-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N4ORyD6QEN/vtDQxo8zB9o4Hwde9DRTXkAFdNffmqrzL4FNR1MfeGXbYxCvxzD0w DwMWkfpiCwTEXnJ0kTa8YQ== 0000950168-95-001077.txt : 19951201 0000950168-95-001077.hdr.sgml : 19951201 ACCESSION NUMBER: 0000950168-95-001077 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19951129 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: COMMUNICATION CABLE INC CENTRAL INDEX KEY: 0000789869 STANDARD INDUSTRIAL CLASSIFICATION: DRAWING AND INSULATING NONFERROUS WIRE [3357] IRS NUMBER: 561433144 STATE OF INCORPORATION: NC FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-37940 FILM NUMBER: 95597088 BUSINESS ADDRESS: STREET 1: 1378 CHARLESTON DR STREET 2: PO BOX 1757 CITY: SANFORD STATE: NC ZIP: 27331 BUSINESS PHONE: 9197757775 MAIL ADDRESS: STREET 1: 1378 CHARLESTON DRIVE STREET 2: PO BOX 1757 CITY: SANFORD STATE: NC ZIP: 27331 FORMER COMPANY: FORMER CONFORMED NAME: FWF COMMUNICATION CABLE INC DATE OF NAME CHANGE: 19860402 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: KUHLMAN CORP CENTRAL INDEX KEY: 0000056955 STANDARD INDUSTRIAL CLASSIFICATION: POWER, DISTRIBUTION & SPECIALTY TRANSFORMERS [3612] IRS NUMBER: 582058047 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 1 SKIDAWAY VILLAGE WALK STREET 2: STE 201 CITY: SAVANNAH STATE: GA ZIP: 31411 BUSINESS PHONE: 9125987809 MAIL ADDRESS: STREET 1: 1 SKIDAWAY VILLAGE WALK STREET 2: SUITE 201 CITY: SAVANNAH STATE: GA ZIP: 31411 FORMER COMPANY: FORMER CONFORMED NAME: KUHLMAN ELECTRIC CO DATE OF NAME CHANGE: 19670522 SC 13D 1 KUHLMAN ACQUISITION CORP. SCHEDULE 13D #40954.1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 COMMUNICATION CABLE, INC. (Name of Issuer) Common Stock, Par Value $1.00 Per Share (Title of Class of Securities) 203378 10 4 (CUSIP Number) ROBERT S. JEPSON, JR. CHAIRMAN AND CHIEF EXECUTIVE OFFICER KUHLMAN ACQUISITION CORP. KUHLMAN CORPORATION 3 SKIDAWAY VILLAGE SQUARE SAVANNAH, GEORGIA 31411 TELEPHONE: (912) 598-7809 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) WITH COPIES TO: RICHARD A. WALKER, ESQ. PATRICK DAUGHERTY, ESQ. GENERAL COUNSEL JANET L. FORT, ESQ. KUHLMAN CORPORATION PARKER, POE, ADAMS & BERNSTEIN L.L.P. 3 SKIDAWAY VILLAGE SQUARE 2500 CHARLOTTE PLAZA SAVANNAH, GEORGIA 31411 CHARLOTTE, NORTH CAROLINA 28244 TELEPHONE: (912) 598-7809 TELEPHONE: (704) 335-9060
NOVEMBER 20, 1995 (Date of event which requires filing of this statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box . Check the following box if a fee is being paid with this statement . Page 1 of 10 Pages. CUSIP NO. 203378 10 4 13D
1 Names of Reporting Persons/S.S. or I.R.S. Identification Nos. of Above Persons: KUHLMAN ACQUISITION CORP. 58-2132248 2 Check the Appropriate Box if a Member of a Group (a) [x] (b) [ ] 3 SEC Use Only 4 Source of Funds: AF, BK 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e) 6 Citizenship or Place of Organization: NORTH CAROLINA
Number of Shares Benefically Owned By Each Reporting Person With 7 Sole Voting Power: Number of Shares 315,703 Benefically Owned By Each Reporting Person With 8 Shared Voting Power: 0 9 Sole Dispositive Power: 315,703 10 Shared Dispositive Power: 0
11 Aggregate Amount Beneficially Owned by Each Reporting Person: 315,703 SHARES, INCLUDING 315,603 SHARES PURSUANT TO A STOCK OPTION AGREEMENT 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares 13 Percent of Class Represented by Amount in Row (11): 12.0% OF ALL SHARES ASSUMED TO BE OUTSTANDING (11.2% ASSUMING EXERCISE OF ALL EXERCISABLE OPTIONS ASSUMED TO BE OUTSTANDING) 14 Type of Reporting Person: CO
2 CUSIP NO. 203378 10 4 13D
1 Names of Reporting Persons/S.S. or I.R.S. Identification Nos. of Above Persons: KUHLMAN CORPORATION 58-2058047 2 Check the Appropriate Box if a Member of a Group (a) [x] (b) [ ] 3 SEC Use Only 4 Source of Funds: WC, BK 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e) 6 Citizenship or Place of Organization: DELAWARE
Number of Shares Beneficially Owned By Each Reporting Person With 7 Sole Voting Power: Number of Shares 315,703 Beneficially Owned By Each Reporting Person With 8 Shared Voting Power: 0 9 Sole Dispositive Power: 315,703 10 Shared Dispositive Power: 0
11 Aggregate Amount Beneficially Owned by Each Reporting Person: 315,703 SHARES, INCLUDING 315,603 SHARES PURSUANT TO A STOCK OPTION AGREEMENT 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares 13 Percent of Class Represented by Amount in Row (11): 12.0% OF ALL SHARES ASSUMED TO BE OUTSTANDING (11.2% ASSUMING EXERCISE OF ALL EXERCISABLE OPTIONS ASSUMED TO BE OUTSTANDING) 14 Type of Reporting Person: CO
3 ITEM 1. SECURITY AND ISSUER. This Statement on Schedule 13D, dated November 29, 1995 (the "Statement"), filed by Kuhlman Corporation, a Delaware corporation ("Kuhlman"), and Kuhlman Acquisition Corp., a North Carolina corporation and a wholly-owned subsidiary of Kuhlman (the "Purchaser"), relates to shares (the "Shares") of common stock, par value $1.00 per share (the "Common Stock"), of Communication Cable, Inc., a North Carolina corporation (the "Company"), and is filed pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Act"). Kuhlman and the Purchaser are together referred to herein as the "Reporting Persons." The address of the principal executive offices of the Company is 1378 Charleston Drive, Sanford, North Carolina 27331. This Statement on Schedule 13D is being jointly filed by the Reporting Persons pursuant to a joint filing agreement filed herewith as Exhibit 1. ITEM 2. IDENTITY AND BACKGROUND. This Statement is being jointly filed by the Reporting Persons. The name, business address, present principal occupation or employment, the name, principal business and address of any corporation in which such employment is conducted and, as appropriate, the citizenship or state of organization of each Reporting Person and each person who is an executive officer or director of a Reporting Person are set forth on and incorporated by reference to Annexes A and B attached hereto. During the last five years, none of the Reporting Persons and, to the best knowledge of the Reporting Persons, none of the persons listed on Annexes A and B attached hereto, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or was a party to a civil proceeding of a judicial or administrative body of a competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. On November 20, 1995, the Purchaser and Kuhlman entered into a Stock Option Agreement (the "Stock Option Agreement") with James R. Fore, the Company's President and Chief Executive Officer (the "Selling Stockholder"). The Stock Option Agreement covers all Shares owned by the Selling Stockholder at any time until January 15, 1996, subject to extension in certain circumstances (the "Selling Stockholder's Shares"). At the date of the Stock Option Agreement, the Selling Stockholder represented and warranted to the Purchaser that he owned 268,128 Shares, as well as presently exercisable options to purchase an additional 47,475 Shares. The Selling Stockholder is obligated to exercise "in-the-money" options, subject to extension in certain circumstances, upon the written request of the Purchaser following an exercise of either of the Put Option or the Call Option referred to below. On the assumption that all of the Selling Stockholder's options are in-the-money, at the date of the Stock Option Agreement the Selling Stockholder's Shares consisted of 315,603 Shares. Pursuant to the Stock Option Agreement: (1) the Selling Stockholder has an option (the "Put Option") to sell all of the Selling Stockholder's Shares to the Purchaser at any time and from time to time until the close of business on January 15, 1996, subject to extension in certain circumstances, at a purchase price of $12.00 per share (the "Exercise Price"); and (2) the Purchaser has an option (the "Call Option") to purchase all of the Selling Stockholder's Shares from the Selling Stockholder at any time and from time to time after December 31, 1995 until the close of business on January 15, 1996, subject to extension in certain circumstances, at the Exercise Price. A copy of the Stock Option Agreement is filed herewith as Exhibit 2. On November 27, 1995, the Purchaser purchased 100 Shares in the open market at a price of $9.00 per Share. On November 29, 1995, the Purchaser commenced a tender offer (the "Offer") for any and all outstanding Shares upon the terms and subject to the conditions set forth in the Purchaser's Offer to Purchase dated November 29, 1995 (the "Offer to Purchase") and in the related Letter of Transmittal (the "Letter of Transmittal"). Copies of the Offer to Purchase and the Letter of Transmittal are filed herewith as Exhibits 3 and 4, respectively. The information contained under the caption "Source and Amount of Funds" at Section 13 of the Offer to Purchase is incorporated herein by reference. ITEM 4. PURPOSE OF TRANSACTION. The information contained under the captions "Effect of the Offer on Market for the Shares; Exchange Act Registration" at Section 7 of the Offer to Purchase, "Background of the Offer; Contacts with the Company" at Section 10 of the Offer to Purchase and "Purpose of the Offer" at Section 12 of the Offer to Purchase are incorporated herein by reference. 4 ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. The information contained in the introduction to the Offer to Purchase is incorporated herein by reference. Except as set forth therein or in this Statement, neither the Purchaser nor Kuhlman, nor, to the best of their knowledge, any of the natural persons named on Annexes A and B attached hereto, beneficially own any Shares or have effected any transactions in Shares during the past 60 days. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Inasmuch as the Stock Option Agreement is a contract that includes arrangements, understandings and relationships among the Purchaser, Kuhlman and the Selling Stockholder with respect to the Shares, the entire Stock Option Agreement is incorporated herein by reference. ITEM 7. MATERIALS TO BE FILED AS EXHIBITS. Exhibit 1 -- Joint Filing Agreement between Kuhlman Acquisition Corp. and Kuhlman Corporation Exhibit 2 -- Stock Option Agreement dated November 20, 1995 among Kulhman Acquisition Corp., Kuhlman Corporation and James R. Fore Exhibit 3 -- Offer to Purchase dated November 29, 1995 Exhibit 4 -- Letter of Transmittal 5 SIGNATURES After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in this statement is true, complete and correct. Date: November 29, 1995 KUHLMAN CORPORATION BY /S/ ROBERT S. JEPSON, JR. ROBERT S. JEPSON, JR. CHAIRMAN AND CHIEF EXECUTIVE OFFICER KUHLMAN ACQUISITION CORP. BY /S/ ROBERT S. JEPSON, JR. ROBERT S. JEPSON, JR. CHAIRMAN AND CHIEF EXECUTIVE OFFICER 6 Annex A DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER The names and titles of the directors and executive officers of the Purchaser and their principal occupations or employments during the last five years are set forth below. The address of each such director and executive officer is 3 Skidaway Village Square, Savannah, Georgia 31411. All directors and officers listed below are citizens of the United States.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND FIVE-YEAR NAME AND TITLE EMPLOYMENT HISTORY Robert S. Jepson, Jr. See description in Annex B. Chairman of the Board, Chief Executive Officer and Director Curtis G. Anderson See description in Annex B. President and Director Vernon J. Nagel See description in Annex B. Vice President and Treasurer Richard A. Walker See description in Annex B. Secretary Ward D. Richards Mr. Richards, who was elected as Assistant Assistant Secretary Secretary of the Purchaser on October 1, 1995, has served as Senior Corporate Attorney of Kuhlman since 1993. From August 1991 to August 1993, Mr. Richards served as Corporate Attorney for Kuhlman. Prior thereto, he was an associate in the law firm of Wyatt, Tarrant & Combs. Jeffrey R. Samuels Mr. Samuels, who was elected as Assistant Assistant Treasurer Treasurer of the Purchaser on October 1, 1995, has served as Director of Finance since May 1993. From April 1989 to May 1993, he was Controller of Burns Aerospace Corporation.
A-1 Annex B DIRECTORS AND EXECUTIVE OFFICERS OF KUHLMAN The names and titles of the directors and executive officers of Kuhlman and their principal occupations or employments during the last five years are set forth below. Except as otherwise indicated below, the address of each such director and executive officer is 3 Skidaway Village Square, Savannah, Georgia 31411. All directors and officers listed below are citizens of the United States.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND NAME AND TITLE FIVE-YEAR EMPLOYMENT HISTORY Robert S. Jepson, Jr. Mr. Jepson, who was elected President and Chief Executive Chairman of the Board, Chief Officer of Kuhlman on February 10, 1993, and Chairman of Executive Officer and Director the Board on June 9, 1993, founded and was Chairman and Chief Executive Officer of The Jepson Corporation from 1983 until its sale in 1989. The Jepson Corporation was a diversified manufacturing company listed on the New York Stock Exchange. Immediately preceding his election as President and Chief Executive Officer of Kuhlman, Mr. Jepson was, and is currently, Chairman and Chief Executive Officer of Jepson Associates, Inc., a private investment company. He currently serves as a director of The Washington Water Power Company and Savannah Foods & Industries, Inc. Curtis G. Anderson Mr. Anderson, who was elected President and Chief President, Chief Operating Officer and Director Operating Officer of Kuhlman on April 26, 1994, and director on September 8, 1993, founded and has been, since 1986, Chairman of Anderson Capital Corporation, a private investment company. Prior thereto, he spent 19 years in corporate and investment banking, including 14 years with Citibank and five years with The First National Bank of Chicago where he served as Executive Vice President, Head of Financial Products Department. Gary G. Dillon Mr. Dillon has served as Chairman of the Board, President Chairman, President and Chief Executive Officer and Chief Executive Officer of Schwitzer, Inc. since June of Schwitzer, Inc. and Director 1991, having served as President and Chief Executive Officer since April 1989. Prior thereto, he served as President and Chief Executive Officer of Household Manufacturing, Inc. Mr. Dillon currently serves as a director of Household International, Inc. Vernon J. Nagel Mr. Nagel joined Kuhlman on April 5, 1993 and was elected Executive Vice President of Finance, Vice President of Finance, Chief Financial Officer and Chief Financial Officer and Treasurer Treasurer of Kuhlman on June 9, 1993 and Executive Vice President of Finance on February 22, 1994. He was the Vice President of Finance, Chief Financial Officer and Secretary of Stericycle, Inc. (medical waste management) from January 1990 until March 1993. Prior thereto, he served as a Vice President of The Jepson Corporation from 1985 until 1990, including Chief Financial Officer from 1989 until 1990 and Controller from 1986 until 1989.
B-1
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND NAME AND TITLE FIVE-YEAR EMPLOYMENT HISTORY Richard A. Walker Mr. Walker has served as an Executive Vice President or Executive Vice President, Chief Administrative Officer, in a similar position with Kuhlman since 1991. General Counsel and Secretary From 1984 until April 1991, Mr. Walker served as Vice President, General Counsel and Secretary of Kuhlman. Prior thereto, he was a partner in the law firm of Harness, Dickey & Pierce. John Zvolensky, Jr. Mr. Zvolensky has served as President and Chief Executive President and Chief Executive Officer of Officer of Kuhlman Electric Corporation since July 31, Kuhlman Electric Corporation 1995. From July 1994 until joining Kuhlman Electric, he was General Manager and Chief Operating Officer of the Greater Cleveland Growth Association. From January 1992 to September 1993, he was President of WCI Cabinet Group, a division of White Consolidated Industries. From 1987 to 1991, Mr. Zvolensky was President and Chief Executive Officer of Emerson Quiet Cool. William E. Burch Mr. Burch has been a consultant from 1982 to the present Director and currently serves as a director of Atkinson Company. From 1984 to 1993, he was counsel to the law firm of Lukins & Annis in Spokane, Washington. From 1981 to 1984, he served as Vice Chairman of Fred S. James & Co. (insurance brokers). From 1975 to 1981, he served that company as President and Chief Executive Officer. Steve Cenko Mr. Cenko has been a consultant from 1985 to the present. Director From 1980 to 1985 he served as President of Lamb Systems Group (engineering, manufacturing and marketing of machine tools) and as a director and Executive Vice President of Lamb Technicon Corporation (holding company). Alexander W. Dreyfoos, Jr. Mr. Dreyfoos is currently serving as Chairman of the Director Board of Photo Electronics Corporation (broadcasting) and WPEC TV (Palm Beach, Florida) and has served continuously in those positions since 1963 and 1973, respectively. William M. Kearns, Jr. Mr. Kearns is currently President of W.M. Kearns & Co., Director Inc. (private investment company). He was associated with Lehman Brothers (investment banking) and its predecessor firms for more than 33 years. From 1992 to 1994 he was an Advisory Director of Lehman Brothers and from 1969 through 1992 he was a Managing Director of that firm. He also serves as a director of Selective Insurance Group, Inc. and Mountasia Entertainment International, Inc. Robert D. Kilpatrick Mr. Kilpatrick currently serves as a director of United Director Companies Financial Corporation. He retired as Chairman of the Board and Chief Executive Officer of CIGNA Corporation (insurance) in 1989 and 1988, respectively. He served in various executive positions with CIGNA prior thereto. John L. Marcellus, Jr. Mr. Marcellus currently serves as a director of Southern Director Financial Federal Savings Bank. He retired as Chairman, President and Chief Executive Officer of Oneida Ltd. (tableware manufacturing) in 1986.
B-2
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND NAME AND TITLE FIVE-YEAR EMPLOYMENT HISTORY George J. Michel, Jr. Mr. Michel has been a private investor and consultant and Director Chairman of Windstar International, Inc. (management consulting) from 1990 to the present. Prior to 1990, he was Chairman of Stanadyne, Inc. (diversified manufacturer of fabricated metal products) from 1985 to 1989 and Chief Executive Officer of the same corporation from 1988 to 1989. General H. Norman Schwarzkopf General Schwarzkopf currently serves as a director of Director Borg Warner Security Corporation and The Washington Water Power Company and is active as an author, lecturer and TV consultant. He retired in August 1991 as a Four-Star General in the U.S. Army after having served as Commander in Chief, United States Central Command, Department of Defense, and Commander of Operations Desert Shield and Desert Storm.
