-----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, IgbU5tfS67AhGuO04/xf3Qpn/ozREZZknRWuEBVOJzu+ifDBmHKq71Owc0Y2eebG kv6NkiHE8YZXiS09jYO0jA== 0000918402-95-000038.txt : 19951130 0000918402-95-000038.hdr.sgml : 19951130 ACCESSION NUMBER: 0000918402-95-000038 CONFORMED SUBMISSION TYPE: PRE13E3 PUBLIC DOCUMENT COUNT: 15 FILED AS OF DATE: 19951128 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: BIG O TIRES INC CENTRAL INDEX KEY: 0000718082 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MOTOR VEHICLES & MOTOR VEHICLE PARTS & SUPPLIES [5010] IRS NUMBER: 870392481 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: PRE13E3 SEC ACT: 1934 Act SEC FILE NUMBER: 005-37842 FILM NUMBER: 95596579 BUSINESS ADDRESS: STREET 1: 11755 E PEAKVIEW AVE CITY: ENGLEWOOD STATE: CO ZIP: 80111 BUSINESS PHONE: 3037902800 MAIL ADDRESS: STREET 1: 11755 E PEAKVIEW AVENUE CITY: ENGLEWOOD STATE: CO ZIP: 80111 FORMER COMPANY: FORMER CONFORMED NAME: TIRES INC DATE OF NAME CHANGE: 19870101 FORMER COMPANY: FORMER CONFORMED NAME: VENTURE CONSOLIDATED INC DATE OF NAME CHANGE: 19841021 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HOPPER & KANOUFF PC CENTRAL INDEX KEY: 0000918402 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: PRE13E3 BUSINESS ADDRESS: STREET 1: 1610 WYNKOOP STREET STREET 2: SUITE 200 CITY: DENVER STATE: CO ZIP: 80202-0457 BUSINESS PHONE: 3038926000 MAIL ADDRESS: STREET 1: 1610 WYNKOOP STREET STE 200 CITY: DENVER STATE: CO ZIP: 80201-0457 PRE13E3 1 SCHEDULE 13E-3 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 2O549 Rule 13e-3 Transaction Statement (Pursuant to Section 13(e) of the Securities Exchange Act of 1934) BIG O TIRES, INC. ------------------------------------------ (Name of the Issuer) BOTI Holdings, Inc. BOTI Acquisition Corp. Big O Tires, Inc. ------------------------------------------ (Name of Person(s) Filing Statement) Common Stock, par value $.10 per share (Title of Class of Securities) 089324206 ------------------------------ (CUSIP Number of Class of Securities) Richard M. Russo, Esq. GIBSON, DUNN & CRUTCHER 1801 California Street, Suite 4100 Denver, Colorado 80202 (303) 298-5700 ------------------------------------------ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Person(s) Filing Statement) This statement is filed in connection with (check the appropriate box): a. [x] The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of 1934. b. [ ] The filing of a registration statement under the Securities Act of 1933. c. [ ] A tender offer. d. [ ] None of the above. Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: [X]. Calculation of Filing Fee ------------------------------------------------- Transaction valuation Amount of Filing Fee* $56,699,686.00 $11,339.94 ------------------------------------------------- * The filing fee is calculated as 1/50 of 1% of the transaction value of $56,699,686.00 (based on the purchase of 3,317,840 shares of common stock for a total price of $54,744,360 and the cancellation of 216,308 options at a total price of $1,955,326). [X] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid . . . . . . . . . . . . . $11,339.94 Form or Registration No.: . . . . . . . . . . . . Schedule 14A Filing Party: . . . . . . . . . . . . . . . . . . Big O Tires, Inc. Date Filed: . . . . . . . . . . . . . . . . . . . November 20, 1995 INTRODUCTION This Rule 13e-3 Transaction Statement (the "Statement") relates to a Proxy Statement (the "Proxy Statement") of Big O Tires, Inc., a Nevada corporation (the "Company") and the issuer of the class of equity securities to which this Statement relates, concerning the proposed merger (the "Merger") of BOTI Acquisition Corp., a Nevada corporation (the "Purchaser") and a wholly owned subsidiary of BOTI Holdings, Inc., a Nevada corporation (the "Parent"), with and into the Company, pursuant to which each outstanding share of Common Stock, par value $0.10 per share (the "Common Stock"), of the Company, except certain excluded shares, will be canceled and converted into the right to receive $16.50 in cash, upon the terms and subject to the conditions set forth in the Agreement and Plan of Merger, dated as of July 24, 1995, as amended, among the Parent, the Purchaser and the Company (the "Merger Agreement") (a copy of which is filed as Appendix A to the Proxy Statement which is attached hereto as Exhibit (d)(1)). The information contained or incorporated herein with respect to the Parent, the Purchaser and plans for the Company after the consummation of the Merger has been provided by the Parent. All other information contained or incorporated herein has been provided by the Company. The following cross reference sheet is being supplied pursuant to General Instruction F to Schedule 13E-3 and shows the location, in the Proxy Statement filed by the Company with the Securities and Exchange Commission on the date hereof, of the information required to be included in response to the items of this Statement. With respect to the information required to be included in response to Item 14 of this Statement, the cross-reference sheet indicates the location of such information in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994 (the "Annual Report") or the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1995 (the "Quarterly Report"). Copies of the Annual Report and the Quarterly Report will be furnished to stockholders with the Proxy Statement. The information in the Proxy Statement, the Annual Report, and the Quarterly Report which are attached hereto as Exhibits (d)(1), (d)(2) and (d)(3), respectively, including all exhibits thereto, is hereby expressly incorporated herein by reference and the responses to each item of this Statement are qualified in their entirety by the provisions of the Proxy Statement, the Annual Report and the Quarterly Report. CROSS REFERENCE SHEET Item in Schedule 13E-3 Location in Proxy Statement Item 1(a) Cover Page, "Summary -- the Parties" Item 1(b) "Introduction," "Summary -- The Date and Place of the Special Meeting" and "The Special Meeting -- Record Date and Voting" Item 1(c)-(d) "Summary -- Price Range of Common Stock and Dividend History" and "Price Range of Company Common Stock and Dividend History" Item 1(e)-(f) "Recent Transactions by the Company in the Common Stock" and "Information Pertaining to the Parent, the Purchaser and Related Persons" Item 2(a)-(d) and (g) "Summary -- The Parties," "The Merger Agreement -- Parties to the Merger Agreement," "Directors and Executive Officers of the Company" and "Information Pertaining to the Parent, the Purchaser and Related Persons" Item 2(e)-(f) Inapplicable Item 3(a)-(b) "Information Pertaining to the Parent, The Purchaser and Related Persons -- Certain Past Contacts, Transactions or Negotiations with Company" and "Special Factors -- Background and Negotiations Regarding the Merger" Item 4(a) "Summary -- The Merger," "The Merger Agreement" and "Special Factors -- Background and Negotiations Regarding the Merger" Item 4(b) "Information Pertaining to the Parent, the Purchaser and Related Persons -- General" Item 5(a)-(e) "Summary -- Plans for the Company After the Merger" and "Special Factors -- Plans for the Company After the Merger" Item 5(f)-(g) "Special Factors -- Plans for the Company After the Merger" Item 6(a)-(c) "Special Factors -- Financing of the Merger," "Special Factors -- Expenses of the Merger" and "Information Pertaining to the Parent, the Purchaser and Related Persons -- General" Item 6(d) Inapplicable Item 7(a)-(d) "Special Factors -- The Parent's Purposes and Reasons for the Merger," "Special Factors -- Recommendation of the Board of Directors; the Company's Purpose and Reasons for and Belief as to the Fairness of the Merger," "Special Factors -- Plans for the Company After the Merger" and "Special Factors -- Federal Income Tax Consequences" Item 8(a)-(f) "The Special Meeting -- Vote Required to Approve the Merger," "Summary -- Recommendations for the Merger," "Special Factors -- Recommendation of the Board of Directors; the Company's Purpose and Reasons for and Belief as to the Fairness of the Merger" and "Special Factors -- Opinion of Financial Advisor" and "Special Factors -- The Parent's Purposes and Reasons for the Merger" Item 9(a)-(c) "Summary -- Opinion of Financial Advisor," "Special Factors -- Opinion of Financial Advisor" Item 10(a) "Principal Stockholders of the Company," "Security Ownership of the Company's Management" and "Information Pertaining to the Parent, the Purchaser and Related Persons -- General; -- Security Ownership of Management of BOTDA in Company" Item 10(b) "Information Pertaining to the Parent, the Purchaser and Related Persons -- General" Item 11 "Information Pertaining to the Parent, the Purchaser and Related Persons -- General" Item 12(a)-(b) "Introduction," "Summary -- Recommendations for the Merger; -- Interests of Certain Persons in the Merger" and "Special Factors -- Recommendation of the Board of Directors; the Company's Purpose and Reasons for Belief as to the Fairness of the Merger"Item 13(a) Item 13(a) "Summary -- No Appraisal or Dissenter's Rights" and "The Special Meeting -- Absence of Appraisal Rights and Right to Dissent" Item 13(b)-(c) Inapplicable Item 14(a)(1) "Part I, Item 1 - Financial Statements" of The Quarterly Report Item 14(a)(2) "Item 8 - Financial Statements and Supplementary Data" of The Annual Report Item 14(a)(3) "Selected Consolidated Financial Data of the Company" Item 14(a)(4) "Selected Consolidated Financial Data of the Company" Item 14(b) Inapplicable Item 15(a)-(b) "The Special Meeting -- Proxy Solicitation" Item 16 Proxy Statement, Annual Report on Form 10-K and Quarterly Report on Form 10-Q Item 17 Included herewith Item 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION. (a) The name and principal executive office of the issuer are: Big O Tires, Inc., 11755 East Peakview Avenue, Suite A, Englewood, Colorado 80111. (b) The information set forth under the headings "Introduction," "Summary -- The Date and Place of the Special Meeting" and "The Special Meeting -- Record Date and Voting" in Exhibit (d)(1) hereto is incorporated herein by reference. (c)-(d) The information set forth under the headings "Summary - -- Price Range of Company Common Stock and Dividend History" and "Price Range of Company Common Stock and Dividend History" in Exhibit (d)(1) hereto is incorporated herein by reference. (e)-(f) The information set forth under the headings "Recent Transactions by the Company in the Common Stock" and "Information Pertaining to the Parent, the Purchaser and Related Persons" in Exhibit (d)(1) hereto is incorporated herein by reference. ITEM 2. IDENTITY AND BACKGROUND. This statement is being filed by (i) Big O Tires, Inc., the issuer of the Common Stock, (ii) BOTI Holdings, Inc., a Nevada corporation, and (iii) BOTI Acquisition Corp., a Nevada corporation (collectively, the "Filing Persons"). (a)-(d) The information set forth under the headings "Summary - -- The Parties," "The Merger Agreement -- Parties to the Merger Agreement," "Directors and Executive Officers of the Company" and "Information Pertaining to the Parent, the Purchaser and Related Persons" in Exhibit (d)(1) hereto is incorporated herein by reference. (e)-(f) None of the Filing Persons and no executive officer or director of any of the Filing Persons was, during the past 5 years, convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or been the subject of a judgment, decree or final order enjoining further violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws. (g) All of the directors and officers of each of the Filing Persons are citizens of the United States except for Horst K. Mehlfeldt who is a citizen of the Federal Republic of Germany. ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS. (a)-(b) The information set forth under the headings "Information Pertaining to the Parent, the Purchaser and Related Persons -- Certain Past Contacts, Transactions or Negotiations with Company" and "Special Factors -- Background and Negotiations Regarding the Merger" in Exhibit (d)(1) hereto is incorporated herein by reference. ITEM 4. TERMS OF THE TRANSACTION. (a) The information set forth under the headings "Summary -- The Merger," "The Merger Agreement" and "Special Factors -- Background and Negotiations Regarding the Merger" in Exhibit (d)(1) hereto is incorporated herein by reference. (b) The information set forth under the heading "Information Pertaining to the Parent, the Purchaser and Related Persons -- General" in Exhibit (d)(1) hereto is incorporated by reference. ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE. (a)-(e) The information set forth under the headings "Summary - - - Plans for the Company after the Merger" and "Special Factors -- Plans for the Company After the Merger" in Exhibit (d)(1) hereto is incorporated herein by reference. (f)-(g) The information set forth under the heading "Special Factors -- Plans for the Company after the Merger" in Exhibit (d)(1) hereto is incorporated by reference. ITEM 6. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION. (a)-(d) The information set forth under the headings "Special Factors -- Financing of the Merger," "Special Factors -- Expenses of the Merger" and "Information Pertaining to the Parent, the Purchaser and Related Persons -- General" in Exhibit (d)(1) hereto is incorporated herein by reference. ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS. (a)-(d) The information set forth under the headings "Special Factors -- The Parent's Purposes and Reasons for the Merger," "Special Factors - - - Recommendation of the Board of Directors; the Company's Purpose and Reasons for and Belief as to the Fairness of the Merger," "Special Factors -- Plans for the Company After the Merger" and "Special Factors -- Federal Income Tax Consequences" in Exhibit (d)(1) hereto is incorporated herein by reference. ITEM 8. FAIRNESS OF THE TRANSACTION. (a)-(f) The information set forth under the headings "The Special Meeting -- Vote Required to Approve the Merger," "Summary -- Recommendations for the Merger," "Special Factors -- Recommendation of the Board of Directors; the Company's Purpose and Reasons for and Belief as to the Fairness of the Merger," "Special Factors -- Opinion of Financial Advisor" and "Special Factors -- The Parent's Purposes and Reasons for the Merger" in Exhibit (d)(1) hereto is incorporated herein by reference. ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS. (a)-(c) The information set forth under the headings "Summary - -- Opinion of Financial Advisor," "Special Factors -- Opinion of Financial Advisor" in Exhibit (d)(1) hereto is incorporated herein by reference. ITEM 10. INTEREST IN SECURITIES OF THE ISSUER. (a) The information set forth under the headings "Principal Stockholders of the Company," "Security Ownership of the Company's Management" and "Information Pertaining to the Parent, the Purchaser and Related Persons -- General; -- Security Ownership of Management of BOTDA in Company" in Exhibit (d)(1) hereto is incorporated herein by reference. (b) The information set forth under the heading "Information Pertaining to the Parent, the Purchaser and Related Persons -- General" in Exhibit (d)(1) is incorporated by this reference. ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE ISSUER'S SECURITIES. The information set forth under the heading "Information Pertaining to the Parent, the Purchaser and Related Persons -- General" in Exhibit (d)(1) is incorporated by this reference. ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD TO THE TRANSACTION. (a)-(b) The information set forth under the headings "Introduction," "Summary -- Recommendations for the Merger; -- Interests of Certain Persons in the Merger" and "Special Factors -- Recommendation of the Board of Directors; the Company's Purpose and Reasons for Belief as to the Fairness of the Merger" in Exhibit (d)(1) hereto is incorporated herein by reference. ITEM 13. OTHER PROVISIONS OF THE TRANSACTION. (a) Appraisal rights are not provided. The information set forth under the headings "Summary -- No Appraisal or Dissenter's Rights" and "The Special Meeting -- Absence of Appraisal Rights and Right to Dissent" in Exhibit (d)(1) hereto is incorporated herein by reference. (b) Not applicable. (c) Not applicable. ITEM 14. FINANCIAL INFORMATION. (a)(l) The information set forth in "Part I, Item 1 - Financial Statements" of Exhibit (d)(3) hereto is incorporated herein by reference. (2) The information set forth in "Item 8 - Financial Statements and Supplemental Data" of Exhibit (d)(2) hereto is incorporated herein by reference. (3) The information set forth under the heading "Selected Consolidated Financial Data of the Company" in Exhibit (d)(1) hereto is incorporated herein by reference. (4) The information set forth under the heading "Selected Consolidated Financial Data of the Company" in Exhibit (d)(1) hereto is incorporated herein by reference. (b) Inapplicable. ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED. (a)-(b) The information set forth under the heading "The Special Meeting -- Proxy Solicitation" in Exhibit (d)(1) hereto is incorporated herein by reference. ITEM 16. ADDITIONAL INFORMATION. The information set forth in Exhibits (d)(1), (d)(2), and (d)(3) is incorporated herein by reference. ITEM 17. MATERIAL TO BE FILED AS EXHIBITS. (a)(1) Commitment Letter from First National Bank of Chicago dated July 24, 1995, and accepted and agreed to on July 27, 1995, by John B. Adams, Treasurer of BOTI Acquisition Corp. (a)(2) Commitment Letter from BancBoston Capital Inc. dated August 31, 1995, and accepted and agreed to on September 1, 1995, by Steven P. Cloward as President of BOTI Holdings, Inc. and accepted and agreed to on September 8, 1995, by Wesley E. Stephenson as President of Big O Tire Dealers of America. (b)(1) Report of PaineWebber Incorporated regarding the fairness of the Merger Consideration dated November 14, 1995, entitled Presentation to the Board of Directors. (b)(2) Report of PaineWebber Incorporated dated April 14, 1994, entitled Big O Tires, Inc. Rights Agreement Background Information. (b)(3) Report of PaineWebber Incorporated dated August 14, 1994, entitled Big O Tires, Inc. Shareholders' Rights Plan Supplemental Information. (b)(4) Report of PaineWebber Incorporated dated September 12, 1994, entitled Project Snow Review of Strategic Alternatives. (b)(5) Report of PaineWebber Incorporated dated September 12, 1994, entitled Project Snow Supplemental Information. (b)(6) PaineWebber Incorporated Fairness Opinion, attached as Appendix B to Exhibit (d)(1). (c)(1) Draft of Stock Purchase Agreement between Big O Dealers, L.P. and Balboa Investments. (c)(2) Draft Form of Stock Purchase Agreement prepared by Big O Dealers, L.P. (c)(3) Draft of Stock Subscription Agreement between Big O Dealers, L.P. and BOTI Holdings, Inc. (c)(4) Draft Form of Stock Subscription Agreement of BOTI Holdings, Inc. for Members of Management. 8 (d)(1) Letter to Stockholders, Notice of Special Meeting of Stockholders, Proxy Statement and proxy card (including exhibits). (d)(2) Annual Report on Form 10-K for the fiscal year ended December 31, 1994 of Big O Tires, Inc. (d)(3) Quarterly Report on Form 10-Q for the quarter ended September 30, 1995 of Big O Tires, Inc. (e) Not applicable. (f) Not applicable. SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. BIG O TIRES, INC. November 17, 1995 /s/ John E. Siipola - ------------------------ -------------------------- (Date) John E. Siipola Member, Office of the Chief Executive SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. BOTI HOLDINGS, INC. November 17, 1995 /s/ Steven P. Cloward - ------------------------- ----------------------------- (Date) Steven P. Cloward President SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. BOTI ACQUISITION CORP. November 17, 1995 /s/ Steven P. Cloward - ------------------------- ----------------------------- (Date) Steven P. Cloward President 9 EX-1 2 EXHIBIT (A)(1) The First National Bank of Chicago Mail Suite One First National Plaza Chicago, Illinois 60670 Telephone: (312) 732-4000 July 24, 1995 Mr. Steven P. Cloward c/o Big O Tires, Inc. 11755 East Peakview Avenue Englewood, Colorado 80111 Gentlemen/Ladies: The First National Bank of Chicago ("First Chicago") understands that you, certain other members of management of Big O Tires, Inc. (the "Company") and the Company's Employee Stock Ownership Plan (collectively, "Borrower's Shareholders") have created an acquisition corporation named BOTI Acquisition Corp. ("Borrower"), and Borrower will seek to enter a merger agreement ("Merger Agreement") with Company whereby Borrower will merge (the "Merger") into Company and Company will be the surviving corporation (the "Acquisition"). You have requested senior facilities (the "Facilities") in the aggregate principal amount of $40 million (the "Aggregate Commitment"). First Chicago is pleased to confirm its commitment to Borrower for the entire amount of the Facilities on the terms and conditions set forth in the term sheet attached hereto ("Term Sheet") and subject to the conditions set forth in this Commitment Letter. First Chicago intends, and reserves the right, to syndicate the Facilities to a group of lenders (collectively, including First Chicago, the "Lenders") selected by it. First Chicago understands that Borrower will be capitalized with: (i) the Facilities; (ii) an equity contribution, effected in a manner acceptable to First Chicago, of substantially all of the shares of common stock of Company which Borrower's Shareholders own, and $10 million cash (collectively, "Equity"); (iii) at least $10 million of new privately placed senior debt ("Privately Placed Senior Debt"); (iv) $10 million of new senior subordinated debt described below ("New Subordinated Debt"); and, after the Acquisition, (v) Company's approximately $3.2 million of existing subordinated debt ("Existing Subordinated Debt") and Company's approximately $1.8 million of other existing debt. The terms and conditions of the Merger Agreement (including without limitation the total consideration to be paid and the form thereof) shall be acceptable to the Lenders. The definitive structure of the Acquisition has not been determined and must be satisfactory to the Lenders. The terms and conditions of the Privately Placed Senior Debt, including without limitation, those pertaining to default, amortization, interest rate, covenants and defaults, and the entity or entities which issue the debt, shall be in form and substance acceptable to the Lenders. The terms and conditions of the New and Existing Subordinated Debt (collectively, "Subordinated Debt"), including without limitation, those pertaining to subordination, default, standstill, sinking fund, amortization, interest rate, covenants and defaults, the entity or entities which issue or are otherwise liable for the Subordinated Debt, shall be in form and substance acceptable to the Lenders. Accordingly, certain terms of the Existing Subordinated Debt shall be amended. Without limiting the foregoing, all covenants and defaults contained in the Subordinated Debt indenture shall be less restrictive than those contained in the Loan Documents; the Subordinated Debt shall be unsecured; there shall be no mandatory prepayments or redemptions of any type; none of the New Subordinated Debt shall mature until at least one year after all of the Senior Facilities have matured (but the Existing Subordinated Debt held by Kelly-Springfield may mature according to the amortization schedule described in the Borrower's business plan, dated June 26, 1995); and there shall be no substantial limitation on the sale of assets. First