or of the summary set forth above, without
considering the analyses as a whole, could create an incomplete view of the
processes underlying the Goldman Sachs Materials. No company or transaction used
in the above analyses as a comparison is directly comparable to BCOP or the
contemplated transaction.
The analyses were prepared solely for purposes of Goldman Sachs providing
the Goldman Sachs Materials to the Parent Board and do not purport to be
appraisals or necessarily reflect the prices at which businesses or securities
actually may be sold. Analyses based upon forecasts of future results are not
necessarily indicative of actual future results, which may be significantly more
or less favorable than suggested by such analyses. Because such analyses are
inherently subject to uncertainty, being based upon numerous factors or events
beyond the control of the parties or their respective advisors, none of Parent,
BCOP, Goldman Sachs or any other person assumes responsibility if future results
are materially different from those forecast. As described above, the Goldman
Sachs Materials was one of many factors taken into consideration by the Parent
Board in making its determination to proceed with the Offer. This summary does
not purport to be a complete description of the analyses performed by Goldman
Sachs. You should read the full Goldman Sachs Materials attached as
Exhibit (c)(3) to the Schedule TO filed by the Parent and BCOP.
Goldman Sachs, as part of its investment banking business, is continually
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities, private placements,
and valuations for estate, corporate and other purposes. Goldman Sachs is
familiar with Parent and BCOP, having provided certain investment banking and
financial advisory services to Parent and BCOP from time to time, including
having acted as:
- lead-managing underwriter of a public offering of 3,700,000 shares of BCOP
common stock in April 1995;
- advisor in BCOP's acquisition of the entire share capital of Jean-Paul
Guisset for $143.8 million in cash and an undisclosed amount of
profit-related payments; and
- lead-managing underwriter in the issuance of various public debt issues
for Parent from 1997-1999 for approximately $246 million in proceeds.
Goldman Sachs has been engaged by Parent to provide financial advisory
services in connection with Parent's announced review of strategic alternatives
for its DeRidder, Louisiana paper mill and seven box plants. In the fall of
1998, Goldman Sachs was engaged by Parent to help analyze a bid from a competing
supplier of office products for all of the common stock of BCOP. Goldman Sachs
has also been engaged from time to time by BCOP and Parent as its financial
advisor in advising and assisting BCOP with possible strategic transactions that
have never materialized.
Goldman Sachs may also provide investment banking services to Parent and
BCOP in the future. Parent selected Goldman Sachs as its financial advisor
because it is a nationally recognized investment banking firm that has
substantial experience in transactions similar to the Offer.
Goldman Sachs provides a full range of financial, advisory and brokerage
services and in the course of its normal trading activities may from time to
time effect transactions and hold positions in
18
the securities or options on securities of Parent or BCOP for its own account
and for the account of customers. As of March 16, 2000, Goldman Sachs holds the
following positions:
LONG POSITION SHORT POSITION
------------------------- --------------
Parent common stock................................. 43,286 18,805 shares
Parent 9.850% Notes due June 15, 2002............... $600,000 principal amount --
Parent 9.980% Notes due March 27, 2003.............. $300,000 principal amount --
BCOP common stock................................... 1,400 shares 20,800 shares
BCOP 7.050% Notes due May 15, 2005.................. $800,000 principal amount --
Pursuant to a letter agreement dated September 30, 1999, Parent engaged
Goldman Sachs to act as its financial advisor in connection with the Offer.
Pursuant to the terms of this engagement letter, Parent has agreed to pay
Goldman Sachs, upon consummation of the Offer, a transaction fee of $2,000,000
in cash.
Parent has agreed to reimburse Goldman Sachs for its reasonable
out-of-pocket expenses, including attorneys' fees, and to indemnify Goldman
Sachs against certain liabilities, including certain liabilities under the
federal securities laws.
The foregoing summary does not purport to be a complete description of the
analyses performed by Goldman Sachs and is qualified by reference to the Goldman
Sachs Report filed as an exhibit to the Schedule TO. Copies of the Goldman Sachs
Report are available for inspection and copying at the principal executive
offices of Parent during regular business hours by any holder of Shares of BCOP,
or a shareholder's representative who has been so designated in writing. Parent
shall provide a copy of the Goldman Sachs Report to any shareholder or any
representative of a shareholder who has been so designated in writing upon
written request and at the expense of the requesting shareholder or
representative.
PURPOSE AND STRUCTURE OF AND REASONS FOR THE OFFER AND THE MERGER
The purpose of the Offer is for Parent to acquire the entire equity interest
in BCOP in a transaction in which the Public Shareholders would receive $16.50
per share in cash. The purpose of the Merger is for Parent to acquire all of the
equity interest in BCOP not acquired pursuant to the Offer. Upon consummation of
the Merger, BCOP will become a wholly owned subsidiary of Parent.
Under the DGCL, if, following consummation of the Offer, Parent owns at
least 90% of the outstanding Shares, Parent will be able to cause the Merger to
occur without a vote of BCOP's shareholders. If the Minimum Condition is
satisfied, Parent will own over 90% of the outstanding shares. In that event,
Parent and BCOP have agreed to take all necessary and appropriate action to
cause the Merger to become effective as soon as reasonably practicable after
consummation of the Offer without a meeting of BCOP's shareholders.
Parent has structured this transaction as a cash tender offer to be followed
by a cash merger. Parent believes this structure will effect a prompt and
orderly transfer of ownership of BCOP from BCOP's public shareholders to Parent
and Purchaser. It will also effect the prompt delivery of cash to shareholders
for all of their Shares.
The Parent Board believes that undertaking the proposed transaction in this
form and at this time represents the most attractive way of accomplishing
several strategic business objectives, including Parent's interest in increasing
its investment in the office products distribution business, increasing the
financial flexibility of BCOP, and facilitating an acceleration of BCOP's growth
initiatives without exposing the Public Shareholders to the market risk inherent
in such initiatives. For further background on Parent's reasons, see "Background
of the Transaction" and "Position of the Parent and Purchaser Regarding the
Fairness of the Offer and the Merger."
19
PLANS FOR BCOP AFTER THE OFFER AND THE MERGER; EFFECTS OF THE OFFER AND THE
MERGER
PLANS FOR BCOP. Pursuant to the Merger Agreement, promptly upon completion
of the Offer, BCOP and Parent intend to effect the Merger in accordance with the
terms of the Merger Agreement. (See "SPECIAL FACTORS--The Merger Agreement.")
Parent has no present intention to change the senior management of BCOP, but
reserves the right to do so at any time. It is expected that after the Merger,
when there are no longer any Public Shareholders, that the BCOP Board will
ultimately be composed solely of persons who are officers of BCOP or Parent.
Except as otherwise disclosed in this Offer to Purchase, BCOP has no present
plans or proposals that would result in an extraordinary corporate transaction
involving BCOP or any of its subsidiaries, such as a merger, reorganization,
liquidation, relocation of operations, or sale or transfer of a material amount
of assets. However, BCOP's management will continue to routinely review
proposals for the acquisition or disposition of assets or other changes to
BCOP's business, corporate structure, capitalization, management or dividend
policy which they consider to be in the best interests of BCOP and Parent. Prior
to the date of this Offer, BCOP's management has communicated a preliminary,
non-binding indication of interest with respect to the possible acquisition of
office products distribution businesses which generated annual revenues of
approximately $325 million in their last fiscal year. Any actual transaction
would be subject to satisfactory diligence, negotiation of an acceptable
agreement and approval of the boards of the parties. In addition, following the
Merger, BCOP's management will continue to evaluate and review BCOP's
businesses, operations and properties and make such changes as are deemed
appropriate.
As a result of the Offer, the interest of Parent in BCOP's net book value
and net earnings will increase in proportion to the number of Shares acquired in
the Offer. If the Merger is consummated, Parent's interest in such items and in
BCOP's equity generally will increase to 100%, and Parent and its subsidiaries
will be entitled to all benefits resulting from that interest, including all
income generated by BCOP's operations and any future increase in BCOP's value.
Similarly, Parent will also bear the risk of losses generated by BCOP's
operations and any decrease in the value of BCOP after the Merger. After the
Merger, the Public Shareholders will cease to have any equity interest in BCOP,
will not have the opportunity to participate in any earnings and growth of BCOP
after the Merger, and will not have any right to vote on corporate matters.
Similarly, the Public Shareholders will not face the risk of losses generated by
BCOP's operations or a decline in the value of BCOP after the Merger.
The Shares are currently traded on The New York Stock Exchange ("NYSE"). See
"THE OFFER--Information Concerning BCOP". Following the consummation of the
Merger, the Shares will no longer be traded on the NYSE, and the registration of
the Shares under the Exchange Act will be terminated. Accordingly, after the
Merger there will be no publicly traded equity securities of BCOP outstanding
and BCOP will no longer be required to file periodic reports with the SEC. See
"THE OFFER--Effects of the Offer on the Market for Shares; NYSE and Exchange Act
Registration."
EFFECT OF FAILURE TO COMPLETE THE OFFER AND CONSUMMATE THE MERGER. It is
expected that if Shares are not accepted for payment by Purchaser pursuant to
the Offer and the Merger is not consummated, BCOP's current management, under
the general direction of the BCOP Board, will continue to manage BCOP.
20
RIGHTS OF SHAREHOLDERS IN THE MERGER
No appraisal rights are available in connection with the Offer. If the
Merger is consummated, however, shareholders of BCOP who have not sold their
Shares will have certain rights under the DGCL to dissent and demand appraisal
of and to receive payment in cash of the fair value of their Shares.
Shareholders who perfect such rights by complying with the procedures in
Section 262 of the DGCL ("Section 262") will have the fair value of their Shares
(exclusive of any element of value arising from the accomplishment or
expectation of the Merger) determined by the Delaware Court of Chancery and will
be entitled to receive a cash payment equal to that fair value from the
corporation surviving the Merger. In addition, those dissenting shareholders
will be entitled to receive payment of a fair rate of interest from the date of
consummation of the Merger on the amount determined to be the fair value of
their Shares. In determining the fair value of the Shares, the court must take
into account all relevant factors. Accordingly, the determination could be based
upon considerations other than, or in addition to, the market value of the
Shares, including, among other things, asset values, dividend payment history
and earning capacity. As a consequence of Delaware case law, the fair value
determined in any appraisal proceeding could be more than, less than or equal to
the purchase price of the Offer.
Assuming the proper procedures are followed, Parent does not intend to
object to the exercise of appraisal rights by any shareholder and the demand for
appraisal of, and payment in cash for the fair value of, the Shares.
Several decisions by Delaware courts have held that, in certain
circumstances, a controlling shareholder of a company involved in a merger has a
fiduciary duty to other shareholders that requires that the merger be "entirely
fair" to the other shareholders. In determining whether a merger is fair to
minority shareholders, Delaware courts have considered, among other things, the
type and amount of consideration to be received by the shareholders and whether
there was fair dealing among the parties. The Delaware Supreme Court stated in
WEINBERG V. UOP, INC. and RABKIN V. PHILIP A. HUNT CHEMICAL CORP. that although
the remedy ordinarily available to minority shareholders in a cash-out merger is
the right to appraisal described above, monetary damages, injunctive relief, or
such other relief as the court may fashion, may be available if a merger is
found to be the product of procedural unfairness including fraud,
misrepresentation or other misconduct.
THE PRECEDING SUMMARY OF THE RIGHTS OF DISSENTING SHAREHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
SHAREHOLDERS DESIRING TO EXERCISE ANY AVAILABLE APPRAISAL RIGHTS. IT IS
QUALIFIED BY REFERENCE TO THE FULL TEXT OF SECTION 262 WHICH IS ATTACHED HERETO
AS EXHIBIT C TO THIS OFFER TO PURCHASE. THE PRESERVATION AND EXERCISE OF
APPRAISAL RIGHTS ARE CONDITIONED ON STRICT ADHERENCE TO THE APPLICABLE
PROVISIONS OF THE DGCL.
THE MERGER AGREEMENT
THE FOLLOWING IS A SUMMARY OF THE MATERIAL PROVISIONS OF THE MERGER
AGREEMENT. THE SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL
TEXT OF THE MERGER AGREEMENT, WHICH IS INCORPORATED HEREIN BY REFERENCE AND A
COPY OF WHICH IS ATTACHED HERETO AS EXHIBIT B. CAPITALIZED TERMS NOT OTHERWISE
DEFINED IN THE FOLLOWING SUMMARY SHALL HAVE THE MEANINGS SET FORTH IN THE MERGER
AGREEMENT.
THE OFFER. The Merger Agreement provides that the Parent, Purchaser and
BCOP will use their reasonable best efforts to commence the Offer as promptly as
practicable after the date of the Merger Agreement but in no event later than
March 26, 2000. The Merger Agreement further provides that, upon the terms and
subject to the prior satisfaction or waiver of the conditions of the Offer,
Purchaser will use its reasonable efforts to consummate the Offer in accordance
with its terms and accept for payment and pay for Shares tendered as soon as
practical and legally permitted. The Merger Agreement provides that Purchaser
will not: (i) decrease the Offer Price; (ii) change the number of
21
Shares to be purchased in the Offer; (iii) change the form of consideration
payable pursuant to the Offer; (iv) amend or waive the Minimum Condition; or
(v) make any other change in the terms or conditions of the Offer which is
adverse to the holders of Shares. The Merger Agreement further provides that
Purchaser may in its sole discretion extend the Offer from time to time if, and
to the extent that, at the expiration date of the Offer, any of the conditions
to the obligations of Purchaser to consummate the Offer have not been satisfied
or waived; provided, however, that the Offer shall not be extended beyond
June 30, 2000. In addition, the Merger Agreement provides that Purchaser may, in
its sole discretion, increase the Offer Price and extend the Offer to the extent
required by law in connection with any such increase.
THE MERGER. The Merger Agreement provides that at the Effective Time,
Purchaser will be merged with and into BCOP in accordance with the DGCL. As a
result of the Merger, the separate existence of Purchaser will cease, and BCOP
will be the Surviving Corporation.
The Merger Agreement provides that at the Effective Time, each issued and
outstanding share of Common Stock, other than (i) Shares owned by BCOP as
treasury stock, (ii) Shares owned by Parent, Purchaser or any other wholly owned
subsidiary of Parent, and (iii) Dissenting Shares, shall be converted into the
right to receive the Offer Price in cash.
OPTIONS. The Merger Agreement provides that BCOP will use its reasonable
best efforts to provide that, at the Effective Time, each outstanding option to
purchase shares of Common Stock (collectively, the "BCOP Options") granted under
any of BCOP's stock option plans (the "BCOP Option Plans"), whether or not
exercisable, will be terminated and, in exchange therefor, each holder of a BCOP
Option will receive an amount in cash, equal to the excess, if any, of the Offer
Price over the applicable exercise price.
REPRESENTATIONS AND WARRANTIES. In the Merger Agreement, BCOP has made
representations and warranties to Parent and Purchaser with respect to, among
other things:
- capitalization,
- the authorization, execution, delivery, performance and enforceability of
the Merger Agreement and related matters,
- the Special Committee's: (i) approval of the terms of the Merger Agreement
and the transactions contemplated thereby; (ii) determination that the
Merger and the Offer are advisable, fair to and in the best interests of
the Public Shareholders; (iii) recommendation that the BCOP Board approve
the Merger Agreement and the transactions contemplated thereby; and
(iv) recommendation that the Public Shareholders tender their Shares
pursuant to the Offer,
- filings with the Commission and financial statements,
- disclosures in the Offer Documents and Schedule TO, and
- compliance with legal requirements.
In the Merger Agreement, Parent and Purchaser have each made customary
representations and warranties to BCOP with respect to, among other things:
- corporate organization and good standing,
- the authorization, execution, delivery, performance and enforceability of
the Merger Agreement and related matters,
- consents and approvals,
- the absence of conflict with their respective certificates of
incorporation, by-laws, or any applicable law,
22
- litigation, and
- sufficient funds at Closing to perform the obligations under the Merger
Agreement.
CONDUCT OF BUSINESS. Except as expressly contemplated by the Merger
Agreement or consented to in writing by Parent, prior to the Effective Time,
BCOP and each of its subsidiaries shall operate the businesses conducted by them
in the ordinary and usual course and shall use their reasonable efforts to
preserve intact their present business organizations, keep available the
services of their present officers and key employees, and preserve their
relationships with material customers and suppliers and others having business
dealings with them, to the end that their goodwill and ongoing businesses shall
be unimpaired at the Effective Time.
Additionally, except as contemplated by the Merger Agreement or agreed in
writing by Parent, prior to the Effective Time neither BCOP nor any of its
subsidiaries shall:
(i) except for actions made in the ordinary course of business
consistent with past practice, increase the compensation payable to or
become payable to its directors, officers or employees, pay any bonus, grant
any severance or termination pay to, or enter into or amend any employment
or severance agreement with, any director, officer or other employees of
BCOP or any of its subsidiaries, establish, adopt, enter into or amend 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 directors,
officers or employees, materially change any actuarial assumption or other
assumption used to calculate funding obligations with respect to any pension
or retirement plan, or change the manner in which contributions to any such
plan are made or the basis on which such contributions are determined,
except, in each case, as may be required by law or contractual commitments
which are existing as of the date of the Merger Agreement; or
(ii) except for actions required by law, take any action that will
result in any of the representations and warranties of BCOP set forth in the
Merger Agreement becoming untrue or in any of the conditions to the Merger
not being satisfied.
NO SOLICITATION. BCOP has agreed that it will not, nor will it authorize or
permit any of its subsidiaries or any officer, director, employee, investment
banker, attorney or other advisor or representative of BCOP or any of its
subsidiaries to, directly or indirectly (i) solicit, initiate, or encourage the
submission of, or approve or recommend, or propose publicly to approve or
recommend any Acquisition Proposal (as defined below); (ii) enter into any
agreement with respect to any Acquisition Proposal; or (iii) solicit, initiate,
participate in, or encourage any discussions or negotiations regarding, or
furnish to any person (other than Parent or any of its affiliates or
representatives) any information for the purpose of facilitating the making of,
or take any other action to facilitate any inquiries or the making of, any
proposal that constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal. BCOP is obligated to promptly advise Parent of any
Acquisition Proposal and any inquiries with respect to any Acquisition Proposal.
The term "Acquisition Proposal" means any proposal for a merger or other
business combination involving BCOP or any proposal or offer to acquire in any
manner, directly or indirectly, any equity interest in BCOP, or a material
portion of the assets of BCOP. Nothing shall prohibit BCOP from taking and
disclosing to its shareholders a position contemplated by Rules 14d-9 and
14e-2(a) promulgated under the Exchange Act.
DIRECTORS' AND OFFICERS' INDEMNIFICATION. The Merger Agreement provides
that Parent shall cause the Certificate of Incorporation and the By-Laws of the
Surviving Corporation to contain the provisions with respect to indemnification
and exculpation from liability set forth in BCOP's Certificate of Incorporation
and By-Laws, which provisions shall not be amended, repealed or otherwise
modified for a period of six years from the Effective Time in any manner that
would adversely affect the rights
23
thereunder of individuals who on or prior to the Effective Time were directors,
officers, employees or agents of BCOP, unless such modification is required by
law. Parent further guarantees the payment obligations of the Surviving
Corporation arising from the indemnification and exculpation provisions referred
to in the preceding sentence.
The Merger Agreement further provides that Parent or the Surviving
Corporation shall maintain in effect for six years from the Effective Time
policies of directors' and officers' liability insurance containing terms and
conditions which are not less advantageous to the insured than any such policies
of BCOP in effect on the date of the Merger Agreement, with respect to matters
occurring prior to the Effective Time, to the extent available, and having the
maximum available coverage under any of BCOP's current policies.
CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The respective
obligation of each party to effect the Merger is subject to the satisfaction on
or prior to the Effective Time of each of the following conditions (any of which
may be waived by the parties in writing, in whole or in part, to the extent
permitted by applicable law): (i) no order or injunction of a court of competent
jurisdiction, shall be in effect, no statute, rule or regulation shall have been
enacted by a governmental entity and no action, suit or proceeding by any
governmental entity shall have been instituted or threatened, which prohibits
the consummation of the Merger or materially challenges the transactions
contemplated by the Merger Agreement; (ii) all consents, approvals and
authorizations of and filings with governmental entities required for the
consummation of the transactions contemplated by the Merger Agreement, if any,
shall have been obtained or effected or filed; and (iii) Parent, Purchaser or
their affiliates shall have purchased Shares pursuant to the Offer.
The obligations of Parent and Purchaser to effect the Merger are further
subject to the satisfaction or waiver of each of the following conditions prior
to or at the Closing Date: (i) the representations and warranties of BCOP
contained in the Merger Agreement shall be true and correct in all material
respects at and as of the Effective Time as though made at and as of the
Effective Time, except to the extent that any such representation or warranty is
made as of a specified date, in which case such representation or warranty shall
have been true and correct in all material respects as of such date; and BCOP
shall have performed and complied in all material respects with all of its
undertakings and agreements required by the Merger Agreement to be performed or
complied with by it prior to or at the Effective Time.
TERMINATION. The Merger Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time:
(a) by the mutual written consent of the Boards of Directors of Parent,
Purchaser and BCOP (upon recommendation of the Special Committee);
(b) by either BCOP upon the recommendation of the Special Committee, on
the one hand, or Parent and Purchaser, on the other hand, if: (i) the Offer
shall have expired without any Shares being purchased pursuant to the Offer
or Purchaser shall not have accepted for payment any Shares pursuant to the
Offer by July 1, 2000; provided, however, that this right to terminate the
Merger Agreement shall not be available to any party whose failure to
fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of Purchaser to purchase the Shares pursuant to the
Offer on or before such date; or (ii) any governmental entity shall have
issued an order, decree or ruling or taken any other action (which order,
decree, ruling or other action the parties to the Merger Agreement shall use
their reasonable efforts to lift), which permanently restrains, enjoins or
otherwise prohibits the acceptance for payment of, or payment for, Shares
pursuant to the Offer or the Merger and such order, decree, ruling or other
action shall have become final and non-appealable;
24
(c) by BCOP, if Parent or Purchaser shall have breached in any material
respect any of their respective representations, warranties, covenants or
other agreements contained in the Merger Agreement, and the breach cannot be
or has not been cured within 30 days after the giving of written notice by
BCOP to Parent or Purchaser, as applicable; or
(d) by Parent, if:
(i) before the purchase of Shares by Purchaser pursuant to the Offer,
the BCOP Board or the Special Committee shall have withdrawn, modified or
changed in a manner adverse to Parent or Purchaser its approval or
recommendation of the Offer, the Merger Agreement or the Merger or shall
have recommended an Acquisition Proposal or shall have executed an
agreement in principle or definitive agreement relating to an Acquisition
Proposal or similar business combination with a person or entity other
than Parent, Purchaser or their affiliates; or
(ii) before the purchase of Shares pursuant to the Offer, BCOP shall
have breached any representation, warranty, covenant or other agreement
contained in the Merger Agreement which (x) would give rise to the
failure of the condition summarized in section 12(a) or 12(b) in the
section entitled "The Offer--Conditions of the Offer" and (y) cannot be
or has not been cured within 30 days after the giving of written notice
to BCOP; provided, however, that Parent may not terminate the Merger
Agreement if any affirmative action by Parent was the cause of the breach
by BCOP of any representation, warranty or covenant.
If the Merger Agreement is terminated, it shall become null and void and
there shall be no liability on the part of Parent, Purchaser or BCOP; provided
that nothing shall relieve any party from any liability or obligation with
respect to any willful breach of the Merger Agreement.
INTERESTS OF PERSONS IN THE OFFER AND THE MERGER
Pursuant to the Merger Agreement, BCOP is obligated to attempt in good faith
to provide that BCOP Options will be cancelled immediately prior to the
Effective Time. In exchange for cancellation of the BCOP options, the holders
will be entitled to receive from BCOP, for each Share subject to the stock
option, a cash payment equal to the excess, if any, of the Offer Price over the
applicable exercise price.
The table in the next section entitled "Shares and Options Owned by
Directors and Executive Officers of BCOP" shows the number of Shares owned by
the executive officers and directors of BCOP and the number of options they have
which will be subject to the treatment described above.
Except for proceeds derived from the tender of Shares and the cancellation
of options and director meeting fees paid to directors who are not employees of
BCOP, no director or executive officer of BCOP is entitled to receive any cash
compensation directly attributable to the Offer or the Merger. However, certain
key managers and executive officers of BCOP may be eligible to participate in a
retention and incentive program established by Parent. This program entitles
participants to receive monetary awards if BCOP meets certain financial goals.
Several directors and executive officers of Parent and Purchaser also own
Shares and options to purchase BCOP stock. Information concerning their holdings
is set forth in the next section.
The Merger Agreement contains certain provisions with respect to
indemnification of directors and executive officers and maintenance of
directors' and officers' liability insurance subsequent to the Effective Time.
See "SPECIAL FACTORS--The Merger Agreement."
25
BENEFICIAL OWNERSHIP OF SHARES, PRESENT INTENTIONS AND RECOMMENDATIONS
Parent owns 53,398,724 or 81% of the outstanding shares of the common stock
of BCOP. Set forth in the table below is a list of the directors and executive
officers of Parent and Purchaser who beneficially own Shares. In addition to
Shares owned outright, the table separately shows the number of options
exercisable within 60 days of the offer date and options not exercisable within
60 days of the offer date. To the best of the knowledge of Parent and Purchaser,
each of the indicated persons intends to tender his or her Shares in connection
with the Offer.
SHARES AND OPTIONS OWNED BY DIRECTORS AND
EXECUTIVE OFFICERS OF PARENT AND PURCHASER
OPTIONS OPTIONS NOT
NUMBER EXERCISABLE EXERCISABLE
NAME(1) OF SHARES WITHIN 60 DAYS WITHIN 60 DAYS
- ------- --------- -------------- --------------
A. James Balkins III.................................... 10,254 38,000 43,000
Charles D. Blencke...................................... 2,117 0 0
Thomas E. Carlile....................................... 8,273 0 0
Graham L. Covington..................................... 2,862 0 0
Theodore Crumley........................................ 1,000 0 0
A. Ben Groce............................................ 8,029 0 0
Vincent T. Hannity...................................... 810 0 0
John W. Holleran........................................ 598 0 0
Christopher C. Milliken................................. 22,239 187,733 108,667
Carol B. Moerdyk........................................ 9,289 140,400 43,000
George H. Harad......................................... 2,000 0 0
A. William Reynolds..................................... 20,000 18,000 5,000
Jane E. Shaw............................................ 5,000 0 0
------ ------- -------
TOTAL:............................................ 92,471 384,133 199,667
- ------------------------
(1) Each of the directors and executive officers of Parent and Purchaser named
below owns shares and options equal to less than 1% of the outstanding
Shares.
26
Set forth below is a table showing the number of Shares and options
beneficially owned by all directors and executive officers of BCOP (members of
the Special Committee are identified with an asterisk). To the best of the
knowledge of Parent and Purchaser, each of the persons who own Shares will
tender them in connection with the Offer.
SHARES AND OPTIONS OWNED BY DIRECTORS AND
EXECUTIVE OFFICERS OF BCOP
OPTIONS OPTIONS NOT
NUMBER EXERCISABLE EXERCISABLE
NAME(1) OF SHARES WITHIN 60 DAYS WITHIN 60 DAYS
- ------- --------- -------------- --------------
A. James Balkins III.................................... 10,254 38,000 43,000
Richard Black........................................... 1,494 131,800 43,000
Kenneth W. Cupp......................................... 4,972 42,750 27,800
Darrell R. Elfeldt...................................... 1,200 51,200 17,400
David A. Goudge......................................... 574 35,533 22,067
William E. Gruber....................................... 2,544 26,967 18,533
Thomas J. Jaszka........................................ 200 13,333 10,767
David Kelly............................................. 1,025 9,400 7,100
John A. Love............................................ 3,148 45,200 17,400
Gary A. Massel.......................................... 0 27,867 23,533
Michael F. Meehan....................................... 4,848 41,800 17,400
Christopher C. Milliken................................. 22,239 187,733 108,667
Carol B. Moerdyk........................................ 9,289 140,400 43,000
Stephen M. Thompson..................................... 2,000 53,200 17,400
Peter Vanexan........................................... 0 29,000 17,400
John B. Carley*......................................... 24,000 18,000 5,000
James G. Connelly III*.................................. 3,000 18,000 5,000
Theodore Crumley........................................ 1,000 0 0
Peter G. Danis Jr....................................... 22,000 267,800 35,000
George J. Harad......................................... 2,000 0 0
A. William Reynolds..................................... 20,000 18,000 5,000
Donald Roller*.......................................... 1,000 5,000 5,000
------- --------- -------
TOTAL:............................................ 136,787 1,200,983 489,467
- ------------------------
(1) Each of the directors and executive officers of Parent and Purchaser named
below owns shares and options equal to less than 1% of the outstanding
Shares. In the aggregate, these individuals own shares and options
exercisable within 60 days equal to 2% of the outstanding Shares.
To the knowledge of Parent and Purchaser, none of the persons identified in
Schedule I, the directors and executive officers of BCOP or the executive
officers and directors of other subsidiaries of Parent have had any transaction
in the Shares within the past 60 days. Except for normal transactions in the
BCOP stock fund of Parent's 401(k) savings plan and the BCOP Employee Stock
Purchase Plan, neither the Parent, Purchaser nor BCOP has had any transaction in
the Shares within the past 60 days.
To the best knowledge of Parent and Purchaser, except as set forth below, no
director or executive officer of Parent, Purchaser or BCOP has made a public
recommendation relating to the Offer or the Merger. In their capacities as board
members, each of the directors of Parent, Purchaser and BCOP have voted in favor
of the Offer and the Merger and the recommendations of the boards of directors
of Parent, Purchaser and BCOP in favor of the Offer and the Merger are set forth
in this Offer to Purchase. Certain officers of Parent and BCOP have supported
the Offer and the Merger in
27
communications to employees of Parent and BCOP and in discussions with
investment analysts and other interested persons.
LITIGATION RELATED TO THE OFFER
Between December 1, 1999 and December 3, 1999, nine purported class action
lawsuits were filed by purported shareholders of BCOP in the Delaware Court of
Chancery against Parent, BCOP, and BCOP's directors arising out of Parent's
initial proposal to acquire BCOP's outstanding minority public shares for $13.25
per share in cash. The cases are captioned ERNEST HACK V. BOISE CASCADE OFFICE
PRODUCTS CORPORATION ET AL., KENNETH STEINER V. THEODORE CRUMLEY ET AL., MATTHEW
LUBRANO V. BOISE CASCADE OFFICE PRODUCTS CORPORATION ET AL., CHAYA LICHTENSTEIN
v. THEODORE CRUMLEY ET AL., FRED KHANI V. BOISE CASCADE OFFICE PRODUCTS
CORPORATION ET AL., CRANDON CAPITAL PARTNERS V. BOISE CASCADE OFFICE PRODUCTS
CORPORATION ET AL., JIM KILLHAM V. THEODORE CRUMLEY ET AL., WAYNE FOOTE V.
THEODORE CRUMLEY ET AL., AND MORRIS PELLETIER V. THEODORE CRUMLEY ET AL., The
lawsuits allege, among other things, that Parent's offer was wrongful, unfair,
and harmful to the Public Shareholders, and that the individual defendants could
not fairly discharge their fiduciary duties. The lawsuits sought, among other
things, injunctive relief against consummation of the proposed transaction,
rescission of the transaction if it were consummated, damages, and attorneys'
fees and expenses. On January 19, 2000, the Court, upon stipulation of the
parties, entered an Order of Consolidation that combined the nine cases into one
matter for all purposes.
On March 20, 2000, the parties to the litigation entered into a Memorandum
of Understanding with respect to a proposed settlement of the lawsuits. The
proposed settlement would provide for full releases of the defendants and
certain related or affiliated persons and extinguish all claims that have been,
could have been or could be asserted by or on behalf of any member of the class
against the defendants which in any manner relate to the allegations, facts, or
other matters raised in the lawsuits or which otherwise relate to the
transactions contemplated by the Merger Agreement, including the Offer and the
Merger. The settlement provides for the payment of $700,000 in attorney's fees
and up to $20,000 for expenses upon final approval of the settlement of the
actions. The final settlement of the lawsuits, including the amount of
attorneys' fees to be paid, is subject to court approval.
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain United States federal income tax
consequences of the Offer and the Merger to shareholders of BCOP whose Shares
are tendered and accepted for payment pursuant to the Offer or whose Shares are
converted into cash in the Merger. The discussion is for general information
only and does not purport to consider all aspects of United States federal
income taxation that might be relevant to shareholders of BCOP. The discussion
is based on current provisions of the Internal Revenue Code of 1986, as amended
(the "Code"), existing, proposed and temporary regulations promulgated
thereunder and administrative and judicial interpretations thereof, all of which
are subject to change, possibly with a retroactive effect. The discussion
applies only to shareholders of BCOP in whose hands Shares are capital assets
within the meaning of Section 1221 of the Code and may not apply to Shares
received pursuant to the exercise of employee stock options or otherwise as
compensation, or to certain types of shareholders (such as insurance companies,
tax-exempt organizations, financial institutions and broker-dealers) who may be
subject to special rules. This discussion does not discuss the United States
federal income tax consequences to any shareholder of BCOP who, for United
States 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 foreign, state or local tax laws.
BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH SHAREHOLDER SHOULD CONSULT
HIS OR HER OWN TAX ADVISOR TO DETERMINE THE APPLICABILITY OF THE RULES DISCUSSED
BELOW AND THE PARTICULAR TAX EFFECTS TO A
28
BENEFICIAL HOLDER OF THE OFFER AND THE MERGER, INCLUDING THE APPLICATION AND
EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.
The receipt of cash for Shares pursuant to the Offer or the Merger will be a
taxable transaction for United States federal income tax purposes and possibly
for state and local income tax purposes as well. In general, a shareholder who
sells Shares pursuant to the 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 Offer or exchanged for cash pursuant to the Merger. Gain or loss will be
determined separately for each block of Shares (i.e., Shares acquired at the
same cost in a single transaction) tendered pursuant to the Offer or exchanged
for cash pursuant to the Merger. Such gain or loss will be long-term capital
gain or loss provided that a shareholder's holding period for such Shares is
more than one year at the time of consummation of the Offer or the Merger, as
the case may be. Capital gains recognized by an individual upon a disposition of
a Share that has been held for more than one year generally will be subject to a
maximum United States federal income tax rate of 20% or, in the case of a Share
that has been held for one year or less, will be subject to tax at ordinary
income tax rates. Certain limitations apply to the use of a shareholder's
capital losses.
29
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 any such extension or
amendment), Purchaser 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 of this Offer to Purchase. The term "Expiration Date" shall mean
5:00 p.m., New York City time, on Wednesday, April 19, 2000, unless and until
Purchaser, in accordance with the terms of the Merger Agreement, shall have
extended the period of time for which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended by Purchaser, shall expire.
The Offer is conditioned upon the satisfaction of the Minimum Condition and
the other conditions set forth in Section 12. If such conditions are not
satisfied prior to the Expiration Date, Purchaser reserves the right, subject to
the terms of the Merger Agreement and subject to the applicable rules and
regulations of the Securities and Exchange Commission, 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 and, to the extent permitted by applicable law, purchase all Shares
validly tendered and not withdrawn, (iii) subject to the conditions summarized
below, extend the Offer and, subject to the right of shareholders to withdraw
Shares until the Expiration Date, retain all Shares which have been validly
tendered and not withdrawn during the period or periods for which the Offer is
extended, or (iv) subject to the following sentence, modify the terms of the
Offer. The Merger Agreement provides that Purchaser will not reduce the Offer
Price, amend or waive the Minimum Condition, change the form of consideration to
be paid in the Offer, reduce the number of Shares subject to the Offer, or amend
any other condition to the Offer in any manner adverse to the holders of the
Shares or impose additional conditions to the Offer without the written consent
of the Special Committee.
If on the initial scheduled Expiration Date of the Offer, which shall be no
earlier than twenty business days after the date the Offer is commenced, all
conditions to the Offer have not been satisfied or waived, Purchaser may, from
time to time, in its sole discretion, extend the Expiration Date of the Offer;
provided, however, that the Expiration Date may not be extended beyond June 30,
2000. In addition, Purchaser may (but is not obligated to) increase the amount
it offers to pay per Share in the Offer, and the Offer may be extended to the
extent required by law in connection with such increase, in each case without
the consent of BCOP.
Any extension, amendment or termination of the Offer will be followed as
promptly as practicable by public announcement thereof, the announcement in the
case of an extension to be issued no later than 9:00 a.m., New York City time,
on the next business day after the previously scheduled Expiration Date in
accordance with the public announcement requirements of Rules 14d-4(c), 14d-
6(d) and 14e-1(d) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). As used in this Offer to Purchase, "business day" has the
meaning set forth in Rule 14d-1 under the Exchange Act. Without limiting the
obligation of Purchaser under such Rule or the manner in which Purchaser may
choose to make any public announcement, Purchaser currently intends to make
announcements by issuing a press release to PR Newswire.
If Purchaser extends the Offer, or if Purchaser (whether before or after its
acceptance for payment of Shares) is delayed in its purchase of, or payment for,
Shares or is unable to pay for Shares pursuant to the Offer for any reason,
then, without prejudice to Purchaser's rights under the Offer, the Depositary
may retain tendered Shares on behalf of Purchaser, and such Shares may not be
withdrawn except to the extent tendering shareholders are entitled to withdrawal
rights as described in Section 4. However, the ability of Purchaser to delay the
payment for Shares that Purchaser has accepted for payment is limited by
Rule 14e-l(c) under the Exchange Act, which requires that a bidder pay the
30
consideration offered or return the securities deposited by, or on behalf of,
holders of securities promptly after the termination or withdrawal of the Offer.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the
Exchange Act. The minimum period during which the Offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer, other than a change in price or a change in percentage of securities
sought, will depend upon the facts and circumstances then existing, including
the relative materiality of the changed terms or information. In a public
release, the Commission has stated that in its view an offer must remain open
for a minimum period of time following a material change in the terms of the
Offer and that waiver of a material condition, such as the Minimum Condition, is
a material change in the terms of the Offer. The release states that an offer
should remain open for a minimum of five business days from the date a material
change is first published, sent or given to security holders and that, if
material changes are made with respect to information not materially less
significant than the offer price and the number of shares being sought, a
minimum of ten business days may be required to allow adequate dissemination and
investor response. The requirement to extend the Offer will not apply to the
extent that the number of business days remaining between the occurrence of the
change and the then-scheduled Expiration Date equals or exceeds the minimum
extension period that would be required because of such amendment. If, prior to
the Expiration Date, Purchaser increases the consideration offered to holders of
Shares pursuant to the Offer, such increased consideration will be paid to all
holders whose Shares are purchased in the Offer whether or not such Shares were
tendered prior to such increase.
BCOP has provided Purchaser with BCOP's shareholder lists and security
position listings for the purpose of disseminating the Offer to holders of
Shares. This Offer to Purchase and the related Letter of Transmittal will be
mailed by Purchaser to record holders of Shares and will be furnished by
Purchaser to brokers, dealers, banks and similar persons whose names, or the
names of whose nominees, appear on the shareholder lists or, if applicable, who
are listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT.
Upon the terms and subject to the conditions to the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), Purchaser will accept for payment and will pay, promptly after the
Expiration Date, for all Shares validly tendered prior to the Expiration Date
and not properly withdrawn in accordance with Section 4.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates for
such Shares (or a timely Book-Entry Confirmation (as defined below) with respect
thereto), (ii) a Letter of Transmittal (or an exact copy 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 in Section 3
below), and (iii) any other documents required by the Letter of Transmittal. The
per Share consideration paid to any holder of Shares pursuant to the Offer will
be the highest per Share consideration paid to any other holder of such Shares
pursuant to the Offer.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered to Purchaser and not
withdrawn, if and when Purchaser gives oral or written notice to the Depositary
of Purchaser's acceptance for payment of such Shares. 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 payment from Purchaser and
transmitting payment to tendering shareholders.