B-3 EX-99 2 EXHIBIT 1 Exhibit 1 JOINT FILING AGREEMENT This will confirm the agreement by and among all of the undersigned that the Schedule 13D filed on or about this date with respect to the beneficial ownership by the undersigned of shares of the common stock, par value $1.00 per share, of Communication Cable, Inc. is being filed on behalf of each of the undersigned. Date: November 29, 1995 KUHLMAN CORPORATION BY /S/ ROBERT S. JEPSON, JR. ROBERT S. JEPSON, JR. CHAIRMAN AND CHIEF EXECUTIVE OFFICER KUHLMAN ACQUISITION CORP. BY /S/ ROBERT S. JEPSON, JR. ROBERT S. JEPSON, JR. CHAIRMAN AND CHIEF EXECUTIVE OFFICER EX-10 3 EXHIBIT 2 Exhibit 2 STOCK OPTION AGREEMENT STOCK OPTION AGREEMENT dated November 20, 1995 ("Agreement") among Mr. James R. Fore, a resident of Sanford, North Carolina ("Stockholder"), Kuhlman Acquisition Corp., a North Carolina corporation ("Purchaser"), and Kuhlman Corporation, a Delaware corporation ("Kuhlman"). WHEREAS, Purchaser desires to purchase from Stockholder, and Stockholder desires to sell to Purchaser, all of the shares of common stock, par value $1.00 per share (the "Shares"), of Communication Cable, Inc., a North Carolina corporation (the "Company"), that Stockholder owns at any time from the date hereof until the close of business on January 15, 1996 (subject to extension as provided in Section 15 hereof) (collectively, the "Stockholder Shares"), including Shares acquired by Stockholder upon exercise of options to purchase Shares owned by Stockholder at any time during the term of this Agreement (the "Company Options"), all upon the terms and subject to the conditions hereof; NOW, THEREFORE, in consideration of $1,000 paid by Kuhlman to Stockholder, the sufficiency and receipt of which are hereby acknowledged, as well as the mutual covenants and agreements set forth herein, the parties hereto agree as follows: 1. PUT AND CALL OPTIONS; EXERCISE; ADJUSTMENTS (a) Subject to the terms and conditions hereof, Purchaser hereby grants to Stockholder an irrevocable option (the "Put Option") to sell the Stockholder Shares to Purchaser at a purchase price of $12.00 per Share (the "Purchase Price"). Subject to the terms and conditions hereof, the Put Option may be exercised by Stockholder at any time and from time to time from the date hereof until the close of business on January 15, 1996 (subject to extension as provided in Section 15 hereof). (b) Subject to the terms and conditions hereof, Stockholder hereby grants to Purchaser an irrevocable option (the "Call Option") to purchase the Stockholder Shares from Purchaser at the Purchase Price. Subject to the terms and conditions hereof, the Call Option may be exercised by Purchaser at any time and from time to time after December 31, 1995 and prior to the close of business on January 15, 1996 (subject to extension as provided in Section 15 hereof). (c) To exercise a Put Option, Stockholder shall send a written notice to Purchaser (the "Put Exercise Notice") specifying a date (not earlier than the third business day nor later than the fifth business day following the date such notice is given) for the closing of such sale and the number of Stockholder Shares to be sold on that date. To exercise a Call Option, Purchaser shall send a written notice to Stockholder (the "Call Exercise Notice") specifying a date (not earlier than the third business day nor later than the fifth business day following the date such notice is given) for the closing of such purchase and the number of Stockholder Shares to be purchased on that date. In the event of any change in the number of issued and outstanding Shares by reason of any stock dividend, stock split, split-up, recapitalization, merger or other change in the corporate or capital structure of the Company, the number of Stockholder Shares subject to this Agreement, the Put Option and the Call Option and the Purchase Price shall be appropriately adjusted. For purposes of this Agreement, the Put Option and the Call Option, the term "Stockholder Shares" shall include any distributions of securities, cash, property or other assets or rights in respect of Stockholder Shares distributed or issued by the Company on or after the date of this Agreement. (d) Upon the written request of Purchaser made at any time following an exercise of the Put Option or the Call Option, Stockholder agrees to exercise all of the Company Options that remain outstanding and exercisable or such lesser number of Company Options as the Purchaser shall have specified in its request, PROVIDED that Stockholder shall not be required to exercise any Company Options that are "out-of-the-money" for purposes of Rule 16b-6 under the Securities Exchange Act of 1934, as amended. 2. CLOSING The closing (the "Closing") of a purchase and sale pursuant to an exercise of the Put Option or Call Option shall take place on the date specified in the Put Exercise Notice or the Call Exercise Notice, as the case may be, at 10:00 A.M., local time, at the offices of Parker, Poe, Adams & Bernstein L.L.P., 2500 Charlotte Plaza, Charlotte, North Carolina, or at such other time and place as the parties hereto may agree (a "Closing Date"). On each Closing Date, Stockholder will deliver to Purchaser a certificate or certificates, duly endorsed (or accompanied by duly executed stock powers), representing the Stockholder Shares subject to the applicable Put Exercise Notice or Call Exercise Notice, including the Shares acquired by Stockholder upon exercise of all Company Options, free and clear of all Liens (as defined below). Any payment made by Purchaser to Stockholder pursuant to this Agreement shall be made by certified or official bank check or checks or, at Stockholder's request, by wire transfer of federal funds to a bank designated by Stockholder. In this Agreement, the term "Lien" means any lien, claim, charge, encumbrance, pledge, security interest or other restriction of any nature whatsoever on or with respect to Stockholder Shares; EXCLUDING, HOWEVER, (i) as regards Stockholder Shares (including Shares acquired by Stockholder upon exercise of Company Options), the general restriction on the transferability of such Shares by virtue of Stockholder's status as a director, officer and/or ten percent beneficial owner of the Company's outstanding Shares or by virtue of such Shares being "restricted securities" as defined in Rule 144 under the Securities Act of 1933, as amended, and (ii) as regards Company Options, any and all of the restrictions thereon stated in the existing Incentive Stock Option Plan of the Company. 3. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER Stockholder represents and warrants to Purchaser and Kuhlman that: (a) Authority. This Agreement is a valid and binding agreement of Stockholder enforceable against Stockholder in accordance with its terms. (b) Stockholder Shares and Company Options. Stockholder is the record and beneficial holder of, and has good and valid title to, 268,128 Shares, free and clear of all Liens. Stockholder is the record and beneficial holder of, and has good and valid title to, Company Options to purchase 2 47,475 Shares, all of which were issued to Stockholder pursuant to the Company's Incentive Stock Option Plan, and which are free and clear of all Liens and are exercisable. At each Closing, Stockholder will deliver to Purchaser good and valid title to the Stockholder Shares subject to the applicable Put Exercise Notice or Call Exercise Notice, including the Shares acquired by Stockholder upon exercise of all Company Options, free and clear of all Liens. Except for the Company Options, there are no options or other rights to acquire or dispose of, or other contracts (including proxies, voting trusts or voting agreements) relating to, any Stockholder Shares. 4. REPRESENTATIONS AND WARRANTIES OF PURCHASER AND KUHLMAN Purchaser and Kuhlman jointly and severally represent and warrant to Stockholder that the execution and delivery of this Agreement by them and the consummation by them of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Purchaser and Kuhlman and that this Agreement has been duly executed and delivered on behalf of Purchaser and Kuhlman and constitutes a valid and binding obligation of Purchaser and Kuhlman enforceable against Purchaser and Kuhlman in accordance with its terms. Purchaser represents and warrants to Stockholder that any and all Stockholder Shares acquired hereunder will be acquired by the Purchaser for purposes of investment and not with a view to or in connection with the distribution thereof within the meaning of Section 2(11) of the Securities Act of 1933, as amended. Purchaser has and shall have no participation in any such undertaking and no participation in the underwriting of any such undertaking. Each of Purchaser and Kuhlman represents that it has access to all information about the Company that the Company has filed with the Securities and Exchange Commission. 5. EXPENSES Subject to Section 12, each party hereto shall pay its own expenses incurred in connection with this Agreement. 6. COVENANTS Stockholder covenants and agrees during the Relevant Term not (i) to sell, transfer, pledge, assign, hypothecate or otherwise dispose of, or enter into any contract with respect to the sale, transfer, pledge, assignment, hypothecation or other disposition of, any Stockholder Shares or Company Options otherwise than pursuant to this Agreement, (ii) to grant any proxy with respect to any Stockholder Shares or Company Options, deposit any Stockholder Shares or Company Options into a voting trust or enter into a voting agreement with respect to any Stockholder Shares or Company Options otherwise than pursuant to this Agreement or (iii) to take any action that would make any representation or warranty of Stockholder herein untrue or incorrect. Stockholder further covenants and agrees during the Relevant Term: (iv) upon the receipt or exercise of any Company Option, to notify Purchaser immediately of such event; (v) upon the written request of Purchaser, to grant Purchaser or its designee(s) an irrevocable proxy to vote or otherwise exercise all shareholder rights pertaining to all Stockholder Shares as directed by Purchaser or such designee(s); and (vi) upon 3 the reasonable written or oral request of Purchaser, to assist Purchaser and Kuhlman in furtherance of the Acquisition (as defined below) in the manner and to the extent not inconsistent with Stockholder's duties to the Company and its other shareholders and in the manner and to the extent he may lawfully do so in his personal capacity as a shareholder of the Company. In this Agreement, "Relevant Term" means the period from the date hereof until the earliest to occur of (i) the acquisition by Purchaser of all of the Stockholder Shares pursuant to exercise of the Put Option or the Call Option, (ii) any other acquisition by Purchaser, Kuhlman or a Kuhlman Affiliate (as defined in Section 11) of all of the Stockholder Shares, (iii) the time at which the Put Option and the Call Option may no longer be exercised (taking into account any extension under Section 15) and the Closings pursuant to all due and timely exercises of the Put Option and the Call Option have been consummated as required (including pursuant to any extension provided under Section 15) or (iv) the close of business on April 20, 1996. 7. PERFORMANCE GUARANTEE Kuhlman and Purchaser represent and warrant to Stockholder that Kuhlman owns all of the issued and outstanding capital stock of Purchaser. Kuhlman hereby guarantees the faithful and timely performance of the obligations of Purchaser stated in this Agreement. 8. NOTICES All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given, if delivered in person, by overnight courier, by facsimile transmission, telexed or mailed by certified or registered mail, postage prepaid, return receipt requested, as follows (or at such other address for a party as shall be specified by like notice, provided that such a notice shall be effective only upon receipt thereof): If to Purchaser or Kuhlman: Kuhlman Corporation 3 Skidaway Village Square Savannah, Georgia 31411 Attention: Richard A. Walker, Esq. Fax: (912) 598-0737 With a copy (which shall not constitute notice) to: Parker, Poe, Adams & Bernstein L.L.P. 2500 Charlotte Plaza Charlotte, North Carolina 28244 Attention: Patrick Daugherty, Esq. Fax: (704) 334-4706 If to Stockholder: Mr. James R. Fore 1975 Wedgewood Drive 4 Golf East Sanford, North Carolina 27330 With a copy (which shall not constitute notice) to: Kennedy Covington Lobdell & Hickman, L.L.P. 100 North Tryon Street, Suite 4200 Charlotte, North Carolina 28202-4006 Attention: J. Norfleet Pruden III, Esq. Fax: (704) 331-7598 A notice shall be effective as of the date of such delivery, fax or mailing, as the case may be. 9. PARTIES IN INTEREST This Agreement shall inure to the benefit of and be binding upon the parties named herein and their respective successors and assigns. Nothing in this Agreement, express or implied, is intended to confer upon any person other than Purchaser, Stockholder or Kuhlman, or their successors or assigns, any rights or remedies under or by reason hereof. 10. ENTIRE AGREEMENT; AMENDMENTS This Agreement contains the entire agreement between Stockholder, on the one hand, and Purchaser or Kuhlman, on the other hand, with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, oral or written, with respect to such transactions. This Agreement may not be changed, amended or modified orally, but rather may be changed only by an agreement in writing signed by the party against whom any waiver, change, amendment, modification or discharge may be sought. 11. NO ASSIGNMENT This Agreement and the Put Option and Call Option granted hereunder shall in no way be subject to assignment by Stockholder, Purchaser or Kuhlman; PROVIDED, HOWEVER, that (a) Purchaser may assign any or all of its rights or duties hereunder to any person who is, at the time of the assignment, controlling, controlled by or under common control with Kuhlman or Purchaser (a "Kuhlman Affiliate") and (b) Kuhlman may assign its duties hereunder by operation of law in a merger, reorganization or other similar transaction to a successor which succeeds to substantially all of its business and assets. 12. INDEMNIFICATION Purchaser and Kuhlman, jointly and severally, agree to indemnify Stockholder and to hold 5 Stockholder harmless from and against any loss, liability, cost or expense (including reasonable attorneys' fees) incurred by Stockholder arising out of any claim by any person or entity (other than a party to this Agreement) resulting from the execution, delivery or performance of this Agreement, except that neither Purchaser nor Kuhlman shall have any such responsibility relative to any loss, liability, cost or expense that Stockholder may incur as a result of Stockholder's gross negligence or intentional misconduct or as a result of the compensation or benefits paid or made available to Stockholder following the termination of Stockholder's employment under the Employment Agreement of even date herewith among Stockholder, Purchaser and Kuhlman. 13. COUNTERPARTS This Agreement may be executed in any number of counterparts, each of which, when executed, shall be deemed to be an original, but all of which, taken together, shall constitute one and the same agreement. 14. GOVERNING LAW This Agreement shall be governed by and construed in accordance with the laws of the State of North Carolina. 15. EXTENSION IN CERTAIN EVENTS (a) In the event that, on January 15, 1996, neither the Put Option nor the Call Option has been exercised in full, and on such date the Put Option or the Call Option or both (as the case may be) may not be exercised by reason of any judicial or regulatory judgment, decree or order preventing or restraining such exercise (an "Exercise Prohibition"), then the time within which the Put Option or the Call Option or both (as the case may be) may be exercised hereunder shall be extended until the earlier of (i) the first date thereafter on which an Exercise Prohibition does not exist and has not existed for at least the three preceding consecutive business days (or such other time as Stockholder and Purchaser agree upon) or (ii) the close of business on April 15, 1996. (b) In the event that, on the date specified in a Put Exercise Notice or Call Exercise Notice for the Closing of the purchase and sale of Stockholder Shares thereunder, such Closing may not be consummated by reason of any judicial or regulatory judgment, decree or order preventing or restraining such Closing (a "Closing Prohibition"), then the time for such Closing shall be extended until the earlier of (i) the first date thereafter on which a Closing Prohibition does not exist and has not existed for at least the three preceding consecutive business days (or such other time as Stockholder and Purchaser agree upon) or (ii) the close of business on April 20, 1996. If a Closing Prohibition prevents consummation of any Closing until after the close of business on April 20, 1996, then neither party shall have any liability to the other for a failure to effect such Closing to the extent due to such Closing Prohibition, or any obligation to complete such Closing, provided the Closing Prohibition was not the result of the defaulting party's failure to comply in good faith with the terms of this Agreement. 6 (c) If an Exercise Prohibition or Closing Prohibition arises during the Relevant Term, then the parties hereto shall use their reasonable best efforts (subject, in the case of Stockholder, to his duties to the Company and its other shareholders) to remove the Exercise Prohibition or Closing Prohibition, as the case may be, as soon as practicable. 16. ACQUISITION As used in this Agreement, the term "Acquisition" means the first to occur of (i) the purchase by Kuhlman, Purchaser or a Kuhlman Affiliate of no less than that number of shares of capital stock of the Company as would then have voting power sufficient to elect a majority of the directors of the Company, (ii) the purchase by Kuhlman, Purchaser or a Kuhlman Affiliate of all or substantially all of the assets of the Company or (iii) a merger of the Company with or into Kuhlman, Purchaser or a Kuhlman Affiliate. 17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES All representations and warranties contained in this Agreement shall survive delivery of and payment for the Stockholder Shares. 7 IN WITNESS WHEREOF, Stockholder, Purchaser and Kuhlman have caused this Agreement to be duly executed and delivered on the day and year first written above. /s/ James R. Fore (L.S.) James R. Fore KUHLMAN ACQUISITION CORP. By: /s/ Curtis G. Anderson Name: Curtis G. Anderson Its: President KUHLMAN CORPORATION By: /s/ Curtis G. Anderson Name: Curtis G. Anderson Its: President and Chief Operating Officer 8 EX-20 4 EXHIBIT 3 Exhibit 3 OFFER TO PURCHASE FOR CASH ANY AND ALL OUTSTANDING SHARES OF COMMON STOCK OF COMMUNICATION CABLE, INC. AT $12.00 NET PER SHARE BY KUHLMAN ACQUISITION CORP. A WHOLLY-OWNED SUBSIDIARY OF KUHLMAN CORPORATION THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, JANUARY 22, 1996, UNLESS EXTENDED. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF SHARES THAT, WHEN ADDED TO THE SHARES BENEFICIALLY OWNED BY THE PURCHASER (INCLUDING THE SHARES SUBJECT TO THE STOCK OPTION AGREEMENT REFERRED TO HEREIN), CONSTITUTES AT LEAST 80% OF THE COMMON STOCK OUTSTANDING ON A FULLY DILUTED BASIS (THE "MINIMUM TENDER CONDITION") AND (2) THE PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE NORTH CAROLINA CONTROL SHARE ACQUISITION ACT HAS BEEN COMPLIED WITH OR IS INVALID OR OTHERWISE INAPPLICABLE TO THE OFFER AND THAT ALL SHARES THEN OWNED BY THE PURCHASER HAVE, AND ALL SHARES TENDERED FOR PURCHASE PURSUANT TO THE OFFER WILL HAVE, UPON PURCHASE BY THE PURCHASER, THE SAME VOTING RIGHTS AS ALL OTHER SHARES NOT CONSTITUTING "INTERESTED SHARES" WITHIN THE MEANING OF SUCH ACT (THE "VOTING RIGHTS CONDITION"). IMPORTANT Any holder of Shares desiring to tender all or any portion of such Shares should either (1) complete and sign the enclosed Letter of Transmittal or a facsimile copy thereof in accordance with the instructions in the Letter of Transmittal and mail or deliver it with such holder's stock certificates, and any other required documents to the Depositary (or tender such Shares pursuant to the procedure for book-entry transfer set forth in Section 3, if such means are available to such holder) or (2) request such holder's broker, dealer, bank or other nominee to effect the transaction for such holder. A holder whose Shares are registered in the name of a broker, dealer, bank or other nominee must contact such broker, dealer, bank or other nominee to tender such Shares. Any holder who desires to tender Shares and whose certificates for such Shares are not immediately available, or who cannot comply in a timely manner with the procedure for book-entry transfer of Shares, may tender such Shares by following the procedure for guaranteed delivery set forth in Section 3. Questions and requests for assistance or for additional copies of this Offer to Purchase and the Letter of Transmittal may be directed to the Information Agent. The Information Agent for the Offer is: GEORGESON & COMPANY INC. Wall Street Plaza New York, New York 10005 (212) 440-9800 (Call Collect) November 29, 1995 TO THE SHAREHOLDERS OF COMMUNICATION CABLE, INC.: Kuhlman Acquisition Corp., a North Carolina corporation (the "Purchaser") and a wholly-owned subsidiary of Kuhlman Corporation, a Delaware corporation ("Kuhlman"), hereby offers to purchase any and all outstanding shares (the "Shares") of common stock, par value $1.00 per share (the "Common Stock"), of Communication Cable, Inc., a North Carolina corporation (the "Company"), at $12.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which together constitute the "Offer"). The holders of Shares are referred to herein as "Shareholders" or "holders." Tendering Shareholders will not be obligated to pay brokerage commissions, fees or, except as otherwise provided in the Letter of Transmittal, transfer taxes with respect to the purchase of Shares by the Purchaser pursuant to the Offer. The Purchaser will pay all charges and expenses of Harris Trust Company of New York, as Depositary, and of Georgeson & Company Inc., as Information Agent, in connection with the Offer. The purpose of the Offer is to enable the Purchaser to acquire control of the Company. As soon as practicable following the purchase of Shares pursuant to the Offer, the Purchaser intends to seek the maximum representation obtainable on the Company's Board of Directors. Thereafter the Purchaser or the Company may seek to purchase, as and in the manner permitted by law, Shares not purchased pursuant to the Offer. It is possible that the Purchaser ultimately will acquire the entire equity interest in the Company, although the Purchaser has not yet determined whether or how to pursue that end other than by offering to purchase any and all Shares in the Offer. For a discussion of different scenarios in which the Company might become a party to a merger, see Section 12 of this Offer to Purchase. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF SHARES THAT, WHEN ADDED TO THE SHARES BENEFICIALLY OWNED BY THE PURCHASER (INCLUDING THE SHARES SUBJECT TO THE STOCK OPTION AGREEMENT REFERRED TO HEREIN), CONSTITUTES AT LEAST 80% OF THE COMMON STOCK OUTSTANDING ON A FULLY DILUTED BASIS (THE MINIMUM TENDER CONDITION) AND (2) THE PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE NORTH CAROLINA CONTROL SHARE ACQUISITION ACT HAS BEEN COMPLIED WITH OR IS INVALID OR OTHERWISE INAPPLICABLE TO THE OFFER AND THAT ALL SHARES THEN OWNED BY THE PURCHASER HAVE, AND ALL SHARES TENDERED FOR PURCHASE PURSUANT TO THE OFFER WILL HAVE, UPON PURCHASE BY THE PURCHASER, THE SAME VOTING RIGHTS AS ALL OTHER SHARES NOT CONSTITUTING "INTERESTED SHARES" WITHIN THE MEANING OF SUCH ACT (THE VOTING RIGHTS CONDITION). SEE SECTION 15. THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING OF THE COMPANY'S SHAREHOLDERS. ANY SUCH SOLICITATION BY KUHLMAN OR THE PURCHASER WILL BE MADE ONLY PURSUANT TO SEPARATE PROXY MATERIALS COMPLYING WITH THE REQUIREMENTS OF SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"). The Offer will expire at 12:00 midnight, New York City time, on Monday, January 22, 1996, unless extended. On November 20, 1995, the Purchaser and Kuhlman entered into a Stock Option Agreement (the "Stock Option Agreement") with James R. Fore, the Company's President and Chief Executive Officer, who is referred to herein as the "Selling Stockholder." The Stock Option Agreement covers all Shares owned by the Selling Stockholder at any time until January 15, 1996, subject to extension in certain circumstances (the "Selling Stockholder's Shares"). At the date of the Stock Option Agreement, the Selling Stockholder represented and warranted to the Purchaser that he owned 268,128 Shares, as well as presently exercisable options to purchase an additional 47,475 Shares. The Selling Stockholder is obligated to exercise "in-the-money" options, subject to extension in certain circumstances, upon the written request of the Purchaser following an exercise of either of the Put Option or the Call Option referred to below. On the assumption that all of the Selling Stockholder's options are in-the-money, at the date of the Stock Option Agreement the Selling Stockholder's Shares consisted of 315,603 Shares. Pursuant to the Stock Option Agreement: (1) the Selling Stockholder has an option (the "Put Option") to sell all of the Selling Stockholder's Shares to the Purchaser at any time and from time to time until the close of business on January 15, 1996, subject to extension in certain circumstances, at a purchase price of $12.00 per share (the "Exercise Price"); and (2) the Purchaser has an option (the "Call Option") to purchase all of the Selling Stockholder's Shares from the Selling Stockholder at any time and from time to time after December 31, 1995 until the close of business on January 15, 1996, subject to extension in certain circumstances, at the Exercise Price. See Section 11 for further information relating to the Stock Option Agreement, including the circumstances under which the terms of the Put Option and Call Option may be extended. According to the Company's Quarterly Report on Form 10-Q for its quarterly period ended July 31, 1995 (the "Company's 10-Q"), on July 31, 1995 there were issued and outstanding 2,574,005 Shares. According to the Company's Annual Report on Form 10-K for its fiscal year ended October 31, 1994 (the "Company's 1994 10-K"), on October 31, 1994 there were issued and outstanding options to purchase 240,567 Shares, all of which were then exercisable. Consequently, if the 2 Purchaser acquires 315,603 Shares pursuant to the Stock Option Agreement, then, including 100 Shares purchased by the Purchaser in the open market on November 27, 1995, the Purchaser will own approximately 12.0% of the 2,621,480 Shares assumed to be outstanding (without giving effect to the exercise of any of the options to purchase 193,092 other Shares assumed to be outstanding and exercisable) and 11.2% of the 2,814,572 Shares assumed to be outstanding (giving effect to the exercise of the options to purchase all 193,092 other Shares assumed to be outstanding and exercisable). Assuming that no Shares were issued after July 31, 1995 and that no options were granted or became exercisable after October 31, 1994, the Minimum Tender Condition would be satisfied if an aggregate of 1,935,955 Shares (other than the Shares subject to the Stock Option Agreement and the 100 Shares purchased by the Purchaser on November 27, 1995) were validly tendered by the Expiration Date and not withdrawn. The actual number of Shares that constitutes the Minimum Tender Condition will depend on the Company's capital accounts as they exist when the Offer is consummated. THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. 1. TERMS OF THE OFFER; NUMBER OF SHARES. Upon the terms and subject to the conditions of the Offer, the Purchaser will accept for payment and purchase any and all Shares that are validly tendered and not properly withdrawn on or prior to the Expiration Date (as hereinafter defined). The term "Expiration Date" shall mean 12:00 Midnight, New York City time, on Monday, January 22, 1996, unless the Purchaser, in its sole discretion, 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 on which the Offer, as so extended by the Purchaser, shall expire. The Purchaser expressly reserves the right, at any time or from time to time, to extend the period of time during which the Offer is open by giving oral or written notice of such extension to the Depositary. During any such extension, all Shares previously tendered and not accepted for payment or withdrawn will remain subject to the Offer and may be accepted for payment by the Purchaser. If the Purchaser decreases the percentage of Shares being sought or increases or decreases the consideration to be paid for Shares pursuant to the Offer, and if the Offer is scheduled to expire at any time before the expiration of a period of 10 business days from and including the date that notice of such increase or decrease is first published, sent or given in the manner specified below, then the Offer will be extended until the expiration of such period of 10 business days. If the Purchaser makes a material change in the terms of the Offer (other than a change in price or percentage of Shares sought) or in the information concerning the Offer, or waives a material condition of the Offer, then the Purchaser will extend the Offer, if required by applicable law, for a period sufficient to allow Shareholders to consider the amended terms of the Offer. For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or federal holiday and consists of the time period from 12:01 A.M. through 12:00 Midnight, New York City time. The Purchaser also reserves the right (i) upon the occurrence of any of the conditions specified in Section 15 (including, without limitation, the Minimum Tender Condition), to delay (except as otherwise required by applicable law) acceptance for payment of or payment for Shares, or to terminate the Offer and not accept for payment or pay for Shares, or (ii) at any time or from time to time to amend the Offer in any respect or to waive or modify the Minimum Tender Condition or any other condition of the Offer (subject, in any case, to any applicable requirement that the Offer be extended for a period sufficient to allow Shareholders to consider such amendment, waiver or modification). The reservation by the Purchaser of the right to delay acceptance for payment of or payment for Shares is subject to the provisions of applicable law which require that the Purchaser pay the consideration offered or return the Shares deposited as promptly as practicable after termination or withdrawal of the Offer. Any such extension, delay, termination or amendment will be followed as promptly as practicable by a public announcement thereof, such announcement in the case of an extension to be made no later than 9:00 A.M., New York City time, on the next business day after the previously scheduled Expiration Date. Without limiting the manner in which the Purchaser may choose to make any such public announcement, the Purchaser shall have no obligation (except as otherwise required by applicable law) to publish, advertise or otherwise communicate any such public announcement other than by making a release to the Dow Jones News Service. A request is being made to the Company for the use of its stockholder lists and security position listings for the purpose of disseminating the Offer to Shareholders. This Offer to Purchase and the related Letter of Transmittal will be mailed by the Purchaser to record holders of Shares on the date hereof and will be furnished to brokers, dealers, banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency's security position listing for subsequent transmittal to beneficial owners of Shares. 3 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and subject to the conditions of the Offer, the Purchaser will accept for payment, and will pay for Shares validly tendered and not properly withdrawn (including during any extension of the Offer, if the Offer is extended, subject to the terms of such extension), as soon as practicable after the later of (i) the Expiration Date and (ii) the satisfaction or waiver of the conditions set forth in Section 15. For purposes of the Offer, the Purchaser shall be deemed to have accepted for payment (and thereby purchased) tendered Shares if, as and when the Purchaser gives oral or written notice to the Depositary, as agent for tendering Shareholders, of its acceptance for payment of such Shares pursuant to the Offer. Payment for Shares purchased pursuant to the Offer will be made by deposit of the purchase price with the Depositary, which will then transmit payments to tendering Shareholders. Under no circumstances will interest on the purchase price for Shares be paid by the Purchaser, regardless of any delay in transmitting such payments. If the Purchaser increases the consideration to be paid for Shares pursuant to the Offer, then the Purchaser will pay such increased consideration for all Shares purchased pursuant to the Offer. If any tendered Shares are not purchased pursuant to the Offer for any reason, or if certificates are submitted for more Shares than are tendered, then certificates for such unpurchased Shares will be returned, without expense to the tendering Shareholder (or, in the case of Shares delivered by book-entry transfer within a Book-Entry Transfer Facility as described in Section 3 below, such Shares will be credited to an account maintained within such Book-Entry Transfer Facility), without expense to the tendering Shareholder, as promptly as practicable following the expiration or termination of the Offer. Delivery of documents to a Book-Entry Transfer Facility in accordance with Book-Entry Transfer Facility procedures does not constitute delivery to the Depositary. If the Purchaser extends the Offer, 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 the Purchaser's rights under this Offer to Purchase, the Depositary may, nevertheless, on behalf of the Purchaser and subject to Rule 14e-1 under the Exchange Act, retain tendered Shares, and such Shares may not be withdrawn, except to the extent tendering holders are entitled to, and duly exercise, withdrawal rights as described in Section 4. The Purchaser reserves the right to transfer or assign to one or more of its affiliates or direct or indirect subsidiaries the right to purchase Shares tendered pursuant to the Offer, but any such transfer or assignment by the Purchaser will not relieve it of its obligations under the Offer and will not prejudice the rights of tendering Shareholders to receive payment for Shares properly tendered and accepted for payment pursuant to the Offer. 3. PROCEDURE FOR ACCEPTING THE OFFER AND TENDERING SHARES. For a Shareholder validly to tender Shares pursuant to the Offer, a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantees and any other required documents must be received by the Depositary at one of its addresses set forth on the back cover page of this Offer to Purchase, and either the certificates for such Shares must be delivered to the Depositary or pursuant to the procedure for book-entry transfer set forth below (and a confirmation of receipt of such tendered Shares received by the Depositary), in each case prior to the Expiration Date, or else the Shareholder must comply with the guaranteed delivery procedure set forth below. Within two business days after the date of this Offer to Purchase, the Depositary will establish an account with respect to the Shares at The Depository Trust Company, the Midwest Securities Trust Company and the Philadelphia Depository Trust Company (individually, a "Book-Entry Transfer Facility," and, collectively, the "Book-Entry Transfer Facilities"). Any financial institution that is a participant in a Book-Entry Transfer Facility system may make book-entry delivery of Shares by causing a Book-Entry Transfer Facility to transfer such Shares into the Depositary's account in accordance with such Book-Entry Transfer Facility procedure for such transfer. Although delivery of Shares may be effected through book entry at such Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile thereof) with any required signature guarantees and any other required documents must, in any case, be received by the Depositary at one of its addresses set forth on the back cover page of this Offer to Purchase by the Expiration Date, or else the Shareholder must comply with the guaranteed delivery procedure set forth below. Except as otherwise provided below, all signatures on a Letter of Transmittal must be guaranteed by an eligible institution in a recognized Medallion Guarantee Program (an "Eligible Institution"). An Eligible Institution means a firm or any other entity identified in Rule 17Ad-15 under the Exchange Act, including (as such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal securities dealer, municipal securities broker, government securities dealer or government securities broker; (iii) a credit union; (iv) a national securities exchange, registered securities association or clearing agency; or (v) a savings association. A verification by a notary public is not acceptable. Signatures on a Letter of Transmittal need not be guaranteed if the Letter of Transmittal is signed by the registered holder(s) of the Share certificates submitted therewith and such holder(s) have not completed either the box entitled "Special Payment Instructions" or the box entitled "Special 4 Delivery Instructions" on the Letter of Transmittal. See Instruction 1 of the Letter of Transmittal. If the certificate(s) 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 unpurchased Shares are to be issued to a person other than the registered owner, then the certificate(s) must be endorsed or accompanied by appropriate powers of attorney, in either case signed exactly as the name(s) of the registered owner(s) appear(s) on the certificate(s), with the signature(s) on the certificate(s) or power(s) of attorney guaranteed as aforesaid. See Instruction 5 of the Letter of Transmittal. THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER. IF SENT BY MAIL, THE USE OF REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ORDER TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING AT A 31% RATE ON PAYMENTS MADE TO CERTAIN SHAREHOLDERS WITH RESPECT TO THE PURCHASE PRICE OF SHARES PURCHASED PURSUANT TO THE OFFER, EACH SUCH SHAREHOLDER MUST, UNLESS AN EXEMPTION APPLIES, PROVIDE THE DEPOSITARY WITH SUCH HOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND CERTIFY THAT SUCH HOLDER IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED WITH THE LETTER OF TRANSMITTAL. If a Shareholder desires to tender Shares pursuant to the Offer and such Shareholder's certificates for Shares are not immediately available or time will not permit such Shareholder to deliver such certificates and any other required documents to the Depositary prior to the Expiration Date, then such Shares may nevertheless be tendered provided that all of the following conditions are satisfied: (a) such tender is made by or through an Eligible Institution; (b) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Purchaser, is received by the Depositary (as provided below) by the Expiration Date; and (c) the certificates for such Shares in proper form for transfer (or confirmation of book-entry transfer of Shares into the Depositary's account at a Book-Entry Transfer Facility as described above), together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof) and any other documents required by the Letter of Transmittal, are received by the Depositary within three National Association of Securities Dealers, Inc. ("NASD") Automated Quotation ("NASDAQ") National Market System trading days after the date of execution of such Notice of Guaranteed Delivery. The Notice of Guaranteed Delivery may be delivered by hand, or may be transmitted by telegram, telex, facsimile transmission or mail, to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in such Notice. Payment for Shares purchased pursuant to the Offer will in all cases be made only after timely receipt by the Depositary of certificates therefor (or timely confirmation of a book-entry transfer of Shares into the Depositary's account at a Book-Entry Transfer Facility as described above), a properly completed and duly executed Letter of Transmittal (or facsimile thereof) and any other required documents. By executing a Letter of Transmittal as set forth above, a tendering Shareholder irrevocably appoints designees of the Purchaser as such Shareholder's 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 the Purchaser (and any and all other Shares and other securities issued or issuable in respect of such Shares on or after November 29, 1995 (the "Offer Commencement Date")), effective when the Purchaser accepts such Shares for payment. All such proxies shall be considered coupled with an interest in the tendered Shares. Such appointment is effective only upon the acceptance for payment of such Shares by the Purchaser. Accordingly, a tendering Shareholder will retain the voting rights (and other rights) associated with such holder's Shares upon tendering such Shares in response to this Offer and at all times thereafter unless and until such Shares are accepted for payment. Upon acceptance for payment, all prior proxies given by such Shareholder with respect to such purchased Shares and other securities will be, without further action, revoked, and no subsequent proxies may be given. Such designees will, with respect to such Shares or other securities, be empowered to exercise all voting and other rights of such Shareholder as they in their discretion may deem proper in respect of any annual, special or adjourned meeting of the Company's stockholders, or otherwise. All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Purchaser, whose determination shall be final and binding. The Purchaser reserves the absolute right to reject any or all tenders of Shares determined by it not to be in proper form or the acceptance for payment of or payment for which may, in the opinion of the Purchaser's counsel, be unlawful. The Purchaser 5 also reserves the absolute right to waive the Minimum Tender Condition or any other condition of the Offer or any defect or irregularity in any tender of Shares. The Purchaser, the Depositary and the Information Agent shall be under no duty to give notification of any defects or irregularities in tenders and shall incur no liability for failure to give any such notification. The Purchaser's acceptance for payment of Shares tendered pursuant to any one of the procedures set forth above will constitute a binding agreement between the tendering Shareholder and the Purchaser upon the terms and subject to the conditions of the Offer. 4. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. Thereafter, such tenders are irrevocable, except that Shares may be withdrawn after January 27, 1996 unless theretofore accepted for payment as provided in this Offer to Purchase. If the Purchaser extends the period of time during which the Offer is open, is delayed in accepting for payment or paying for Shares, or is unable to accept for payment or pay for Shares pursuant to the Offer for any reason, then, without prejudice to the Purchaser's rights under the Offer, the Depositary may, on behalf of the Purchaser, retain all Shares tendered, and such Shares may not be withdrawn except as otherwise provided in this Section 4. For a withdrawal to be effective, a written, telegraphic, telex or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover page of this Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder(s) of the certificates evidencing such Shares if different from that of the person tendering such Shares. If certificates for Shares to be withdrawn have been delivered to the Depositary, then, prior to the release of such certificates, the tendering Shareholder must also submit the serial numbers shown on the particular certificates evidencing such Shares and the signature on such holder's notice of withdrawal must be guaranteed by an Eligible Institution, unless the Shares to be withdrawn were tendered for the account of an Eligible Institution. If Shares have been delivered pursuant to the procedure for book-entry transfer as set forth in Section 3, then the notice of withdrawal must specify the name and number of the account at the applicable Book-Entry Transfer Facility to be credited with the withdrawn Shares. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Purchaser, in its sole discretion, whose determination shall be final and binding. Withdrawals may not be revoked, and any Shares properly withdrawn will be deemed not validly tendered for purposes of the Offer. Properly withdrawn Shares may be retendered, however, by following any of the procedures described in Section 3 at any subsequent time prior to the Expiration Date. 5. CERTAIN TAX CONSEQUENCES. The receipt by non-dissenting Shareholders of cash in exchange for Shares pursuant to the Offer will be treated as a taxable sale for federal income tax purposes and also may be a taxable transaction under applicable state, local, foreign and other tax laws. In general, for federal income tax purposes, such a holder will recognize gain or loss upon such sale equal to the difference between such holder's adjusted tax basis in the Shares sold in the Offer and the amount of cash to be received in exchange therefor. Gain or loss will be calculated separately for each block of Shares tendered and accepted for payment pursuant to the Offer. Such gain or loss generally will be capital gain or loss for federal income tax purposes if the Shares were capital assets in the hands of the Shareholder. Such capital gain or loss will be long-term capital gain or loss with respect to Shares held more than 12 months. The foregoing discussion may not apply to Shareholders who acquired their Shares pursuant to compensation arrangements with the Company or who are not citizens or residents of the United States or who are otherwise subject to special tax treatment under the Internal Revenue Code of 1986, as amended. In order to avoid backup withholding of federal income tax on the cash received upon the surrender of Shares pursuant to the Offer, a Shareholder must, unless an exemption applies, provide the Depositary with such holder's correct taxpayer identification number ("TIN") on Substitute Form W-9 included in the Letter of Transmittal and certify, under penalties of perjury, that such number is correct. If the correct TIN is not provided, then a $50 penalty may be imposed by the Internal Revenue Service and payments made in exchange for the surrendered Shares may be subject to backup withholding of 31%. Backup withholding is not an additional federal income tax. Rather, the federal income tax liability of persons subject to backup withholding will be reduced by the amount of such tax withheld. If backup withholding results in an overpayment of taxes, then a refund may be obtained from the Internal Revenue Service. THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY. DUE TO THE INDIVIDUAL NATURE OF TAX CONSEQUENCES, EACH SHAREHOLDER IS URGED TO CONSULT SUCH HOLDER'S OWN TAX ADVISOR AS TO THE SPECIFIC TAX 6 CONSEQUENCES TO SUCH HOLDER OF THE OFFER, INCLUDING THE EFFECTS OF APPLICABLE FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND OF CHANGES IN THE TAX LAWS. 6. MARKET FOR COMMON STOCK; DIVIDENDS. The Common Stock is traded on the NASDAQ National Market System under the symbol "CABL." The following table sets forth, for the periods indicated, the high and low closing sale prices per share of Common Stock, as reported by NASDAQ, according to the Company's Annual Reports on Form 10-K for the fiscal year ended October 31, 1994 (the "Company's 1994 10-K") and published financial sources.