Chicago has reviewed certain historical and pro forma financial statements of Company, received in February, 1995, and entitled "Confidential Memorandum, Big O Tires, Inc. $50,000,000 Acquisition Financing", delivered by KPMG Peat Marwick LLP, and certain financial information First Chicago has about Company from First Chicago's existing credit relationship with the Company. First Chicago's commitment is subject to its continuing satisfaction therewith and its satisfaction of such other due diligence investigation as may be necessary for First Chicago's credit evaluation. In the event that First Chicago's continuing review of the Borrower and its subsidiaries discloses information relating to conditions or events not previously disclosed to First Chicago or relating to new information or additional developments concerning conditions or events previously disclosed which may have a material adverse effect on the condition, assets, properties, business or prospects of the Borrower and its subsidiaries, or any such conditions set forth in such definitive documentation are not satisfied, First Chicago may, in its sole discretion, suggest alternative financing amounts or structures that ensure adequate protection for the Lenders or decline to participate in the proposed financing. Borrower agrees to (i) reimburse First Chicago for all out-of-pocket expenses (including the fees of outside counsel and time charges for inside counsel) incurred in connection with this Commitment Letter, the transactions contemplated thereby and First Chicago's on-going due diligence therewith, including without limitation travel expenses and costs incurred in connection with the preparation, negotiation, execution, administration, syndication, and enforcement of any document relating to this transaction and its role hereunder, (ii) indemnify and hold harmless the Lenders and their respective officers, employees, agents and directors (collectively, including the Lenders, the "Indemnified Persons") against any and all losses, claims, damages, or liabilities of every kind whatsoever to which the Indemnified Persons may become subject in connection in any way with the transaction which is the subject of this Commitment Letter, including without limitation expenses incurred in connection with investigating or defending against any liability or action whether or not a party thereto, except to the extent any of the foregoing is found in a final judgment by a court of competent jurisdiction to have arisen solely from such Lender's gross negligence or wilful misconduct; and (iii) assert no claim against First Chicago or the Lenders or any other Indemnified Persons seeking consequential damages on any theory of liability in connection in any way with the transaction which is the subject of this Commitment Letter or any multiple roles which First Chicago assumes. The obligations described in this paragraph are independent of all other obligations of Borrower hereunder and under the Loan Documents, shall survive the expiration, revocation or termination of this Commitment Letter, and shall be payable whether or not the financing transactions contemplated by this Commitment Letter shall close. First Chicago's obligations under this Commitment Letter are enforceable solely by the party signing this Commitment Letter and may not be relied upon by any other person. For purposes of enforcing this indemnity, Borrower irrevocably submits to the non-exclusive jurisdiction of any court in which a claim arising out of or relating to the services provided under this Commitment Letter is properly brought against First Chicago or the Lenders and irrevocably waive any objection as to venue or inconvenient forum. IF THIS COMMITMENT LETTER, THE TERM SHEET, THE AGENT FEE LETTER, OR ANY ACT, OMISSION OR EVENT DESCRIBED IN THIS PARAGRAPH BECOMES THE SUBJECT OF A DISPUTE, THE BORROWER AND FIRST CHICAGO EACH HEREBY WAIVE TRIAL BY JURY. Borrower agrees not to settle any claim, litigation or proceeding relating to this transaction (whether or not First Chicago is a party thereto) unless such settlement releases all Indemnified Persons from any and all liability in respect of such transaction. - 2 - First Chicago's Commitment hereunder is separate and distinct from First Chicago's undertaking to act as Borrower's placement agent for the Privately Placed Senior Debt. The Borrower has directed First Chicago that those personnel working on the Commitment hereunder and those personnel working on the private placement should share the Borrower's confidential information with each other and generally work together on this transaction. Borrower acknowledges and consents to First Chicago's acting in these multiple roles. Borrower understands that the personnel working on the private placement will not be representing First Chicago as agent bank under this Commitment and cannot bind First Chicago in that capacity. This commitment is subject to (i) the preparation, execution, and delivery of a mutually acceptable credit agreement ("Credit Agreement") and other loan documents (collectively, the "Loan Documents") incorporating, without limitation, substantially the terms and the conditions outlined herein and in the Term Sheet; and (ii) First Chicago's determination that (a) there is an absence of a material adverse change in the business, condition (financial or otherwise), operations, performance, properties, or prospects of the Borrower or any of its material subsidiaries from December 31, 1994; and (b) there is an absence of any material adverse change prior to closing in primary and secondary loan syndication markets or capital markets generally. First Chicago will manage all aspects of the syndication, including, without limitation, decisions as to the selection of institutions to be approached and when they will be approached, when their commitments will be accepted, which institutions will participate, the allocations of the commitments among the Lenders and the amount and distribution of the fees discussed herein among the Lenders. Upon First Chicago's acceptance of any such commitment from a Lender, First Chicago shall be relieved of its commitment to fund such amount. To assist First Chicago in its syndication efforts, Borrower shall (a) provide and to cause its advisors to provide First Chicago upon request with all information deemed reasonably necessary by it to complete successfully the syndication, including, without limitation, all information and projections prepared by Borrower or on Borrower's behalf relating to the transactions contemplated hereby; (b) cause the management of the Borrower to actively participate in, both the preparation of an information package regarding the operations and prospects of the Borrower and the presentation of the information to prospective Lenders; (c) not to make any statement publicly about the Commitment or the Facilities which might negatively affect First Chicago's and Lenders' ability to syndicate the Facilities; and (d) assist, if First Chicago so requests, restructuring in a manner mutually acceptable to First Chicago and the Borrower, of the terms and conditions of the Facilities if, in First Chicago's judgment, any portion of the syndication shall have been unsuccessful. After the Borrower has publicly announced the transaction, the Borrower authorizes First Chicago to answer inquiries from the media with respect to the Facilities and to issue press releases with respect to the Facilities. The foregoing authorization shall remain in effect unless the Borrower notifies First Chicago in writing that such authorization is revoked. Please indicate your acceptance of this commitment in the space indicated below and return a copy of this Commitment Letter so executed to First Chicago. This commitment will expire at 5 p.m. Wednesday, August 2, 1995, unless on or prior to such time First Chicago shall have received a copy of this Letter executed by the Borrower. Notwithstanding timely acceptance of the commitment pursuant to the preceding sentence, the commitment will automatically terminate unless definitive Loan Documents are executed on or before November 30, 1995. By its acceptance hereof, the Borrower agrees to pay First Chicago the fees described in the fee letter ("Fee Letter") of even date herewith. By its acceptance hereof, Borrower hereby authorizes First Chicago, at First Chicago's sole expense but without any prior approval by Borrower, to publish such tombstones and give such other publicity to the Facilities as First - 3 - Chicago may from time to time determine in its sole discretion. By accepting delivery of this Commitment Letter, the Fee Letter and the Term Sheet, Borrower hereby agrees that, prior to executing this Commitment Letter, Borrower will not disclose either expressly or impliedly, without First Chicago's consent, to any person any of the terms of this Commitment Letter, the Fee Letter or Term Sheet, or the fact that this Commitment Letter, the Fee Letter or Term Sheet or the financing proposal represented thereby exists except that Borrower may disclose any of the foregoing to any employee, financial advisor (but not to any commercial lender) or attorney of Borrower to whom, in each case, it is necessary to disclose such information so long as any such employee, advisor or attorney is directed to observe this confidentiality obligation. Upon Borrower's execution of this Commitment Letter, Borrower may make public disclosure of the existence and the amount of the commitment; and Borrower may file a copy of the Commitment Letter, or make such other disclosures if such disclosure is, in the opinion of Borrower's counsel, required by law. If Borrower does not accept this commitment, Borrower is to immediately return this Commitment Letter, the Fee Letter and the Term Sheet (and all copies of the foregoing) to First Chicago. This Commitment Letter and Term Sheet supersede any and all prior versions thereof. This Commitment Letter shall be governed by the internal laws of the State of Illinois, and may only be amended by a writing signed by both parties. THE FIRST NATIONAL BANK OF CHICAGO By: /s/ Nathan L. Bloch Title: Vice President Accepted and agreed: BOTI ACQUISITION CORP. ("Borrower") By: /s/ John B. Adams Title: Treasurer Date: July 27, 1995 - 4 - TERM SHEET ACQUISITION OF BIG O TIRES, INC. July 24, 1995 This Term Sheet is delivered with a Commitment Letter of even date herewith. Capitalized terms herein shall have the meaning set forth in the Commitment Letter. THE FACILITIES Borrower: BOTI Acquisition Corp., (an Acquisition Corporation), and after the Merger, the Company. Amount: $40 million (the "Aggregate Commitment") comprised of loans under the Facilities described below. Agent: The First National Bank of Chicago (maximum commitment is $40 million). Lenders: A group of lenders to be determined (collectively, together with the Agent in its capacity as lender, the "Lenders"). Documentation: The Facilities will be evidenced by a Credit Agreement, notes, security agreements and other Loan Documents mutually satisfactory to the Borrower and the Lenders. Syndication Management: The Agent will manage all aspects of the syndication including, without limitation, the timing of offers to potential Lenders, the amounts offered to potential Lenders, and the acceptance of commitments, and the compensation provided, all as set forth in the Commitment Letter. Facility A: Term Loan Amount: $20 million. Purpose: To provide funds for the purchase of Company, pursuant to the Acquisition, for payment of expenses incurred in connection with the Acquisition, and for Borrower to provide a loan of up to $5.5 million to the Company's ESOP (the "ESOP Loan") in connection with the Acquisition. Maturity: Sixth anniversary of closing. Amortization: Quarterly installments of principal amounts per annum as follows: Aggregate Amount Year Each Year 1 $2,000,000 2 $3,000,000 3 $3,000,000 4 $4,000,000 5 $4,000,000 6 $4,000,000 Facility B: Revolving Credit - 5 - Amount: $20 million (the "Facility 'B' Commitment"). Purpose: To provide funds for the working capital needs of the Company and its Subsidiaries with a sublimit (to be determined) for letters of credit. Maturity: Sixth anniversary of closing. FEES The Borrower will pay the following fees: Commitment Fee: A commitment fee of 1/2% per annum on the average daily unborrowed portion of Facility "B" Commitment payable quarterly in arrears to the Lenders (including the Agent) ratably from the Closing Date until termination of Facility "B" Commitment. Agent and Other Fees: Such fees payable to the Agent as are specified in the fee letter between the Agent and the Borrower. L/C Fees: Customary. MISCELLANEOUS FACILITY TERMS Borrowing Base: The aggregate outstanding amount of loans under Facility B shall not at any time exceed the Borrowing Base. The borrowing base will be substantially the same as the terms of the existing Revolving Credit Agreement dated as of January 23, 1995 among Big O Tires, Inc. and The First National Bank of Chicago. Allocation; Ratable Share: The Agent shall, in its sole discretion, allocate the commitments received from the various lenders. INTEREST RATES Facility A At the Company's option: ABR plus 1.75% per annum Eurodollar Rate plus 3.0% per annum Facility B At the Company's option: ABR plus 1.75% per annum Eurodollar Rate plus 3.0% per annum "ABR" means the Alternate Base Rate and is the larger of CBR, or the federal funds rate plus 1/2% per annum. "CBR" means the corporate base rate of interest announced by - 6 - the Agent from time to time, changing when and as said corporate base rate changes. "Eurodollar Rate" means the rate offered by the Agent in the London interbank market for deposits in the amount of, and for a maturity corresponding to, the Agent's portion of the loan, as adjusted for maximum statutory reserves. Eurodollar Rate interest periods shall be one, two, three or six months. Interest shall be payable in arrears on the last day of each interest period and, in the case of an interest period longer than three months, quarterly, and upon any prepayment. Interest and fees will be computed for actual days elapsed on a 360-day year basis. The Credit Agreement will include customary provisions relating to yield protection, availability and capital adequacy. After default, the interest rate will be equal to the ABR plus 4% per annum. The Eurodollar Rate will not be made available, at the Agent's sole option, for the first 90 days following the initial funding of the loans. ABR advances will be in a minimum amount of $100,000, and in multiples of $50,000 in excess thereof. Eurodollar advances will be in a minimum amount of $1,000,000, and in multiples of $100,000 in excess thereof. COLLATERAL, GUARANTIES OR OTHER CREDIT SUPPORT Each of the Facilities will be secured by a first perfected security interest in all of the Company's assets and, through secured guaranties, in all of the subsidiaries' assets, except that the Facilities will not be secured by any of the following: (i) liens in the Las Vegas, Nevada and Boise, Idaho distribution centers to be granted to the holders of the Privately Placed Senior Debt; (ii) liens in the New Albany, Indiana distribution center granted to National City Bank; (iii) liens granted by Big O Development, Inc. in certain retail stores; and (iv) liens granted by Big O Retail Enterprises, Inc. in certain equipment to Colonial Pacific Leasing. The collateral will secure interest rate swaps or hedge obligations owing to any Lender. PREPAYMENTS Mandatory Prepayments: Sale of Assets: Upon the sale, transfer or other disposition of any assets (other than the sale of inventory in the ordinary course of business), to the extent permitted by the Lenders, the Company shall make a mandatory prepayment in an amount equal to 100% of the net proceeds realized from any such sale, transfer or other disposition of Facility A until paid in full, then to reduce commitments under Facility B to $0. Mandatory Prepayments: - 7 - Excess Cash Flow: Upon delivery of its audited financial statements in each year commencing with the fiscal year ending December 31, 1995, the Company shall make a mandatory prepayment in an amount equal to 100% of the Excess Cash Flow, if positive, for the most recently ended fiscal year, of Facility A until paid in full, then to reduce commitments under Facility B to $0. Excess Cash Flow shall be defined in the Credit Agreement. Mandatory Prepayment: Sale of Equity: Upon the sale of any common stock, preferred stock, warrant or other equity, the Company shall make a mandatory prepayment of 100% of the proceeds thereof of Facility A until paid in full, then to reduce commitments under Facility B to $0. Voluntary Prepayments: Facility A may be prepaid in whole or in part without premium on 1 day's notice, provided that such payments will be in amounts of at least $500,000, and the Facility B Commitment may be permanently reduced without premium on 1 day's notice, provided such payments will be in an amount of at least $500,000. Allocation of Prepayments: All mandatory prepayments shall be applied to the principal installments of Facility A in the inverse order of maturity. All voluntary prepayments shall be applied pro rata over the remainder of the Facility. CONDITIONS OF LENDING The Loan Documents shall be in form and substance acceptable to the Lenders. The Credit Agreement shall include, without limitation, conditions precedent, representations and warranties, covenants, events of default, indemnification and other provisions customary for such financings. CONDITIONS PRECEDENT Usual conditions to each loan (including absence of default or unmatured default, lack of material adverse change from the Company's financial condition and operations as reflected in the Borrower's consolidated pro forma financial statements as of March 31, 1995 previously delivered to the Agent). Additional conditions precedent to initial loan will include without limitation those set forth below. Initial Funding: Initial funding shall occur no later than November 30, 1995. Approval: Evidence satisfactory to the Agent and the Required Lenders (to be defined in the Credit Agreement) that the Company's and Acquisition Sub's respective directors and shareholders shall have approved the Acquisition; and all regulatory and legal approvals for the Acquisition shall have been obtained. - 8 - Litigation: Absence of injunction or temporary restraining order which, in the judgment of the Agent or the Required Lenders would prohibit the making of the loans or the consummation of the Acquisition; and absence of litigation which would reasonably be expected to result in a material adverse effect on the Borrower and its subsidiaries. Due Diligence: Satisfactory results of due diligence investigation of the Company and its Subsidiaries (including without limitation contingent liabilities (e.g., environmental, retiree medical benefits, ERISA, etc.) and contractual obligations. All financial, accounting, and tax aspects of the acquisition must be acceptable. Total Consideration: The amounts and forms of the consideration paid in the Acquisition shall be acceptable to the Required Lenders. Merger Agreement: The Merger Agreement shall contain terms and conditions which are acceptable to the Required Lenders (including without limitation the consideration to be paid in the Acquisition), the representations and warranties in the Merger Agreement shall be accurate as of the date of the Acquisition closing and the conditions therein shall have been satisfied and Required Lenders must have received an opinion of counsel satisfactory to Required Lenders as to the enforceability of the Merger Agreement and its compliance with all applicable law. Equity: The Borrower shall receive the Equity (described in the Commitment Letter). ESOP Loan: The terms of the ESOP Loan from Borrower to the ESOP shall be upon terms and conditions acceptable to the Required Lenders. Subordinated Debt: The Borrower shall have received proceeds of New Subordinated Debt in an amount equal to at least $10 million, and the Existing Subordinated Debt shall be amended, in each case, upon the terms set forth in the Commitment Letter. Privately Placed Senior Debt: The Borrower shall have received proceeds of the Privately Placed Senior Debt in an amount equal to at least $10 million upon the terms set forth in the Commitment Letter. Financial Statements: The Agent and the Required Lenders shall have received (i) pro forma opening financial statements giving effect to the Acquisition which must not be materially less favorable, in the Agents' and Required Lenders' reasonable judgment, than the projections previously provided to them and which must demonstrate, in their reasonable judgment, together with all other information then available to the Agent and Required Lenders, that the Borrower and its subsidiaries can repay their debts and satisfy their respective other obligations as and when - 9 - due, and can comply with the financial covenants acceptable to the Agent and Required Lenders, and (ii) such information as the Agent and the Required Lenders may reasonably request to confirm the tax, legal and business assumptions made in such pro forma financial statements. Fairness Opinion: Receipt of copy of any fairness opinion from the Company's investment banker addressed to the Company's board of directors, relating to the terms of the Acquisition. Valuation: The Agent and the Required Lenders shall have received Opinions of value, solvency and other appropriate factual information and advice in form and substance satisfactory to them and from a source or sources acceptable to them supporting the conclusions that after giving effect to the Acquisition, the Borrower is solvent and will be solvent subsequent to incurring the indebtedness in connection with the Acquisition, will be able to pay its debts and liabilities as they become due and will not be left with unreasonably small capital with which to engage in its businesses. Environment: If requested by the Required Lenders, an environmental review report, satisfactory in form and substance to the Required Lenders, from an environmental review firm acceptable to the Required Lenders, as to any environmental hazards or liabilities and with the Borrower's plans with respect thereto. Existing Facilities: Prepayment of all obligations under existing First Chicago loan facilities (other than those under the Facilities). Legal: All legal (including tax implications) and regulatory matters shall be satisfactory to the Required Lenders. Collateral: Liens creating a first priority security interest in the Collateral shall have been perfected. Regulations: Compliance with all applicable requirements of Regulations U, G, T and X of the Board of Governors of the Federal Reserve System. No Default; No MAC: No default or unmatured default shall exist on the funding date and no material adverse change in the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower or any obligor or guarantor since December 31, 1994, shall have occurred. Interest Rate Protection: The Agent may require the Borrower to enter into interest rate swap and hedge agreements or other agreements which effectively limit the amount of interest that the Borrower must pay on notional amounts of the lender financing to be agreed upon. Customary Documents: Receipt of other customary closing documentation, including, without limitation, legal opinions of the Borrower's counsel, acceptable to the Agent. - 10 - COVENANTS Covenants: The Credit Agreement will contain customary covenants, including, without limitation, restrictions (subject to exceptions, as appropriate, to be