31
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICE TO BE PAID BY
PURCHASER FOR THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY
IN MAKING SUCH PAYMENT.
Purchaser reserves the right, in its sole discretion, to delay acceptance
for payment of, or payment for, Shares in order to comply with any applicable
law. If Purchaser is delayed in its acceptance for payment of, or payment for,
Shares or is unable to accept for payment, or pay for, Shares pursuant to the
Offer for any reason, then, without prejudice to Purchaser's rights under the
Offer (including such rights as are set forth in Sections 1 and 12, but subject
to compliance with Rule 14e-1(c) under the Exchange Act), the Depositary may,
nevertheless, on behalf of Purchaser, 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.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if certificates are submitted representing more Shares than are
tendered, certificates evidencing Shares not tendered or not accepted for
purchase will be returned to the tendering shareholder, or such other person as
the tendering shareholder shall specify in the Letter of Transmittal, as
promptly as practicable following the expiration, termination or withdrawal of
the Offer. In the case of Shares delivered by book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility (as defined below)
pursuant to the procedures set forth in Section 3, such Shares will be credited
to such account maintained at the Book-Entry Transfer Facility as the tendering
shareholder shall specify in the Letter of Transmittal, as promptly as
practicable following the expiration, termination or withdrawal of the Offer. If
no such instructions are given with respect to Shares delivered by book-entry
transfer, any such Shares not tendered or not purchased will be returned by
crediting the account at the Book-Entry Transfer Facility designated in the
Letter of Transmittal as the account from which such Shares were delivered.
Purchaser reserves the right to transfer or assign, in whole or in part, to
Parent or to any direct or indirect wholly owned subsidiary of Parent, the right
to purchase Shares tendered pursuant to the Offer, but any such transfer or
assignment will not relieve Purchaser of its obligations under the Offer and
will in no way prejudice the rights of tendering shareholders to receive payment
for Shares validly tendered and accepted for payment pursuant to the Offer.
3. PROCEDURES FOR TENDERING SHARES.
VALID TENDER. For Shares to be validly tendered pursuant to the Offer,
either (i) a properly completed and duly executed Letter of Transmittal (or an
exact copy thereof), together with any required signature guarantees, or in the
case of a book-entry transfer, an Agent's Message (as defined below), and any
other required documents, must 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, and either certificates for tendered Shares must be received by
the Depositary at one of such addresses or such Shares must be delivered
pursuant to the procedures for book-entry transfer set forth below (and a
Book-Entry Confirmation (as defined below) received by the Depositary), in each
case prior to the Expiration Date, or (ii) the tendering shareholder must comply
with the guaranteed delivery procedures set forth below. Participants in BCOP's
ESPP should refer to separate instructions included with this Offer to Purchase
and complete the appropriate sections of the Letter of Transmittal and other
required documentation, as indicated in the separate instructions.
BOOK-ENTRY TRANSFER. The Depositary will establish accounts with respect to
the Shares at The Depository Trust Company (the "Book-Entry Transfer Facility")
for purposes of the Offer within two business days after the date of this Offer
to Purchase. Any financial institution that is a participant in the Book-Entry
Transfer Facility's system may make book-entry delivery of Shares by causing the
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account in accordance with the Book-Entry Transfer Facility's procedure for such
transfer. However, although delivery of Shares may be effected through
book-entry transfer into the Depositary's account at the Book-Entry Transfer
32
Facility, the Letter of Transmittal (or an exact copy), properly completed and
duly executed, with any required signature guarantees, or an Agent's Message,
and any other required documents must be transmitted to, and received by, the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase prior to the Expiration Date, or the tendering shareholder must comply
with the guaranteed delivery procedures described below. The confirmation of a
book-entry transfer of Shares into the Depositary's account at the Book-Entry
Transfer Facility as described above is referred to herein as a "Book-Entry
Confirmation." DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN
ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that Purchaser
may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of
Transmittal (i) if the 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 therewith and
that registered holder has not completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on the
Letter of Transmittal, or (ii) if such Shares are tendered for the account of a
financial institution (including most commercial banks, savings and loan
associations and brokerage houses) which is a participant in good standing in
the Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, an "Eligible Institution" and, collectively, "Eligible Institutions"). In
all other cases, all signatures on Letters of Transmittal must be guaranteed by
an Eligible Institution. See Instructions 3 and 5 to the Letter of Transmittal.
If the certificates for Shares are registered in the name of a person other
than the signer of the Letter of Transmittal, or if payment is to be made, or
certificates for Shares not tendered or not accepted for payment are to be
returned, to a person other than the registered holder of the certificates
surrendered, then the tendered certificates for such Shares must be endorsed or
accompanied by appropriate stock powers, signed exactly as the name or names of
the registered holders or owners appear on the certificates, with the signatures
on the certificates or stock powers guaranteed as stated above. See Instruction
5 to the Letter of Transmittal.
GUARANTEED DELIVERY. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's certificates for Shares are not immediately
available or the procedures for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such shareholder's tender may be
effected if all of the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
33
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Purchaser, is received by
the Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for (or a Book-Entry Confirmation with respect
to) such Shares, together with a properly completed and duly executed Letter
of Transmittal (or an exact copy thereof), with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message,
and any other required documents, are received by the Depositary within
three trading days after the date of execution of such Notice of Guaranteed
Delivery. A "trading day" is any day on which the New York Stock Exchange is
open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the Depositary
or transmitted by telegram, facsimile transmission or mail to the Depositary and
must include a guarantee by an Eligible Institution in the form set forth in
such Notice of Guaranteed Delivery.
Upon the acceptance of Shares for payment pursuant to the Offer, the valid
tender of Shares pursuant to one of the procedures described above will
constitute a binding agreement between the tendering shareholder and Purchaser,
upon the terms and subject to the conditions of the Offer.
APPOINTMENT. By executing the Letter of Transmittal as set forth above
(including delivery through an Agent's Message), the tendering shareholder will
irrevocably appoint designees of Purchaser as such shareholder's
attorneys-in-fact and proxies, in the manner set forth in the Letter of
Transmittal, each with full power of substitution, to the full extent of such
shareholder's rights with respect to the Shares tendered by such shareholder and
accepted for payment by Purchaser, and with respect to any and all other Shares
or other securities or rights issued or issuable in respect of such purchased
Shares. All such powers of attorney and proxies will be considered coupled with
an interest in the tendered Shares. Such appointment will be effective if, as
and when, and only to the extent that, Purchaser accepts for payment Shares
tendered by such shareholder as provided herein. Upon such appointment, all
prior powers of attorney, proxies and consents given by such shareholder with
respect to such Shares or other securities or rights will, without further
action, be revoked and no subsequent powers of attorney, proxies, consents or
revocations may be given by such shareholder and, if given, will not be deemed
effective. The designees of Purchaser will thereby be empowered to exercise all
voting and other rights with respect to such Shares and other securities or
rights, including, without limitation, in respect of any annual, special or
adjourned meeting of BCOP's shareholders, actions by written consent in lieu of
any such meeting or otherwise, as they in their sole discretion deem proper.
Purchaser reserves the right to require that, in order for Shares to be deemed
validly tendered, immediately upon Purchaser's acceptance for payment of such
Shares, Purchaser must be able to exercise full voting, consent and other rights
with respect to such Shares and other related securities or rights, including
voting at any meeting of shareholders.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by Purchaser, in its sole discretion, which determination
will be final and binding. Purchaser reserves the absolute right to reject any
or all tenders of any Shares determined by it not to be in proper form or the
acceptance for payment of which, or payment for which, may, in the opinion of
Purchaser's counsel, be unlawful. Purchaser also reserves the absolute right, in
its sole discretion, subject to the provisions of the Merger Agreement, 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 or irregularities relating thereto have been
cured or waived. None of Purchaser, Parent, the Depositary, the Information
Agent or any other person will be under any duty to give notification of any
defects or irregularities in tenders or incur any liability for failure to give
any such notification. Subject to the terms of the Merger Agreement,
34
Purchaser's interpretation of the terms and conditions of the Offer (including
the Letter of Transmittal and the instructions thereto) will be final and
binding.
BACKUP WITHHOLDING. 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 of cash pursuant to the Offer. In order to prevent
backup federal income tax withholding with respect to payment to certain
shareholders of the purchase price of 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 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, Certificate of Foreign Status
(a copy of which may be obtained from the Depositary), in order to avoid backup
withholding. See Instruction 9 of the Letter of Transmittal.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, or as provided by applicable
law, tenders of Shares are irrevocable. Shares tendered pursuant to the Offer
may be withdrawn pursuant to the procedures set forth below at any time prior to
the Expiration Date and, unless previously accepted for payment and paid for by
Purchaser pursuant to the Offer, may also be withdrawn at any time after
May 20, 2000.
For a withdrawal to be effective, a written or faxed notice of withdrawal
must be timely received by the Depositary at one of its addresses set forth on
the back cover of this Offer to Purchase and must specify the name of the person
having tendered the Shares to be withdrawn, the number of Shares to be withdrawn
and the name of the registered holder of the Shares to be withdrawn, if
different from the name of the person who tendered the Shares. If certificates
for Shares 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 by an Eligible Institution, the signatures on the notice of
withdrawal must be guaranteed by an Eligible Institution. If Shares have been
delivered pursuant to the procedures for book-entry transfer as set forth in
Section 3, 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 and otherwise comply with such Book-Entry Transfer Facility's procedures.
Withdrawals of tenders of Shares may not be rescinded, and any Shares
properly withdrawn will thereafter be deemed not validly tendered for purposes
of the Offer. However, withdrawn Shares may be retendered by again following one
of the procedures described in Section 3 any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser, in its sole discretion,
which determination will be final and binding. None of Purchaser, Parent, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in any notice of withdrawal
or incur any liability for failure to give any such notification.
35
5. PRICE RANGE OF THE SHARES.
The Shares are traded on the NYSE under the symbol "BOP." The following
table reflects the high and low sales prices of the Shares as reported by the
NYSE for the periods indicated.
BOISE CASCADE OFFICE PRODUCTS CORPORATION
HIGH LOW
-------- --------
Year Ended December 31, 1998
First Quarter............................................. $20.44 $14.88
Second Quarter............................................ 20.50 15.25
Third Quarter............................................. 16.88 7.06
Fourth Quarter............................................ 13.69 8.50
Year Ended December 31, 1999
First Quarter............................................. 15.75 10.63
Second Quarter............................................ 12.88 9.88
Third Quarter............................................. 12.69 9.25
Fourth Quarter............................................ 15.31 9.31
Year Ending December 31, 2000
First Quarter through March 21, 2000...................... 16.3125 14.50
On November 30, 1999, the last full trading day before the announcement that
Parent had made a proposal to the BCOP Board to acquire the outstanding minority
public shares of BCOP, the closing price of the Shares on the NYSE was $11.50
per Share. The average closing price for the 30 day trading period ended
November 30, 1999 was $10.56. On March 10, 2000, the last full day of trading
before the execution of the Merger Agreement was publicly announced, the closing
price of the Shares on the NYSE was $15.1875 per Share. On March 21, 2000, the
last full day of trading before the commencement of the Offer, the closing price
of the Shares on the NYSE was $16.25 per Share.
You are urged to obtain a current market quote for the Shares.
6. INFORMATION CONCERNING BCOP.
GENERAL. BCOP is a Delaware corporation with its principal offices located
at 800 West Bryn Mawr Avenue, Itasca, Illinois 60143. The telephone number is
(630) 773-5000. BCOP is one of the world's premier business-to-business
distributors of products for the office. BCOP sells a broad line of branded and
private label office supplies, office furniture, paper, computer consumables,
and promotional products. BCOP purchases most of its products directly from
manufacturers and distributes them directly to business customers.
AVAILABLE INFORMATION. The Shares are registered under the Exchange Act.
Accordingly, BCOP is subject to the information filing requirements of the
Exchange Act and 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 BCOP's directors
and officers (including their remuneration, stock options granted to them, and
shares held by them), the principal holders of BCOP's securities, and any
material interest of those persons in transactions with BCOP is required to be
disclosed in proxy statements and annual reports distributed to BCOP's
shareholders and filed with the SEC. Such reports, proxy statements, and other
information are available for inspection and copying at the public reference
facilities of the SEC located at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the regional offices of the SEC located at 500 West Madison Street, Suite
1400, Chicago, Illinois 60661, and Seven World Trade Center, Suite 1300, New
York, New York 10048. Copies of this material may also be obtained by mail, upon
payment of the
36
SEC's customary fees, from the SEC's principal office at 450 Fifth Street. N.W.,
Washington, D.C. 20549. The SEC also maintains an Internet site on the World
Wide Web at (http://www.sec.gov) that contains reports, proxy statements, and
other information. In addition, such material should also be available for
inspection at the NYSE's offices located at 20 Broad Street, New York, New York
10005.
SUMMARY FINANCIAL INFORMATION. The audited financial statements for BCOP
for the years ended December 31, 1998 and December 30, 1997 are incorporated by
reference from BCOP's reports on Form 10-K for those years. The unaudited
financial statements for the nine months ended September 30, 1998 and 1999 are
incorporated by reference from BCOP's reports on Form 10-Q for those periods.
These reports may be inspected and copies may be obtained from the SEC in the
manner set forth above. The following table summarizes certain financial
information derived from those reports.
BOISE CASCADE OFFICE PRODUCTS CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
9 MONTHS ENDED FISCAL YEAR ENDED
SEPTEMBER 30 DECEMBER 31,
----------------------- -----------------------
1999 1998 1998 1997
---------- ---------- ---------- ----------
OPERATING DATA:
Net Sales................................... $2,488,469 $2,253,108 $3,067,327 $2,596,732
Operating Income............................ 109,422 94,029 120,494 119,250
Net earnings................................ 53,151 43,144 53,067 56,886
Basic net earnings per share................ .81 .66 .81 .89
Diluted net earnings per share.............. .81 .66 .81 .89
BALANCE SHEET DATA
(AT END OF PERIOD):
Total assets................................ $1,498,393 $1,393,373 $1,461,745 $1,291,488
Total liabilities........................... 886,720 838,010 898,831 785,853
Shareholders' equity........................ 611,673 555,363 562,914 505,635
Book value per share........................ 9.30 8.45 8.56 7.71
Ratio of earnings to fixed changes.......... 4.9x 4.1x 3.9x 5.0x
Except as otherwise noted in this Offer to Purchase, all of the information
with respect to BCOP in this Offer to Purchase has been derived from publicly
available information. Although Parent and Purchaser have no knowledge that any
such information is untrue, Parent and Purchaser take no responsibility for the
accuracy or completeness of information contained in this Offer to Purchase with
respect to BCOP or for any failure by BCOP to disclose events which may have
occurred or may affect the significance or accuracy of any such information.
FINANCIAL PROJECTIONS. BCOP does not, as a matter of course, make public
forecasts or projections as to its future financial performance. Nevertheless,
BCOP regularly prepares internal projections, which it provides to the Board.
The projections provided to the Special Committee and its financial and legal
advisors are included in this Offer.
THE PROJECTIONS BELOW WERE NOT PREPARED WITH A VIEW TO PUBLIC DISCLOSURE OR
IN COMPLIANCE WITH PUBLISHED GUIDELINES OF THE SEC REGARDING PROJECTIONS OR THE
GUIDELINES ESTABLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
REGARDING PROJECTIONS.
THE PROJECTIONS, WHILE PRESENTED WITH NUMERICAL SPECIFICITY, ARE
FORWARD-LOOKING STATEMENTS THAT ARE BASED ON MYRIAD ESTIMATES AND ASSUMPTIONS,
INCLUDING, BUT NOT LIMITED TO, THOSE LISTED BELOW.
37
THESE ESTIMATES AND ASSUMPTIONS INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER
THINGS, FUTURE ECONOMIC AND COMPETITIVE CONDITIONS, INFLATION RATES, AND FUTURE
BUSINESS CONDITIONS. THESE ESTIMATES AND ASSUMPTIONS MAY NOT BE REALIZED AND ARE
INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC, AND COMPETITIVE
UNCERTAINTIES, MANY OF WHICH ARE BEYOND THE CONTROL OF BCOP. THEREFORE, THERE
CAN BE NO ASSURANCE THAT THE PROJECTIONS BELOW WILL PROVE TO BE RELIABLE
ESTIMATES OF PROBABLE FUTURE PERFORMANCE. IT IS QUITE LIKELY THAT ACTUAL RESULTS
WILL VARY MATERIALLY FROM THESE ESTIMATES. IN LIGHT OF THE UNCERTAINTIES
INHERENT IN PROJECTIONS OF ANY KIND, THE INCLUSION OF PROJECTIONS IN THIS OFFER
SHOULD NOT BE REGARDED AS A REPRESENTATION BY ANY PARTY THAT THE ESTIMATED
RESULTS WILL BE REALIZED. THERE CAN BE NO ASSURANCES IN THIS REGARD. THE
PROJECTIONS WERE NOT PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES AND WERE NOT AUDITED OR REVIEWED BY ANY INDEPENDENT ACCOUNTING FIRM,
NOR DID ANY INDEPENDENT ACCOUNTING FIRM PERFORM ANY OTHER SERVICES WITH RESPECT
TO THESE PROJECTIONS. NONE OF PARENT, PURCHASER, BCOP, THE SPECIAL COMMITTEE OR
ANY OTHER PERSON ASSUMES ANY RESPONSIBILITY FOR THE ACCURACY OF SUCH
PROJECTIONS.
COMPANY MANAGEMENT PROJECTIONS AS OF DECEMBER 15, 1999
($ in millions, except per share data)
1999 2000 2001 2002 2003 2004
-------- -------- -------- -------- -------- --------
Sales.............................................. $3,349 $3,785 $4,255 $4,700 $5,125 $5,547
EBITDA............................................. 207 233 281 317 349 379
EBIT............................................... 146 165 207 239 268 295
Net Income......................................... 71 79 104 124 143 161
Diluted Earnings per Share......................... $ 1.08 $ 1.21 $ 1.55 $ 1.83 $ 2.08 $ 2.34
7. INFORMATION CONCERNING PARENT AND PURCHASER.
Parent is a Delaware corporation with its principal executive offices
located at 1111 West Jefferson Street, Boise, Idaho 83702. The telephone number
is (208) 384-6161. Parent is a major distributor of office products and building
materials and is an integrated manufacturer and distributor of paper and wood
products. Parent also owns over two million acres of timberland.
Purchaser is a Delaware corporation with its principal executive offices
located at 1111 West Jefferson Street, Boise, Idaho 83702. The telephone number
is (208) 384-6161. Purchaser was established in March 2000 for the sole purpose
of enabling the transactions contemplated by this Offer and the Merger
Agreement.
The name, business address, citizenship, present principal occupation or
employment and five-year employment history of each of the executive officers
and directors of Parent and Purchaser is set forth in Schedule I of this Offer.
Parent and BCOP have entered into an agreement pursuant to which BCOP has
granted to Parent an option to purchase shares of BCOP voting stock, or
securities convertible into or exchangeable for BCOP voting stock, that BCOP may
wish to issue and sell from time to time. This agreement also grants Parent
certain demand and participation registration rights for the Shares held by
Parent.
Except as described above and elsewhere in this Offer to Purchase, (i) none
of Parent or Purchaser or, to the best of Parent's or Purchaser's knowledge, any
of the persons listed in Schedule I, or any associate or majority-owned
subsidiary of Parent or any of the persons so listed, beneficially owns or has
any right to acquire directly or indirectly any Shares or has any contract,
arrangement, understanding, or relationship with any other person with respect
to any Shares, including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any
shares, joint ventures, loan or option arrangements, puts or calls, guaranties
of loans,
38
guaranties against loss, or the giving or withholding of proxies, and (ii) none
of Parent or Purchaser or, to the best knowledge of Parent or Purchaser, any of
the other persons referred to above, or any of the respective directors,
executive officers, or subsidiaries of any of the foregoing, has effected any
transaction in any Shares during the past 60 days.