HIGH LOW Fiscal Year Ended October 31, 1993: First Quarter...................................................................... $ 13 1/4 $ 7 Second Quarter..................................................................... 13 11 Third Quarter...................................................................... 17 1/2 10 Fourth Quarter..................................................................... 15 1/4 11 1/4 Fiscal Year Ended October 31, 1994: First Quarter...................................................................... $ 13 1/4 $ 10 1/4 Second Quarter..................................................................... 13 10 1/4 Third Quarter...................................................................... 14 1/4 8 Fourth Quarter..................................................................... 15 13 Fiscal Year Ended October 31, 1995: First Quarter...................................................................... $ 14 $ 7 1/2 Second Quarter..................................................................... 8 7 1/2 Third Quarter...................................................................... 11 7 Fourth Quarter..................................................................... 10 1/2 9 Fiscal Year Ended October 31, 1996: First Quarter (through November 28, 1995).......................................... $ 9 1/2 $ 8 1/2
On November 28, 1995, the last full day of trading prior to the Offer Commencement Date, the last sale price for the Common Stock, as reported by NASDAQ, was $9.00 per Share. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE COMMON STOCK. According to the Company's 1994 10-K and published financial sources, the Company has paid no cash dividends on its Common Stock. According to the Company, its outstanding options to purchase Shares were issued pursuant to an Incentive Stock Option Plan, a Directors Stock Option Plan and a 1995 Outside Directors Stock Option Plan (collectively, the "Option Plans"). The Option Plans impose severe restraints on the transferability of options outstanding under the Option Plans (the "Outstanding Options"). There is no trading market for the Outstanding Options. 7. EFFECT OF THE OFFER ON MARKET FOR THE SHARES; EXCHANGE ACT REGISTRATION. The purchase of Shares pursuant to the Offer will reduce the number of Shares that might otherwise trade publicly and may reduce the number of holders of Shares, which could adversely affect the liquidity and market value of the remaining Shares held by the public. According to the Company's 1994 10-K, on October 31, 1994 there were 2,494,839 Shares outstanding and approximately 1,300 record holders of Shares. Depending upon the number of Shares purchased pursuant to the Offer, the Common Stock may no longer meet the standards for continued inclusion in the NASDAQ National Market System. If trading volume were lower than such standards, then quotations might continue to be published in the "additional list" or in one of the "local lists," or such quotations might not be published at all. If the number of Shareholders fell below 300, then NASDAQ might cease to provide quotations, but quotations might still be available from other sources. The Purchaser cannot predict the extent of the public market for the Shares or the availability of quotations after the Offer, which will depend upon the number of holders of the Shares remaining at such time, the interest in maintaining any market in the Shares on the part of securities firms, whether or not the Shares are "margin securities"' for purposes of the margin regulations of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), possible termination of registration of the Common Stock under the Exchange Act, as described below, and other factors. The Shares are currently "margin securities" under the regulations of the Federal Reserve Board, which has the effect, among other things, of allowing brokers to extend credit on such Shares as collateral. Depending on factors similar to those described above, following the Offer the Shares might no longer constitute "margin securities" for the purposes of the Federal Reserve Board's margin regulations, in which case they could no longer be used as collateral for loans made by brokers. 7 The Common Stock is currently registered under the Exchange Act. Such registration may be terminated upon application of the Company to the Securities and Exchange Commission (the "Commission") if the outstanding Shares are neither listed on a national securities exchange nor held by 300 or more holders of record. The Purchaser and Kuhlman intend to seek to cause the Company to apply for termination of Exchange Act registration of the Common Stock as soon after consummation of the Offer as the requirements for termination are met and to take all permitted actions to make the Company eligible for such termination. Immediately upon the filing of an application to terminate registration of the Common Stock, the Company's obligations to file periodic reports with the Commission would be suspended. If registration of the Common Stock were terminated, then the Company no longer would be required to file such reports, and certain provisions of the Exchange Act, such as the short-swing profit recovery provisions of Section 16(b), the requirement of furnishing a proxy statement or information statement pursuant to Sections 14(a) and 14(c) in connection with shareholders' meetings or written consents and the related requirement of furnishing an annual report to shareholders, and the requirements of Rule 13e-3 under the Exchange Act with respect to "going private" transactions, no longer would apply to the Company. Furthermore, "affiliates" of the Company and persons holding "restricted securities" of the Company might be deprived of the ability to dispose of such securities pursuant to Rule 144 under the Securities Act of 1933, as amended. If registration of the Shares under the Exchange Act were terminated, then the Shares no longer would be "margin securities" or be eligible for NASDAQ reporting. 8. CERTAIN INFORMATION CONCERNING THE COMPANY. The Company is a North Carolina corporation with its principal executive offices located at 1378 Charleston Drive, Sanford, North Carolina 27331. Its telephone number at that address is (919) 775-7775. This paragraph contains certain information about the Company's business as derived from the Company's 1994 10-K. The Company engineers, designs and manufactures electronic wire and cable which are marketed to original equipment manufacturers and, through local distributors, to a variety of end users. The Company manufactures coaxial, multi-conductor and ribbon cable which are used for data, voice and video communications by the computer and data processing industries, the medical and industrial electronics industries, the U.S. Government and U.S. Government agencies and for satellite and other telecommunications applications. The Company is an approved cable source to a number of leading industrial companies which have performed extensive tests and procedures in evaluating the Company's products to qualify them for purchase. While most of the Company's product line conforms to standard specifications, the Company also emphasizes the production of re-engineered and modified standard cable and custom cable. The Company began significant production in 1986 and currently operates plants in Siler City, Hayesville and Sanford, North Carolina, and in Texarkana, Arkansas. Set forth below is certain selected financial information for the Company for the fiscal years ended October 31, 1992, 1993 and 1994 and the nine months ended July 31, 1994 and 1995, as derived from the Company's 1994 10-K and the Company's 10-Q. More comprehensive financial information is included in such reports and in the other documents filed by the Company with the Commission. The following summary is qualified in its entirety by reference to such reports and other documents and all of the financial information and related notes contained therein. Such reports and other documents may be examined and copies may be obtained from the offices of the Commission in the manner set forth below. 8 COMMUNICATION CABLE INC. SELECTED FINANCIAL INFORMATION (IN THOUSANDS, EXCEPT PER-SHARE DATA)
NINE MONTHS ENDED YEAR ENDED OCTOBER 31, JULY 31, 1992 1993 1994 1994 1995 (UNAUDITED) Income Statement Information: Net Sales............................................................ $40,559 $47,662 $52,376 $37,819 $41,459 Net Income........................................................... 1,033 1,737 1,521 1,411 1,120 Net Income Per Share................................................. .41 .68 .59 .53 .43
AT OCTOBER 31, AT JULY 31, 1992 1993 1994 1995 (UNAUDITED) Balance Sheet Information: Working Capital...................................................... $12,098 $13,362 $14,301 $15,811 Total Assets......................................................... 24,950 26,234 27,899 28,654 Long-Term Debt....................................................... 5,340 4,987 4,592 4,287 Stockholders' Equity................................................. 14,612 16,384 18,017 19,173
The Company is subject to the disclosure requirements of the Exchange Act and in accordance therewith files periodic reports, proxy statements and other information with the Commission relating to its business, financial condition and other matters. Such reports, proxy statements and other information may be inspected at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and should also be available for inspection and copying at the regional offices of the Commission in Chicago (Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661) and New York (Seven World Trade Center, 13th Floor, New York, New York 10048). Copies of such material can also be obtained from the Public Reference Section of the Commission in Washington, D.C. (450 Fifth Street, N.W., Washington, D.C. 20549), at prescribed rates. Except as otherwise set forth herein, the information concerning the Company contained in this Offer to Purchase has been taken from or is based upon reports and other documents on file with the Commission or otherwise publicly available. Although the Purchaser has no knowledge that would indicate that any statements contained herein based on such documents and records are untrue, it cannot take responsibility for the accuracy or completeness of the information contained in such reports and other documents or for any failure by the Company to disclose events that may have occurred or may affect the significance or accuracy of any such information but are unknown to the Purchaser. 9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND KUHLMAN. The Purchaser was incorporated in North Carolina on July 27, 1994 for the purpose of acquiring the Company and has not conducted any other business to date. All of the outstanding capital stock of the Purchaser is owned by Kuhlman, a Delaware corporation whose predecessor was founded in 1894. Kuhlman is a holding company with two core business segments, "Electrical Products" and "Industrial Products." In its Electrical Products segment it manufactures and markets products such as electrical and electronic wire and cable products, as well as distribution, power and instrument transformers. In its Industrial Products segment it manufactures and markets products such as turbochargers, engine cooling fans, fan drives and crankshaft vibration dampers used in enhancing the efficiency of diesel and gasoline engines, as well as spring products and metal stampings for automotive and non-automotive applications. The principal offices of the Purchaser and of Kuhlman are located at 3 Skidaway Village Square, Savannah, Georgia 31411. The telephone number for each of them at that address is (912) 598-7809. The name, citizenship, business address, present principal occupation or employment and five-year employment history of each executive officer and director of the Purchaser and Kuhlman are set forth in Annexes A and B hereto, respectively. Kuhlman is subject to the disclosure requirements of the Exchange Act and in accordance therewith files periodic reports, proxy statements and other information with the Commission relating to its business, financial condition and other 9 matters. Such reports, proxy statements and other information are available for inspection and copying at prescribed rates at the offices of the Commission as set forth in Section 8. Set forth below is certain selected consolidated financial information for Kuhlman excerpted or derived from its Current Report on Form 8-K dated July 21, 1995 (the "Kuhlman 8-K") and its Quarterly Report on Form 10-Q for its quarterly period ended September 30, 1995 (the "Kuhlman 10-Q"). More comprehensive financial information is included in the Kuhlman 8-K and the Kuhlman 10-Q and in other documents filed with the Commission, and the following data is qualified in its entirety by reference to such reports and other documents and to all of the financial information and related notes contained therein or incorporated therein by reference. KUHLMAN CORPORATION SELECTED CONSOLIDATED FINANCIAL INFORMATION (IN THOUSANDS, EXCEPT PER-SHARE DATA)
NINE MONTHS ENDED YEAR ENDED DECEMBER 31, SEPTEMBER 30, 1992 1993 1994 1994 1995 (UNAUDITED) Income Statement Information: Net Sales...................................................... $231,426 $242,221 $396,117 $297,033 $318,301 Net Income (Loss).............................................. (5,247) 310 9,970 8,966 4,355 Net Income (Loss) per share.................................... (0.42) 0.02 0.73 0.66 0.33 Balance Sheet Information: (at end of period) Working Capital................................................ $ 54,845 $ 63,397 $ 49,501 $ 49,501 $ 48,736 Total Assets................................................... 155,530 242,921 229,185 229,185 237,001 Long-Term Debt................................................. 38,469 97,824 76,895 76,895 76,336 Stockholders' Equity........................................... 64,842 64,187 73,216 73,216 74,012
Except for 100 Shares purchased by the Purchaser in the open market on November 27, 1995 at a price of $9.00 per Share, and except as described in Section 11, neither the Purchaser nor Kuhlman nor, to the best knowledge of the Purchaser, any of the persons listed on Annexes A and B hereto, beneficially owns or has a right to acquire any of the Shares; with the same exceptions, neither the Purchaser nor Kuhlman nor, to the best knowledge of the Purchaser, any of the persons listed on Annexes A and B hereto, has effected any transaction in the Shares during the past 60 days. Except as set forth in Section 11, neither the Purchaser or Kuhlman nor, to the best knowledge of the Purchaser, any of the persons listed on Annexes A and B hereto, has any contract, arrangement, understanding or relationship with any other person with respect to any securities of the Company, including, but not limited to, the transfer or voting thereof, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss or the giving or withholding of proxies. Except as described in Section 11 and except for purchases of wire and cable by a Kuhlman subsidiary from the Company aggregating approximately $1,426,084, $2,542,581 and $2,029,624 in the Company's fiscal years ended October 31, 1993, 1994 and 1995, respectively, and approximately $30,583 in its current fiscal year to date, neither the Purchaser nor Kuhlman nor, to the best knowledge of the Purchaser, any of the persons listed on Annexes A and B hereto, has since November 1, 1992 had any business relationship or transaction with the Company or any of its executive officers, directors or affiliates such as would require reporting under the rules of the Commission. Except as described in Sections 10, 11 and 12, since November 1, 1992 there have been no contacts, negotiations or transactions between, on the one hand, the Purchaser or Kuhlman or any of the persons listed in Annexes A and B hereto, and, on the other hand, the Company or any of its affiliates, in any such case concerning: a merger, consolidation or acquisition; a tender offer or other acquisition of securities; an election of directors; or a sale or other transfer of a material amount of assets. 10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY. In February 1994, as part of its strategy to search for acquisitions that could further strengthen and diversify Kuhlman, Kuhlman identified the Company as an opportunity for a business combination that would allow Kuhlman to expand and enhance its presence in the wire and cable industry. In March 1994, the Company was asked whether it would be interested in expanding its relationship with Kuhlman. The Company had been a supplier of certain wire and cable products to one of Kuhlman's indirect subsidiaries (Coleman Cable 10 Systems, Inc.) for several years. The Company's Chief Executive Officer advised that the Company would consider a business combination. In April 1994, there were separate discussions with a director and with the Chief Executive Officer of the Company regarding a possible combination of the Company with Kuhlman. At the regularly scheduled annual meeting of the Kuhlman Board of Directors in April 1994, the possible combination of the Company and Kuhlman was discussed and favorably received. Following this meeting, the Chief Executive Officer of Kuhlman contacted the Chief Executive Officer of the Company to further discuss a possible combination and to arrange for a meeting. In May 1994, senior executives of Kuhlman met with senior officers of the Company at one of the Company's plants. Following that plant visit, the Chief Executive Officers of both Kuhlman and the Company had further discussions regarding the possible form of a business combination of Kuhlman and the Company. The Chief Executive Officer of the Company requested, and later received, in the beginning of June 1994, information on Kuhlman and a possible combination, which he distributed to members of the Company's Board of Directors. Later in June 1994, the Chief Executive Officers of Kuhlman and the Company decided that a presentation by Kuhlman's Chief Executive Officer to the Company Board of Directors would be appropriate, and such a presentation was scheduled for later in June 1994. Prior to this proposed presentation, the Chief Executive Officer of Kuhlman communicated with the members of the Kuhlman Board of Directors regarding details of a possible combination of Kuhlman and the Company and, with the support of the Kuhlman Board of Directors, proceeded with further discussions with the Company. On June 24, 1994, the Chief Executive Officer of Kuhlman, accompanied by senior executives of Kuhlman, made a presentation to the Company Board of Directors and provided a draft of a letter of intent with respect to a possible combination. Following the meeting on June 24, 1994, further discussions occurred between Kuhlman and Company senior executives, as well as between Kuhlman's senior executives and representatives of the Company's financial advisor, regarding additional information requested by the Company to evaluate a possible combination. Both parties conducted due diligence on each other, directly and through their agents, attorneys and accountants. On July 7, 1994, the Company's Chief Executive Officer advised Kuhlman's Chief Executive Officer that the Company Board of Directors had reviewed the possibility of a combination with Kuhlman and was generally positive about such a possible combination as well as about discussing, negotiating and executing a letter of intent as soon as it could obtain additional information regarding Kuhlman. The Chief Executive Officer of Kuhlman communicated the status of the possible transaction to the Kuhlman Board of Directors. On July 14, 1994, a meeting was held between Kuhlman's senior executives and the Company's senior executives, as well as representatives of the Company's financial advisor, at which time additional information concerning the two companies was exchanged between Kuhlman and the Company. Having previously considered the various corporate materials and financial information concerning Kuhlman, the Company Board of Directors, on July 17, 1994, appointed a Special Committee of the Company Board of Directors (the "Company Special Committee") to consider the proposed letter of intent with Kuhlman. On July 18, 1994, the Company Board of Directors and the Company Special Committee met by telephone with their financial and legal advisors to consider the proposed letter of intent with Kuhlman. The Company Board of Directors approved the letter of intent on July 18, 1994, and on that same day Kuhlman and the Company executed the letter of intent. The signing of the letter of intent was announced publicly and mutual due diligence reviews continued in greater detail. On July 29, 1994, a regularly scheduled meeting of the Kuhlman Board of Directors was held at which the proposed merger with the Company was discussed. At that meeting, the Kuhlman Board of Directors authorized continued negotiations with the Company and the preparation and execution of a definitive written agreement providing for the merger of a wholly-owned subsidiary of Kuhlman with and into the Company on the terms set forth in the letter of intent and discussed at the meeting. On September 9, 1994, the Company Special Committee met at the Company's offices in connection with the regularly scheduled meeting of the Company Board of Directors. The purpose of the meeting was for the Company Special Committee to receive reports regarding information it had requested from management, financial and legal advisors, accountants and environmental consultants. In addition to considering the proposed merger with Kuhlman, the Company Special Committee considered whether it would be in the best interest of the Company's shareholders to solicit indications of interest from third parties. The Company Special Committee decided that it was not in the best interest of the Company and its shareholders to solicit indications of interest from third parties, but that the Company Special Committee would continue to respond in a diligent manner to any indications of interest to acquire the Company. The Company Special Committee also gave non-binding preliminary approval of the proposed merger with Kuhlman, subject to completion of the Company Special Committee's evaluation of the proposed transaction. 