negotiated) on the following: -liens and encumbrances -dividends and retirement of stock -guarantees -sale and leaseback transactions -sale of assets -consolidations and mergers -investments and acquisitions -capital expenditures -loans and advances -indebtedness and additional indebtedness -compliance with pension, environmental and other laws -operating leases -transactions with affiliates -changes in line of business -hedging of interest rates (e.g., with swaps, caps) -prepayment of other debt -permit inspection of records and assets -other Financial Covenants: The Credit Agreement will contain financial covenants containing limitations to be negotiated, including, without limitation, covenants pertaining to: -minimum net worth -interest coverage -leverage ratio -fixed charge coverage -cash flow coverage REPRESENTATIONS AND WARRANTIES Usual representations and warranties in connection with each loan shall be included in the Credit Agreement, including but not limited to absence of material adverse change, absence of material litigation, absence of default or unmatured default, representations regarding environmental issues, priority of the Lender's liens, compliance with all material requirements of law and contracts, and compliance with Regulations G, U, T and X. DEFAULTS Customary events of default, including, without limitation, cross default to occurrence of a default (whether or not resulting in acceleration) under any - 11 - other agreement governing indebtedness of the Company or any of its subsidiaries and change of control. ASSIGNMENTS AND PARTICIPATIONS Each Lender may, in its sole discretion, sell participations and may, in a manner acceptable to Agent, sell assignments in the loans and in its commitment and disclose information to prospective participants and assignees, and share, at its option, any fees with such participants and assignees. The assignor shall pay an assignment fee (each an "Assignment Fee") of $5,000 to First Chicago upon any assignment by a Lender of its rights and obligations under the Credit Facilities (including, but not limited to, an assignment by a Lender to another Lender). OTHER This commitment is governed by the law of the State of Illinois. This term sheet is intended as an outline only and does not purport to summarize all the conditions, covenants, representations, warranties and other provisions which would be contained in definitive legal documentation for the financing contemplated hereby. The commitment of the Agent and the other Lenders is subject to negotiation and execution of definitive Loan Documents in form and substance satisfactory to the Agent and the other Lenders and their respective counsel. In addition, the organizational structure of the Company after the Acquisition, the form and structure of the Acquisition and the financial, legal, accounting, tax and all other aspects of the Acquisition shall be satisfactory to the Agent and the other Lenders and their respective counsel. - 12 - EX-2 3 EXHIBIT (A)(2) BANCBOSTON CAPITAL 100 Federal Street Boston, Massachusetts 02110 Mail: P.O. Box 2016 Boston, MA 02106-2016 a Bank of Boston company August 31, 1995 Steven P. Cloward Wes Stephenson President & Chief Executive Officer Big O Tire Dealers of America C/O Big O Tires C/O Rick Waxman 11755 East Peakview Avenue Wendell, Rosen, Black & Dean Englewood, CO 80111 P.O. Box 2047 11 Broadway 24th Floor Oakland, CA 94607 Dear Gentlemen: We are pleased to advise you that BancBoston Capital Inc. ("BBC") or an affiliate is able to provide up to $10,000,000 of mezzanine financing to BOTI Holdings, Inc. an acquisition corporation ("Newco") formed by The Big O Tire Dealers of America ("BOTDA"), The Big O ESOP ("the ESOP"), and members of senior management ("the Management Group") of Big O Tires, Inc. ("Big O" or "the Company") to acquire all of the capital stock ("the Acquisition") of Big O. The principal terms of our commitment are set forth in an attachment to this letter. This commitment is subject to the following conditions: (a) Completion of the Acquisition on terms satisfactory to BBC for a purchase price not exceeding $16.50 per share with transaction costs not exceeding $5MM. (b) Negotiation and execution of a definitive Securities Purchase and Warrant Agreement satisfactory to BBC, Newco, and the Management Group substantially on the terms outlined in the attachment to this letter. (c) Obtaining senior debt financing (including a loan to the ESOP) of an amount and on terms and conditions satisfactory to BBC; (d) Kelly-Springfield agreeing to continue to provide approximately $3.2 million of junior subordinated debt financing on terms and conditions satisfactory to BBC; (e) BOTDA obtaining $10 million of financing on terms and conditions satisfactory to BBC; (f) A total investment by the Management Group, the ESOP and BOTDA of not less than $19.6 million of equity in Newco, on terms satisfactory to BBC; (g) Negotiation of an inter-creditor agreements between BBC and First Chicago, and BBC and Kelly-Springfield, and BBC and any other provider of senior bank debt, on mutually satisfactory terms; (h) The execution of a stockholders agreement between BBC, the Management Group, the ESOP and the BOTDA on mutually satisfactory terms; (i) The execution of employment and non-compete agreements between Newco and the Management Group on mutually satisfactory terms; (j) Absence of (a) any environmental problems involving Big O's business or assets, the determination of which may require an environmental consultant satisfactory to us, and (b) any material litigation relating to the proposed financing of the Acquisition; (k) Compliance by Newco with all legal and regulatory requirements applicable to the Acquisition and the proposed financing; (l) An actuarial estimate of the ESOP's repurchase liability over the next five years, disclosing a level of liability acceptable to BBC. (m) Key man life insurance on any management personnel BBC deems appropriate in amounts to be mutually agreed upon prior to closing. This commitment constitutes the Commitment referenced in BBC's letter to you dated July 7, 1995 ("the Proposal Letter") and, upon your acceptance as provided below, will supersede the Proposal Letter in its entirety. As provided in the Proposal Letter, you will be responsible for all of BBC's reasonable out-of-pocket expenses (including the fees and disbursements of our counsel, accountants and consultants) whether or not the transaction contemplated herein closes. In addition, as previously agreed in the Proposal Letter, in the event that you proceed to complete the Acquisition within one year after the date of this letter without utilizing the financing made available by BBC hereunder, in addition to all out of pocket expenses referred to above, you agree to pay BBC a breakup fee of $500,000 on the closing date of the acquisition as liquidated damages to compensate BBC for its lost investment opportunities, (which you hereby agree are not and will not be susceptible to reasonable proof of amount and, therefore, will not be compensated by ordinary damages.) You further agree to keep this letter and its contents confidential and without the prior written consent of BBC, you agree not to disclose to any person any of the terms, conditions or other contents of this letter or subsequent negotiations between the parties hereto. This interest letter will expire at 5:00 PM (EDT) on September 1, 1995 unless we have received a signed copy of this letter signifying your agreement to these terms and conditions. Additionally, you will pay us a non-refundable cash deposit of $50,000, payable upon your acceptance of this letter, which deposit will be credited against your obligations to reimburse our out-of-pocket expenses. Upon your signed acceptance hereof, this letter will supersede the Proposal Letter and all previous correspondence to the extent they are inconsistent herewith. We are delighted to have the opportunity to work with you and look forward to the successful completion of the transaction. Sincerely, /s/ Charles R. Grant Charles R. Grant Vice President Accepted and Agreed to: By: /s/ Steven P. Cloward By: /s/ Wesley E. Stephenson Title: President Title: President On behalf of Newco On behalf of BOTDA Date: 9/1/9 Date: 9/8/95 TERM SHEET-BIG O TIRES ATTACHMENT 1. Senior Subordinated Notes Obligor: Newco, a company which will acquire the shares of and merge with Big O Tires, Inc. Face Amount: $10,000,000 Purchase Price: Par Maturity: Eight years from closing Amortization: Years 1-5 none. Thereafter and commencing at the end of the first quarter of year 6, twelve consecutive quarterly payments in arrears of $833,333, subject to there being a payment default under the revolver or term loan provided by First National Bank of Chicago. Security: Unsecured Subordination: To the senior bank debt of Newco on mutually satisfactory terms Closing Fee: $250,000 payable in cash at closing Interest Rate: 12.5% per annum payable quarterly in arrears in cash Prepayment: Prepayment of the principal prior to the fifth anniversary will require payment of a make whole prepayment penalty. Warrant: BBC will receive a detached warrants representing a 12% equitable interest in Newco on a fully diluted basis. Terms of this warrant are outlined below in (2). General Covenants: In addition to the normal representations, warranties and covenants, BBC would expect that the Securities Purchase Agreement would include the following: - Similar covenants to the senior lender, including but not limited to tests for minimum net worth, interest coverage and debt service, debt to worth, minimum operating income and maximum limitations on additional indebtedness and capital expenditures. - Limitation on the kinds of business in which the company engages, as well as restrictions on mergers and acquisitions. - Limitation on distributions and dividends. - No amendment subsequent to closing of clauses in the senior debt agreement relating to terms and conditions of subordinated debt principal, amortization, interest and fees. - BBC's consent required on change of ownership and/or control of Newco and on changes to Newco's charter documents. - Restrictions on additional senior indebtedness; if management believes at the time of BBC's put that it needs to add senior indebtedness to finance such put, BBC agrees to discuss such request with management at that time. - Monthly financial reporting, including income statement, balance sheet and cash flows, covenant compliance reports and certified annual audit, and any other information we may reasonably request. - Subordination of the Kelly-Springfield subordinated note on terms satisfactory to BBC. - Right to appoint one Board member. Transfer Rights: Freely transferable subject to applicable securities laws. 2. Warrant Description: Detached warrants representing a 12% equitable interest in Newco on a fully diluted basis. Price: Nominal. Exercise Period: At any time. Put Rights: From time to time after the fifth anniversary of closing, BBC may require Newco to repurchase all or part of the Warrant or Warrant Stock for cash equal to the percentage of Newco's total common equity represented by the Warrant or Warrant Stock being put multiplied by the greater of (a) the fair market value of Newco's total common equity as determined by negotiation or by appraisal, if necessary and (b) 6 times trailing 12 month EBITDA less borrowed money bank debt outstanding plus cash on hand ("Put Value"). If Newco is unable to pay BBC's put in cash, the Put Value shall be added to the principal amount of BBC's Note earning cash interest at BBC's cost of funds plus 15% per annum and maturing concurrently with the Note. If at any time within nine months after any Put Closing Date, the company or any of its subsidiaries becomes party to a capital transaction or enters into any