Except as set forth in this Offer to Purchase, since March 1, 1998, neither
Parent or Purchaser nor, to the best knowledge of Parent or Purchaser, any of
the persons listed on Schedule I, has had any transaction with BCOP or any of
its executive officers, directors, or affiliates that is required to be reported
under the rules and regulations of the SEC applicable to the Offer. Except as
reflected in this Offer to Purchase and except for normal parent-subsidiary
discussions relating to the composition of the board of directors, since
March 1, 1998, there have been no contracts, negotiations, or transactions
between Parent, or any of its subsidiaries or, to the best knowledge of Parent
or Purchaser, any of the persons listed in Schedule I to this Offer, on the one
hand, and BCOP or its affiliates, on the other hand, concerning: a merger,
consolidation, or acquisition; a tender offer for, or other acquisition of,
securities of any class of BCOP; an election of directors of BCOP; or a sale or
other transfer of a material amount of assets of BCOP or any of its
subsidiaries.
8. SOURCE AND AMOUNT OF FUNDS.
The Offer is not conditioned upon any financing arrangements. The total
amount of funds required by Purchaser to purchase all of the Shares and pay all
fees and expenses related to the Offer will be approximately $210 million.
Purchaser expects to obtain these funds from Parent through capital
contributions or advances. Parent will obtain the required funds from working
capital and from borrowings under its Revolving Credit Agreement dated
March 11, 1997, among Parent and various banks and financial institutions, which
is incorporated by reference from Parent's report on Form 10-K filed on
March 7, 1997. The Revolving Credit Agreement permits Parent to borrow as much
as $600 million at variable interest rates and expires in June 2002. It contains
financial covenants relating to minimum net worth, minimum interest coverage,
and a ceiling ratio of debt to capitalization. Neither Parent nor Purchaser have
alternative financing arrangements if the expected funding sources do not
generate the required funds.
Parent intends to repay any borrowed funds with funds generated in the
ordinary course of business. In December 1999, Parent also announced that it was
considering strategic alternatives for a number of its paper division assets. To
the extent that adoption of these strategic alternatives results in the sale of
one or more of these assets, the borrowed funds may also be repaid with the
proceeds from those transactions.
9. TRANSACTIONS BETWEEN PARENT AND BCOP.
In addition to the transactions between Parent and BCOP described in
"SPECIAL FACTORS--Background of the Offer and the Merger," Parent and BCOP have
engaged in other commercial transactions. Parent supplies office papers to BCOP
under a Paper Sales Agreement which commenced April 1, 1995. The price for the
papers is calculated according to a formula meant to approximate prevailing
market prices. The Paper Sales Agreement has a term of 20 years with automatic
renewal for five-year periods. Termination rights are available under specified
circumstances. Purchases by BCOP under this agreement were approximately
$282 million in 1998 and $306 million in 1999. Parent also provides
administrative services to BCOP for a charge which reasonably approximates
Parent's cost of providing the services. Parent also provides tax administration
for BCOP and BCOP reimburses Parent for the cost of providing that
administration, but BCOP is responsible for all tax liability which it incurs.
Finally, Parent and BCOP have an agreement that gives Parent rights to purchase
Shares of voting stock (or securities convertible into voting stock) which BCOP
may wish to issue from time to time.
39
10. DIVIDENDS AND DISTRIBUTIONS.
BCOP has not paid cash dividends to date and intends to retain any future
earnings for use in the business. Except as set forth below and except for the
impact of normal financial covenants in loan agreements and the provisions of
the DGCL, there are no restrictions on BCOP's ability to pay dividends.
The Merger Agreement provides that prior to the Effective Date, neither BCOP
nor any Company subsidiary shall: (i) declare, set aside or pay any dividend or
other distribution payable in cash, stock or property with respect to any shares
of any class or series of its capital stock; (ii) redeem, purchase or otherwise
acquire directly or indirectly any shares of any class or series of its capital
stock, or any instrument or security which consists of or includes a right to
acquire such shares; (iii) issue, sell, transfer, pledge, dispose of or encumber
any shares of any class or series of its capital stock or Voting Debt, or
securities convertible or exchangeable for, or options, warrants, calls,
commitments or rights of any kind to acquire any shares of any class or series
of its capital stock or Voting Debt, other than Shares reserved for issuance on
the date hereof pursuant to the exercise of outstanding Company stock options;
or (iv) split, combine or reclassify any shares of any class or series of its
capital stock.
11. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; NYSE AND EXCHANGE ACT
REGISTRATION.
The purchase of Shares by Purchaser pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly, will reduce the number of
holders of Shares, and could thereby adversely affect the liquidity and market
value of the remaining publicly held Shares.
NYSE LISTING. Depending upon the number of Shares purchased pursuant to the
Offer, the Shares may no longer meet the standards for continued listing on the
NYSE. According to the NYSE's published guidelines, the Shares would not be
eligible to be included for continued listing if the number of publicly held
Shares and the average monthly trading volume fall below certain levels, or the
number of publicly held Shares falls below 1,100,000, or the aggregate market
value of the publicly held Shares falls below $40,000,000. If these standards
are not met, the Shares would no longer be admitted to listing on the NYSE.
Shares held directly or indirectly by an officer or director of BCOP or by a
beneficial owner of more than 10% of the Shares will ordinarily not be
considered as being publicly held for purposes of these standards. Parent
currently intends to cause BCOP to delist the Shares from the NYSE as soon after
consummation of the Offer and the Merger as reasonably practicable. As of
March 17, 2000, there were approximately 460 holders of the Common Stock.
MARGIN REGULATIONS. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of allowing
brokers to extend credit on the collateral of such Shares for the purpose of
buying, carrying, or trading in securities ("Purpose Loans"). Depending upon
factors similar to those described above regarding the continued listing, public
trading, and market quotations of the Shares, it is possible that, following the
purchase of the Shares pursuant to 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
Purpose Loans made by brokers.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. This registration may be terminated upon application by BCOP to
the SEC if the Shares are not listed on a national securities exchange and there
are fewer than 300 record holders. The termination of the registration of the
Shares under the Exchange Act would substantially reduce the information
required to be furnished by BCOP to holders of Shares and to the SEC and would
make certain provisions of the Exchange Act, such as the short-swing profit
recovery provisions of Section 16(b), the requirements of furnishing a proxy
statement in connection with shareholders meetings, and the requirements of
Rule 13e-3 under the Exchange Act with respect to "going private" transactions,
no longer applicable
40
to the Shares. In addition, "affiliates" of BCOP and persons holding "restricted
securities" of BCOP may be deprived of the ability to dispose of such securities
pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended.
If registration of the Shares under the Exchange Act was terminated, the Shares
would no longer be "margin securities" or be eligible for NYSE trading. Parent
currently intends to cause BCOP to terminate the registration of the Shares
under the Exchange Act as soon after consummation of the Offer as the
requirements for termination of registration are met.
12. CONDITIONS OF THE OFFER.
The Offer is subject to the condition that there shall have been validly
tendered and not withdrawn prior to the expiration of the Offer, a majority of
the Shares held by the Public Shareholders.
Subject to the terms of the Merger Agreement, the Offer may be terminated
on the Expiration Date, or amended or extended, if the Minimum Condition has
not been satisfied or if any of the following events shall occur or shall
have occurred on or after the date of the Merger Agreement and before the
Expiration Date:
(a) there shall be threatened or pending any suit, action or proceeding
by any governmental entity (i) seeking to prohibit or impose any material
limitations on Parent's or Purchaser's ownership or operation (or that of
any of their respective subsidiaries or affiliates) of all or a material
portion of their or BCOP's businesses or assets, or to compel Parent or
Purchaser or their respective subsidiaries and affiliates to dispose of or
hold separate any material portion of the business or assets of BCOP or
Parent and their respective subsidiaries, in each case taken as a whole,
(ii) challenging the acquisition by Parent or Purchaser of any Shares under
the Offer or seeking to restrain or prohibit the making or consummation of
the Offer or the Merger or the performance of any of the other transactions
contemplated by the Merger Agreement or seeking to obtain from BCOP, Parent
or Purchaser any damages that are material in relation to BCOP and its
subsidiaries, taken as a whole, (iii) seeking to impose material limitations
on the ability of Purchaser, or rendering Purchaser unable, to accept for
payment, pay for or purchase some or all of the Shares pursuant to the Offer
and the Merger, (iv) seeking to impose material limitations on the ability
of Purchaser or Parent effectively to exercise full rights of ownership of
the Shares, including, without limitation, the right to vote the Shares
purchased by it on all matters properly presented to BCOP's shareholders, or
(v) which otherwise is reasonably likely to have a material adverse affect
on the consolidated financial condition, businesses or results of operations
of BCOP and its subsidiaries, taken as a whole; or
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to
the Offer or the Merger, or any other action shall be taken by any
Governmental Entity, that is reasonably likely to result, directly or
indirectly, in any of the consequences referred to in clauses (i) through
(v) of paragraph (a) above; or
(c) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on the New York Stock Exchange or in
the Nasdaq National Market System, for a period in excess of ten consecutive
hours (excluding suspensions or limitations resulting solely from physical
damage or interference with such exchanges not related to market
conditions), (ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the
41
United States (whether or not mandatory), (iii) a commencement of a war or
other international or national calamity directly involving the United
States, (iv) any limitation (whether or not mandatory) by any United States
or foreign governmental authority on the extension of credit by banks or
other financial institutions, (v) a change in general financial bank or
capital market conditions which materially or adversely affects the ability
of financial institutions in the United States to extend credit or syndicate
loans, or (vi) in the case of any of the foregoing existing at the time of
the commencement of the Offer, a material acceleration or worsening thereof;
or
(d) there shall have occurred an event or events which in the aggregate
have resulted in or are reasonably likely to result in a reduction from 1999
levels in BCOP's revenues of 12% or in BCOP's earnings before interest and
taxes of 15% excluding any reduction attributable to any action of BCOP
which is approved in writing by the BCOP Board or an officer of Parent; or
(e) the BCOP Board or any committee thereof (i) shall have withdrawn,
modified or changed in a manner adverse to Parent or Purchaser its approval
or recommendation of the Offer, the Merger Agreement or the Merger,
(ii) shall have recommended the approval or acceptance of an Acquisition
Proposal from, or similar business combination with, a Person other than
Parent, Purchaser or their affiliates, or (iii) shall have executed an
agreement in principle or definitive agreement relating to an Acquisition
Proposal from, or similar business combination with, a Person other than
Parent, Purchaser or their affiliates; or
(f) any of the representations and warranties of BCOP set forth in the
Merger Agreement that are qualified as to materiality shall not be true and
correct and any such representations and warranties that are not so
qualified shall not be true and correct in any material respect, in each
case as of the date of the Merger Agreement and as of the scheduled
expiration date of the Offer; provided, however, that if failure of a
representation or warranty to be true and correct was caused by any
affirmative action of Parent, Parent may not rely upon such failure as a
basis for not proceeding with the Offer; or
(g) BCOP shall have failed to perform in any material respect any
obligation or to comply in any material respect with any agreement or
covenant of BCOP to be performed or complied with by it under the Merger
Agreement; provided, however, if the failure to perform or comply was caused
by any affirmative action by Parent, Parent may not rely upon such failure
as a basis for not proceeding with the Offer; or
(h) all consents necessary to the consummation of the Offer or the
Merger including, without limitation, consents from parties to loans,
contracts, leases or other agreements and consents from governmental
agencies, whether federal, state or local shall not have been obtained,
other than consents the failure to obtain which would not have a material
adverse effect on BCOP and its subsidiaries, taken as a whole; or
(i) the Merger Agreement shall have been terminated in accordance with
its terms;
which in the judgment of Parent, reasonably exercised, in any such case, and
regardless of the circumstances giving rise to such condition, makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment of
or payment for Shares.
Except for the Minimum Condition, the foregoing conditions are for the
sole benefit of Parent and Purchaser and may be waived by Parent or Purchaser
prior to the Expiration Date in their sole discretion, which discretion shall
be reasonably exercised. The failure by Parent or Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
If the Offer is terminated on the Expiration Date, Purchaser will not be
obligated to pay for any Shares that have been tendered, and any such Shares
will be promptly returned to the tendering shareholder.
42
13. LEGAL MATTERS; REGULATORY APPROVALS.
GENERAL. Except as described below, Parent and Purchaser are not aware of
any license or regulatory permit that appears to be material to the business of
BCOP and its subsidiaries, taken as a whole, that might be adversely affected by
Purchaser's acquisition of Shares pursuant to the Offer. Likewise, Parent is not
aware of any approval or other action by any governmental, administrative or
regulatory agency, or authority or public body, domestic or foreign, that would
be required for the acquisition or ownership of Shares by Purchaser pursuant to
the Offer. Should any approval or other action be required, it is presently
contemplated that the approval or action would be sought except as described
below in this Section under "State Takeover Statutes." While, except as
otherwise expressly described in this Offer, Purchaser does not currently intend
to delay acceptance for payment of 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 without substantial conditions or
that adverse consequences might not result to BCOP's business or that certain
parts of BCOP's business might not have to be disposed of if the approvals were
not obtained or such other actions were not taken or to obtain any such approval
or other action, any of which could cause Purchaser to decline to accept for
payment, or pay for, any Shares tendered. Purchaser's obligation under the Offer
to accept for payment and pay for shares is subject to the conditions to the
Offer (see Section 12 above), including conditions relating to legal matters
discussed in this Section 13.
ANTITRUST. The acquisition of the Shares is exempt from the requirements of
the HSR Act and the rules that have been promulgated under that Act by the
Federal Trade Commission ("FTC"). The Act exempts the acquisition of voting
securities of a company where at least 50% of the voting securities are already
owned by the acquiring person. Before the acquisition of the Shares, Parent held
approximately 81% of the voting securities of BCOP.
STATE TAKEOVER STATUTES. BCOP is incorporated under the laws of the State
of Delaware. In general, Section 203 of the DGCL prevents an "interested
shareholder" (generally, a person who owns or has the right to acquire 15% or
more of a corporation's outstanding voting stock, or an affiliate or associate
of that person) from engaging in a "business combination" (defined to include
mergers and other transactions) with a Delaware corporation for a period of
three years following the date such person became an interested shareholder
unless, among other things, before that date the board of directors of the
corporation approved either the business combination or the transaction in which
the interested director became an interested shareholder. Parent became an
interested shareholder on April 1, 1995, in connection with the initial public
offering of BCOP. Accordingly, Section 203 does not apply to the Offer and the
Merger.
A number of states have adopted "takeover" statutes that purport to apply to
attempts to acquire corporations that are incorporated in those states, or whose
business operations have substantial economic effects in such states, or which
have substantial assets, security holders, employees, principal executive
offices, or places of business in such states. In EDGAR V. MITE CORPORATION, the
Supreme Court of the United States invalidated on constitutional grounds the
Illinois Business Takeover Act, which, as a matter of state securities law, made
takeovers of corporations meeting certain requirements more difficult. However,
in CTS CORP. V. DYNAMICS CORP. OF AMERICA, the Supreme Court held that a state
may, as a matter of corporate law and, in particular, those laws concerning
corporate governance, constitutionally disqualify a potential acquirer from
voting on the affairs of a target corporation without prior approval of the
remaining shareholders, provided that the corporation has a substantial number
of shareholders in the state and is incorporated there.
BCOP, directly or through its subsidiaries, conducts business in a number of
states throughout the United States, some of which have enacted takeover
statutes. Purchaser does not know whether any of these statutes will, by their
terms, apply to the Offer, and has not complied with any such statutes. To the
extent that the provisions of these statutes purport to apply to the Offer,
Purchaser believes there
43
are reasonable bases for contesting such statutes. If any person should seek to
apply any state takeover statute, Purchaser would take such action as then
appears desirable, which action may include challenging the validity or
applicability of any such statute in appropriate court proceedings. If it is
asserted that one or more takeover statutes apply to the Offer and it is not
determined by an appropriate court that such statute or statutes do not apply or
are invalid as applied to the Offer, Purchaser might be required to file
information with, or receive approvals from, the relevant state authorities, and
Purchaser might be unable to purchase or pay for shares tendered pursuant to the
Offer, or be delayed in continuing or consummating the Offer. In such case,
Purchaser may not be obligated to accept for payment, or pay for, Shares
tendered pursuant to the Offer.
14. FEES AND EXPENSES.
Except as otherwise provided herein, all fees and expenses incurred in
connection with the Offer, the Merger, the Merger Agreement and the other
transactions contemplated thereby will be paid by the party incurring such fees
and expenses, except that Parent will pay for all fees and expenses relating to
the filing, printing and mailing of the documents in connection with the Offer
and the Schedule 14D-9.
Purchaser has retained D. F. King & Co., Inc. to act as the Information
Agent in connection with the Offer. The Information Agent may contact holders of
Shares by mail, telephone, fax and personal interviews and may request brokers,
dealers and other nominee shareholders to forward materials to the beneficial
owners of shares. The Information Agent will receive reasonable and customary
compensation for its services, will be reimbursed for certain reasonable
out-of-pocket expenses and will be indemnified against certain liabilities and
expenses in connection therewith, including certain liabilities under the
federal securities laws.
Purchaser has retained the Shareholder Services Department of Parent, which
is BCOP's transfer agent, to serve as the Depositary. The Depositary has not
been retained to make solicitations or recommendations in its role as
Depositary. The Depositary will not charge a fee for its services.
Estimated fees and expenses to be incurred in connection with the Offer and
the Merger are as follows:
Special Committee's Financial Advisor's Fees................ $2,000,000
Parent's Financial Advisor Fees............................. 2,000,000
Special Committee's Legal Fees.............................. 125,000
Parent's Legal and Accounting Fees.......................... 500,000
Printing, Information Agent and Mailing Costs............... 75,000
Special Committee Fees...................................... 85,000
Filing Fees................................................. 48,000
Miscellaneous............................................... 50,000
Total................................................... $4,883,000
Except as set forth above, Purchaser will not pay any fees or commissions to
any broker or dealer or any other person for soliciting tenders of Shares
pursuant to the Offer. Brokers, dealers, commercial banks and trust companies
will, upon request, be reimbursed by Parent for customary mailing and handling
expenses incurred by them in forwarding interest to their customer.
15. MISCELLANEOUS.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the securities,
blue sky, or other laws of such jurisdiction. Purchaser may, in its discretion,
however, take such action as it may deem necessary to make the Offer in any
jurisdiction
44
and extend the Offer to holders of Shares in any such jurisdiction. In any
jurisdiction where the securities, blue sky, or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of Purchaser by one or more registered brokers or dealers licensed under
the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR PURCHASER NOT CONTAINED IN THIS OFFER OR
IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, THAT INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Parent and Purchaser have filed with the Commission a Tender Offer Statement
on Schedule TO and BCOP has filed with the Commission a Tender Offer
Solicitation/Recommendation Statement on Schedule 14D-9, together with exhibits
in each case, pursuant to Regulation M-A and Rule 14d-9, respectively, under the
Exchange Act, furnishing certain additional information with respect to the
Offer. Such Schedules and any amendments thereto, including exhibits, are
available for inspection and copies can be obtained in the same manner set forth
in "THE OFFER--Certain Information Concerning BCOP" and "THE OFFER--Certain
Information Concerning Parent and Purchaser" of this Offer to Purchase (except
that such material will not be available at the regional offices of the
Commission).
Boise Acquisition Corporation
March 22, 2000
45
SCHEDULE I
INFORMATION CONCERNING
DIRECTORS AND EXECUTIVE OFFICERS
OF PARENT AND PURCHASER
DIRECTORS, EXECUTIVE OFFICERS AND MANAGERS OF PURCHASER AND PARENT. The
following table sets forth the name and present principal occupation or
employment, and material occupations, positions, offices or employment for the
past five years of the directors and executive officers of Purchaser and Parent.