11 The parties continued to negotiate the terms of the merger agreement. On September 20, 1994, the Company Special Committee held another meeting at the Company's offices. The purpose of the meeting was to receive updated reports from management, consultants and advisors in connection with the proposed merger. The Company Special Committee also reviewed the form of merger agreement proposed by Kuhlman for approval. The Company Special Committee unanimously determined that it was in the best interest of the Company and its shareholders to proceed with the proposed merger with Kuhlman, and the Company Special Committee recommended the proposed merger agreement to the Company Board of Directors for approval. Following the meeting of the Company Special Committee on September 20, 1994, the Company Board of Directors met. The Company Board of Directors received the report and recommendations of the Special Committee. After due discussion and deliberation, the Company Board of Directors unanimously approved and adopted all of the recommendations of the Company Special Committee. On September 21, 1994, the Company and Kuhlman executed a definitive merger agreement. Thereafter, both the Company and Kuhlman directed their efforts towards finalizing the preparation and filing of a registration statement with the Commission. A registration statement was filed on October 6, 1994. Following the receipt of comments from the Commission, both the Company and Kuhlman directed their efforts to both preparing an amendment to the registration statement and continued mutual due diligence. For a number of reasons, including the long lapse of time from the parties' original discussions and changing market and operating conditions at both companies, the Company and Kuhlman terminated their merger agreement on January 10, 1995. In June 1995, senior executives of the Company and Kuhlman again entered into discussions about a possible business combination. In early July, Kuhlman proposed to the Company's Chief Executive Officer and to Charles L. Wellard (a Company director and holder of approximately 12.0% of the Common Stock) an agreement by the terms of which the two Shareholders would grant to George J. Falconero (a third Company director) an irrevocable proxy to vote certain of their Shares in circumstances looking towards a business combination of Kuhlman and the Company. An agreement was never executed by all the parties and never became effective. In late July, a draft of a letter of intent covering a proposed merger between Kuhlman and the Company was prepared and circulated among the companies and their legal counsel. In early August, Kuhlman delivered drafts of a stock purchase agreement covering Shares owned by the Company's Chief Executive Officer and a stock option agreement covering certain Shares owned by Mr. Wellard. None of these documents was ever executed or became effective. On August 9, 1995, Kuhlman's Chief Executive Officer advised Mr. Falconero that Kuhlman had decided to terminate its efforts to attempt to structure a business combination with the Company. In November 1995, Kuhlman's Chief Executive Officer contacted the Company's Chief Executive Officer relative to acquiring his Shares. On November 16, 1995, legal counsel for Kuhlman delivered to legal counsel for the Company's Chief Executive Officer a summary of terms of a stock option agreement covering his Shares. Negotiations occurred that day and the next day. On November 16, 1995, senior executives of Kuhlman briefed Kuhlman's directors on the negotiations pending with the Company's Chief Executive Officer and on preparations for the Offer. Discussions with and among the Kuhlman Board of Directors and Kuhlman senior executives were held that afternoon and evening. On November 17, 1995, the Kuhlman Board of Directors approved the execution of a stock option agreement and an employment agreement with the Company's Chief Executive Officer and the making of the Offer. On November 18, 1995, legal counsel for Kuhlman delivered to legal counsel for the Company's Chief Executive Officer drafts of a stock option agreement covering his Shares and an employment agreement. Negotiations continued through the next day. The definitive versions of these agreements were signed on November 20, 1995. On November 28, 1995, senior executives of Kuhlman and Kuhlman's acquisition counsel attended a special meeting of the Company Board of Directors at the request of Kuhlman's Chief Executive Officer. At that meeting they advised the Company's directors of the Purchaser's intention to make the Offer, and they solicited the cooperation and support of the Company Board of Directors. 11. THE STOCK OPTION AGREEMENT; THE EMPLOYMENT AGREEMENT. On November 20, 1995, the Purchaser and Kuhlman entered into the Stock Option Agreement with the Selling Stockholder. The Stock Option Agreement covers all Shares owned by the Selling Stockholder at any time until January 15, 1995, subject to extension in certain circumstances. At the 12 date of the Stock Option Agreement, the Selling Stockholder represented and warranted to the Purchaser that he owned 268,128 Shares, as well as presently exercisable options to purchase an additional 47,475 Shares. The Selling Stockholder is obligated to exercise "in-the-money" options, subject to extension in certain circumstances, upon the written request of the Purchaser following an exercise of either of the Put Option or the Call Option referred to below. On the assumption that all of the Selling Stockholder's options are in-the-money, at the date of the Stock Option Agreement the Selling Stockholder's Shares consisted of 315,603 Shares. The Stock Option Agreement evidences both a Put Option and a Call Option: (1) the Selling Stockholder has an option to sell all of the Selling Stockholder Shares to the Purchaser at any time and from time to time until the close of business on January 15, 1996, subject to extension (as explained below in this Section 11), at an Exercise Price of $12.00 per Share; and (2) the Purchaser has an option to purchase all of the Selling Stockholder's Shares from the Selling Stockholder at any time and from time to time after December 31, 1995 until the close of business on January 15, 1996, subject to extension (as explained below in this Section 11), at the same Exercise Price. The Stock Option Agreement states that the Selling Stockholder may exercise a Put Option by sending written notice to the Purchaser specifying a date (not earlier than the third business day nor later than the fifth business day following the date such notice is given) for the closing of such sale and the number of Selling Stockholder's Shares to be sold on that date. The Purchaser may exercise a Call Option by sending written notice to the Selling Stockholder specifying a date (not earlier than the third business day nor later than the fifth business day following the date such notice is given) for the closing of such purchase and the number of Selling Stockholder Shares to be purchased on that date. On the closing date of a purchase and sale pursuant to an exercise of the Put Option or Call Option, the Selling Stockholder shall deliver to the Purchaser a certificate or certificates, duly endorsed (or accompanied by duly executed stock powers), representing the Selling Stockholder's Shares subject to the applicable put exercise notice or call exercise notice, including the Shares acquired by the Selling Stockholder upon exercise of all Company options, free and clear of all liens. In the Stock Option Agreement, the Selling Stockholder has covenanted and agreed during the Relevant Term (as defined below) not (i) to sell, transfer, pledge, assign, hypothecate or otherwise dispose of, or enter into any contract with respect to the sale, transfer, pledge, assignment, hypothecation or other disposition of, any Selling Stockholder's Shares or Company options otherwise than pursuant to the Stock Option Agreement, (ii) to grant any proxy with respect to any Selling Stockholder's Shares or Company options, deposit any Selling Stockholder's Shares or Company options into a voting trust or enter into a voting agreement with respect to any Selling Stockholder's Shares or Company options otherwise than pursuant to the Stock Option Agreement or (iii) to take any action that would make any representation or warranty of the Selling Stockholder therein untrue or incorrect. The Selling Stockholder has further covenanted and agreed during the Relevant Term: (iv) upon the receipt or exercise of any Company option, to notify the Purchaser immediately of such event; (v) upon the written request of the Purchaser, to grant the Purchaser or its designee(s) an irrevocable proxy to vote or otherwise exercise all shareholder rights pertaining to all Selling Stockholder's Shares as directed by the Purchaser or such designee(s); and (vi) upon the reasonable written or oral request of the Purchaser, to assist the Purchaser and Kuhlman in furtherance of the Acquisition (as defined below) in the manner and to the extent not inconsistent with the Selling Stockholder's duties to the Company and its other shareholders and in the manner and to the extent he may lawfully do so in his personal capacity as a shareholder of the Company. In the Stock Option Agreement, "Relevant Term" is defined as the period from November 20, 1995 until the earliest to occur of (i) the acquisition by the Purchaser of all of the Selling Stockholder's Shares pursuant to exercise of the Put Option or the Call Option, (ii) any other acquisition by the Purchaser, Kuhlman or a Kuhlman affiliate of all of the Selling Stockholder's Shares, (iii) the time at which the Put Option and the Call Option may no longer be exercised (taking into account any extension) and the closings pursuant to all due and timely exercises of the Put Option and the Call Option have been consummated as required (including pursuant to any extension anticipated by the Stock Option Agreement) or (iv) the close of business on April 20, 1996. The term "Acquisition" means the first to occur of (i) the purchase by Kuhlman, the Purchaser or a Kuhlman affiliate of no less than that number of shares of capital stock of the Company as would then have voting power sufficient to elect a majority of the directors of the Company, (ii) the purchase by Kuhlman, the Purchaser or a Kuhlman affiliate of all or substantially all of the assets of the Company or (iii) a merger of the Company with or into Kuhlman, the Purchaser or a Kuhlman affiliate. In the event that, on January 15, 1996, neither the Put Option nor the Call Option has been exercised in full, and on such date the Put Option or the Call Option or both (as the case may be) may not be exercised by reason of any judicial or regulatory judgment, decree or order preventing or restraining such exercise (an "Exercise Prohibition"), then the time within which the Put Option or the Call Option or both (as the case may be) may be exercised under the Stock Option Agreement will be extended until the earlier of (i) the first date thereafter on which an Exercise Prohibition does not exist and has not existed for at least the three preceding consecutive business days or (ii) the close of business on April 15, 1996. In the event 13 that, on the date specified in a put exercise notice or call exercise notice for the closing of the purchase and sale of Selling Stockholder's Shares thereunder, such closing may not be consummated by reason of any judicial or regulatory judgment, decree or order preventing or restraining such closing (a "Closing Prohibition"), then the time for such closing shall be extended until the earlier of (i) the first date thereafter on which a Closing Prohibition does not exist and has not existed for at least the three preceding consecutive business days or (ii) the close of business on April 20, 1996. The parties to the Stock Option Agreement have agreed to use their reasonable best efforts (subject, in the case of the Selling Stockholder, to his duties to the Company and its other shareholders) to remove as soon as practicable any Exercise Prohibition or Closing Prohibition that arises during the Relevant Term. Also on November 20, 1995, the Selling Stockholder signed an Employment Agreement with the Purchaser. The Employment Agreement recites that the Selling Stockholder continues to be employed by the Company as its President and Chief Executive Officer, and continues to be a director of the Company, and that nothing in the Employment Agreement is intended to interfere with the due and proper performance of his duties to the Company or to create any employment relationship with him prior to the Commencement Date referred to below. According to the parties, the purpose of the Employment Agreement is to set forth the terms of the Selling Stockholder's employment with the Purchaser in the event that Kuhlman should consummate an acquisition of the Company through the Purchaser. The Employment Agreement shall become effective upon the first to occur of (i) the purchase by Kuhlman, the Purchaser or a Kuhlman affiliate of no less than that number of shares of the Company as would then have voting power sufficient to elect a majority of the directors of the Company, (ii) the purchase by Kuhlman, the Purchaser or a Kuhlman affiliate of all or substantially all of the assets of the Company or (iii) a merger of the Company with or into Kuhlman, the Purchaser or a Kuhlman affiliate (the date of the first to occur of such events being the "Commencement Date"). The term of the Selling Stockholder's employment by the Purchaser shall be the three years immediately following the Commencement Date, unless terminated earlier. During his employment with the Purchaser, the Selling Stockholder has promised to devote his full business time, skill, energies, judgment, knowledge and efforts to advancement of the best interests of the Purchaser and its subsidiaries and the performance of such executive duties on behalf of the Purchaser and its subsidiaries as the Board of Directors of the Purchaser may assign to him from time to time. As compensation for the services to be rendered by the Selling Stockholder during the term of the Employment Agreement, the Purchaser has agreed to pay him the following salary and bonus: in and for the first year following the Commencement Date, $300,000; in and for the second year following the Commencement Date, $330,000; and in and for the third year following the Commencement Date, $363,000. The Selling Stockholder and his spouse also will receive medical and health insurance benefits consistent with the insurance benefits that they are currently entitled to receive from the Company. At any time after the six-month period commencing with the Commencement Date, the Employee may by notice terminate his employment effective as of a date not less than 30 days after the date such notice is given. Notwithstanding the occurrence of any such termination, the compensation and benefits payable to him shall continue to be paid for the remainder of the three-year term. The Purchaser also has agreed to pay such compensation and benefits following the death or disability of the Selling Stockholder during and for the three-year term or upon his early termination by the Purchaser with or without cause. As a party to the Employment Agreement, Kuhlman has guaranteed to the Selling Stockholder the faithful and timely performance of the obligations of the Purchaser stated in the Employment Agreement. The Purchaser and Kuhlman, jointly and severally, will indemnify the Selling Stockholder and hold him harmless from and against certain losses, liabilities, costs or expenses resulting from the execution, delivery or performance of the Employment Agreement. The Selling Stockholder has agreed to keep confidential all information and documents furnished to him by or on behalf of the Purchaser and not to use the same to his advantage, except to the extent such information or documents become lawfully obtainable from other sources or are in the public domain through no violation of the Employment Agreement on his part or as consented to in writing. The foregoing is a summary of certain provisions of the Stock Option Agreement and the Employment Agreement, the full texts of which have been filed as exhibits to the Schedule 14D-1 filed with the Commission by the Purchaser in connection with the Offer. Such summary is qualified in its entirety by reference to such exhibits, which are available for inspection (and copies of which may be obtained) at the same places and in the same manner as set forth with respect to the information concerning the Company in Section 8 of this Offer to Purchase (except that they will not be available at the regional offices of the Commission). 12. PURPOSE OF THE OFFER. The purpose of the Offer is to enable the Purchaser to acquire control of the Company. As soon as practicable following the purchase of Shares pursuant to the Offer, the Purchaser intends to seek the maximum 14 representation obtainable on the Company Board of Directors. Thereafter the Purchaser or the Company may seek to purchase, as and in the manner permitted by law, Shares not purchased pursuant to the Offer. Such purchases may be effected in privately negotiated transactions, in one or more tender or exchange offers, in open market purchases or otherwise. It is possible that the Purchaser ultimately will acquire the entire equity interest in the Company. Whether or not the Offer is consummated, the Purchaser expressly reserves the right, subject to applicable law, to sell or otherwise dispose of any or all Shares acquired pursuant to the Offer or otherwise. Such transactions may be effected on terms and at prices as it shall determine, which may be more or less than the price to be paid pursuant to the Offer and could be for cash or other consideration. On the assumption that the Offer is consummated, it may be necessary, nevertheless, for the Purchaser to await the next annual meeting of the Company's shareholders, or to call a special meeting of the Company's shareholders, to cause the election of persons constituting a majority of the Company Board of Directors. The Company's Bylaws provide that its Board of Directors shall be not less than three nor more than ten, as may be fixed by resolution duly adopted by the shareholders or by the Board of Directors prior to the annual meeting at which such directors are to be elected. The Company Board of Directors currently consists of six members whose terms expire at the next annual meeting of the Shareholders. The Company's Bylaws provide that any director may be removed at any time with or without cause by a vote of the shareholders holding a majority of the outstanding shares entitled to vote at an election of directors. The Company's Proxy Statement dated January 27, 1995 states that the Shareholders do not have cumulative voting rights. There are several scenarios in which the Purchaser might effect a merger with the Company, depending upon the percentage of the Common Stock that may be acquired by the Purchaser, among other factors. The following discussion assumes the satisfaction of the Minimum Tender Condition and the Voting Rights Condition, the consummation of the Offer by the Purchaser and approval by the Company Board of Directors of the actions and transactions described. Section 55-11-04 of the North Carolina Business Corporation Act, as amended (the "NCBCA"), provides that a parent corporation owning at least 90% of the outstanding shares of each class of a subsidiary corporation may merge the subsidiary into itself without approval of the shareholders of the parent or subsidiary. Under this "short form" merger statute, if the Purchaser were to own at least 90% of the Shares upon consummation of the Offer (or at any time thereafter), then -- but for the fact that the Common Stock is registered under Section 12 of the Exchange Act -- the Purchaser could effect a merger with the Company without approval of the shareholders of either company. In this connection, The North Carolina Shareholder Protection Act (the "Protection Act") -- which applies by its terms to a North Carolina corporation (such as the Company) that has a class of shares registered under Section 12 of the Exchange Act -- purports to require the affirmative vote of the holders of 95% of the voting shares of the corporation, considered as one class, for the adoption or authorization of a merger with any other entity (such as the Purchaser) if the other entity beneficially owns, directly or indirectly, more than 20% of the voting shares of the corporation, considered as one class. Exempted from the Protection Act are certain transactions in which minimum pricing and stock values are involved and certain other "fairness" requirements are met. In particular, the "fairness" provisions of the Protection Act state that the 95% vote requirement of the Protection Act shall not apply to a business combination in which each of the following conditions is met: (1) the cash, or fair market value of other consideration, to be received per share by the holders of the corporation's common stock in such business combination bears the same or a greater percentage relationship to the market price of the corporation's common stock immediately prior to the announcement of such business combination by the corporation as the highest per share price (including brokerage commissions and/or soliciting dealers' fees) which such other entity has theretofore paid for any of the shares of the corporation's common stock already owned by it bears to the market price of the corporation's common stock immediately prior to the commencement of acquisition of the corporation's common stock by such other entity, directly or indirectly; (2) the cash, or fair market value of other consideration, to be received per share by holders of the corporation's common stock in such business combination (i) is not less than the highest per share price (including brokerage commissions and/or soliciting dealers' fees) paid by such other entity in acquiring any of its holdings of the shares of the corporation's common stock and (ii) is not less than the earnings per share of the corporation's common stock for the four full consecutive fiscal quarters immediately preceding the record date for the solicitation of votes on such business combination, multiplied by the then price/earnings multiple, if any, of such other entity as customarily computed and reported in the financial community; (3) after the other entity has acquired a 20% interest and prior to the consummation of such business combination: (i) the other entity shall have taken steps to ensure that the corporation's board of directors included at all times 15 representation by continuing directors proportionate to the outstanding shares of the corporation's common stock held by persons not affiliated with the other entity (with a continuing director to occupy any resulting fractional board position); (ii) there shall have been no reduction in the rate of dividends payable on the corporation's common stock, except as may have been approved by a unanimous vote of its directors; (iii) the other entity shall have not acquired any newly issued shares of the corporation's capital stock, directly or indirectly, from the corporation, except upon conversion of any convertible securities acquired by the other entity prior to obtaining a 20% interest or as a result of a pro rata stock dividend or stock split; and (iv) the other entity shall not have acquired any additional shares of the corporation's outstanding common stock, or securities convertible into common stock, except as part of the transaction which resulted in the other entity acquiring its 20% interest; (4) the other entity shall not have (i) received the benefit, directly or indirectly, except proportionately with other shareholders, of any loans, advances, guarantees, pledges, or other financial assistance or tax credits provided by the corporation