letter of intent contemplating any capital transaction, the company shall simultaneous with such capital transaction make an additional payment to BBC equal to the excess, if any, of the value it would have received for its Warrant or Warrant Stock had it been a party to such capital transaction over the value it actually received on the Put Closing Date. Call Rights: At any time after the seventh anniversary of closing, Newco may repurchase all of the Warrant or Warrant Stock for cash equal to the percentage of Newco's total common equity represented by the Warrant or Warrant Stock being called multiplied by the greater of (a) the fair market value of Newco's total common equity as determined by negotiation or by appraisal, if necessary and (b) 6 times trailing 12 month EBITDA less borrowed money bank debt outstanding plus cash on hand ("Call Value"). If at any time within eighteen months after any Call Closing Date, the company or any of its subsidiaries becomes arty to a capital transaction or enters into any letter of intent contemplating any capital transaction, the company shall simultaneous with such capital transaction make an additional payment to BBC equal to the excess, if any, of the value it would have received for its Warrant or Warrant Stock had it been a party to such capital transaction over the value it actually received on the Call Closing Date. Shareholders Rights: (a) Anti-dilution provisions and pre-emptive rights. (b) Rights to piggyback on a pro rata basis on any public or private sale of the Newco's equity securities. (c) Demand registration rights, provided BBC must be joined in its demand by any one or more stockholders if the company is not public at the time of its demand. (d) BBC will have the right to appoint a Director to the Board, provided that if the senior subordinated notes have been paid in full and the total of BBC's common stock and warrant entitlement is less than 5% then BBC will have no right to appoint a director but will retain a right to have a representative attend board meetings. (e) Freely transferable (except to direct competitors of Newco) subject to applicable securities laws. (f) Rights to receive copies of all information provided to Newco's lenders. This summary of terms does not purport to include all the provisions (including usual representations and warranties, conditions, covenants and events of default) which would be contained in documents for this transaction, all of which must be satisfactory in form and substance to us and our counsel, and to Newco and its counsel prior to the making of the proposed investment. EX-3 4 EXHIBIT (B)(1) Big O Tires, Inc. PRESENTATION TO THE BOARD OF DIRECTORS November 14, 1995 PaineWebber Incorporated - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- TABLE OF CONTENTS ---------------------------------------------------------------------- I EXECUTIVE SUMMARY II REVIEW OF DUE DILIGENCE III BIG O TIRES, INC. EXHIBIT I -- COMPANY OVERVIEW EXHIBIT II -- HISTORICAL FINANCIAL PERFORMANCE EXHIBIT III -- STOCK PRICE AND VOLUME PERFORMANCE IV VALUATION SUMMARY V SUPPLEMENTAL INFORMATION EXHIBIT I -- COMPARATIVE COMPANY ANALYSIS EXHIBIT II -- DISCOUNTED CASH FLOW ANALYSIS EXHIBIT III -- PREMIUMS PAID ANALYSIS EXHIBIT IV -- MANAGEMENT FINANCIAL FORECAST - ------------------------------------------------------------------------------- PaineWebber Incorporated - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- PART I -- EXECUTIVE SUMMARY - ------------------------------------------------------------------------------- PaineWebber Incorporated 1 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- EXECUTIVE SUMMARY -------------------------------------------------------------------- BIG O TIRES -- BUSINESS DESCRIPTION The primary business of Big O Tires, Inc. ("Big O", "Big O Tires" or the "Company") is to franchise Big O Tires retail stores and supply them with tires and related automotive products. On a limited basis, the Company also owns and operates retail stores. The following table summarizes the Company's store locations by region. (1)
- -------------------------------------------------------------------------------- NUMBER OF NUMBER OF FRANCHISEE NUMBER OF COMPANY JOINT VENTURE REGION OWNED STORES OWNED STORES STORES TOTAL - ---------------------------------------------------------------------------------------- Southwest Region 84 1 10 95 (includes AZ, southern CA, NV and UT) Western Region 97 0 1 98 (Northern CA and NV) Northwest Region 77 1 1 79 (ID, MT, NV, OR, UT, WA, and WY) Central Region 68 0 1 69 (includes CO, NE, NM, OK, SD, TX, and WY) Southeast Region 35 2 0 37 (includes IN, KY, and NC) --- -- -- --- Total 361 4 13 378 ---------------------------------------------------------------------------------------- _________________ (1) As reported in the December 31, 1994 10-K.
- ------------------------------------------------------------------------------- PaineWebber Incorporated 2 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- EXECUTIVE SUMMARY -------------------------------------------------------------------- BIG O TIRES STOCK PRICE TIMELINE [GRAPH] EXECUTIVE SUMMARY BIG O TIRES STOCK PRICE TIMELINE DATE STOCK PRICE COMMENTS 06/01/93 13.500000 06/02/93 15.250000 06/03/93 15.880000 BALBOA INCREASES ITS STAKE TO 312,000 SHARES, 9.9% 06/04/93 15.750000 06/07/93 14.880000 06/08/93 14.750000 06/09/93 15.880000 06/10/93 15.500000 06/11/93 14.500000 06/14/93 14.750000 06/15/93 14.750000 06/16/93 14.250000 06/17/93 14.130000 06/18/93 14.500000 06/21/93 14.250000 06/22/93 14.750000 06/23/93 14.380000 06/24/93 14.750000 06/25/93 15.000000 06/28/93 14.750000 06/29/93 15.250000 06/30/93 15.000000 07/01/93 15.000000 07/02/93 15.250000 07/06/93 15.000000 07/07/93 15.250000 07/08/93 15.130000 07/09/93 14.000000 07/12/93 13.380000 07/13/93 14.500000 07/14/93 14.500000 07/15/93 15.250000 07/16/93 15.130000 07/19/93 14.880000 07/20/93 15.000000 07/21/93 14.380000 07/22/93 14.380000 07/23/93 15.000000 07/26/93 14.630000 07/27/93 14.880000 07/28/93 15.500000 07/29/93 15.500000 07/30/93 15.630000 08/02/93 16.130000 08/03/93 15.750000 08/04/93 15.250000 08/05/93 15.380000 08/06/93 15.880000 08/09/93 15.880000 08/10/93 16.630000 08/11/93 16.250000 08/12/93 17.000000 08/13/93 16.750000 08/16/93 16.250000 08/17/93 16.500000 08/18/93 16.750000 08/19/93 16.750000 08/20/93 16.630000 08/23/93 16.250000 08/24/93 16.250000 08/25/93 16.750000 08/26/93 16.250000 08/27/93 16.380000 08/30/93 16.630000 08/31/93 16.500000 09/01/93 17.130000 09/02/93 16.500000 09/03/93 17.000000 09/07/93 16.250000 09/08/93 16.500000 09/09/93 16.500000 09/10/93 16.000000 09/13/93 16.000000 09/14/93 15.750000 09/15/93 16.000000 09/16/93 16.000000 09/17/93 16.250000 09/20/93 16.250000 09/21/93 15.500000 09/22/93 15.750000 09/23/93 15.500000 09/24/93 15.000000 09/27/93 14.750000 09/28/93 15.000000 09/29/93 14.880000 09/30/93 15.130000 10/01/93 15.000000 10/04/93 15.000000 10/05/93 15.000000 10/06/93 15.250000 10/07/93 14.750000 10/08/93 15.250000 10/11/93 15.000000 10/12/93 15.130000 10/13/93 15.000000 10/14/93 15.000000 10/15/93 16.000000 10/18/93 15.750000 10/19/93 15.880000 10/20/93 15.250000 10/21/93 15.500000 10/22/93 14.750000 10/25/93 15.500000 10/26/93 15.500000 10/27/93 16.250000 10/28/93 15.880000 10/29/93 16.130000 11/01/93 16.000000 11/02/93 15.500000 11/03/93 16.000000 11/04/93 15.250000 11/05/93 14.630000 11/08/93 15.250000 11/09/93 15.500000 11/10/93 15.250000 11/11/93 14.880000 11/12/93 14.880000 11/15/93 15.000000 11/16/93 14.750000 11/17/93 14.750000 11/18/93 15.000000 11/19/93 14.630000 11/22/93 14.250000 11/23/93 14.380000 11/24/93 14.250000 11/29/93 14.380000 11/30/93 15.000000 12/01/93 15.250000 12/02/93 15.500000 12/03/93 15.500000 12/06/93 15.250000 12/07/93 15.250000 12/08/93 15.250000 12/09/93 15.125000 12/10/93 15.375000 12/13/93 14.750000 12/14/93 14.250000 12/15/93 14.250000 12/16/93 14.375000 12/17/93 14.125000 12/20/93 13.875000 PAVIA PROPOSES THAT BIG O TIRES HIRE AN INVESTMENT BANKING FIRM. 12/21/93 14.750000 12/22/93 14.500000 12/23/93 14.875000 12/27/93 14.875000 12/28/93 14.625000 12/30/93 14.250000 12/31/93 14.250000 01/01/94 14.250000 01/03/94 14.125000 01/04/94 13.875000 01/05/94 14.000000 01/06/94 14.500000 01/07/94 14.000000 01/10/94 14.000000 01/11/94 13.750000 01/12/94 14.000000 01/13/94 13.500000 01/14/94 13.750000 01/17/94 13.500000 01/18/94 13.000000 01/19/94 13.750000 01/20/94 13.375000 01/21/94 13.500000 01/24/94 13.500000 01/25/94 13.125000 01/26/94 13.125000 01/27/94 13.125000 01/28/94 13.625000 01/31/94 14.250000 02/01/94 15.750000 02/02/94 15.500000 02/03/94 15.750000 02/04/94 15.500000 02/07/94 15.375000 02/08/94 15.000000 02/09/94 14.750000 02/10/94 14.500000 02/11/94 14.500000 02/14/94 14.750000 02/15/94 14.500000 02/16/94 14.500000 02/17/94 14.750000 02/18/94 14.375000 02/22/94 14.375000 02/23/94 14.750000 02/24/94 14.750000 02/25/94 13.750000 02/28/94 13.625000 03/01/94 14.250000 03/02/94 13.375000 03/03/94 14.000000 03/04/94 14.000000 03/07/94 14.625000 03/08/94 14.875000 03/09/94 14.875000 03/10/94 14.500000 03/11/94 14.875000 03/14/94 14.625000 03/15/94 15.250000 03/16/94 14.875000 03/17/94 14.750000 03/18/94 15.250000 03/21/94 15.375000 03/22/94 15.750000 03/23/94 15.750000 03/24/94 15.500000 03/25/94 16.000000 03/28/94 16.000000 03/29/94 15.000000 03/30/94 15.500000 03/31/94 14.750000 04/04/94 13.125000 04/05/94 14.750000 04/06/94 14.000000 04/07/94 14.375000 04/08/94 13.875000 04/11/94 13.750000 04/12/94 14.250000 04/13/94 14.000000 04/14/94 15.000000 04/15/94 15.375000 04/18/94 14.750000 04/19/94 14.500000 04/20/94 14.625000 04/21/94 15.000000 04/22/94 15.375000 04/25/94 15.000000 04/26/94 15.500000 04/28/94 15.500000 04/29/94 15.125000 05/02/94 15.500000 05/03/94 15.750000 05/04/94 15.750000 05/05/94 15.500000 05/06/94 15.000000 05/09/94 15.750000 05/10/94 15.250000 05/11/94 14.750000 05/12/94 14.625000 05/13/94 14.625000 05/17/94 15.250000 05/18/94 15.500000 05/19/94 16.000000 05/20/94 15.500000 05/23/94 15.750000 05/24/94 15.250000 05/25/94 15.000000 05/26/94 15.000000 05/27/94 15.000000 05/31/94 15.000000 06/01/94 15.250000 06/02/94 15.375000 06/03/94 15.250000 06/06/94 15.750000 06/07/94 15.625000 06/08/94 15.625000 MAJORITY OF SHAREHOLDERS VOTE IN FAVOR OF PAVIA PROPOSAL 06/09/94 16.000000 06/10/94 15.500000 06/13/94 15.500000 06/14/94 15.750000 06/15/94 16.125000 06/16/94 16.375000 06/17/94 16.750000 06/20/94 15.875000 06/21/94 16.250000 06/22/94 15.750000 06/23/94 15.750000 06/24/94 15.250000 06/27/94 16.000000 06/28/94 16.250000 06/29/94 16.250000 06/30/94 15.500000 07/01/94 15.750000 07/05/94 15.250000 ENGAGES PAINEWEBBER 07/06/94 14.750000 07/07/94 14.750000 07/08/94 15.250000 07/11/94 15.000000 07/12/94 15.500000 07/13/94 15.630000 07/14/94 15.750000 07/15/94 15.750000 07/18/94 15.000000 07/19/94 16.250000 07/20/94 15.630000 07/21/94 15.630000 07/22/94 16.250000 07/25/94 15.750000 07/26/94 15.880000 07/27/94 15.750000 07/28/94 15.750000 07/29/94 15.750000 08/01/94 15.750000 08/02/94 15.500000 08/03/94 15.630000 08/04/94 15.630000 08/05/94 15.437500 08/08/94 15.000000 08/09/94 15.000000 08/10/94 15.750000 08/11/94 15.000000 08/12/94 15.630000 08/15/94 15.130000 08/16/94 15.630000 08/17/94 15.250000 08/18/94 15.500000 08/19/94 16.000000 08/22/94 15.880000 08/23/94 15.750000 08/24/94 15.380000 08/25/94 15.750000 08/26/94 15.380000 ADOPTS SHAREHOLDERS RIGHTS PLAN 08/29/94 14.880000 08/30/94 15.750000 08/31/94 15.750000 09/01/94 15.880000 09/02/94 16.500000 09/06/94 16.500000 09/07/94 16.500000 09/08/94 15.750000 09/09/94 16.000000 09/12/94 15.750000 09/13/94 15.500000 09/14/94 16.250000 09/15/94 15.750000 09/16/94 16.000000 09/19/94 15.250000 09/20/94 15.250000 09/21/94 16.000000 09/22/94 16.000000 PAVIA TO ASSIST INVESTMENT COMMITTEE 09/23/94 16.000000 09/26/94 15.750000 09/27/94 15.750000 09/28/94 15.500000 09/29/94 15.630000 09/30/94 16.000000 10/03/94 15.500000 