Individuals serving as directors or officers of both Purchaser and Parent are
denoted with an asterisk (*). Unless otherwise indicated, each person is a
citizen of the United States with a principal business address of 1111 West
Jefferson Street, Boise, ID 83702.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
- ---- ----------------------------------------------
Phillip J. Carroll Mr. Carroll is a director of Parent and has held this
position since 1997. Mr. Carroll is chairman of the board
and chief executive officer of Fluor Corporation and has
held these positions since 1998. Fluor Corporation is a
global engineering, construction, maintenance and
diversified services company, and its principal business
address is One Enterprise Drive, Aliso Viejo, CA 92656.
From 1993 to 1998, Mr. Carroll was president and chief
executive officer of Shell Oil Company. Shell Oil Company
is an integrated petroleum company, and its principal
business address is 910 Louisiana St., Houston, TX
77002-4904.
Rakesh Gangwal Mr. Gangwal is a director of Parent and has held this
position since 1998. Mr. Gangwal is president and chief
executive officer of US Airways Group, Inc. and US
Airways, Inc., and has held these positions since 1998.
From 1996 to 1998, Mr. Gangwal was president and chief
operating officer of US Airways Group, Inc., and US
Airways, Inc. US Airways Group, Inc. is the parent
corporation of US Airways' mainline jet and express
divisions as well as several related companies, all in the
air transportation industry. US Airways, Inc., is the main
operating arm of US Airways Group. The primary business
address for both US Airways Group, Inc., and US Airways,
Inc. is 2345 Crystal Drive, 8(th) Floor, Arlington, VA
22227. From 1994 to 1996, Mr. Gangwal was executive vice
president of planning and development of Air France. Air
France is an international airline, and its principal
business address in the United States is 125 West 55(th)
Street, New York, NY 10019-5384.
Edward E. Hagenlocker Mr. Hagenlocker is a director of Parent and has held this
position since 1998. Since 1999, Mr. Hagenlocker has been
self-employed as a consultant. His primary business
address is 1400 North Woodward Ave., Suite 165,
Bloomfield, MI 48304. From 1996 to 1998, Mr. Hagenlocker
was vice-chairman of Ford Motor Company, an automotive
manufacturer. From 1994 to 1996, Mr. Hagenlocker was
president--automotive operations of Ford Motor Company.
The primary business address of Ford Motor Company is
American Road, P.O. Box 1899, Dearborn, MI 48121.
I-1
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
- ---- ----------------------------------------------
Robert K. Jaedicke Mr. Jaedicke is a director of Parent and has held this
position since 1983. Mr. Jaedicke is professor (emeritus)
of accounting at Stanford University Graduate School of
Business and has held this position since 1961. Stanford
University is an educational institution, and its primary
business address is Stanford University, Graduate School
of Business, Stanford, CA 94305.
Donald S. Macdonald Mr. Macdonald is a director of Parent and has held this
position since 1996. His primary business address is 27
Marlborough Ave., Toronto, Ontario, M5R1XS, Canada. From
1991 until his retirement on Febraury 29, 2000, Mr.
Macdonald was of counsel to McCarthy, Tetrault. McCarthy,
Tetrault is a law firm, and its primary business address
is Suite 4700, Toronto Dominion Bank Tower,
Toronto-Dominion Centre, Toronto, Ontario M5K 1E6, Canada.
Mr. Macdonald is a Canadian citizen.
Gary G. Michael Mr. Michael is a director of Parent and has held this
position since 1997. Mr. Michael is chairman of the board
and chief executive officer of Albertson's, Inc., and has
held these positions since 1991. Albertson's, Inc. is a
retail food and drug company, and its primary business
address is P.O. Box 20, Boise, ID 83726.
A. William Reynolds Mr. Reynolds is a director of Parent and has held this
position since 1989. Mr. Reynolds is also a director of
BCOP and has held this position since 1995. Mr. Reynolds
is chief executive of Old Mill Group and has held this
position since 1995. Old Mill Group is a private
investment firm, and its primary business address is 1696
Georgetown Road., Unit E, Hudson, OH 44236. From 1987 to
1995, and from 1985 to 1994, Mr. Reynolds was chairman and
chief executive officer, respectively, of GenCorp, Inc.
GenCorp, Inc. is a diversified manufacturing and services
company, and its primary business address is 175 Ghent
Road, Fairlawn, OH 44313-3300.
Francesca Ruiz de Luzuriaga Ms. Ruiz de Luzuriaga is a director of Parent and has held
this position since 1998. Ms. Ruiz de Luzuriaga is chief
operating officer of Mattel Interactive and has held this
position since 1999. Mattel Interactive, a subsidiary of
Mattel, Inc., is a software manufacturer, and its primary
business address is 500 Redwood Blvd., Novato, CA 94947.
From 1997 to 1999, and from 1995 to 1997, Ms. Ruiz de
Luzuriaga was executive vice president of worldwide
business planning and resources and executive vice
president and chief financial officer, respectively, of
Mattel, Inc. Mattel, Inc., is a toy manufacturer, and its
primary business address is 333 Continental Blvd.,
MI-1530, El Segundo, CA 90245.
Jane E. Shaw Ms. Shaw is a director of Parent and has held this
position since 1994. Ms. Shaw is chairman of the board and
chief executive officer of AeroGen, Inc. and has held
these positions since 1998. AeroGen, Inc. is a private
company specializing in the development of pulmonary drug
delivery systems. Ms. Shaw is
I-2
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
- ---- ----------------------------------------------
also the founder of The Stable Network. Organized in 1995,
The Stable Network is a biopharmaceutical consulting
company, and its primary business address is 1040 Noel
Drive, Suite 107, Menlo Park, CA 94025.
Frank A. Shrontz Mr. Shrontz is a director of Parent and has held this
position since 1989. Mr. Schrontz is chairman emeritus of
The Boeing Company and has held this position since 1996.
From 1986 to 1996, and from 1988 to 1997, Mr. Shrontz was
chief executive officer and chairman of the board,
respectively, of The Boeing Company. The Boeing Company is
an aerospace company, and its primary business address is
7755 East Marginal Way, South, Seattle, WA 98108.
Carolyn M. Ticknor Ms. Ticknor is a director of Parent and has held this
position since February 2000. Ms. Ticknor has been vice
president, since 1995, and president of imaging and
printing systems division, since 1999, of Hewlett-Packard
Company. From 1994 to 1999, Ms. Ticknor was general
manager of LaserJet imaging systems of Hewlett-Packard
Company. Hewlett-Packard Company is a global provider of
computing, printing and imaging products and services, and
the primary business address for its imaging and printing
systems operations is P.O. Box 15, MS 264, Boise, ID
83707.
Ward W. Woods, Jr. Mr. Woods is a director of Parent and has held this
position since 1992. Mr. Woods is a member of the general
partner of Bessemer Holdings, L.P., and special partner of
Bessemer Partners & Co. and has held these positions since
1999. From 1989 to 1999, Mr. Woods was president and chief
executive officer of Bessemer Securities, LLC. Bessemer
Holdings, L.P., Bessemer Partners & Co., and Bessemer
Securities, LLC are investment companies and their primary
business address is 630 Fifth Avenue, 39(th) Floor, New
York, NY 10111.
George J. Harad Mr. Harad has been a director of Parent since 1991 and
chairman of the board of directors and chief executive
officer of Parent since 1995. From 1994 to 1995, Mr. Harad
was president and chief executive officer of Parent. Mr.
Harad is also chairman of the board of BCOP and has held
this position since 1995.
John C. Bender Mr. Bender is senior vice president of building products
of Parent and has held this position since 1999. From 1993
to 1999, Mr. Bender was vice president of operations,
timber and wood products division, of Parent.
Theodore Crumley* Mr. Crumley is senior vice president and chief financial
officer of Parent and has held these positions since 1994.
Mr. Crumley is also vice president of Purchaser and has
held that position since 2000. Mr. Crumley is also a
director of BCOP and has held this position since 1995.
I-3
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
- ---- ----------------------------------------------
A. Ben Groce Mr. Groce is senior vice president, manufacturing, paper
division, of Parent and has held this position since 1987.
John W. Holleran* Mr. Holleran is senior vice president, human resources,
and general counsel of Parent and has held these positions
since 1999. Mr. Holleran is also president and a director
of Purchaser and has held these positions since 2000. From
1996 to 1998, and from 1991 to 1996, Mr. Holleran was
senior vice president and general counsel and vice
president and general counsel, respectively, of Parent. He
is also general counsel of BCOP and has held this position
since 1995.
Christopher C. Milliken Mr. Milliken is senior vice president of Parent and has
held that position since 1995. Mr. Milliken is also
president and chief executive officer of BCOP and has held
those positions since 1998. From 1995 to 1998, and from
1990 to 1995, Mr. Milliken was senior vice president of
operations, and eastern region manager, respectively, of
BCOP.
N. David Spence Mr. Spence is senior vice president and general manager,
paper division, of Parent and has held these positions
since 1991.
A. James Balkins Mr. Balkins is vice president of Parent and has held that
position since 1994. Mr. Balkins is also senior vice
president, chief financial officer and treasurer of BCOP
and has held those positions since 1998. From 1996 to
1998, and from 1991 to 1997, Mr. Balkins was vice
president of corporate planning and development and
associate general counsel and corporate secretary,
respectively, of Parent.
Stanley R. Bell Mr. Bell is vice president and general manager, building
materials distribution division, of Parent and has held
these positions since 1993.
Charles D. Blencke Mr. Blencke is vice president of Louisiana operations,
paper division, of Parent and has held this position since
1992. The primary business address for Parent's Louisiana
operations is P.O. Box 1060, DeRidder, LA 70634-1060.
Thomas E. Carlile* Mr. Carlile is vice president and controller of Parent and
has held these positions since 1994. Mr. Carlile is also
vice president of Purchaser and has held that position
since 2000.
Graham L. Covington Mr. Covington is vice president of marketing and sales,
paper division, of Parent and has held this position since
1998. From 1996 to 1998, and from 1985 to 1996, Mr.
Covington was business manager, paper division, and
general sales manager II, paper division, respectively, of
Parent. The primary business address for Parent's paper
division is 1800 SW First Avenue, Suite 300, Portland, OR
97201-5324.
Karen E. Gowland* Ms. Gowland is associate general counsel of Parent and has
held this position since 1989, and is vice president and
corporate secretary of Parent and has held these positions
since 1997. Ms.
I-4
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
- ---- ----------------------------------------------
Gowland is also vice president and secretary of Purchaser
and has held these positions since 2000.
Vincent T. Hannity Mr. Hannity is vice president of corporate communications
and investor relations of Parent and has held this
position since 1996. From 1984 to 1996, Mr. Hannity was
director of investor relations of Parent.
Guy G. Hurlbutt Mr. Hurlbutt is vice president of public policy and
environment of Parent and has held this position since
1998. From 1997 to 1998, and from 1984 to 1997, Mr.
Hurlbutt was director of environmental affairs and
associate general counsel, respectively, of Parent.
Irving Littman* Mr. Littman is vice president and treasurer of Parent and
has held these positions since 1986. Mr. Littman is also
vice president and treasurer of Purchaser and has held
those positions since 2000.
Richard W. Merson Mr. Merson is vice president of Alabama operations, paper
division, of Parent and has held this position since 1997.
From 1993 to 1997, Mr. Merson was regional manager, paper
division, of Parent. The primary business address of
Parent's Alabama operations is 307 West Industrial Road,
Jackson, AL 36545-3499.
Carol B. Moerdyk Ms. Moerdyk is vice president of Parent and has held that
position since 1990. Ms. Moerdyk is also senior vice
president of North American and Australian contract
operations of BCOP and has held that position since 1998.
From 1995 to 1998, and from 1992 to 1995, Ms. Moerdyk was
senior vice president and chief financial officer and vice
president of office products distribution, respectively,
of BCOP.
David A. New Mr. New is vice president of timberland resources of
Parent and has held this position since 1997. From 1995 to
1997, Mr. New was technical manager of forestry, pulp and
paper, Southeast Asia group, of Fletcher Challenge
Limited. From 1992 to 1995, Mr. New was general manager of
technical services, of Tasman Forestry, Ltd., a subsidiary
of Fletcher Challenge Limited. Fletcher Challenge Limited
is a New Zealand-based international company with
operations in building, energy, forests and paper and its
primary business address is Private Bag 92 114, Auckland,
New Zealand.
I-5
EXHIBIT A
March 12, 2000
Special Committee of the Board of Directors
Boise Cascade Office Products Corporation
800 West Bryn Mawr Avenue
Itasca, Illinois 60143-1594
Dear Sirs:
You have asked us to advise you with respect to the fairness of the
stockholders of Boise Cascade Office Products Corporation (the "Company"), other
than Boise Cascade Corporation (the "Acquiror") and its affiliates, from a
financial point of view, of the consideration to be received by such
stockholders pursuant to the terms of the Agreement and Plan of Merger, dated as
of March 12, 2000 (the "Merger Agreement"), among the Company, the Acquiror and
Boise Acquisition Corporation, a Delaware Corporation, which is a wholly owned
subsidiary of the Acquiror (the "Sub"). Upon the terms and subject to the
conditions of the Merger Agreement (i) the Acquiror will commence a tender offer
(the "Offer") for all issued and outstanding shares of common stock, par value
$0.01 per share, of the Company not beneficially owned by the Acquiror or Sub
(the "Shares") at a price of $16.50 per share in cash (the "Consideration") and
(ii) following consummation of the Offer, Sub will be merged with and into the
Company (the "Merger") and each outstanding Share not acquired in the Offer will
be converted into the right to receive the Consideration (the Offer and the
Merger, together, the "Transaction").
In arriving at our opinion, we have reviewed certain publicly available
business and financial information relating to the Company, as well as the
Merger Agreement. We have also reviewed certain other information, including
financial forecasts, provided to or discussed with us by the Company, and have
met with the Company's management to discuss the business and prospects of the
Company.
In arriving at our opinion, we have also considered certain financial and
stock market data of the Company, and we have compared those data with similar
data for other publicly held companies in businesses similar to the Company and
we have considered, to the extent publicly available, the premiums paid in
certain other going private transactions effected by a controlling stockholder
and other transactions which have recently been proposed or effected. We also
considered such other information, financial studies, analyses and
investigations and financial, economic and market criteria which we deemed
relevant.
In connection with our review, we have not assumed any responsibility for
independent verification of any of the foregoing information and have relied on
its being complete and accurate in all material respects. With respect to the
financial forecasts, we have been advised, and have assumed, that they have been
reasonably prepared on bases reflecting the best currently available estimates
and judgments of the Company's management as to the future financial performance
of the Company. In addition, we have not been requested to make, and have not
made, an independent evaluation or appraisal of the assets or liabilities
(contingent or otherwise) of the Company, nor have we been furnished with any
such evaluations or appraisals. Our opinion is necessarily based upon
information available to us, and financial, economic, market and other
conditions as they exist and can be evaluated on the date hereof. We were not
requested to, and did not, solicit third party indications of interest in
acquiring all or any part of the Company.
We have acted as financial advisor to the Special Committee of the Board of
Directors of the Company in connection with the Transaction and will receive a
fee for our services, a significant portion of which is contingent upon
consummation of the Merger. We will also receive a fee for rendering this
opinion.
A-1
In the ordinary course of our business, we and our affiliates may actively
trade the debt and equity securities of both the Company and the Acquiror for
our and such affiliates' own accounts and for the accounts of customers and,
accordingly, may at any time hold a long or short position in such securities.
It is understood that this letter is for the information of the Special
committee of the Board of Directors of the Company in connection with its
consideration of the Transaction, does not constitute a recommendation to any
stockholder as to whether to tender in the Offer or how such stockholder should
vote or act on any matter relating to the Merger and is not to be equated or
referred to, in whole or in part, in any registration statement, prospectus or
proxy statement, or in any other document used in connection with the offering
or sale of securities, nor shall this letter be used for any other purposes,
without our prior written consent.
Based upon and subject to the foregoing, it is our opinion that, as of the
date hereof, the Consideration to be received by the stockholders of the Company
in the Transaction is fair to such stockholders, other than the Acquiror and its
affiliates, from a financial point of view.
Very truly yours,
Credit Suisse First Boston Corporation
A-2
EXHIBIT B
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
BOISE CASCADE CORPORATION,
BOISE CASCADE OFFICE PRODUCTS CORPORATION,
AND
BOISE ACQUISITION CORPORATION
DATED AS OF MARCH 12, 2000
TABLE OF CONTENTS
ARTICLE I
THE OFFER................................................................. B-1
Section 1.01 THE OFFER................................................... B-1
Section 1.02 COMPANY ACTION.............................................. B-2
ARTICLE II
THE MERGER................................................................ B-3
Section 2.01 THE MERGER.................................................. B-3
Section 2.02 EFFECTIVE TIME.............................................. B-4
Section 2.03 CLOSING..................................................... B-4
Section 2.04 CERTIFICATE OF INCORPORATION; BY-LAWS; OFFICERS AND
DIRECTORS................................................... B-4
Section 2.05 CONVERSION OF SHARES........................................ B-4
Section 2.06 DISSENTING SHARES........................................... B-5
Section 2.07 TREATMENT OF OPTIONS........................................ B-5
Section 2.08 EXCHANGE OF CERTIFICATES.................................... B-5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................. B-7
Section 3.01 CAPITALIZATION.............................................. B-7
Section 3.02 AUTHORIZATION............................................... B-7
Section 3.03 FAIRNESS OPINION AND APPROVAL BY THE SPECIAL COMMITTEE...... B-7
Section 3.04 SEC REPORTS................................................. B-8
Section 3.05 OFFER DOCUMENTS............................................. B-8
Section 3.06 COMPLIANCE WITH APPLICABLE LAWS............................. B-8
Section 3.07 BROKERS AND FINDERS......................................... B-8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER................ B-8
Section 4.01 ORGANIZATION................................................ B-8
Section 4.02 AUTHORIZATION............................................... B-9
Section 4.03 NO VIOLATIONS; CONSENTS AND APPROVALS....................... B-9
Section 4.04 SCHEDULE TO................................................. B-10
Section 4.05 BROKERS AND FINDERS......................................... B-10
Section 4.06 LITIGATION.................................................. B-10
Section 4.07 FINANCING................................................... B-10
ARTICLE V
CERTAIN COVENANTS AND AGREEMENTS.......................................... B-10
Section 5.01 CONDUCT OF BUSINESS......................................... B-10
Section 5.02 ANNOUNCEMENT................................................ B-11
Section 5.03 NO SOLICITATION............................................. B-11
Section 5.04 NOTIFICATION OF CERTAIN MATTERS............................. B-12
Section 5.05 DIRECTORS' AND OFFICERS' INDEMNIFICATION.................... B-12
Section 5.06 ACCESS...................................................... B-12
Section 5.07 REASONABLE BEST EFFORTS..................................... B-13
Section 5.08 PURCHASER COMPLIANCE........................................ B-13
Section 5.09 OBLIGATION OF PARENT........................................ B-13
i
ARTICLE VI
CONDITIONS PRECEDENT...................................................... B-13
Section 6.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER...................................................... B-13
Section 6.02 CONDITIONS TO THE OBLIGATIONS OF PARENT AND THE PURCHASER TO
EFFECT THE MERGER........................................... B-13
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER......................................... B-14
Section 7.01 TERMINATION................................................. B-14
Section 7.02 EFFECT OF TERMINATION....................................... B-15
Section 7.03 AMENDMENT................................................... B-15
Section 7.04 WAIVER...................................................... B-15
ARTICLE VIII
MISCELLANEOUS............................................................. B-15
Section 8.01 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES............... B-15
Section 8.02 EXPENSES.................................................... B-15
Section 8.03 APPLICABLE LAW.............................................. B-16
Section 8.04 NOTICES..................................................... B-16
Section 8.05 ENTIRE AGREEMENT............................................ B-17
Section 8.06 ASSIGNMENT.................................................. B-17
Section 8.07 HEADINGS; REFERENCES........................................ B-17
Section 8.08 COUNTERPARTS................................................ B-17
Section 8.09 NO THIRD PARTY BENEFICIARIES................................ B-17
Section 8.10 SEVERABILITY; ENFORCEMENT................................... B-18
Section 8.11 CERTAIN DEFINITIONS......................................... B-18
Annex A B-19
ii
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of March 12, 2000 (the "Agreement")
among Boise Cascade Corporation, a Delaware corporation ("Parent"), Boise
Cascade Office Products Corporation, a Delaware corporation ("the Company"), and
Boise Acquisition Corporation, a Delaware corporation, and a wholly-owned
subsidiary of Parent (the "Purchaser").