or (ii) made any major change in the corporation's business or equity capital structure unless by a unanimous vote of the directors, in either case prior to the consummation of the business combination; and (5) a proxy statement responsive to the requirements of the Exchange Act shall be mailed to the public shareholders of the corporation for the purpose of soliciting shareholder approval of the business combination and shall contain prominently in the forepart thereof any recommendations as to the advisability or inadvisability of the business combination which the continuing directors, or any of them, may choose to state and, if deemed advisable by a majority of the continuing directors, an opinion of a reputable investment banking firm as to the fairness (or not) of the terms of the business combination to the remaining public shareholders of the corporation, which investment banking firm shall be selected by a majority of the continuing directors and shall be paid by the corporation a reasonable fee for its services upon receipt of such opinion. In view of the effect of the Protection Act on use of the short form merger statute, the Purchaser would prefer to pursue a merger with the Company upon acquiring 95% or more of the Common Stock (there being no other class of voting shares of the Company outstanding) rather than some lesser percentage. In such circumstances, the merger could be effected without any shareholder vote and without observing the "fairness" requirements of the Protection Act. If the Purchaser were to acquire at least 90% but less than 95% of the Common Stock, then it might nevertheless determine to effect a short form merger, although in such circumstances the Protection Act would purport to impose the aforementioned "fairness" requirements. Unless and until the Purchaser acquires at least 90% of the Common Stock, any merger with the Company would require the approval of the Company's shareholders under the NCBCA and the Company's Articles of Incorporation. The NCBCA generally provides that the affirmative votes of the voting group cast at a shareholders' meeting at which a quorum is present (either in person or by proxy) must exceed the negative votes cast by such voting group to effect routine stockholder action other than the election of directors, which requires only a plurality vote. For a merger, the NCBCA requires the affirmative vote of a majority of the shares of any voting group entitled to vote on the transaction. The NCBCA permits a corporation to require a greater vote in its articles of incorporation or bylaws. Under the Company's Articles of Incorporation, the affirmative vote of 80% of outstanding capital stock is required to merge the Company with another entity. In addition, upon a merger, without the approval of the Board of Directors, the Company's Articles of Incorporation provide that the Shareholders have the right (a "Poison Put"), during the one-year period after the effective date of the merger, to exchange their stock for any acquiring company's promissory notes payable in 30 days and bearing interest at the rate of 12% per annum in the principal amount of 200% of the higher of: (a) the market value of the stock as of the effective date of the corporate action or (b) the book value of such stock as of the end of the month immediately preceding such corporate action. The "fairness" requirements of the Protection Act, detailed above, also would purportedly apply to such a merger. Section 55-9A-06 of the NCBCA, which is part of The North Carolina Control Share Acquisition Act (the "Control Act"), provides a right of redemption for the shareholders of a "covered corporation" (such as the Company) following a vote of the shareholders to accord voting rights to "control shares" acquired in a "control share acquisition." The Control Act by its terms would apply to a non-exempt acquisition by the Purchaser of 20% of all outstanding Shares in the present circumstances and would apply, therefore, to consummation of the Offer upon satisfaction of the Minimum Tender Condition. For this reason, the Offer is subject to the Voting Rights Condition. The Purchaser intends to comply with the Control Act in pursuing the Offer. Among other things, this means that the Purchaser expects to honor the redemption rights provided for by statute. Section 55-9A-06, as applied to the Offer, provides that all Shareholders (other than holders of control shares) have the right to have their shares redeemed by the Company at the fair value of those shares as of the day prior to the date on which Shareholders voted to accord voting rights to the control shares. Such right is exercisable at any time within 30 days 16 after the date on which the Shareholder receives notice from the Company of such holder's right of redemption. The Company has an additional 30 days from its receipt of the Shareholder's demand for payment within which to effect redemption. For further information about the Control Act, see Section 17 of this Offer to Purchase. In view of these requirements of statutory law and of the Company's Articles of Incorporation, the Purchaser may not pursue a merger with the Company unless and until it acquires at least 80% of the Common Stock. Alternatively, upon acquiring control of the Company, the Purchaser might seek to amend the Company's Articles of Incorporation to eliminate the Poison Put provision and thereafter propose a merger. Such course of action would require the approval of the holders of a majority of the Shares then outstanding. Unless the Purchaser had acquired at least 95% of the Shares, the "fairness" provisions of the Protection Act also would apply by their terms. In any merger scenario involving the Purchaser and the Company, the timing and other details of the transaction would depend upon a variety of factors such as general economic conditions and prospects, the future prospects, asset value and earnings of the Company, the number of Shares acquired by the Purchaser pursuant to the Offer or otherwise and the statutory requirements described above. The Purchaser can give no assurance that a merger or other business combination will be proposed or that, if proposed, will not be delayed or abandoned. The Purchaser expressly reserves the right not to propose any merger or other business combination involving the Company or to propose a merger or other business combination on terms other than those set forth herein. Its ultimate decision could be affected by information hereafter obtained by the Purchaser, changes in general economic or market conditions or in the business of the Company or other factors. Shareholders do not have dissenters' rights as a result of the Offer. Shareholders who do not vote in favor of a merger do have certain rights pursuant to Article 13 of the NCBCA to dissent and demand determination of, and to receive payment in cash of the fair value of, their Shares. If the statutory procedures were satisfied, then the assertion of such rights could lead to a judicial determination of the fair value required to be paid in cash to such dissenting holders for their Shares. Any such judicial determination of the fair value of the Shares or the market value of their Shares could be more or less than the Offer price or the price provided for in a merger. Section 55-13-01 of the NCBCA defines "fair value" as the value of the shares immediately before the effectuation of the transaction to which the dissenter objects, excluding any appreciation or depreciation in anticipation of the transaction unless such exclusion would be inequitable. Such "fair value" of the Shares as finally determined may be more or less than the consideration to be received by other Shareholders in a merger. Any Shareholder who asserts dissenters' rights under the NCBCA, but fails to comply with the statutory requirements of the NCBCA, is considered to have withdrawn his dissent and demand for payment. The foregoing 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 dissenters' rights. Failure to follow the steps required by the NCBCA for perfecting dissenters' rights may result in the loss of such rights. Except as set forth in this Offer to Purchase, based on their current knowledge of the Company neither the Purchaser nor Kuhlman has any specific plans or proposals with respect to any extraordinary corporate transaction such as a merger, reorganization or liquidation involving the Company or any of its subsidiaries, a sale or transfer of a material amount of assets of the Company or any of its subsidiaries, any change in the present board of directors or management of the Company, any material change in the present capitalization, corporate structure, dividend policy or business of the Company or causing a class of securities of the Company to be delisted from NASDAQ or to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act. Upon acquiring control of the Company, however, the Purchaser intends to initiate a thorough review of the Company and its assets, corporate structure, capitalization, operations, properties, policies, management and personnel. After the completion of such review, the Purchaser will determine what actions or changes, if any, would be desirable in light of the circumstances that then exist. The Purchaser expressly reserves the right to effect such actions or changes. 13. SOURCE AND AMOUNT OF FUNDS. If the Purchaser purchases all Shares subject to the Stock Option Agreement, and if all of the Shares (including Shares underlying Outstanding Options but excluding Shares subject to the Stock Option Agreement) are tendered pursuant to the Offer and accepted for purchase, then the total amount of funds required by the Purchaser to purchase such Shares and to pay related fees and expenses would be approximately $35 million. The Purchaser expects to obtain all funds needed to consummate the Stock Option Agreement and the Offer by means of one or more capital contributions to be made by Kuhlman to the Purchaser. Kuhlman plans to use funds available in its cash accounts, together with bank borrowings, to make capital contributions in amounts sufficient to fund the approximately $35 million required to consummate the Stock Option Agreement and the Offer. Kuhlman has received commitment letters dated November 28, 1995 from NationsBank of Georgia, N.A. and The 17 Chase Manhattan Bank, N.A. (the "Banks"), pursuant to which each of the Banks has agreed to provide up to $17.5 million (or a total of $35 million) of financing to pay for the acquisition of the Company, ongoing working capital needs arising in connection with such acquisition and costs and expenses of such acquisition (the "Commitment Letters"). The obligations of the Banks under the Commitment Letters are subject to terms and conditions typical of financings of such type and magnitude, including, for example, the negotiation, execution and delivery of definitive documentation, the absence of any material adverse change with respect to Kuhlman and satisfactory completion of due diligence. Kuhlman expects to repay its obligations to the Banks with funds provided by cash flows from operating activities. The foregoing is a summary of certain provisions of the Commitment Letters, the full texts of which have been filed as exhibits to the Schedule 14D-1 filed with the Commission by the Purchaser in connection with the Offer. Such summary is qualified in its entirety by reference to such exhibits, which are available for inspection (and copies of which may be obtained) at the same places and in the same manner as set forth with respect to the information concerning the Company in Section 8 of this Offer to Purchase (except that they will not be available at the regional offices of the Commission). If and when a definitive agreement relating to the Commitment Letters is executed, a copy will be filed as an exhibit to an amendment to the Schedule 14D-1. 14. DIVIDENDS AND DISTRIBUTIONS. If, on or after the Offer Commencement Date, the Company should declare or pay any cash or stock dividend on the Common Stock or any other distributions on, or issue any rights with respect to, the Common Stock, payable or distributable to holders of record on a date prior to the transfer to the name of the Purchaser, its nominees or transferees on the Company's stock transfer records of the Shares purchased pursuant to the Offer, then, without prejudice to the Purchaser's rights under Section 15, (i) the purchase price per Share payable by the Purchaser pursuant to the Offer shall be reduced by the amount of any such cash dividend or distribution and (ii) the whole of any such non-cash dividend, distribution or right shall be received and held by each tendering Shareholder for the account of the Purchaser and shall be required to be promptly remitted and transferred by each tendering Shareholder to the Depositary for the account of the Purchaser, accompanied by appropriate documentation of transfer. Pending such remittance, the Purchaser will be entitled to all rights and privileges as owner of any such non-cash dividend, distribution or right and may withhold the entire purchase price or deduct from the purchase price the amount of value thereof, as determined by the Purchaser in its sole discretion. If, on or after the Offer Commencement Date, the Company should (i) split, combine or otherwise change the Shares or the capitalization of the Company, (ii) issue or sell any shares of capital stock of any class, or any securities convertible into any such shares, or any rights, warrants or options to acquire any such shares or convertible securities, other than Shares issued pursuant to and in accordance with the present terms of the Outstanding Options, or (iii) purchase or otherwise acquire any outstanding Shares, then, without prejudice to the Purchaser's rights under Section 15, the Purchaser, in its sole discretion, may make such adjustments in the purchase price and other terms of the Offer as it deems appropriate to reflect such split, combination or other change, issuance or sale or purchase or other acquisition. 15. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of the Offer, the Purchaser will not be required to accept for payment, purchase or pay for any Shares tendered, and may terminate or amend the Offer or postpone the acceptance for payment of and any payment for any Shares not theretofore accepted for payment or paid for, if (i) the Minimum Tender Condition or the Voting Rights Condition shall not have been satisfied or (ii) at any time after the commencement of the Offer, and before the time of payment for any such Shares, any one or more of the following conditions exist: (a) any change shall have occurred in the management, business, properties, condition (financial or otherwise) or results of operations of the Company and its subsidiaries, considered as one enterprise, that may reasonably be expected to have a material adverse effect on the management, business, properties, condition (financial or otherwise) or results of operations of the Company and its subsidiaries, considered as one enterprise (a "Material Adverse Effect"); (b) any action or proceeding shall be instituted or pending by or before any court or governmental, administrative or regulatory agency or authority by any person, or any action or proceeding shall be threatened by any governmental authority, in any such case that has a reasonable likelihood of success, challenging the making of the Offer or the acquisition by the Purchaser of any Shares pursuant to the Offer or the Stock Option Agreement or otherwise having a Material Adverse Effect; (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 the NASDAQ National Market System (excluding any trading halt as a result of a specified decrease in a market index), (ii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States generally, (iii) an outbreak or escalation of armed hostilities or other national or international calamity materially involving the United States, (iv) any limitation (whether or not mandatory) by any governmental authority on, or any 18 other event that reasonably might be expected to materially affect, the extension of credit by banks or other financial institutions, or (v) in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof; (d) legal proceedings shall have been commenced or threatened by any governmental authority, or any judgment, ruling, order, writ, injunction, decree, statute, rule or regulation shall have been promulgated, enacted, entered or deemed applicable to the Offer or the Stock Option Agreement or the transactions contemplated thereby by any governmental authority or by any court, other than the application to the Offer or the Stock Option Agreement or the transactions contemplated thereby of the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), that may reasonably be expected to (i) make the acceptance for payment of or payment for some or all of the Shares pursuant to the Offer or the Stock Option Agreement illegal or otherwise prohibit or materially restrict consummation of the Offer or the Stock Purchase Agreement or the transactions contemplated thereby, (ii) result in a material delay in the ability of the Purchaser, or render the Purchaser unable, to accept for payment or pay for some or all of the Shares pursuant to the Offer or the Stock Option Agreement, (iii) impose any material limitation on the ability of the Purchaser to acquire or hold or effectively to exercise all rights of ownership of the Shares acquired pursuant to the Offer and the Stock Option Agreement or (iv) otherwise have a Material Adverse Effect; (e) the applicable HSR Act waiting period shall not have expired or been terminated; (f) the Company or any of its subsidiaries, joint ventures or partnerships or other affiliates shall have (i) split, combined or otherwise changed, or authorized or proposed the split, combination or other change of, the Shares or its capitalization, (ii) acquired or otherwise caused a reduction in the number of, or authorized or proposed the acquisition or other reduction in the number of, any presently outstanding Shares or other securities or other equity interests, (iii) issued, distributed or sold, or authorized or proposed the issuance, distribution or sale of, additional Shares, other than Shares issued or sold upon exercise (in accordance with the present terms thereof) of options issued pursuant to the Option Plans, shares of any other class of capital stock or other equity interests, other voting securities, debt securities or any securities convertible into, or rights, warrants or options, conditional or otherwise, to acquire, any of the foregoing, (iv) declared, paid or proposed to declare or pay any cash dividend or other distribution on any shares of capital stock of the Company (other than stock dividends not exceeding amounts previously declared by the Company), (v) altered or proposed to alter any material term of any outstanding security or material contract, permit or license, (vi) incurred any debt otherwise than in the ordinary course of business or any debt containing, in the sole judgment of the Purchaser, burdensome covenants or security provisions, (vii) authorized, recommended, proposed or entered into an agreement (unless the Purchaser or Kuhlman is party to such agreement) with respect to any merger, consolidation, recapitalization, liquidation, dissolution, business combination, acquisition of assets, disposition of assets, release or relinquishment of any material contractual or other right of the Company or any of its subsidiaries or any comparable event not in the ordinary course of business, (viii) entered into any employment, change in control, severance, executive compensation or similar agreement, arrangement or plan with or for one or more of its employees, consultants or directors, or entered into or amended, or made grants or awards pursuant to, any agreements, arrangements or plans so as to provide for increased benefits to one or more employees, consultants or directors, or taken any action to fund, secure or accelerate the funding of compensation or benefits provided for one or more employees, consultants or directors, whether or not as a result of or in connection with the transactions contemplated by the Stock Option Agreement and the Offer, (ix) except as may be required by law, taken any action to terminate or amend any employee benefit plan (as defined in Section 3(c) of the Employee Retirement Income Security Act of 1974, as amended) of the Company or any of its subsidiaries, or the Purchaser shall become aware of any such action not previously disclosed by the Company in a publicly available filing with the Commission, or (x) amended or authorized or proposed any amendment to its Articles of Incorporation or Bylaws or similar organizational documents, or the Purchaser shall become aware that the Company or any of its subsidiaries shall have proposed or adopted any such amendment not previously disclosed by the Company in a publicly available filing with the Commission; or (g) a tender or exchange offer for any Shares shall be made or publicly proposed to be made by any person other than the Purchaser or Kuhlman (including the Company or any of its subsidiaries or affiliates), or it shall be publicly disclosed or the Purchaser shall otherwise learn that (i) any person, entity (including the Company or any of its subsidiaries) or "group" (within the meaning of Section 13(d)(3) of the Exchange Act) other than the Purchaser or Kuhlman shall have acquired or proposed to acquire beneficial ownership of 5% or more of any class or series of capital stock of the Company (including the Shares), through the acquisition of stock, the formation of a group or otherwise, or shall have been granted any right, option or warrant, conditional or otherwise, to acquire beneficial ownership of 5% or more of any class or series of capital stock of the Company (including the Shares) other than acquisitions for bona fide arbitrage purposes only and except as disclosed in a Schedule 13D or Schedule 13G on file with the Commission on the date of this Offer to Purchase, (ii) any person or group 19 other than the Purchaser and Kuhlman shall enter into a definitive agreement or an agreement in principle or make a proposal with respect to a tender or exchange offer or a merger, consolidation or other business combination with or involving the Company, or with respect to any amendment of or modification to an existing such transaction, or (iii) any person other than the Purchaser or Kuhlman shall file a Notification and Report Form under the HSR Act or make a public announcement reflecting an intent to acquire the Company or any assets or securities of the Company; which, in the sole judgment of the Purchaser in any such case, and regardless of the circumstances (including any action or inaction by the Purchaser or any of its affiliates) giving rise to any such condition, makes it inadvisable to proceed with the Offer or such acceptance for payment or payment. The foregoing conditions are for the sole benefit of the Purchaser and may be asserted by the Purchaser regardless of the circumstances (including any action or inaction by the Purchaser or any of its affiliates) giving rise to any such condition or may be waived by the Purchaser in whole or in part at any time and from time to time in its sole discretion. The failure by the Purchaser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right, the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances, and each right shall be deemed an ongoing right that may be asserted at any time and from time to time. Any determination by the Purchaser concerning any condition or event described in this Section 15 shall be final and binding upon all parties. 