10/04/94 15.750000 10/05/94 15.500000 10/06/94 15.500000 10/07/94 16.250000 10/10/94 16.250000 10/11/94 17.000000 OFFER OF $18.00 FROM AKH 10/12/94 17.250000 10/13/94 16.750000 10/14/94 16.625000 10/17/94 16.250000 10/18/94 16.250000 10/19/94 16.625000 10/20/94 16.437500 10/21/94 16.875000 10/24/94 16.625000 10/25/94 16.750000 10/26/94 16.750000 10/27/94 16.750000 10/28/94 16.375000 10/31/94 16.500000 11/01/94 17.000000 11/02/94 17.250000 11/03/94 16.500000 11/04/94 16.000000 11/07/94 16.625000 11/08/94 16.125000 11/09/94 16.500000 11/10/94 15.500000 11/11/94 16.000000 11/14/94 16.000000 11/15/94 15.750000 11/16/94 16.000000 11/17/94 16.250000 11/18/94 15.875000 11/21/94 15.875000 11/22/94 15.875000 11/23/94 16.000000 11/25/94 15.875000 11/28/94 15.875000 11/29/94 16.000000 11/30/94 16.250000 12/01/94 16.000000 12/02/94 16.000000 12/05/94 17.187500 OFFER FROM MGMT. AND DEALERS OF $18.50 12/06/94 17.125000 12/07/94 17.125000 12/08/94 16.750000 12/09/94 16.500000 12/12/94 16.625000 12/13/94 16.750000 12/14/94 16.250000 12/15/94 16.062500 12/16/94 15.750000 AKH WITHDRAWS PROPOSAL 12/20/94 16.375000 12/21/94 16.250000 12/22/94 16.125000 ENTERS INTO EXCLUSIVE NEGOTIATIONS WITH MANAGEMENT/DEALER GROUP 12/23/94 16.000000 12/27/94 15.750000 12/28/94 15.750000 12/29/94 15.250000 12/30/94 15.250000 01/01/95 15.250000 01/03/95 15.750000 01/04/95 16.250000 01/05/95 15.875000 01/06/95 16.000000 01/09/95 15.875000 01/10/95 15.625000 01/11/95 15.875000 01/12/95 15.500000 01/13/95 15.625000 01/16/95 15.500000 01/17/95 15.625000 01/18/95 15.625000 01/19/95 15.500000 01/20/95 15.375000 01/23/95 16.625000 01/24/95 15.250000 01/25/95 15.625000 01/26/95 15.500000 01/27/95 15.562500 01/30/95 15.375000 01/31/95 15.625000 02/01/95 15.750000 02/02/95 15.500000 02/03/95 15.625000 02/06/95 15.937500 02/07/95 15.750000 MANAGEMENT/DEALER GROUP DECIDES NOT TO PURSUE ACQUISITION 02/08/95 14.250000 02/09/95 14.375000 02/10/95 14.625000 02/13/95 14.125000 02/14/95 13.750000 02/15/95 13.875000 02/16/95 13.937500 02/17/95 14.000000 02/21/95 13.625000 02/22/95 13.625000 02/23/95 14.000000 02/24/95 14.000000 02/27/95 13.375000 02/28/95 13.250000 03/01/95 13.500000 03/02/95 13.750000 03/03/95 13.625000 03/06/95 13.750000 03/07/95 13.500000 03/08/95 14.000000 03/09/95 14.125000 03/10/95 14.625000 03/13/95 14.375000 03/14/95 14.375000 03/15/95 14.500000 03/16/95 14.250000 03/17/95 14.375000 03/20/95 13.875000 03/21/95 14.125000 03/22/95 13.875000 03/23/95 13.500000 03/24/95 13.250000 03/27/95 13.250000 03/28/95 13.250000 03/29/95 13.250000 03/30/95 13.000000 03/31/95 13.000000 04/03/95 13.000000 04/04/95 13.375000 04/05/95 13.875000 04/06/95 13.750000 OFFER FROM MGMT. AND DEALERS OF $16.00 04/07/95 13.625000 04/10/95 13.750000 04/11/95 13.750000 04/12/95 13.875000 04/13/95 13.750000 04/17/95 13.750000 04/18/95 13.250000 04/19/95 13.625000 04/20/95 13.625000 04/21/95 13.250000 04/24/95 13.375000 04/25/95 13.250000 04/26/95 13.250000 04/27/95 13.375000 04/28/95 13.750000 05/01/95 14.250000 05/02/95 14.125000 05/03/95 13.750000 05/04/95 14.000000 05/05/95 14.000000 05/08/95 13.500000 05/09/95 14.000000 05/10/95 14.000000 05/11/95 13.750000 05/12/95 13.875000 05/15/95 13.625000 05/16/95 14.500000 05/17/95 13.500000 05/18/95 13.250000 05/19/95 13.250000 05/23/95 13.500000 05/24/95 13.750000 05/25/95 14.000000 05/26/95 13.250000 05/30/95 13.500000 05/31/95 13.750000 06/02/95 13.750000 06/05/95 14.500000 OFFER INCREASED TO $16.50/SHARE 06/06/95 14.250000 06/07/95 14.000000 06/08/95 15.000000 06/09/95 14.500000 06/12/95 14.625000 06/13/95 14.625000 06/14/95 14.625000 06/15/95 14.750000 06/16/95 14.750000 06/19/95 14.750000 06/20/95 14.750000 06/21/95 15.000000 06/22/95 14.750000 06/23/95 14.625000 06/26/95 14.500000 06/27/95 14.500000 06/28/95 14.625000 06/29/95 14.687500 07/03/95 14.625000 07/05/95 14.625000 07/06/95 14.375000 07/07/95 14.500000 07/10/95 15.000000 07/11/95 14.250000 07/12/95 14.125000 07/13/95 13.625000 07/14/95 14.500000 07/17/95 14.875000 07/18/95 14.375000 07/19/95 14.000000 07/20/95 14.375000 07/21/95 14.375000 07/24/95 14.375000 SIGNING OF DEFINITIVE MERGER AGREEMENT 07/25/95 14.250000 07/26/95 14.750000 07/27/95 14.625000 07/28/95 14.500000 07/31/95 14.250000 08/01/95 14.250000 08/02/95 14.500000 08/03/95 14.250000 08/04/95 14.250000 08/08/95 14.375000 08/09/95 14.000000 08/10/95 14.125000 08/11/95 14.500000 08/14/95 14.500000 08/15/95 14.625000 08/16/95 15.000000 FINANCING CONTINGENCY REMOVED 08/17/95 14.500000 08/21/95 14.375000 08/22/95 14.375000 08/23/95 14.625000 08/24/95 14.250000 08/25/95 14.375000 08/28/95 14.250000 08/29/95 14.250000 08/30/95 14.500000 08/31/95 14.125000 09/01/95 14.125000 09/05/95 13.125000 09/06/95 13.750000 09/07/95 13.375000 09/08/95 13.750000 09/11/95 13.500000 09/12/95 13.875000 09/13/95 13.750000 09/14/95 13.625000 09/15/95 13.625000 09/18/95 13.750000 09/19/95 14.000000 09/21/95 14.000000 09/25/95 13.625000 09/26/95 13.625000 09/27/95 13.000000 09/28/95 13.000000 09/29/95 12.750000 10/02/95 13.375000 10/03/95 12.500000 10/04/95 12.375000 10/05/95 12.250000 10/06/95 12.625000 10/09/95 13.750000 10/10/95 13.375000 10/11/95 14.125000 10/12/95 14.500000 10/13/95 14.625000 - ------------------------------------------------------------------------------- PaineWebber Incorporated 3 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- EXECUTIVE SUMMARY - ------------------------------------------------------------------------------- CHRONOLOGY OF EVENTS - ------------------------------------------------------------------------------- DATE EVENT June 3, 1993 7 Investment Group increases its stake in Big O Tires to 312,000 shares, or 9.9% December 20, 1993 Balboa Investment Group delivers proposal to Company for inclusion in the Company's 1994 Proxy Statement recommending that the Company hire an investment banking firm to explore alternatives for enhancing shareholder value including, among other options, the sale of the Company May 23, 1994 Company retains M. Kane & Co. to help evaluate possible store acquisitions June 8, 1994 Shareholders approve proposal to hire an investment bank to explore ways of enhancing the Company's value July 5, 1994 PaineWebber engaged to advise Company August 26, 1994 Company adopts rights plan September 22, 1994 Kenneth Pavia, Big O's second-largest shareholder, invited to assist Investment Committee October 11, 1994 Company receives proposal of $18.00 per share from AKH Company, Inc. December 5, 1994 Company receives buyout offer from senior management and franchised dealers of $18.50 per share December 16, 1994 AKH Company, Inc. ("AKH") withdraws proposal December 22, 1994 Big O Tires enters into exclusive negotiations with manager/ dealer group February 7, 1995 Manager/dealer group decides not to pursue acquisition of Big O April 6, 1995 Company receives new offer from manager/dealer group of $16.00 per share June 5, 1995 Management group boosts offer to $16.50 per share July 24, 1995 Company announces the signing of a definitive merger agreement with the management group at $16.50 per share August 16, 1995 Management group removes financing contingency August 31, 1995 Extension granted until October 2, 1995 to satisfy or waive the contingency that requires participation in the management group by the Company's dealers representing not less than 85% of the Company's stores October 2, 1995 Extension granted until October 16, 1995 to satisfy or waive the 85% participation contingency October 5, 1995 Management achieves 82% store-participation and waives contingency - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- PaineWebber Incorporated 4 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- EXECUTIVE SUMMARY - ------------------------------------------------------------------------------- MARKETING PROCESS OVERVIEW / / In the fall of 1994, PaineWebber began to contact parties with respect to possible interest in acquiring the Company / / 17 potential purchasers were contacted -- 7 Confidentiality Agreements were executed POTENTIAL STRATEGIC BUYERS - ------------------------------------------------------------------------------- Company Comments - ------------------------------------------------------------------------------- Acklands Ltd Interest in Canadian operations only AKII Company Preliminary letter of intent at $18.00 Bridgestone Firestone Inc. Not interested Canadian Tire Not interested. Overlap of licensed stores in British Columbia Cooper Tire & Rubber Co. Not interested Discount Tire Co. Inc. Not interested Goodyear Tire & Rubber Co. Not interested The Kelly-Springfield Tire Co. Not interested Michelin Tire Corp. Not interested Montgomery Ward Not interested Whitman Corp. Not interested - ------------------------------------------------------------------------------- POTENTIAL FINANCIAL BUYERS - ------------------------------------------------------------------------------- Company Comments - ------------------------------------------------------------------------------- Fremont Capital Unwilling to execute Confidentiality Agreement Citicorp Venture Capital Not interested Heller Financial Not interested Vestar Not interested Wafra Investment Advisory Not interested Wasserstein Perella Merchant Banking Fund Not interested - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- PaineWebber Incorporated 5 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- EXECUTIVE SUMMARY - ------------------------------------------------------------------------------- MARKETING PROCESS OVERVIEW (CONT'D) / / The Company initially received two written acquisition proposals: -- On October 11, 1994, AKH, a California-based company which owns retail tire dealerships, delivered a letter to the Company proposing an acquisition of $18.00 per share in cash subject to due diligence, financing and other conditions -- On December 2, 1994, the Company received a letter from a group comprised of certain members of Big O's management and dealers that proposed to acquire all of the outstanding shares of the Company for $18.50 per share subject to, among other things: -- obtaining financing -- participation by at least 80% of the shares held by the Company's ESOP -- participation by franchise dealers having at least 85% of the franchise locations / / On December 6, 1994, two class-action lawsuits were filed seeking to enjoin the transaction and the implementation of the Shareholder Rights Plan -- On March 31, 1995, such lawsuits were dismissed / / On December 16, 1994, Big O Tires received a letter from AKH indicating that it would not proceed with its proposal until the proposal submitted by the Company's management and dealers was no longer being considered _________________ Note: Prior to being retained as financial advisor to the Company with respect to strategic alternatives. PaineWebber acted as financial advisor to Big O in conjunction with an $8.0 million Senior Notes Offering. - ------------------------------------------------------------------------------- PaineWebber Incorporated 6 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- EXECUTIVE SUMMARY - ------------------------------------------------------------------------------- MARKETING PROCESS OVERVIEW (CONT'D) / / On February 7, 1995, the Company received a letter from Big O's management and dealers advising that the group had elected to discontinue pursuing an acquisition as a result of, among other issues: -- the difficulties experienced in obtaining financing commitments -- the inability of the Company's management and dealers' to reach agreement on certain issues relating to the acquisition / / On February 8, 1995, the Company publicly disclosed Big O's management and dealers intentions / / April 6, 1995, the Company received a new proposal from the Company's management and dealers to acquire Big O for a cash price of $16.00 -- the Investment Committee of the Board (the "Investment Committee") determined