WHEREAS, Parent beneficially owns approximately 81.2% of the common stock,
par value $0.01 per share, of the Company ("the Company Common Stock");
WHEREAS, Parent has proposed that the Purchaser acquire all of the issued
and outstanding shares of the Company Common Stock not beneficially owned by
Parent or the Purchaser (the "Shares");
WHEREAS, the Board of Directors of the Company, upon recommendation of a
committee comprised of the three independent directors of the Company's Board of
Directors (the "Special Committee"), has determined that the consideration to be
paid for each Share in the Offer (as defined below) and the Merger (as defined
below) is fair to the holders of the Shares and that it is advisable and in the
best interests of the stockholders of the Company to approve Parent's proposed
acquisition and has unanimously voted (i) to recommend that the stockholders of
the Company accept the Offer and tender their Shares pursuant to the Offer and
(ii) to approve the merger of the Purchaser with and into the Company, with the
Company being the surviving corporation, in accordance with the General
Corporation Law of the State of Delaware (the "DGCL") following consummation of
the Offer (the "Merger"); and
WHEREAS, it is proposed that Parent make a cash tender offer (the "Offer")
in compliance with the applicable provisions of the Securities and Exchange Act
of 1934, as amended (the "Exchange Act") and the rules and regulations
promulgated under that Act to acquire all the issued and outstanding Shares for
$16.50 per Share (such amount, or any greater amount per share paid pursuant to
the Offer, being referred to as the "Per Share Amount") net to the seller in
cash, upon the terms and subject to the conditions of this Agreement. The Offer
will be followed by the Merger, pursuant to which each then-issued and
outstanding Share not beneficially owned by Parent or the Purchaser will be
converted into the right to receive the Per Share Amount, upon the terms and
subject to the conditions provided in this Agreement; and
NOW, THEREFORE, in consideration of the mutual representations, warranties
and agreements contained in this Agreement, the parties agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01 THE OFFER.
(a) Unless this Agreement has been terminated in accordance with
Article VII, Parent, Purchaser and the Company shall use their reasonable best
efforts to complete and file the Offer Documents, as defined below, and Schedule
14D-9 and commence the Offer as promptly as practicable but in no event later
than fourteen days from the date hereof. The Offer shall be scheduled to expire
at 5:00 p.m., New York City time on the 21st business day following commencement
of the Offer (the "Initial Expiration Date").
The Purchaser shall use reasonable best efforts to consummate the Offer in
accordance with its terms and to accept for payment Shares tendered pursuant to
the Offer as soon as legally permitted to do so under applicable law and shall
pay for tendered Shares as soon as practical, subject to:
(i) the condition that pursuant to the Offer, there shall have been
validly tendered and not withdrawn before the Offer expires the number of
Shares which constitutes at least a majority of
B-1
the outstanding Shares not beneficially owned by Parent or Purchaser
immediately prior to the expiration of the Offer (the "Minimum Condition");
and
(ii) the other conditions set forth in Annex A to this Agreement.
(b) The Offer shall be made by means of the Offer to Purchase (as defined
below) and shall be subject to the Minimum Condition and the other conditions
set forth in Annex A to this Agreement and shall reflect, as appropriate, the
other terms set forth in this Agreement. The Purchaser expressly reserves the
right to increase the amount it offers to pay per Share in the Offer and to
extend the Offer to the extent required by law in connection with such an
increase, in each case without the consent of the Company. Without the prior
written consent of the Special Committee, Parent will not:
(i) decrease the Offer Price;
(ii) change the number of Shares to be purchased in the Offer;
(iii) change the form of the consideration payable in the Offer;
(iv) amend or waive the Minimum Condition; or
(v) make any other change in the terms or conditions of the Offer which
is adverse to the holders of Shares.
(c) If, on the Initial Expiration Date, all conditions to the Offer will not
have been satisfied or waived, the Purchaser may, from time to time, in its sole
discretion, extend the expiration date; provided, however, that the Offer shall
not be extended beyond June 30, 2000.
The Per Share Amount shall, subject to any applicable withholding of taxes,
be net to the seller in cash, upon the terms and subject to the conditions of
the Offer.
(d) As soon as reasonably practicable on the date of commencement of the
Offer, Parent shall file with the Securities and Exchange Commission (the "SEC")
a combined Schedule TO and Schedule 13E-3 under cover of Schedule TO. (The
combined Schedule TO and Schedule 13E-3, together with all exhibits and
amendments, is collectively referred to as "Schedule TO.")
The Schedule TO shall contain or shall incorporate by reference an offer to
purchase (the "Offer to Purchase") and the form of the related letter of
transmittal (the Schedule TO, the Offer to Purchase and such other documents,
together with all supplements and amendments thereto, being referred to herein
collectively as the "Offer Documents").
Parent, the Purchaser and the Company agree to correct promptly any
information provided by any of them for use in the Offer Documents which shall
have become materially incorrect or misleading, and Parent and the Purchaser
further agree to take all steps necessary to cause the Schedule TO as so
corrected to be filed with the SEC and the other Offer Documents as so corrected
to be disseminated to the holders of Shares, in each case as and to the extent
required by applicable law.
The Company, the Special Committee and their respective counsel shall be
given the opportunity to review and comment on the Offer Documents and any
amendments to the Offer Documents before they are filed with the SEC. Parent and
the Purchaser shall provide the Company, the Special Committee and their
respective counsel with a copy of any written comments or telephonic
notification of any oral comments from the SEC or its staff with respect to the
Offer Documents promptly after the comments are received.
SECTION 1.02 COMPANY ACTION.
(a) The Company consents to the Offer and represents that:
B-2
(i) the Special Committee and the Company Board of Directors at meetings
duly called and held on March 10, 2000, have each, by unanimous vote of all
directors present and voting;
(A) determined that the Offer and the Merger are advisable, fair to
and in the best interests of the stockholders of the Company (other than
Parent and the Purchaser);
(B) approved this Agreement and the transactions contemplated by this
Agreement; and
(C) resolved to recommend that the stockholders of the Company accept
the Offer and tender their Shares pursuant to the Offer; provided that
such recommendation may be withdrawn, modified or amended to the extent
the Board of Directors, upon recommendation of the Special Committee,
determines in good faith after consultation with independent legal
counsel that its failure to take such action would violate the fiduciary
duties of the Board of Directors under applicable law; and
(ii) Credit Suisse First Boston ("Advisor") has delivered to the Special
Committee a written opinion that, based on, and subject to, the various
assumptions and qualifications set forth in that opinion, as of the date of
this Agreement, the consideration to be received by the holders of Shares
(other than Parent and the Purchaser) pursuant to the Offer and the Merger
is fair to such holders from a financial point of view. A copy of the
opinion has been provided to Parent, and the Company has been authorized by
Advisor to include the opinion in its entirety, in the Offer Documents;
provided, however that any description of the content of the opinion shall
be approved by the Advisor, which approval will not be unreasonably
withheld. The Company consents to the inclusion in the Offer Documents of
the recommendations of the Special Committee and the Company Board of
Directors described above, provided the exact text of any such statement be
first approved by counsel to the committee.
(b) On the same day as Parent first files the Schedule TO with the SEC, the
Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with all amendments, supplements, and exhibits, the
"Schedule 14D-9") containing the recommendations of the Special Committee and
the Company Board of Directors described in Section 1.02(a) and shall
disseminate the Schedule 14D-9 to the extent required by Rule 14d-9 promulgated
under the Exchange Act and any other applicable federal securities laws or
regulations. The Company, Parent and the Purchaser agree to promptly correct any
information provided by any of them for use in the Schedule 14D-9 which has
become materially incorrect or misleading. The Company further agrees to take
all steps necessary to cause the Schedule 14D-9 as so corrected to be filed with
the SEC and disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. Parent and its counsel shall be
given the opportunity to review and comment on the Schedule 14D-9 and any
amendments to such Schedule before it is filed with the SEC. The Company shall
provide Parent and its counsel with a copy of any written comments or telephonic
notification of any oral comments the Company may receive from the SEC with
respect to the Schedule 14D-9 promptly after it is received.
(c) In connection with the transactions contemplated by this Agreement, the
Company shall promptly furnish Parent with any information, including, without
limitation, mailing labels, updated shareholder listings, security position
listings, and such other information and assistance as Parent, the Purchaser or
their agents may reasonably request in connection with the Offer and the Merger.
ARTICLE II
THE MERGER
SECTION 2.01 THE MERGER.
At the Effective Time, upon the terms and subject to the conditions in this
Agreement and in accordance with the DGCL, the Purchaser shall be merged with
and into the Company, the separate
B-3
existence of the Purchaser shall cease and the Company shall continue as the
surviving corporation (the "Surviving Corporation"). The Merger shall have the
effects as provided by the DGCL and other applicable law.
SECTION 2.02 EFFECTIVE TIME.
On the Closing Date, the parties shall file with the Secretary of State of
the State of Delaware, a certificate of merger (the "Certificate of Merger")
executed in accordance with the relevant provisions of the DGCL and shall make
all other filings or recordings required under the DGCL. The Merger shall become
effective at such time as the Certificate of Merger is duly filed with the
Secretary of State of the State of Delaware or at such other time as is
permissible under the DGCL and as Parent and the Company shall agree and as
specified in the Certificate of Merger (the time the Merger becomes effective
being the "Effective Time").
SECTION 2.03 CLOSING.
The closing of the Merger (the "Closing") will take place at the
headquarters of Parent in Boise, Idaho, on the day immediately following the
satisfaction of the conditions provided in Article VI, or at such other date and
place as the Company and Parent shall agree (the "Closing Date").
SECTION 2.04 CERTIFICATE OF INCORPORATION; BY-LAWS; OFFICERS AND DIRECTORS.
Pursuant to the Merger:
(a) the Certificate of Incorporation and By-laws of the Company as in effect
immediately prior to the Effective Time shall be the Certificate of
Incorporation and By-laws of the Surviving Corporation following the Merger
until thereafter changed or amended as provided therein and with applicable law;
(b) the directors of the Company immediately prior to the Effective Time
shall be the directors of the Surviving Corporation following the Merger and
until the earlier of their death, resignation or removal or until their
respective successors are duly elected or appointed and qualified; and
(c) the officers of the Company immediately prior to the Effective Time
shall be the officers of the Surviving Corporation until the earlier of their
death, resignation or removal or until their respective successors are duly
elected or appointed and qualified.
SECTION 2.05 CONVERSION OF SHARES.
As of the Effective Time, by virtue of the Merger and without any action on
the part of the Company, Parent, the Purchaser or the holders of any Shares:
(a) SHARES OF THE PURCHASER. Each share of common stock of the Purchaser
which is issued and outstanding immediately prior to the Effective Time shall be
converted into and become one fully paid and nonassessable share of common stock
of the Surviving Corporation;
(b) CAPITAL STOCK OF THE COMPANY. Subject to Sections 2.05(c) and 2.06, each
share of the Company Common Stock which is issued and outstanding immediately
prior to the Effective Time shall be converted into and become a right to
receive the Per Share Amount in cash and shall automatically be canceled and
retired and shall cease to exist. Each holder of a certificate representing any
such shares of the Company Common Stock shall, to the extent such certificate
represents such shares, cease to have any rights with respect to such shares,
except the right to receive the Per Share Amount allocable to the shares
represented by such certificate upon surrender of such certificate in accordance
with Section 2.08.
(c) CANCELLATION OF TREASURY STOCK AND PARENT-OWNED STOCK. Any shares of the
Company Common Stock that are owned immediately prior to the Effective Time by
the
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Company as treasury stock and each Share owned by Parent, Purchaser or any other
wholly-owned subsidiary of Parent, shall be canceled and retired and shall cease
to exist, and no consideration shall be delivered in exchange for such shares.
Each holder of a certificate representing any such shares shall cease to have
any rights with respect to such shares.
SECTION 2.06 DISSENTING SHARES.
Notwithstanding anything in this Agreement to the contrary, shares of the
Company Common Stock outstanding immediately prior to the Effective Time and
which are held by a stockholder who has properly exercised appraisal rights
thereto, in accordance with Section 262 of the DGCL ("Dissenting Shares") shall
not be converted into a right to receive the Per Share Amount, unless such
holder fails to perfect or withdraws or otherwise loses such holder's right to
appraisal, if any. If, after the Effective Time, such holder fails to perfect or
withdraws or loses any such right to appraisal, each such share of such holder
shall be treated as a share that had been converted as of the Effective Time
into the right to receive the Per Share Amount, without interest, in accordance
with Section 2.05(b). The Company shall give Parent:
(a) prompt notice of any demands for appraisal of any shares of the Company
Common Stock received by the Company; and
(b) the opportunity to participate in and direct all negotiations and
proceedings with respect to any such demands. The Company shall not, without the
prior written consent of Parent, make any payment with respect to, or settle,
offer to settle or otherwise negotiate, any such demands.
SECTION 2.07 TREATMENT OF OPTIONS.
Prior to the Effective Time, the Company will attempt in good faith to
provide that, at the Effective Time, each option to purchase shares of the
Company Common Stock (a "Stock Option") granted under either the 1995 Key
Executive Stock Option Plan or the Company's Directors' Stock Option Plan will
be cancelled. In exchange for each Stock Option, the holder will be entitled to
receive from the Company, for each share of the Company Common Stock subject to
the Stock Option, a cash payment equal to the excess, if any, of the Per Share
Amount over the applicable exercise price.
SECTION 2.08 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. The Shareholders Services Department of Parent shall be
appointed to act as exchange agent (the "Exchange Agent") for the payment of the
Per Share Amount for the holders of the Shares. As of the Effective Time, Parent
shall have deposited with the Exchange Agent, for the benefit of the holders of
shares of the Company Common Stock, for exchange in accordance with this Section
2.08, the aggregate amount of cash payable pursuant to Section 2.05(b) hereof in
exchange for outstanding shares of the Company Common Stock and for the option
cash-out pursuant to 2.07 (the "Exchange Fund").
(b) EXCHANGE PROCEDURES. Promptly after the Effective Time, the Exchange
Agent shall mail to each holder of record of a certificate or certificates which
immediately prior to the Effective Time represented outstanding shares of the
Company Common Stock whose shares were converted into the right to receive cash
pursuant to Section 2.05(b) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the certificates
representing such shares of the Company Common Stock shall pass, only upon
delivery of the certificates representing such shares of the Company Common
Stock to the Exchange Agent and shall be in such form and have such other
provisions as the Exchange Agent may reasonably specify), and instructions for
use in effecting the surrender of the certificates representing such shares of
the Company Common Stock, in exchange for the Per Share Amount. Upon surrender
to the Exchange Agent of a certificate or certificates representing shares of
the Company Common Stock and acceptance thereof by the Exchange Agent,
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the holder thereof shall be entitled to the amount of cash into which the number
of shares of the Company Common Stock previously represented by such certificate
or certificates surrendered shall have been converted pursuant to this
Agreement. The Exchange Agent shall accept such certificates upon compliance
with such reasonable terms and conditions as the Exchange Agent may impose to
effect an orderly exchange thereof in accordance with normal exchange practices.
After the Effective Time, there shall be no further transfer on the records of
the Company or its transfer agent of certificates representing shares of the
Company Common Stock and if such certificates are presented to the Company for
transfer, they shall be canceled against delivery of the Per Share Amount
allocable to the shares of the Company Common Stock represented by such
certificate or certificates to the record holder. If any Per Share Amount is to
be remitted to a name other than that in which the certificate for the Company
Common Stock surrendered for exchange is registered, it shall be a condition of
such exchange that the certificate so surrendered shall be properly endorsed,
with signature guaranteed, or otherwise in proper form for transfer and that the
person requesting such exchange shall pay to the Company or its transfer agent
any transfer or other taxes required by reason of the payment of the Per Share
Amount to a name other than that of the registered holder of the certificate
surrendered, or establish to the satisfaction of the Company or its transfer
agent that the tax has been paid or is not applicable. Until surrendered as
contemplated by this Section 2.08, each certificate for shares of the Company
Common Stock shall be deemed at any time after the Effective Time to represent
only the right to receive upon surrender the Per Share Amount allocable to the
shares represented by such certificates contemplated by Section 2.07(b). No
interest will be paid or will accrue on any amount payable as a Per Share
Amount. Subject to completion of the documentation referred to above, the Per
Share Amount shall be paid at the Effective Time to holders of the Company
Common Stock.
(c) NO FURTHER OWNERSHIP RIGHTS IN THE COMPANY STOCK. The Per Share Amount
paid upon the surrender for exchange of certificates representing shares of the
Company Common Stock in accordance with the terms of this Section 2.08 shall be
deemed to have been paid in full satisfaction of all rights pertaining to the
shares of the Company Common Stock represented by such certificates.
(d) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
(including any interest and other income received by the Exchange Agent in
respect of all such funds) which remains undistributed to the holders of the
certificates representing shares of the Company Common Stock for six months
after the Effective Time shall be delivered to the Surviving Corporation, upon
demand, and any holders of shares of the Company Common Stock prior to the
Merger who have not theretofore complied with this Section 2.08 shall thereafter
look only to the Surviving Corporation and Parent and only as general creditors
thereof for payment of their claim for the Per Share Amount to which they may be
entitled.
(e) NO LIABILITY. No party to this Agreement shall be liable to any Person
(as hereinafter defined) in respect of any amount from the Exchange Fund
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law. The term "Person" means any individual, corporation,
partnership, trust or unincorporated organization or a government or any agency
or political subdivision thereof.
(f) LOST CERTIFICATES. In the event any certificate or certificates
representing shares of the Company Common Stock shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such certificate or certificates to be lost, stolen or destroyed, the Exchange
Agent will issue in exchange for such lost, stolen or destroyed certificate the
Per Share Amount deliverable in respect thereof as determined in accordance with
this Section 2.08, provided that the Person to whom the Per Share Amount is paid
shall, as a condition precedent to payment, indemnify Parent in an agreement
reasonably satisfactory to it against any claim that may be made against Parent
or the Company with respect to the certificate claimed to have been lost, stolen
or destroyed.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and the Purchaser as follows:
SECTION 3.01 CAPITALIZATION.
The authorized capital stock of the Company consists of 200,000,000 shares
of the Company Common Stock, of which 65,814,460 shares are issued and
outstanding as of the date hereof. To the Knowledge of the Company's senior
executive officers, except for the Stock Options, there are no outstanding
options, warrants or other rights of any kind to acquire (including preemptive
rights) any additional shares of capital stock of the Company or securities
convertible into or exchangeable for, or which otherwise confer on the holder
thereof any right to acquire, any such additional shares, nor is the Company
committed to issue any such option, warrant, right or security.
SECTION 3.02 AUTHORIZATION.
The Company has all requisite corporate power and authority to enter into
this Agreement and, subject to any necessary approval of the Merger by the
stockholders of the Company, to carry out its obligations under this Agreement
and to consummate the transactions contemplated by this Agreement. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all requisite corporate action
on the part of the Company (other than, if required by the DGCL, the approval of
this Agreement and the transactions contemplated hereby by the stockholders of
the Company). The Board of Directors of the Company has [unanimously] adopted
resolutions approving this Agreement and the Merger, determined that the terms
of the Merger are advisable, fair to, and in the best interests of, the
Company's stockholders and recommended that the holders of Shares tender their
Shares pursuant to the Offer. This Agreement has been duly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery hereof by Parent and the Purchaser, constitutes the valid and binding
obligation of the Company, enforceable against the Company except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally or by
general equitable principles.