16. FEES AND EXPENSES. The Purchaser will not pay any fee or commission to any broker or dealer or any other person (other than the Information Agent as described below) for soliciting tenders pursuant to the Offer. Georgeson & Company Inc. has been retained by the Purchaser as Information Agent in connection with the Offer. The Information Agent may contact and provide information to Shareholders by mail, telephone, telex, telegraph or personal interview and may request brokers, dealers and nominees to forward certain material to beneficial owners. Such firm and the Depositary will each receive customary compensation from the Purchaser for services relating to the Offer, will be reimbursed for reasonable out-of-pocket expenses in connection therewith and will be indemnified against certain liabilities and expenses in connection with the Offer, including liabilities under the federal securities laws. Brokers, dealers, firms, commercial banks and trust companies will be reimbursed by the Purchaser for reasonable and necessary costs and expenses incurred by them in forwarding material to their customers. 17. CERTAIN LEGAL MATTERS. GENERAL. Except as described below, based upon the Purchaser's examination of publicly available filings of the Company, the Purchaser is not aware of any approval or other action by any federal, state or foreign governmental or administrative authority that would be required for the acquisition of Shares by the Purchaser pursuant to the Offer, or of any licenses or other regulatory permits that appear to be material to the business of the Company and that would be adversely affected by the acquisition of Shares pursuant to the Offer or otherwise. Should any such approval or other action be required, it is currently contemplated that such approval or action would be sought. There is no assurance that any such approval or action, if needed, would be obtained or taken, or, if obtained or taken, would not be without substantial conditions, or that adverse consequences might not result to the business of the Company or that certain parts of the business of the Company might not have to be disposed of in the event that such approvals were not obtained or such other actions were not taken. The Purchaser's obligation under the Offer to accept for payment and pay for Shares is subject to certain conditions, including conditions relating to the legal matters discussed in this Section 17. See Section 15. ANTITRUST. Under the HSR Act and the rules and regulations thereunder (the "HSR Rules"), a cash tender offeror is not permitted to purchase voting securities of a target company pursuant to an offer subject to the HSR Act until the expiration of a 15-day waiting period following the furnishing of certain required information and documentary material by it to the Antitrust Division of the United States Department of Justice (the "Antitrust Division") and the Federal Trade Commission (the "FTC") unless both the Antitrust Division and the FTC terminate the waiting period prior thereto. If, within that 15-day waiting period, either the Antitrust Division or the FTC requests additional information or documentary material relevant to the offer from the cash tender offeror, then the waiting period is extended until the tenth day after a proper response has been made to such request. The Purchaser expects to file the required information and documentary material in connection with the Offer on or before December 4, 1995, and, accordingly, the required waiting period should expire at 11:59 P.M., Washington, D.C. time, on December 19, 1995, unless the Purchaser receives a request for additional information or documentary material prior thereto. 20 If the acquisition of Shares is delayed pursuant to a request by the Antitrust Division or the FTC for additional information or documentary material pursuant to the HSR Act, then the Offer may, but need not, be extended, and in any event the purchase of and payment for Shares will be deferred until ten days after the Purchaser submits a proper response to such request, unless the 10-day extended period expires on or before the date when the initial 15-day period would otherwise have expired or unless the waiting period is sooner terminated by the Antitrust Division or the FTC. Any such extension will not give rise to any withdrawal rights not otherwise provided for by applicable law. The Antitrust Division and the FTC frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's proposed acquisition of Shares pursuant to the Offer. Although Kuhlman and the Company engage in some related businesses, the Purchaser does not believe the acquisition of Shares pursuant to the Offer will lessen competition or result in a violation of any applicable antitrust laws. Nevertheless, at any time before or after the Purchaser's purchase of Shares pursuant to the Offer, either the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the purchase of Shares pursuant to the Offer or seeking the divestiture of Shares acquired by the Purchaser or the divestiture of substantial assets of either Kuhlman or the Company. Private parties may also bring legal actions under the antitrust laws. The Purchaser cannot predict what the result would be or what delay might ensue if such a challenge were made. Accordingly, if any such action or proceeding by the Antitrust Division, the FTC or any other person should be threatened, instituted or pending, the Purchaser could decline to accept payment and pay for any Shares tendered. See Section 15 for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions. STATE TAKEOVER STATUTES. A number of states have adopted state "takeover" statutes and regulations that purport, to varying degrees, to apply to attempts to acquire securities of corporations that are incorporated or have substantial assets, stockholders, principal executive offices or a principal place of business in such states. Except for the North Carolina Statutes discussed below, the Purchaser does not believe that any of these statutes will by their terms apply to the Offer, and the Purchaser may not have complied with certain of these statutes. The Purchaser reserves the right to challenge the applicability of any state law purporting to apply to the Offer (including the North Carolina Statutes). Nothing in this Offer to Purchase nor any action taken in connection herewith is intended as a waiver of such right. To the extent that certain provisions of these statutes or regulations may purport to apply to the Offer, the Purchaser believes that there are reasonable bases for contesting such statutes or regulations. If it were to be asserted that one or more state takeover statutes or regulations apply to the Offer, and if an appropriate court were not to determine that such statutes or regulations are inapplicable or invalid as applied to the Offer, then the Purchaser might be required to file certain information with or to receive approvals from the relevant state authorities, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or might be delayed in continuing or consummating the Offer. In such a case, the Purchaser might not be obligated to accept for payment or pay for any tendered Shares. THE NORTH CAROLINA STATUTES. The North Carolina Tender Offer Disclosure Act (the "Disclosure Act"), the Protection Act and the Control Act (collectively, the "North Carolina Statutes") purport to regulate tender offers. The Disclosure Act applies to tender offers for equity securities of a company that has its principal place of business and substantial assets in North Carolina. It purports to require the Purchaser to file a statement with the Securities Division of the North Carolina Department of State (the "North Carolina Securities Division") relating to the Offer, and it contains prohibitions against deceptive practices in connection with making a tender offer. In EURE V. GRAND METROPOLITAN LIMITED, the North Carolina Superior Court held that the Disclosure Act's 30-day waiting period prior to the commencement of a tender offer is preempted by the Exchange Act and unenforceable. The Purchaser believes that the Disclosure Act is unconstitutional as applied to the Offer. Without conceding the constitutionality of the Disclosure Act, however, the Purchaser has filed a copy of the Schedule 14D-1 relating to the Offer to the North Carolina Securities Division pursuant to the Disclosure Act. If the North Carolina Securities Division takes action under the Disclosure Act, then the Purchaser might not be obligated to accept for payment or pay for Shares tendered pursuant to the Offer. In such a case, the Purchaser might, among other things, terminate the Offer or amend the terms and conditions of the Offer. See Section 15. The Protection Act purports to regulate certain business combinations of certain public corporations organized under North Carolina law, such as the Company, with a shareholder beneficially owning 20% or more of the voting stock of such corporation after the date the relevant person or entity first becomes a 20% shareholder. The statute provides, with certain exceptions, that such a corporation shall not engage at any time in any business combination with such a shareholder without approval of the holders of 95% of the outstanding shares (other than the shares owned by the 20% shareholder). Although the Purchaser is not aware of any judicial decision with respect to the constitutionality of the Protection Act, it believes that such statute may be unconstitutional. Without conceding the constitutionality of the Protection Act, however, the Purchaser intends 21 to attempt to comply with the statute in pursuing any merger with the Company following consummation of the Offer. The Protection Act does not by its terms apply to the Offer itself. For further information about the Protection Act, see Section 12 of this Offer to Purchase. The Control Act provides that an entity that acquires "control shares" of a publicly held North Carolina corporation may not vote those shares unless a majority of all the outstanding shares of the corporation (not including "interested shares") entitled to vote for the election of directors adopts a resolution to accord voting rights to the control shares. An entity acquires control shares whenever it acquires shares that would bring its voting power in the corporation to one of three thresholds: 20%, 33 % or 50%. As used in the Control Act, the term "interested shares" means shares of the corporation beneficially owned by any person who has acquired or proposes to acquire control shares in a control share acquisition, by any officer of the corporation or by any employee of the corporation who is also a director of the corporation. The disinterested shareholders decide whether to accord votes to such shares at the corporation's next shareholders' meeting, unless the acquiror requests management to hold a special meeting of shareholders for such purpose and files a statement divulging certain information about itself and its intended plans. If such a meeting is requested, it must be held within 50 days of such request. If the disinterested shareholders accord voting rights to the control shares and the acquiror owns a majority of all shares, then any minority shareholder may dissent and receive the "fair value" for his shares (not less than the highest price paid by the acquiror for any control shares). Although the Purchaser is not aware of any judicial decision with respect to the constitutionality of the Control Act, it believes that such statute may be unconstitutional as applied to the Offer. Without conceding the constitutionality of the Control Act, the Purchaser intends to attempt to comply with the Control Act in pursuing the Offer. In this connection, the Purchaser has delivered an "acquiring person statement" to the Company as required by the Control Act and has requested a special meeting of shareholders of the Company as permitted by the Control Act. The Purchaser expects the Company to honor such request by calling, within ten days hereof, a special meeting of its shareholders to be held no sooner than 30 days and no later than 50 days from the date hereof. The Control Act states that notice of the special meeting must be given as promptly as reasonably practicable and must include the Purchaser's acquiring person statement, a statement of the position or recommendation of the Company Board of Directors (or a statement that the Company Board of Directors is taking no position or making no recommendation) with respect to granting voting rights to the control shares and a statement describing Shareholders' rights of redemption and the procedure for exercising such rights. The Purchaser and Kuhlman believe that they will accordingly satisfy the requirements of the Control Act. If legal action is nevertheless commenced against the Purchaser or Kuhlman under the Control Act, then the Purchaser might not be obligated to accept for payment or pay for Shares tendered pursuant to the Offer. In such a case, the Purchaser might, among other things, terminate the Offer or amend the terms and conditions of the Offer. See Section 15. 18. MISCELLANEOUS. The Offer is not being made to, nor will tenders be accepted from or on behalf of, Shareholders in any jurisdiction in which the Offer or the acceptance thereof would not be in compliance with the securities laws of such jurisdiction, but the Purchaser may, in its sole discretion, take such action as it may consider necessary to make the Offer in any such jurisdiction and extend the Offer to Shareholders in such jurisdiction. No person has been authorized to give any information or make any representation on behalf of the Purchaser not contained in the Offer, and, if given or made, such information or representation must not be relied upon as having been authorized. The Purchaser has filed with the Commission a Schedule 14D-1, together with exhibits, pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange Act, furnishing certain additional information with respect to the Offer. Such Schedule 14D-1 may be examined and copies may be obtained at the same places and in the same manner as set forth with respect to the information concerning the Company in Section 8 of this Offer to Purchase (except that it will not be available at the regional offices of the Commission). KUHLMAN ACQUISITION CORP. November 29, 1995 22 Annex A DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER The names and titles of the directors and executive officers of the Purchaser and their principal occupations or employments during the last five years are set forth below. The address of each such director and executive officer is 3 Skidaway Village Square, Savannah, Georgia 31411. All directors and officers listed below are citizens of the United States.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND FIVE-YEAR NAME AND TITLE EMPLOYMENT HISTORY Robert S. Jepson, Jr. See description in Annex B. Chairman of the Board, Chief Executive Officer and Director Curtis G. Anderson See description in Annex B. President and Director Vernon J. Nagel See description in Annex B. Vice President and Treasurer Richard A. Walker See description in Annex B. Secretary Ward D. Richards Mr. Richards, who was elected as Assistant Assistant Secretary Secretary of the Purchaser on October 1, 1995, has served as Senior Corporate Attorney of Kuhlman since 1993. From August 1991 to August 1993, Mr. Richards served as Corporate Attorney for Kuhlman. Prior thereto, he was an associate in the law firm of Wyatt, Tarrant & Combs. Jeffrey R. Samuels Mr. Samuels, who was elected as Assistant Assistant Treasurer Treasurer of the Purchaser on October 1, 1995, has served as Director of Finance since May 1993. From April 1989 to May 1993, he was Controller of Burns Aerospace Corporation.
A-1 Annex B DIRECTORS AND EXECUTIVE OFFICERS OF KUHLMAN The names and titles of the directors and executive officers of Kuhlman and their principal occupations or employments during the last five years are set forth below. Except as otherwise indicated below, the address of each such director and executive officer is 3 Skidaway Village Square, Savannah, Georgia 31411. All directors and officers listed below are citizens of the United States.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND NAME AND TITLE FIVE-YEAR EMPLOYMENT HISTORY Robert S. Jepson, Jr. Mr. Jepson, who was elected President and Chief Executive Chairman of the Board, Chief Officer of Kuhlman on February 10, 1993, and Chairman of Executive Officer and Director the Board on June 9, 1993, founded and was Chairman and Chief Executive Officer of The Jepson Corporation from 1983 until its sale in 1989. The Jepson Corporation was a diversified manufacturing company listed on the New York Stock Exchange. Immediately preceding his election as President and Chief Executive Officer of Kuhlman, Mr. Jepson was, and is currently, Chairman and Chief Executive Officer of Jepson Associates, Inc., a private investment company. He currently serves as a director of The Washington Water Power Company and Savannah Foods & Industries, Inc. Curtis G. Anderson Mr. Anderson, who was elected President and Chief President, Chief Operating Officer and Director Operating Officer of Kuhlman on April 26, 1994, and director on September 8, 1993, founded and has been, since 1986, Chairman of Anderson Capital Corporation, a private investment company. Prior thereto, he spent 19 years in corporate and investment banking, including 14 years with Citibank and five years with The First National Bank of Chicago where he served as Executive Vice President, Head of Financial Products Department. Gary G. Dillon Mr. Dillon has served as Chairman of the Board, President Chairman, President and Chief Executive Officer and Chief Executive Officer of Schwitzer, Inc. since June of Schwitzer, Inc. and Director 1991, having served as President and Chief Executive Officer since April 1989. Prior thereto, he served as President and Chief Executive Officer of Household Manufacturing, Inc. Mr. Dillon currently serves as a director of Household International, Inc. Vernon J. Nagel Mr. Nagel joined Kuhlman on April 5, 1993 and was elected Executive Vice President of Finance, Vice President of Finance, Chief Financial Officer and Chief Financial Officer and Treasurer Treasurer of Kuhlman on June 9, 1993 and Executive Vice President of Finance on February 22, 1994. He was the Vice President of Finance, Chief Financial Officer and Secretary of Stericycle, Inc. (medical waste management) from January 1990 until March 1993. Prior thereto, he served as a Vice President of The Jepson Corporation from 1985 until 1990, including Chief Financial Officer from 1989 until 1990 and Controller from 1986 until 1989.
B-1
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND NAME AND TITLE FIVE-YEAR EMPLOYMENT HISTORY Richard A. Walker Mr. Walker has served as an Executive Vice President or Executive Vice President, Chief Administrative Officer, in a similar position with Kuhlman since 1991. General Counsel and Secretary From 1984 until April 1991, Mr. Walker served as Vice President, General Counsel and Secretary of Kuhlman. Prior thereto, he was a partner in the law firm of Harness, Dickey & Pierce. John Zvolensky, Jr. Mr. Zvolensky has served as President and Chief Executive President and Chief Executive Officer of Officer of Kuhlman Electric Corporation since July 31, Kuhlman Electric Corporation 1995. From July 1994 until joining Kuhlman Electric, he was General Manager and Chief Operating Officer of the Greater Cleveland Growth Association. From January 1992 to September 1993, he was President of WCI Cabinet Group, a division of White Consolidated Industries. From 1987 to 1991, Mr. Zvolensky was President and Chief Executive Officer of Emerson Quiet Cool. William E. Burch Mr. Burch has been a consultant from 1982 to the present Director and currently serves as a director of Atkinson Company. From 1984 to 1993, he was counsel to the law firm of Lukins & Annis in Spokane, Washington. From 1981 to 1984, he served as Vice Chairman of Fred S. James & Co. (insurance brokers). From 1975 to 1981, he served that company as President and Chief Executive Officer. Steve Cenko Mr. Cenko has been a consultant from 1985 to the present. Director From 1980 to 1985 he served as President of Lamb Systems Group (engineering, manufacturing and marketing of machine tools) and as a director and Executive Vice President of Lamb Technicon Corporation (holding company). Alexander W. Dreyfoos, Jr. Mr. Dreyfoos is currently serving as Chairman of the Director Board of Photo Electronics Corporation (broadcasting) and WPEC TV (Palm Beach, Florida) and has served continuously in those positions since 1963 and 1973, respectively. William M. Kearns, Jr. Mr. Kearns is currently President of W.M. Kearns & Co., Director Inc. (private investment company). He was associated with Lehman Brothers (investment banking) and its predecessor firms for more than 33 years. From 1992 to 1994 he was an Advisory Director of Lehman Brothers and from 1969 through 1992 he was a Managing Director of that firm. He also serves as a director of Selective Insurance Group, Inc. and Mountasia Entertainment International, Inc. Robert D. Kilpatrick Mr. Kilpatrick currently serves as a director of United Director Companies Financial Corporation. He retired as Chairman of the Board and Chief Executive Officer of CIGNA Corporation (insurance) in 1989 and 1988, respectively. He served in various executive positions with CIGNA prior thereto. John L. Marcellus, Jr. Mr. Marcellus currently serves as a director of Southern Director Financial Federal Savings Bank. He retired as Chairman, President and Chief Executive Officer of Oneida Ltd. (tableware manufacturing) in 1986.
B-2
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND NAME AND TITLE FIVE-YEAR EMPLOYMENT HISTORY George J. Michel, Jr. Mr. Michel has been a private investor and consultant and Director Chairman of Windstar International, Inc. (management consulting) from 1990 to the present. Prior to 1990, he was Chairman of Stanadyne, Inc. (diversified manufacturer of fabricated metal products) from 1985 to 1989 and Chief Executive Officer of the same corporation from 1988 to 1989. General H. Norman Schwarzkopf General Schwarzkopf currently serves as a director of Director Borg Warner Security Corporation and The Washington Water Power Company and is active as an author, lecturer and TV consultant. He retired in August 1991 as a Four-Star General in the U.S. Army after having served as Commander in Chief, United States Central Command, Department of Defense, and Commander of Operations Desert Shield and Desert Storm.