SECTION 3.03 FAIRNESS OPINION AND APPROVAL BY THE SPECIAL COMMITTEE.
On or prior to the date hereof, the Special Committee:
(a) approved the terms of this Agreement and the transactions contemplated
hereby as they relate to the stockholders (other than Parent, Purchaser or any
wholly owned Subsidiary of either of them) of the Company (the "Public
Stockholders"), including without limitation the Merger;
(b) has determined that the Merger and the Offer are advisable, fair to and
in the best interests of the Public Stockholders;
(c) recommended that the Board of Directors of the Company approve and
authorize this Agreement and the transactions contemplated by this Agreement;
and
(d) recommended that the Public Stockholders tender their Shares pursuant to
the Offer.
The Special Committee has received the opinion, dated as of March __, 2000,
of Advisor to the effect that the consideration to be received by the Public
Stockholders in the Merger is fair to such stockholders from a financial point
of view. (A copy of the opinion has been delivered to Parent.) Based on such
opinion, and such other factors as it deemed relevant, the Special Committee has
taken all of the actions set forth in clauses in (a) through (d) above.
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SECTION 3.04 SEC REPORTS.
The Company has filed all reports and schedules required to be filed with
the SEC since January 1, 1998 (collectively, the "SEC Reports"). None of the SEC
Reports, as of their respective dates, contained any untrue statement of
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Each of the balance sheets
(including the related notes) included in the SEC Reports presents fairly the
consolidated financial position of the Company and the Subsidiaries as of the
respective dates thereof, and the other related statements (including the
related notes) included therein present fairly the results of operations and
cash flows of the Company and the Subsidiaries for the respective periods or as
of the respective dates set forth therein, all in conformity with generally
accepted accounting principles consistently applied during the periods involved,
except as otherwise noted therein and subject, in the case of the unaudited
interim financial statements, to normal year-end adjustments and any other
adjustments described therein.
SECTION 3.05 OFFER DOCUMENTS.
Neither Schedule 14D-9 nor any of the information supplied by the Company
for inclusion or incorporation by reference into the Offer Documents, will, at
the respective times the Offer Documents and the Schedule 14D-9 are filed with
the SEC, contain any untrue statement of a material fact or omit to state any
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 are made,
not misleading. The Company makes no representation with respect to any
information supplied by Parent, the Purchaser or any of their affiliates (other
than the Company and the Subsidiaries) expressly for inclusion in the Offer
Documents or Schedule 14D-9.
SECTION 3.06 COMPLIANCE WITH APPLICABLE LAWS.
Except as disclosed in the SEC Reports, to the Knowledge of the senior
executive officers of the Company, the businesses of the Company and the
Subsidiaries are not being conducted in violation of any law, ordinance or
regulation of any Governmental Entity, except for possible violations which
individually or in the aggregate have not had and are not reasonably likely to
have a Material Adverse Effect. No investigation or review by any Governmental
Entity with respect to the Company or any of the Subsidiaries is pending or, to
the knowledge of the Company, threatened, nor has any Governmental Entity
indicated an intention to conduct the same, except for investigations or reviews
which individually or in the aggregate would not have, nor be reasonably likely
to have, a Material Adverse Effect.
SECTION 3.07 BROKERS AND FINDERS.
Other than Advisor, the Company has not employed any broker, finder, advisor
or intermediary in connection with the transactions contemplated by this
Agreement which would be entitled to a broker's, finder's or similar fee or
commission in connection therewith or upon the consummation thereof. The Company
shall pay any fees due to Advisor.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND THE PURCHASER
SECTION 4.01 ORGANIZATION.
Parent is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware. The Purchaser is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware.
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SECTION 4.02 AUTHORIZATION.
Each of Parent and the Purchaser has all corporate power and authority to
enter into this Agreement and to carry out its respective obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all requisite corporate action on the part
of Parent and the Purchaser. The Boards of Directors of each of Parent and the
Purchaser have approved this Agreement and the Merger. This Agreement has been
duly executed and delivered by each of Parent and the Purchaser and, assuming
the due authorization, execution and delivery hereof by the Company, constitutes
the valid and binding obligation of each of Parent and the Purchaser,
enforceable against each of Parent and the Purchaser except as the
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, or similar laws affecting creditors' rights generally or by
general equitable principles.
SECTION 4.03 NO VIOLATIONS; CONSENTS AND APPROVALS.
(a) Neither the execution, delivery and performance of this Agreement by
Parent and the Purchaser nor the consummation by Parent and the Purchaser of the
transactions contemplated hereby will:
(i) violate any provision of the respective Certificates of
Incorporation or By-laws of Parent or the Purchaser;
(ii) conflict with, result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give
rise to any right of termination, amendment, cancellation or acceleration or
to the imposition of any lien) under, or result in the acceleration or
trigger of any payment, time of payment, vesting or increase in the amount
of any compensation or benefit payable pursuant to, the terms, conditions or
provisions of any note, bond, mortgage, indenture, guarantee or other
evidence of indebtedness, lease, license, contract, agreement, plan or other
instrument or obligation to which Parent or the Purchaser is a party or by
which either of them or any of their assets may be bound; or
(iii) conflict with or violate any Laws applicable to Parent or the
Purchaser or any of their properties or assets; except in the case of
clauses (ii) and (iii) for such conflicts, violations, breaches, defaults or
liens which individually and in the aggregate would not be reasonably likely
to have a material adverse effect on the business, results of operations or
financial condition of Parent and the Purchaser, taken as a whole, or
materially impair or delay the consummation of the transactions contemplated
hereby.
(b) No filing or registration with, declaration or notification to, or
order, authorization, consent or approval of, any Governmental Entity or any
other Person is required in connection with the execution, delivery and
performance of this Agreement by Parent or the Purchaser or the consummation by
Parent or the Purchaser of the transactions contemplated hereby, except:
(i) applicable requirements under the Exchange Act;
(ii) the filing of the Certificate of Merger with the Secretary of State
of the State of Delaware; and
(iii) such other consents, approvals, orders, authorizations,
notifications, registrations, declarations and filings the failure of which
to be obtained or made individually and in the aggregate would not have, nor
be reasonably likely to have, a material adverse effect on the business,
results of operations or financial conditions of Parent and the Purchaser,
taken as a whole, or materially impair or delay the consummation of the
transactions contemplated hereby.
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SECTION 4.04 SCHEDULE TO.
None of the information supplied or to be supplied in writing by Parent or
the Purchaser for inclusion or incorporation by reference in the Schedule TO and
the Schedule 14D-9 (and any amendment thereof or supplement thereto), will
contain any untrue statement of a material fact or omit to state any 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 are made, not
misleading. No representation is made by Parent or the Purchaser with respect to
any information supplied by the Company for inclusion in the Schedule TO or
Schedule 14D-9.
SECTION 4.05 BROKERS AND FINDERS.
Other than Goldman Sachs & Co., neither Parent nor the Purchaser has
employed any broker, finder, advisor or intermediary in connection with the
transactions contemplated by this Agreement which would be entitled to a
broker's, finder's or similar fee or commission in connection therewith or upon
the consummation thereof. The Purchaser shall pay any fees due to Goldman Sachs
& Co.
SECTION 4.06 LITIGATION.
There is no action, suit or proceeding pending or, to the knowledge of
Parent or the Purchaser, threatened against Parent or the Purchaser at law, in
equity or otherwise, in, before or by any court or governmental agency or
authority which would reasonably be likely to have a material adverse effect on
the ability of Parent or the Purchaser to perform their respective obligations
under this Agreement.
SECTION 4.07 FINANCING.
Parent will have at the Closing sufficient funds to perform its obligations
under this Agreement.
ARTICLE V
CERTAIN COVENANTS AND AGREEMENTS
SECTION 5.01 CONDUCT OF BUSINESS.
From the date of this Agreement to the Effective Time, the Company covenants
and agrees to do, and to cause the Subsidiaries to do, except as otherwise
expressly contemplated by this Agreement or consented to in writing by Parent,
the following:
(a) ORDINARY COURSE. The Company and each of the Subsidiaries shall operate
the businesses conducted by them in the ordinary and usual course and shall use
their reasonable efforts to preserve intact their present business
organizations, keep available the services of their present officers and key
employees and preserve their relationships with material customers and suppliers
and others having business dealings with them to the end that their goodwill and
on-going businesses shall be unimpaired at the Effective Time.
(b) ACCOUNTING PRINCIPLES; LIABILITIES. The Company shall not, and shall not
permit any Subsidiary to:
(i) change any of the accounting principles or practices used by it,
except as may be required as a result of a change in law or in generally
accepted accounting principles;
(ii) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge, or satisfaction in the ordinary course of
business and consistent with past practice.
(c) EMPLOYEE BENEFITS; EXECUTIVE COMPENSATION. Except for actions made in
the ordinary course of business consistent with past practice, the Company shall
not, and shall not permit
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any Subsidiary to increase the compensation payable to or become payable to its
directors, officers or employees, pay any bonus, grant any severance or
termination pay to, or enter into or amend any employment or severance agreement
with, any director, officer or other employees of the Company or any Subsidiary,
establish, adopt, enter into or amend 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 directors, officers or employees, materially change any
actuarial assumption or other assumption used to calculate funding obligations
with respect to any pension or retirement plan, or change the manner in which
contributions to any such plan are made or the basis on which such contributions
are determined, except, in each case, as may be required by law or contractual
commitments which are existing as of the date of this Agreement.
(d) OTHER BUSINESS. Except for such actions as may be required by law, the
Company shall not, and shall not permit any Subsidiary to, take any action that
will result in any of the representations and warranties of the Company set
forth in this Agreement becoming untrue or in any of the conditions to the
Merger set forth in Article VI not being satisfied.
SECTION 5.02 ANNOUNCEMENT.
Neither the Company, on the one hand, nor Parent or the Purchaser, on the
other hand, shall issue any press release or otherwise make any public statement
with respect to this Agreement and the transactions contemplated hereby without
the prior consent of the other (which consent shall not be unreasonably
withheld), except as may be required by applicable law or stock exchange
regulation. Notwithstanding anything in this Section 5.02 to the contrary,
Parent, the Purchaser and the Company will, to the extent practicable, consult
with each other before issuing, and provide each other the opportunity to review
and comment upon, any such press release or other public statements with respect
to this Agreement and the transactions contemplated hereby whether or not
required by law.
SECTION 5.03 NO SOLICITATION.
From the date of this Agreement to the Effective Time, the Company covenants
and agrees that the Company shall not, nor shall it authorize or permit any of
the Subsidiaries or any officer, director, employee, investment banker, attorney
or other advisor or representative of the Company or any of the Subsidiaries
("the Company Representatives") to, directly or indirectly:
(a) solicit, initiate, or encourage the submission of, or approve or
recommend, or propose publicly to approve or recommend any Acquisition Proposal
(as defined below);
(b) enter into any agreement with respect to any Acquisition Proposal; or
(c) solicit, initiate, participate in, or encourage any discussions or
negotiations regarding, or furnish to any Person (other than Parent or any of
its affiliates or representatives) any information for the purpose of
facilitating the making of, or take any other action to facilitate any inquiries
or the making of, any proposal that constitutes, or may reasonably be expected
to lead to, any Acquisition Proposal.
Without limiting the foregoing, it is understood that any violation, of
which the Company or any of the Subsidiaries had knowledge at the time of such
violation, of the restrictions set forth in the immediately preceding sentence
by any officer, director, employee, investment banker, attorney, employee, or
other advisor or representative of the Company or any of the Subsidiaries,
whether or not such Person is purporting to act on behalf of the Company or any
of the Subsidiaries or otherwise, shall be deemed to be a breach of this Section
5.03 by the Company.
The Company shall promptly advise Parent of any Acquisition Proposal and any
inquiries with respect to any Acquisition Proposal. For purposes of this
Agreement, "Acquisition Proposal" means any
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proposal for a merger or other business combination involving the Company or any
proposal or offer to acquire in any manner, directly or indirectly, any equity
interest in the Company or a material portion of the assets of the Company.
Nothing contained in this Section 5.03 shall prohibit the Company from taking
and disclosing to its stockholders a position contemplated by Rules 14d-9 and
14e-2(a) promulgated under the Exchange Act.
SECTION 5.04 NOTIFICATION OF CERTAIN MATTERS.
The Company shall give prompt notice to Parent, and Parent shall give prompt
notice to the Company, of:
(a) the occurrence, or nonoccurrence, of any event the occurrence, or
nonoccurrence, of which would be reasonably likely to cause any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect at or prior to the Effective Time; and
(b) any material failure of the Company or Parent, as the case may be, to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder, provided, however, that the delivery of any notice
pursuant to this Section 5.04 shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.
SECTION 5.05 DIRECTORS' AND OFFICERS' INDEMNIFICATION.
(a) Parent shall cause the certificate of incorporation and the By-laws of
the Surviving Corporation to contain the provisions with respect to
indemnification and exculpation from liability set forth in the Company's
Certificate of Incorporation and By-Laws on the date of this Agreement, which
provisions shall not be amended, repealed or otherwise modified for a period of
six years from the Effective Time in any manner that would adversely affect the
rights thereunder of individuals who on or prior to the Effective Time were
directors, officers, employees or agents of the Company, unless such
modification is required by law. Parent hereby guarantees the payment
obligations of the Surviving Corporation arising from the indemnification and
exculpation provisions referred to in the preceding sentence.
(b) Parent or the Surviving Corporation shall maintain in effect for six
years from the Effective Time policies of directors' and officers' liability
insurance containing terms and conditions which are not less advantageous to the
insured than any such policies of the Company currently in effect on the date of
this Agreement (the "Company Insurance Policies"), with respect to matters
occurring prior to the Effective Time, to the extent available, and having the
maximum available coverage under any such the Company Insurance Policies.
SECTION 5.06 ACCESS.
Between the date of this Agreement and the Effective Time, the Company shall
(and shall cause each of the Subsidiaries to) afford the officers, employees,
accountants, counsel, financing sources and other representatives of Parent,
full access to all of its properties, books, contracts, commitments and records
and during such period, the Company shall (and shall cause each of the
Subsidiaries to) furnish promptly to Parent:
(a) a copy of each report, schedule, registration statement and other
document filed or received by it during such period pursuant to the requirements
of federal securities laws; and
(b) all other information concerning its business, properties and personnel
as Parent may reasonably request.
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SECTION 5.07 REASONABLE BEST EFFORTS.
Before Closing, upon the terms and subject to the conditions of this
Agreement, Parent, the Purchaser and the Company agree to use their respective
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 (subject to
applicable laws) to consummate and make effective the Merger and other
transactions contemplated by this Agreement as promptly as practicable
including, but not limited to:
(a) the preparation and filing of all forms, registrations and notices
required to be filed to consummate the Merger and the other approvals, consents,
orders, exemptions or waivers by any third party or Governmental Entity;
(b) the preparation of any disclosure documents requested by Parent to
facilitate financing of any of the transactions contemplated by this Agreement;
and
(c) the satisfaction of the other parties' conditions to Closing.
SECTION 5.08 PURCHASER COMPLIANCE.
Parent shall cause the Purchaser to comply with all of its obligations under
this Agreement.
SECTION 5.09 OBLIGATION OF PARENT.
Parent shall not take any action, and it shall use its best efforts not to
permit any director of the Company who is an employee of Parent to take any
action, that would cause the Company to breach any of the representations,
warranties or agreements made by the Company in this Agreement.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligation of each party to effect the Merger shall be
subject to the satisfaction on or prior to the Closing Date of each of the
following conditions (any of which may be waived by the parties hereto in
writing, in whole or in part, to the extent permitted by applicable law):
(a) NO INJUNCTION OR PROCEEDING. No order or injunction of a court of
competent jurisdiction, shall be in effect, no statute, rule or regulation shall
have been enacted by a Governmental Entity and no action, suit or proceeding by
any Governmental Entity shall have been instituted or threatened, which
prohibits the consummation of the Merger or materially challenges the
transactions contemplated hereby.
(b) CONSENTS. Other than filing the Certificate of Merger, and except as
would not be reasonably likely to have a Material Adverse Effect, all consents,
approvals and authorizations of and filings with Governmental Entities required
for the consummation of the transactions contemplated hereby, if any, shall have
been obtained or effected or filed.
(c) PURCHASE OF SHARES IN OFFER. Parent, the Purchaser or their affiliates
shall have purchased Shares pursuant to the Offer.
SECTION 6.02 CONDITIONS TO THE OBLIGATIONS OF PARENT AND THE PURCHASER TO
EFFECT THE MERGER.
The obligations of Parent and the Purchaser to effect the Merger are further
subject to the satisfaction or waiver of each of the following conditions prior
to or at the Closing Date:
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(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Company contained in this Agreement shall be true and correct in all
material respects at and as of the Effective Time as though made at and as of
the Effective Time, except to the extent that any such representation or
warranty is made as of a specified date, in which case such representation or
warranty shall have been true and correct in all material respects as of such
date.
(b) AGREEMENTS. The Company shall have performed and complied in all
material respects with all of its undertakings and agreements required by this
Agreement to be performed or complied with by it prior to or at the Closing
Date.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.01 TERMINATION.
This Agreement may be terminated and the Merger may be abandoned at any time
prior to the Effective Time:
(a) by the mutual written consent of the Boards of Directors of Parent, the
Purchaser and the Company (upon recommendation of the Special Committee);
(b) by either the Company upon the recommendation of the Special Committee,
on the one hand, or Parent and the Purchaser, on the other hand, if:
(i) (x) the Offer shall have expired without any Shares being purchased
pursuant to the Offer or (y) the Purchaser shall not have accepted for
payment any Shares pursuant to the Offer by July 1, 2000; provided, however,
that the right to terminate this Agreement under this Section
7.01(b)(i) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the
failure of the Purchaser to purchase the Shares pursuant to the Offer on or
before such date; or
(ii) any Governmental Entity shall have issued an order, decree or
ruling or taken any other action (which order, decree, ruling or other
action the parties to this Agreement shall use their reasonable efforts to
lift), which permanently restrains, enjoins or otherwise prohibits the
acceptance for payment of, or payment for, Shares pursuant to the Offer or
the Merger and such order, decree, ruling or other action shall have become
final and non-appealable.
(c) by the Company, if Parent or the Purchaser shall have breached in any
material respect any of their respective representations, warranties, covenants
or other agreements contained in this Agreement, and the breach cannot be or has
not been cured within 30 days after the giving of written notice by the Company
to Parent or the Purchaser, as applicable; or
(d) by Parent, if:
(i) before the purchase of Shares by the Purchaser pursuant to the
Offer, the Special Committee shall have withdrawn, modified or changed in a
manner adverse to Parent or the Purchaser its approval or recommendation of
the Offer, this Agreement or the Merger or shall have recommended an
Acquisition Proposal or shall have executed an agreement in principle or a
definitive agreement relating to an Acquisition Proposal or similar business
combination with a person or entity other than Parent, the Purchaser or
their affiliates; or
(ii) before the purchase of Shares pursuant to the Offer, the Company
shall have breached any representation, warranty, covenant or other
agreement contained in this Agreement which (x) would give rise to the
failure of a condition set forth in paragraph (b)(vi) or (b)(vii) of Annex A
to this Agreement and (y) cannot be or has not been cured within 30 days
after the giving of written
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notice to the Company; provided, however, that Parent may not terminate this
Agreement if any affirmative action by Parent or any agent or employee of
Parent was the cause of the breach by the Company of any representation,
warranty or covenant.
SECTION 7.02 EFFECT OF TERMINATION.
If this Agreement is terminated as provided in Section 7.01, written notice
of such termination shall be given by the terminating party or parties to the
other party or parties specifying the provision of this Agreement pursuant to
which such termination is made, this Agreement shall become null and void and
there shall be no liability on the part of Parent, the Purchaser or the Company
(except as set forth in this Section 7.02 and Section 7.01 of this Agreement,
each of which Sections shall survive any termination of this Agreement);
provided that nothing in this Agreement shall relieve any party from any
liability or obligation with respect to any willful breach of this Agreement.
SECTION 7.03 AMENDMENT.
The parties may amend this Agreement in writing; provided, however any
amendment of this Agreement on behalf of the Company shall be subject to the
approval of the Board of Directors of the Company which approval shall be given
only if recommended by the Special Committee.
SECTION 7.04 WAIVER.
At any time before the Effective Time, Parent, by action taken by its Board
of Directors or the Company, by action taken by its Board of Directors upon the
recommendation of the Special Committee, may:
(i) extend the time for the performance of any of the obligations or
other acts of any other party to this Agreement; or
(ii) waive compliance with any of the agreements of any other party or
with any conditions to its own obligations. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party by a duly
authorized officer.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES.
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time. All such representations and warranties will be extinguished on
consummation of the Merger and neither the Company, any Subsidiary nor any of
its officers, directors or employees or stockholders shall be under any
liability whatsoever with respect to any such representation or warranty after
such time. This Section 8.01 shall not limit any covenant or agreement of the
parties which by its terms contemplates performance after the Effective Time.
SECTION 8.02 EXPENSES.
Except as contemplated by this Agreement, all costs and expenses incurred in
connection with this Agreement and the consummation of the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses.
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SECTION 8.03 APPLICABLE LAW.
The law of the State of Delaware shall govern the rights and duties of the
parties to this Agreement.
SECTION 8.04 NOTICES.
All notices and other communications under this Agreement shall be in
writing and shall be deemed to have been duly given or made as follows:
(a) if sent by registered or certified mail in the United States, return
receipt requested, upon receipt;
(b) if sent by reputable overnight air courier (such as DHL or Federal
Express), two business days after being sent;
(c) if sent by facsimile transmission, with a copy mailed on the same day in
the manner provided in clauses (a) or (b) above, when transmitted and receipt is
confirmed by telephone; or
(d) if otherwise actually personally delivered, when delivered.
All notices and other communications under this Agreement shall be sent or
delivered as follows:
If to the Company, to:
Boise Cascade Office Products Corporation
800 West Bryn Mawr Avenue
Ithaca, Illinois 60143
Telephone:(630) 773-5000
Fax: (630) 773-7107
Attention: Christopher Milliken
with a copy to:
James G. Connelly III
104 Wilmette Road, Suite 500
Deerfield, IL 60015
Telephone: (847) 317-4986
and also to:
Shapiro, Forman & Allen LLP
380 Madison Avenue
New York, NY 10017
Telephone: (212) 972-4900
Fax: (212) 557-1275
Attention: Stuart L. Shapiro and Robert W. Forman
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If to Parent or the Purchaser, to:
Boise Cascade Corporation
1111 West Jefferson Street
Boise, Idaho 83728
Telephone: (208) 384-7704
Fax: (208) 384-4912
Attention: John W. Holleran
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street, 31st Floor
Boston, MA 02108-3194
Telephone: (617) 573-4800
Facsimile: (617) 573-4822
Attention: Margaret A. Brown, Esq.
Each party may change its address by written notice in accordance with this
Section.
SECTION 8.05 ENTIRE AGREEMENT.
This Agreement (including the documents and instruments referred to in this
Agreement) contains the entire understanding of the parties with respect to the
subject matter contained in this Agreement, and supersedes and cancels all prior
agreements, negotiations, correspondence, undertakings and communications of the
parties, oral or written, respecting such subject matter.
SECTION 8.06 ASSIGNMENT.
Neither this Agreement nor any of the rights, interests or obligations under
this Agreement shall be assigned by any of the parties (whether by operation of
law or otherwise) without the prior written consent of the other parties;
provided, however, that Parent or the Purchaser may assign this Agreement to any
subsidiary of Parent or the Purchaser. No such assignment shall relieve Parent
or the Purchaser of its obligations under this Agreement. Subject to the first
sentence of this Section 8.06, this Agreement will be binding upon, inure to the
benefit of and be enforceable by, the parties and their respective successors
and assigns.
SECTION 8.07 HEADINGS; REFERENCES.
The article, section and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. All references herein to "Articles" or
"Sections" shall be deemed to be references to Articles or Sections of this
Agreement unless otherwise indicated.
SECTION 8.08 COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which shall be considered one and
the same agreement.
SECTION 8.09 NO THIRD PARTY BENEFICIARIES.
Except as provided in Section 5.05, nothing in this Agreement, express or
implied, is intended to confer upon any person or entity not a party to this
Agreement any rights or remedies under or by reason of this Agreement.
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SECTION 8.10 SEVERABILITY; ENFORCEMENT.
Any term or provision of this Agreement that is invalid or unenforceable in
any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provisions shall be interpreted to be only so broad as is
enforceable.
SECTION 8.11 CERTAIN DEFINITIONS.
As used in this Agreement, the following terms shall have the meanings set
forth in this section:
"Knowledge" - a person shall be deemed to have "Knowledge" of a particular
fact or matter if he is actually aware of such fact or matter.
"Material Adverse Effect" means an effect on the business, assets,
liabilities, results of operations or financial condition of the Company that
has resulted in or is reasonably likely to result in, a reduction from 1999
levels in Company revenues of 12% or in Company earnings before interest and
taxes of 15%.
"Subsidiary" means any corporation, joint venture, partnership, limited
liability company or other entity of which the Company, directly or indirectly,
owns or controls capital stock (or other equity interests) representing more
than fifty percent of the general voting power under ordinary circumstances of
such entity.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
BOISE CASCADE CORPORATION
By: /s/ George J. Harad
- ----------------------------------------------
Title: Chief Executive Officer
- --------------------------------------------
BOISE ACQUISITION CORPORATION
By: /s/ Karen E. Gowland
- ----------------------------------------------
Title: Vice President and Secretary
- --------------------------------------------
BOISE CASCADE OFFICE PRODUCTS CORPORATION
By: /s/ A. James Balkins
- ----------------------------------------------
Title: Sr. Vice President, Chief Financial Officer and Treasurer
- ---------------------------------------------------
B-18
ANNEX A
CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provisions of the Offer, and in addition to
(and not in limitation of) the Purchaser's rights to extend and amend the
Offer at any time in its sole discretion (subject to the provisions of the
Agreement), the Purchaser shall not be required to accept for payment or,
subject to any applicable rules and regulations of the SEC, including Rule
14e-1(c) under the Exchange Act (relating to the Purchaser's obligations to
pay for or return tendered Shares promptly after termination or withdrawal of
the Offer), pay for, and may delay the acceptance for payment of or, subject
to the restriction referred to above, the payment for, any tendered Shares,
and may terminate or amend the Offer as to any Shares not then paid for, if:
(a) the Minimum Condition has not been satisfied, or
(b) at any time on or after the date of the Agreement and before the
Expiration Date, any of the following events shall occur:
(i) there shall be threatened or pending any suit, action or proceeding
by any Governmental Entity which:
(A) seeks to prohibit or impose any material limitations on Parent's
or the Purchaser's ownership or operation (or that of any of their
respective subsidiaries or affiliates) of all or a material portion of
the Company's businesses or assets, or to compel Parent or the Purchaser
or their respective subsidiaries and affiliates to dispose of or hold
separate any material portion of the business or assets of the Company or
Parent and their respective subsidiaries in each case taken as a whole;
(B) challenges the acquisition by Parent or the Purchaser of any
Shares under the Offer, seeks to restrain or prohibit the making or
consummation of the offer or the Merger or the performance of any of the
other transactions contemplated by this Agreement, or seeks to obtain
from the Company, Parent or the Purchaser any damages that are material
in relation to the Company and the Subsidiaries taken as a whole;
(C) seeks to impose material limitations on the ability of the
Purchaser, or render the Purchaser unable, to accept for payment, pay for
or purchase some or all of the Shares pursuant to the Offer and the
Merger;
(D) seeks to impose material limitations on the ability of the
Purchaser or Parent effectively to exercise full rights of ownership of
the Shares, including, without limitation, the right to vote Shares
purchased by it on all matters properly presented to the Company's
shareholders; or
(E) otherwise is reasonably likely to have a material adverse affect
on the consolidated financial condition, businesses or results of
operations of the Company and the Subsidiaries, taken as a whole; or
(ii) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to
the Offer or the Merger, or any other action shall be taken by any
Governmental Entity, that is reasonably likely to result, directly or
indirectly, in any of the consequences referred to in clauses (A) through
(E) of paragraph (i) above; or
(iii) there shall have occurred:
(A) any general suspension of trading in, or limitation on prices for,
securities on the New York Stock Exchange or in the NASDAQ National
Market System, for a period in excess
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of ten consecutive trading hours (excluding suspensions or limitations
resulting solely from physical damage or interference with such exchanges
not related to market conditions);
(B) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States (whether or not
mandatory);
(C) a commencement of a war, or other international or national
calamity directly involving the United States;
(D) any limitation (whether or not mandatory) by any United States or
foreign governmental authority on the extension of credit by banks or
other financial institutions;
(E) a change in general financial bank or capital market conditions
which materially or adversely affects the ability of financial
institutions in the United States to extend credit or syndicate loans; or
(F) in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof;
or
(iv) there shall have occurred an event or events which in the aggregate
have resulted in or are reasonably likely to result in, a reduction from
1999 levels in Company revenues of 12% or in Company earnings before
interest and taxes of 15%, excluding any reduction attributable to any
action of the Company which is approved in writing by the Board of Directors
of the Company or an officer of Parent.
(v) the Company Board of Directors or any committee thereof shall have:
(A) withdrawn, modified or changed in a manner adverse to Parent or
the Purchaser its approval or recommendation of the Offer, this Agreement
or the Merger;
(B) recommended the approval or acceptance of an Acquisition Proposal
from, or similar business combination with, a person or entity other than
Parent, the Purchaser or their affiliates; or
(C) executed an agreement in principle or definitive agreement
relating to an Acquisition Proposal from, or similar business combination
with, a person or entity other than Parent, the Purchaser or their
affiliates; or
(vi) any of the representations and warranties of the Company set forth
in this Agreement that are qualified as to materiality shall not be true and
correct and any such representations and warranties that are not so
qualified shall not be true and correct in any material respect, in each
case as of the date of this Agreement and as of the scheduled expiration of
the Offer; provided, however, that if the failure of a representation or
warranty to be true and correct was caused by any affirmative action by
Parent or any agent or employee of Parent, Parent may not rely upon such
failure as a basis for not proceeding in any manner with the Offer; or
(vii) the Company shall have failed to perform in any material respect
any material obligation or to comply in any material respect with any
material agreement or covenant of the Company to be performed or complied
with by it under this Agreement; provided, however, that if the failure to
perform or comply was caused by any affirmative action by Parent, Parent may
not rely upon such failure as a basis for not proceeding in any manner with
the Offer; or
(viii) all governmental consents necessary to the consummation of the
Offer or the Merger, whether federal, state or local shall not have been
obtained, other than consents the failure to obtain which would not have a
material adverse effect on the Company and the Subsidiaries, taken as a
whole; or
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(ix) this Agreement shall have been terminated in accordance with its
terms;
which in the judgment of Parent, reasonably exercised, in any such case, and
regardless of the circumstances giving rise to such condition, makes it
inadvisable to proceed with the Offer and/or with the acceptance for payment
of or payment for Shares.
Except for the Minimum Condition, the foregoing conditions are for the sole
benefit of Parent and the Purchaser, may be waived by Parent or the Purchaser,
in whole or in part, at any time and from time to time in the sole discretion of
Parent or the Purchaser. The failure by Parent or the Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be asserted
any time and from time to time.
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EXHIBIT C
EXCERPT FROM THE GENERAL CORPORATION LAW OF THE STATE OF
DELAWARE RELATING TO THE RIGHTS OF DISSENTING
STOCKHOLDERS
262. APPRAISAL RIGHTS.
(a) Any stockholder of a corporation of this State who holds shares of stock
on the date of the making of a demand pursuant to subsection (d) of this section
with respect to such shares, who continuously holds such shares through the
effective date of the merger or consolidation, who has otherwise complied with
subsection (d) of this section and who has neither voted in favor of the merger
or consolidation nor consented thereto in writing pursuant to Section 228 of
this title shall be entitled to an appraisal by the Court of Chancery of the
fair value of the stockholder's shares of stock under the circumstances
described in subsections (b) and (c) of this section. As used in this section,
the word "stockholder" means a holder of record of stock in a stock corporation
and also a member of record of a nonstock corporation; the words "stock" and
"share" mean and include what is ordinarily meant by those words and also
membership or membership interest of a member of a nonstock corporation; and the
words "depository receipt" mean a receipt or other instrument issued by a
depository representing an interest in one or more shares, or fractions thereof,
solely of stock of a corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for shares of any class or series of
stock of a constituent corporation in a merger or consolidation to be effected
pursuant to Section 251 (other than a merger effected pursuant to
Section 251(g) of this title), Section 252, Section 254, Section 257,
Section 258, Section 263 or Section 264 of this title:
(1) Provided, however, that no appraisal rights under this section shall
be available for the shares of any class or series of stock, which stock, or
depository receipts in respect thereof, at the record date fixed to
determine the stockholders entitled to receive notice of and to vote at the
meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no appraisal
rights shall be available for any shares of stock of the constituent
corporation surviving a merger if the merger did not require for its
approval the vote of the stockholders of the surviving corporation as
provided in subsection (f) of Section 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required by
the terms of an agreement of merger or consolidation pursuant to Sections
251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock
anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock (or depository receipts in
respect thereof) or depository receipts at the effective date of the
merger or consolidation will be either listed on a national securities
exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities
Dealers, Inc. or held of record by more than 2,000 holders;
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c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or
d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this paragraph.
(3) In the event all of the stock of the subsidiary Delaware corporation
party to a merger effected under Section 253 of this title is not owned by
the parent corporation immediately prior to the merger, appraisal rights
shall be available for the shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections
(d) and (e) of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights are
provided under this section is to be submitted for approval at a meeting of
stockholders, the corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record date for
such meeting with respect to shares for which appraisal rights are available
pursuant to subsections (b) or (c) hereof that appraisal rights are
available for any or all of the shares of the constituent corporations, and
shall include in such notice a copy of this section. Each stockholder
electing to demand the appraisal of such stockholder's shares shall deliver
to the corporation, before the taking of the vote on the merger or
consolidation, a written demand for appraisal of such stockholder's shares.
Such demand will be sufficient if it reasonably informs the corporation of
the identity of the stockholder and that the stockholder intends thereby to
demand the appraisal of such stockholder's shares. A proxy or vote against
the merger or consolidation shall not constitute such a demand. A
stockholder electing to take such action must do so by a separate written
demand as herein provided. Within 10 days after the effective date of such
merger or consolidation, the surviving or resulting corporation shall notify
each stockholder of each constituent corporation who has complied with this
subsection and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become
effective; or
(2) If the merger or consolidation was approved pursuant to Section 228
or Section 253 of this title, each constituent corporation, either before
the effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of stock
of such constituent corporation who are entitled to appraisal rights of the
approval of the merger or consolidation and that appraisal rights are
available for any or all shares of such class or series of stock of such
constituent corporation, and shall include in such notice a copy of this
section; provided that, if the notice is given on or after the effective
date of the merger or consolidation, such notice shall be given by the
surviving or resulting corporation to all such holders of any class or
series of stock of a constituent corporation that are entitled to appraisal
rights. Such notice may, and, if given on or after the effective date of the
merger or consolidation, shall, also notify such stockholders of the
effective date of the merger or consolidation. Any stockholder entitled to
appraisal rights may, within 20 days after the date of mailing of such
notice, demand in writing from the surviving or resulting corporation the
appraisal of such holder's shares. Such demand will be sufficient if it
reasonably informs the corporation of the identity of the stockholder and
that the stockholder intends thereby to demand the appraisal of such
holder's shares. If such notice did not
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notify stockholders of the effective date of the merger or consolidation,
either (i) each such constituent corporation shall send a second notice
before the effective date of the merger or consolidation notifying each of
the holders of any class or series of stock of such constituent corporation
that are entitled to appraisal rights of the effective date of the merger or
consolidation or (ii) the surviving or resulting corporation shall send such
a second notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice need only be
sent to each stockholder who is entitled to receive appraisal rights and who
has demanded appraisal of such holder's shares in accordance with this
subsection. An affidavit of the secretary or assistant secretary or of the
transfer agent of the corporation that is required to give either notice
that such notice has been given shall, in the absence of fraud, be prima
facie evidence of facts stated therein. For purposes of determining the
stockholders entitled to receive either notice, each constituent corporation
may fix, in advance, a record date that shall be not more than 10 days prior
to the date the notice is given, provided, that if the notice is given on or
after the effective date of the merger or consolidation, the record date
shall be such effective date. If no record date is fixed and the notice is
given prior to the effective date, the record date shall be the close of
business on the day next preceding the day on which the notice is given.
(e) Within 120 days after the effective date of the merger or consolidation,
the surviving or resulting corporation or any stockholder who has complied with
subsections (a) and (d) hereof and who is otherwise entitled to appraisal
rights, may file a petition with the Court of Chancery demanding a determination
of the value of the stock of all such stockholders. Notwithstanding the
foregoing, at any time within 60 days after the effective date of the merger or
consolidation, any stockholder shall have the right to withdraw such
stockholder's demand for appraisal and to accept the terms offered upon the
merger or consolidation. Within 120 days after the effective date of the merger
or consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of shares not voted
in favor of the merger or consolidation and with respect to which demands for
appraisal have been received and the aggregate number of holders of such shares.
Such written statement shall be mailed to the stockholder within 10 days after
such stockholder's written request for such a statement is received by the
surviving or resulting corporation or within 10 days after expiration of the
period for delivery of demands for appraisal under subsection (d) hereof,
whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of a copy
thereof shall be made upon the surviving or resulting corporation, which shall
within 20 days after such service file in the office of the Register in Chancery
in which the petition was filed a duly verified list containing the names and
addresses of all stockholders who have demanded payment for their shares and
with whom agreements as to the value of their shares have not been reached by
the surviving or resulting corporation. If the petition shall be filed by the
surviving or resulting corporation, the petition shall be accompanied by such a
duly verified list. The Register in Chancery, if so ordered by the Court, shall
give notice of the time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting corporation and to
the stockholders shown on the list at the addresses therein stated. Such notice
shall also be given by 1 or more publications at least 1 week before the day of
the hearing, in a newspaper of general circulation published by the City of
Wilmington, Delaware or such publication as the Court deems advisable. The forms
of the notices by mail and by publication shall be approved by the Court, and
the costs thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who sold stock represented by certificates to
submit their certificates of stock to the Register of Chancery for notation
thereon of the
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pendency of the appraisal proceedings; and if any stockholder fails to comply
with such direction, the Court may dismiss the proceedings as to such
stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have had to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the stockholder entitled to an appraisal. Any
stockholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has submitted
such stockholder's certificates of stock to the Register in Chancery, if such is
required, may participate fully in all proceedings until it is finally
determined that such stockholder is not entitled to appraisal rights under this
section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court
may direct. Payment shall be so made to each such stockholder, in the case of
holders of uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded appraisal rights as provided in subsection (d) of
this section shall be entitled to vote such stock for any purpose or to receive
payment of dividends or other distributions on the stock (except dividends or
other distributions payable to stockholders of record at a date which is prior
to the effective date of the merger or consolidation); provided, however, that
if no petition for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder shall deliver to the
surviving or resulting corporation a written withdrawal of such stockholder's
demand for an appraisal and an acceptance of the merger or consolidation, either
within 60 days after the effective date of the merger or consolidation as
provided in subsection (e) of this section or thereafter with the written
approval of the corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court
of Chancery shall be dismissed as to any stockholder without the approval of the
Court, and such approval may be conditioned upon such terms as the Court deems
just.
(l) The shares of the surviving or resulting corporation to which the shares
of such objecting stockholders would have been converted had they assented to
the merger or consolidation shall have the status of authorized and unissued
shares of the surviving or resulting corporation.
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