B-3 Facsimile copies of the Letter of Transmittal will be accepted. The Letter of Transmittal and certificates for Shares should be sent or delivered by each Shareholder or such holder's broker, dealer, bank or other nominee to the Depositary at one of its addresses set forth below: The Depositary for the Offer is: HARRIS TRUST COMPANY OF NEW YORK By Mail: By Courier: By Hand: Wall Street Station 77 Water Street Receive Window P.O. Box 1023 4th Floor 77 Water Street, Fifth New York, New York 10268-1023 New York, New York 10005 Floor New York, New York 10005 By Facsimile: (212) 701-7636 (212) 701-7637 Confirm Facsimile by Telephone to: (212) 701-7623
Any questions or requests for assistance or additional copies of the Offer to Purchase and the Letter of Transmittal may be directed to the Information Agent at its address and telephone number set forth below. You may also contact your local broker, dealer, commercial bank or trust company for assistance concerning the Offer. The Information Agent for the Offer is: GEORGESON & COMPANY INC. Wall Street Plaza New York, New York 10005 (800) 223-2064 (call toll-free) (212) 440-9800 (banks and brokers call collect) EX-20 5 EXHIBIT 4 Exhibit 4 LETTER OF TRANSMITTAL TO TENDER SHARES OF COMMON STOCK OF COMMUNICATION CABLE, INC. PURSUANT TO THE OFFER TO PURCHASE DATED NOVEMBER 29, 1995 BY KUHLMAN ACQUISITION CORP. A WHOLLY-OWNED SUBSIDIARY OF KUHLMAN CORPORATION THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, JANUARY 22, 1996, UNLESS EXTENDED. THE DEPOSITARY FOR THE OFFER IS: HARRIS TRUST COMPANY OF NEW YORK BY MAIL: BY COURIER: BY HAND: WALL STREET STATION 77 WATER STREET RECEIVE WINDOW P. O. BOX 1023 4TH FLOOR 77 WATER STREET, FIFTH FLOOR NEW YORK, NEW YORK 10268-1023 NEW YORK, NEW YORK 10005 NEW YORK, NEW YORK 10005 BY FACSIMILE: (212) 701-7636 (212) 701-7637 CONFIRM FACSIMILE BY TELEPHONE TO: (212) 701-7623
Delivery of this instrument to an address other than as set forth above, or transmission via a facsimile number other than as listed above, will not constitute a valid delivery. This Letter of Transmittal is to be completed by holders of Shares ("Shareholders" or "holders") either if certificates are to be forwarded herewith or if delivery is to be made by book-entry transfer to the account maintained by Harris Trust Company of New York (the "Depositary") at The Depository Trust Company ("DTC"), the Midwest Securities Trust Company ("MSTC") or the Philadelphia Depository Trust Company ("PDTC") pursuant to the procedures set forth in Section 3 of the Offer to Purchase. Each of DTC, MSTC and PDTC is a "Book-Entry Transfer Facility"; collectively, they are the "Book-Entry Transfer Facilities." Shareholders who deliver Shares by book-entry transfer are referred to herein as "Book-Entry Shareholders." Shareholders other than Book-Entry Shareholders are referred to herein as "Certificate Shareholders." Shareholders whose certificates are not immediately available or who cannot deliver their certificates and all other documents required hereby to the Depositary on or prior to the Expiration Date must tender their Shares according to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2. NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ CAREFULLY THE ACCOMPANYING INSTRUCTIONS. [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution Check Box of Applicable Book-Entry Transfer Facility: [ ] DTC [ ] MSTC [ ] PDTC Account Number Transaction Code Number [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Registered Owner(s) Date of Execution of Notice of Guaranteed Delivery Name of Eligible Institution that Guaranteed Delivery If Delivered by Book-Entry Transfer, Check Box of Applicable Book-Entry Transfer Facility: [ ] DTC [ ] MSTC [ ] PDTC Account Number Transaction Code Number DESCRIPTION OF SHARES TENDERED NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) CERTIFICATE(S) TENDERED (PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY) TOTAL NUMBER OF SHARES NUMBER OF CERTIFICATE REPRESENTED BY SHARES NO(S).* CERTIFICATE(S)* TENDERED** TOTAL SHARES * Need not be completed by Book-Entry Shareholders. ** Unless otherwise indicated, it will be assumed that all Shares evidenced by any certificates delivered to the Depositary are being tendered. See Instruction 4.
Ladies and Gentlemen: The undersigned hereby tenders to Kuhlman Acquisition Corp., a North Carolina corporation (the "Purchaser") and a wholly-owned subsidiary of Kuhlman Corporation, a Delaware corporation, the above-described shares (the "Shares") of common stock, par value $1.00 per share (the "Common Stock"), of Communication Cable, Inc., a North Carolina corporation (the "Company"), pursuant to the Purchaser's offer to purchase any and all outstanding Shares at a price of $12.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase dated November 29, 1995 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this Letter of Transmittal. The Offer to Purchase and this Letter of Transmittal together constitute the "Offer." The Purchaser reserves the right to transfer or assign, in whole or from time to time in part, to one or more of its subsidiaries or other affiliates the right to purchase Shares tendered pursuant to the Offer. Subject to, and effective upon, acceptance for payment of and payment for the Shares tendered herewith in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Purchaser all right, title and interest in and to all of the Shares that are being tendered hereby (and any and all other Shares or other securities issued or issuable in respect thereof on or after November 29, 1995 (the "Offer Commencement Date")) and appoints the Depositary the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares (and any such other Shares or securities), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (a) deliver certificates for such Shares (and any such other Shares or securities), or transfer ownership of such Shares on the account books maintained by a Book-Entry Transfer Facility, or both, together in either such case with all accompanying evidence of transfer and authenticity, to or upon the order of the Purchaser, (b) present such Shares (and any such other Shares or securities) for transfer on the books of the Company and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any such other Shares or securities), all in accordance with the terms of the Offer. The undersigned hereby irrevocably appoints Robert S. Jepson, Jr., Curtis G. Anderson, Vernon J. Nagel and Richard A. Walker, and each of them, the attorneys and proxies of the undersigned, each with full power of substitution, to vote in such manner as each such attorney and proxy or his substitute shall in his sole discretion deem proper, and otherwise act (including pursuant to written consent) with respect to all of the Shares tendered hereby that have been accepted for payment by the Purchaser prior to the time of such vote or action (and any and all other Shares or securities issued or issuable in respect thereof on or after the Offer Commencement Date), which the undersigned may be entitled to vote at any meeting of shareholders (whether annual or special and whether or not an adjourned meeting) of the Company or otherwise. This proxy is irrevocable and is granted in consideration of, and is effective upon, the acceptance for payment of such Shares by the Purchaser in accordance with the terms of the Offer. A tendering Shareholder will retain the voting rights (and other rights) associated with such holder's Shares upon tendering such Shares in response to this Offer and at all times thereafter unless and until such Shares are accepted for payment. Such acceptance for payment shall revoke any other proxy granted by the undersigned at any time with respect to such Shares (and any such other Shares or securities), and no subsequent proxies will be given with respect thereto by the undersigned. All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as stated above and in the Offer to Purchase, this tender is irrevocable. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby (and any and all Shares or other securities issued or issuable in respect thereof on or after the Offer Commencement Date) and that, when the same are accepted for payment by the Purchaser, the Purchaser will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances, and the same will not be subject to any adverse claim. The undersigned, upon request, will execute and deliver any additional documents deemed by the Depositary or the Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby (and any and all Shares or other securities issued or issuable in respect of such Shares on or after the Offer Commencement Date). The undersigned understands that the Purchaser's acceptance for payment of Shares tendered pursuant to any one of the procedures described in Section 3 of the Offer to Purchase will constitute a binding agreement between the undersigned and the Purchaser upon the terms and subject to the conditions of the Offer. Unless otherwise indicated herein under "Special Payment Instructions," please issue the check for the purchase price and/or return any certificates for Shares not tendered or accepted for payment in the name(s) of the registered holder(s) appearing under "Description of Shares Tendered." Similarly, unless otherwise indicated under "Special Delivery Instructions," please mail the check for the purchase price and/or return any certificates for Shares not tendered or accepted for payment (and accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing under "Description of Shares Tendered." In the event that both the Special Delivery Instructions and the Special Payment Instructions are completed, please issue the check for the purchase price and/or return any certificates for Shares not tendered or accepted for payment in the name of, and deliver said check and/or return such certificates to, the person or persons so indicated. The undersigned recognizes that the Purchaser has no obligation pursuant to the Special Payment Instructions to transfer any Shares from the name of the registered holder thereof if such Purchaser does not accept for payment any of the Shares so tendered. SPECIAL PAYMENT INSTRUCTIONS (See Instructions 1, 5, 6 and 7) To be completed ONLY if certificates for Shares not tendered or not purchased and/or the check for the purchase price of Shares purchased are to be issued in the name of someone other than the undersigned. Issue check and/or certificates to: Name (PLEASE PRINT) Address (INCLUDE ZIP CODE) (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER) SPECIAL DELIVERY INSTRUCTIONS (See Instructions 1, 5, 6 and 7) To be completed ONLY if certificates for Shares not tendered or not purchased and/or the check for the purchase price of Shares purchased are to be sent to someone other than the undersigned, or to the undersigned at an address other than that shown on the front cover. Send check and/or certificates to: Name PLEASE PRINT Address (INCLUDE ZIP CODE) (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER) SIGN HERE (SIGNATURE(S) OF HOLDER(S) OF SHARES) Dated , 199 (Must be signed by the registered holder(s) exactly as name(s) appear(s) on Share certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by trustee(s), executor(s), administrator(s), guardian(s), attorney(s)-in-fact, officer(s) of corporation(s) or other(s) acting in a fiduciary or representative capacity, then please set forth full title(s) and see Instruction 5.) Name(s) (PLEASE PRINT) Capacity (Full Title) Address (INCLUDING ZIP CODE) Area Code and Telephone Number Taxpayer Identification or Social Security No. (COMPLETE SUBSTITUTE W-9 ON REVERSE) GUARANTEE OF SIGNATURE(S) (IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5) Authorized Signature Name Name of Firm Address (INCLUDING ZIP CODE) Area Code and Telephone Number Dated , 199 INSTRUCTIONS Forming Part of the Terms and Conditions of the Offer 1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by an eligible institution in a recognized Medallion Guarantee Program (an "Eligible Institution"). An Eligible Institution means a firm or any other entity identified in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, including (as such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal securities dealer, municipal securities broker, government securities dealer or government securities broker; (iii) a credit union; (iv) a national securities exchange, registered securities association or clearing agency; or (v) a savings association. A verification by a notary public is not acceptable. Signatures on this Letter of Transmittal need not be guaranteed if this Letter of Transmittal is signed by the registered holder(s) of the Share certificates submitted herewith and such holder(s) have not completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" on this Letter of Transmittal. See Instruction 5. 2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of Transmittal is to be completed by Shareholders either if certificates are to be forwarded herewith or if tenders of Shares are to be made pursuant to the procedures for delivery by book-entry transfer set forth in Section 3 of the Offer to Purchase. Certificates for all Shares tendered physically, or confirmation of any book-entry transfer into the Depositary's account at a Book-Entry Transfer Facility of Shares tendered electronically, as well as a properly completed and duly executed Letter of Transmittal or facsimile thereof, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth herein on or prior to the Expiration Date (as defined in the Offer to Purchase). Shareholders whose certificates are not immediately available or who cannot deliver their certificates and all other required documents to the Depositary on or prior to the Expiration Date may tender their Shares by properly completing and duly executing the Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to such procedure, (i) such tender must be made by or through an Eligible Institution, (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Purchaser, must be received by the Depositary by the Expiration Date and (iii) the certificates for all Shares (or confirmation of book-entry transfer of Shares into the Depositary's account at a Book-Entry Transfer Facility), together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof) and any other documents required by this Letter of Transmittal, must be received by the Depositary within three National Association of Securities Dealers, Inc. Automated Quotation National Market System trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided in Section 3 of the Offer to Purchase. The method of delivery of Shares and all other required documents is at the option and risk of the tendering Shareholder. If sent by mail, the use of registered mail with return receipt requested, properly insured, is recommended. No alternative, conditional or contingent tenders will be accepted. All tendering Shareholders, by execution of this Letter of Transmittal (or facsimile thereof), waive any right to receive any notice of the acceptance of their Shares for payment. 3. INADEQUATE SPACE. If the space provided herein is inadequate, the certificate numbers and/or the number of Shares should be listed on a separate schedule attached hereto. 4. PARTIAL TENDERS. This Instruction 4 is applicable to Certificate Shareholders only. If fewer than all of the Shares evidenced by any certificate submitted are to be tendered, fill in the number of Shares that are to be tendered in the box entitled "Description of Shares Tendered." In such case, new certificate(s) for the remainder of the Shares that were evidenced by old certificate(s) will be sent to the registered holder, unless otherwise provided in the appropriate box on this Letter of Transmittal, as soon as practicable after the Expiration Date. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. SIGNATURES ON LETTER OF TRANSMITTAL, POWERS AND ENDORSEMENTS. If this Letter of Transmittal is signed by the registered holder of the Shares tendered hereby, then the signature must correspond with the name as written on the face of the certificate(s) without alteration, enlargement or any change whatsoever. If any of the Shares tendered hereby are owned of record by two or more joint owners, then all such owners must sign this Letter of Transmittal. If any tendered Shares are registered in different names on several certificates, then it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates. If this Letter of Transmittal or any certificates or powers of attorney are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, then such persons should so indicate when signing, and proper evidence satisfactory to the Purchaser of their authority so to act must be submitted. When this Letter of Transmittal is signed by the registered owner(s) of the Shares listed and transmitted hereby, no endorsements of certificates or separate powers of attorney are required unless payment is, or certificates for Shares not tendered or purchased are, to be issued to a person other than the registered owner(s). Signatures on such certificates or powers of attorney must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered owner(s) of the certificates listed, then the certificates must be endorsed or accompanied by appropriate powers of attorney, in either case signed exactly as the name or names of the registered owner or owners appear on the certificates. Signatures on such certificates or powers of attorney must be guaranteed by an Eligible Institution. 6. TRANSFER TAXES. The Purchaser will pay any transfer taxes with respect to the transfer and sale of purchased Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or if certificates for Shares not tendered or purchased are to be registered in the name of, any person other than the registered holder, or if tendered certificates are registered in the name of any person other than the person(s) signing this Letter of Transmittal, then the amount of any transfer taxes (whether imposed on the registered holder or such person) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes or exemption therefrom is submitted. Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the certificates for Shares listed in this Letter of Transmittal. 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is, and/or certificates for unpurchased Shares are, to be issued in the name of a person other than the signer of this Letter of Transmittal, or if a check is to be sent, and/or such certificates are to be returned, to someone other than the signer of this Letter of Transmittal or to an address other than that shown above, then the appropriate boxes on this Letter of Transmittal should be completed. 8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance may be directed to, or additional copies of the Offer to Purchase and this Letter of Transmittal may be obtained from, the Information Agent at the address set forth below or from your broker, dealer, commercial bank or trust company. 9. SUBSTITUTE FORM W-9. The tendering Shareholder is required to provide the Depositary with a correct Taxpayer Identification Number ("TIN") on Substitute Form W-9. Failure to provide the information on the form may subject the tendering Shareholder to 31% federal income tax withholding on the payment of the purchase price. The box in Part 3 of the form may be checked if the tendering Shareholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future. If the box in Part 3 is checked and the Depositary is not provided with a TIN within 60 days, then the Depositary will withhold 31% of all payments of the purchase price thereafter until a TIN is provided to the Depositary. Important: This Letter of Transmittal (or a manually executed facsimile copy thereof), together with certificates or confirmation of book-entry transfer and all other required documents or the Notice of Guaranteed Delivery, must be received by the Depositary by the Expiration Date (as defined in the Offer to Purchase). IMPORTANT TAX INFORMATION Under federal income tax law, a Shareholder whose tendered Shares are accepted for payment is required to provide the Depositary with such holder's correct TIN on Substitute Form W-9 below. If such holder is an individual, then the TIN is his or her social security number. If the Depositary is not provided with the correct TIN, then the Shareholder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, payments that are made to such holder with respect to Shares purchased pursuant to the Offer may be subject to 31% backup withholding. Certain Shareholders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, that Shareholder must submit to the Depositary a statement, signed under penalties of perjury, attesting to that individual's exempt status. Such statements can be obtained from the Depositary or the Information Agent. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional instructions. If backup withholding applies, then the Depositary is required to withhold 31% of any payments made to the Shareholder or other payee. Backup withholding is not an additional federal income tax. Rather, the federal income tax liability of persons subject to backup withholding will be reduced by the amount of such tax withheld. If withholding results in an overpayment of taxes, then a refund may be obtained from the Internal Revenue Service. PURPOSE OF SUBSTITUTE FORM W-9 In order to prevent backup withholding on payments made to a Shareholder or other payee with respect to Shares purchased pursuant to the Offer, the Shareholder is required to notify the Depositary of such holder's current TIN (or the TIN of any other payee) by completing the form below, certifying that the TIN provided on Substitute Form W-9 is correct (or that such holder is awaiting a TIN) and that (1) the Shareholder has not been notified by the Internal Revenue Service that such holder is subject to backup withholding as a result of failure to report all interest or dividends or (2) the Internal Revenue Service has notified the Shareholder that such holder is no longer subject to backup withholding. WHAT NUMBER TO GIVE THE DEPOSITARY The Shareholder is required to give the Depositary the social security number or employer identification number of the record owner of such holder's Shares. If such Shares are registered in more than one name or are not registered in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. PAYER'S NAME: HARRIS TRUST COMPANY OF NEW YORK PART 1 -- Please provide your TIN in the box at Social Security Number(s) or Employer right and certify by signing and dating below. Identification Number(s) SUBSTITUTE FORMW-9 Department of the Treasury PART 2 -- CERTIFICATES -- Under penalties of perjury, I certify that: (1) The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued for me), and (2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) Internal Revenue Service I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup PAYER'S REQUEST FOR withholding as a result of a failure to report all interest or dividends, or (c) the IRS has TAXPAYER notified me that I am no longer subject to backup withholding. IDENTIFICATION CERTIFICATION INSTRUCTIONS -- You must cross out Part 2 above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or NUMBER (TIN) dividends on your tax return. SIGNATURE PART 3 -- DATE , 199 Awaiting TIN [ ]
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all payments of the purchase price made to me thereafter will be withheld until I provide a number. Signature Date , 199
Questions and requests for assistance or additional copies of the Offer to Purchase, the Letter of Transmittal and other tender offer materials may be directed to the Information Agent as set forth below. The Information Agent for the Offer is: GEORGESON & COMPANY INC. Wall Street Plaza New York, New York 10005 (800) 223-2064 (call toll-free) (212) 440-9800 (banks and brokers call collect) -----END PRIVACY-ENHANCED MESSAGE-----