not to accept the $16.00 per share offer and advised the management and dealer group that it would be open to further negotiations at a more favorable price / / On June 7, 1995, after a series of negotiations the Company entered into an agreement with the dealer management group with respect to an offer at $16.50, subject to similar conditions highlighted in the group's December 2, 1994 proposal letter - ------------------------------------------------------------------------------- PaineWebber Incorporated 7 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- EXECUTIVE SUMMARY - ------------------------------------------------------------------------------- TRANSACTION OVERVIEW / / Proposed acquisition by merger of Big O Tires by certain members of senior management and certain franchise dealers of Big O Tires for $16.50 per share in cash (the "Merger Consideration") -- Based on all outstanding shares of common stock and common stock equivalents, the total value of the transaction is approximately $71.5 million -- A portion of the shares held by certain members of management and participants in the Company's ESOP shall be canceled without payment / / In the merger, all shares (other than the Excluded Shares) will be converted into a right to receive the merger Consideration. -- "Excluded Shares" means shares of the Company's common stock that are (i) held by certain members of the Company's senior management, (ii) held by certain participants in the Company's Employee Stock Ownership Plan or (iii) held by, or under contract to be acquired by: (A) the Company, or both (B) their respective direct or indirect subsidiaries or (C) any stockholder or affiliate or both - ------------------------------------------------------------------------------- PaineWebber Incorporated 8 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- EXECUTIVE SUMMARY - ------------------------------------------------------------------------------- TRANSACTION OVERVIEW (CONT'D) / / Transaction is currently conditioned upon, among others things: -- Approval by at least 80% of the shares of Company common stock held by the ESOP -- The absence of any governmental or regulatory prohibitions against the merger -- Shareholder approval -- Receipt of opinions as to the fairness of the transaction from a financial point of view to the disinterested stockholders and participants in the ESOP / / Big O Tires has requested that PaineWebber provide the Board of Directors with an opinion as to whether or not the Merger Consideration is fair, from a financial point of view, to the holders of the Company's common stock (other than holders of the Excluded Shares) - ------------------------------------------------------------------------------- PaineWebber Incorporated 9 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- EXECUTIVE SUMMARY - ------------------------------------------------------------------------------- TRANSACTION OVERVIEW (CONT'D)
CALCULATION OF TOTAL PURCHASE PRICE - ------------------------------------------------------------------------------- ($ IN THOUSANDS EXCEPT PER SHARE AMOUNTS) - ------------------------------------------------------------------------------- Offer Price Per Share $ 16.50 Shares Outstanding (1)(2) 3,436 ------- Implied Equity Value 56,697 Plus: Total Debt 19,019 Less: Cash and Equivalents (4,254) ------- Implied Total Enterprise Value $71,462 ======= - -------------------------------------------------------------------------------
OPERATING STATISTICS - ------------------------------------------------------------------------------- LTM (3) LTM LTM LTM Net 1995E Net 1996E Net Revenues EBITDA (4) EBIT (5) Income Income (6)(7) Income (6) - ------------------------------------------------------------------------------- $141,218 $9,889 $8,237 $3,913 $4,068 $4,859 - -------------------------------------------------------------------------------
MULTIPLE ANALYSIS - ------------------------------------------------------------------------------- TEV/LTM TEV/LTM TEV/LTM MV/LTM MV/1995E MV/1996E Revenues EBITDA EBIT Net Income Net Income Net Income - ------------------------------------------------------------------------------- 0.51x 7.2x 8.7x 14.5x 13.9x 11.7x - -------------------------------------------------------------------------------
________________ (1) Based on 3,317,840 common shares outstanding as of November 10, 1995 plus 118,318 options outstanding, assuming the treasury stock method, as of December 31, 1994. (2) Options outstanding under the treasury stock method are calculated based on 226,347 options outstanding as of December 31, 1994, and assume on average option exercise price and stock price of $7.88 and $16.50 respectively. (3) LTM = Latest twelve months ended September 30, 1995. (4) EBITDA = Earnings Before Interest Taxes, Depreciation and Amortization. (5) EBIT = Earnings Before Interest and Taxes. (6) Based on Company Projections. (7) Excludes $1,274,000 of extraordinary items including shareholder proposal expense, losses on the sale or closure of retail stores, and warehouse consolidation costs. A 42.0% tax rate is assumed. - ------------------------------------------------------------------------------- PaineWebber Incorporated 10 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- EXECUTIVE SUMMARY - ------------------------------------------------------------------------------- VALUATION SUMMARY / / The chart below depicts the following: -- The range of equity values based on the valuation methodologies employed by PaineWebber; and -- The implied fully diluted per share value of the Big O Tires management and dealer offer COMPARISON OF IMPLIED BIG O TIRES PER SHARE VALUE BY METHODOLOGY (1) [GRAPH] EXECUTIVE SUMMARY VALUATION SUMMARY - - THE CHART BELOW DEPICTS THE FOLLOWING: - THE RANGE OF EQUITY VALUES BASED ON THE VALUATION METHODOLOGIES EMPLOYED BY PAINEWEBBER; AND - - THE IMPLIED FULLY DILUTED PER SHARE VALUE OF THE BIG O TIRES MANAGEMENT AND DEALER OFFER COMPARISON OF IMPLIED BIG O TIRES PER SHARE VALUE BY METHODOLOGY (1) [BAR GRAPH APPEARS HERE] CATEGORY $ PER SHARE BOOK VALUE (9/30/95) 11.20 MARKET VALUE (11/10/95) 14.75 MARKET VALUE (52 WEEK HIGH/LOW) 12.00 - 17.38 DISCOUNTED CASH FLOW ANALYSIS 14.95 - 20.32 COMPARATIVE COMPANY ANALYSIS (NO PREMIUM) 11.87 - 16.32 COMPARATIVE COMPANY ANALYSIS (30% PREMIUM)(2) 15.43 - 21.22 [NOTE: ABOVE STOCK PRICES COMPARED WITH $16.50 PER SHARE OFFER PRICE] (1) AS OF SEPTEMBER 10, 1995, BIG O TIRES HAD 3,317,840 SHARES OF COMMON STOCK OUTSTANDING AND 226,347 COMMON STOCK OPTIONS OUTSTANDING WITH AN AVERAGE EXERCISE PRICE OF $7.88. (2) PREMIUM BASED ON RETAIL INDUSTRY (AS DEFINED BY SDC) TRANSACTIONS FROM JANUARY 1, 1990 TO NOVEMBER 3, 1994. ________________ (1) As of September 10, 1995, Big O Tires had 3,317,840 shares of common stock outstanding and 226,347 common stock options outstanding with an average exercise price of $7.88. (2) Premium based on retail industry (as defined by SDC) transactions from January 1, 1990 to November 3, 1994. - ------------------------------------------------------------------------------- PaineWebber Incorporated 11 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- PART II -- REVIEW OF DUE DILIGENCE - ------------------------------------------------------------------------------- PaineWebber Incorporated 12 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- REVIEW OF DUE DILIGENCE - ------------------------------------------------------------------------------- / / Reviewed Big O Tires Annual Reports, Forms 10-K and related financial information for the three fiscal years ended December 31, 1992, 1993 and 1994 and Company's draft Form 10-Q and related unaudited financial information for the nine months ended September 30, 1995. / / Reviewed certain information, including financial forecasts, relating to the business, earnings, cash flow, assets and prospects of Big O Tires, furnished to PaineWebber by Big O Tires. / / Visited Big O Tires facilities and conducted discussions with members of senior management of Big O Tires concerning its business and prospects. / / Reviewed the historical market prices and trading activity for Big O Tires common stock and compared them with those of certain publicly traded companies which PaineWebber deemed relevant. / / Compared the results of operations of Big O Tires with those of certain companies which PaineWebber deemed relevant. / / Compared the results of operations of the Company with those of certain companies which PaineWebber deemed relevant. - ------------------------------------------------------------------------------- PaineWebber Incorporated 13 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- REVIEW OF DUE DILIGENCE -------------------------------------------------------------------- / / Compared the proposed financial terms of the Merger with the financial terms of certain other mergers and acquisitions which PaineWebber deemed relevant. / / Reviewed the merger agreement and the draft proxy statement relating to the Merger as proposed to be filed with the Securities and Exchange Commission. / / Reviewed such other financial studies and analyses and performed such other investigations and took into account such other matters as PaineWebber deemed appropriate, including its assessment of general economic, market and monetary conditions. - ------------------------------------------------------------------------------- PaineWebber Incorporated 14 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- PART III -- BIG O TIRES, INC. - ------------------------------------------------------------------------------- PaineWebber Incorporated 15 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- EXHIBIT I -- COMPANY OVERVIEW - ------------------------------------------------------------------------------- PaineWebber Incorporated 16 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- COMPANY OVERVIEW -------------------------------------------------------------------- / / Big O Tires, Inc., is one of the largest independent retail tire and auto service franchisers in North America, with 378 stores in 18 states primarily in the West and Midwest (1). The Company also distributes tires and other automotive products to 40 Associated Dealers in British Columbia, Canada. It is the sole distributor of its private Big O brand tires and a major distributor of other brands such as Michelin, B.F. Goodrich and Uniroyal, as well as aftermarket suspension parts manufactured by Monroe Auto Equipment. / / In June 1993, the Company adopted a plan to consolidate three of its regional distribution centers into a single warehouse facility to be located near Las Vegas, Nevada. One of the three regional distribution centers to be consolidated was located in Denver, Colorado, and the other two were located in the cities of Ontario and Vacaville, California. The Nevada warehouse facility was opened on March 14, 1995. / / The Company's sales by product line in 1994 were as follows: -------------------------------------------------------------------- (IN THOUSANDS) % OF TOTAL UNITS REVENUES (1) PRODUCT SALES ----- ------------ ------------- Big O Brand Tires 1,410 $80,424 68.0% Other Brand Tires 646 26,472 22.0 Wheels, Shocks and Other Accessories 1,338 12,051 10.0 -------------------------------------------------------------------- _________________ (1) Source: December 31, 1994 10-K. - ------------------------------------------------------------------------------- PaineWebber Incorporated 17 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- COMPANY OVERVIEW -------------------------------------------------------------------- / / In July 1994, the Company implemented its "Cost-U-Less" marketing program. This program provided, along with a marketing message of competitive pricing on all products and services, a reduction in the cost of Big O brand tires to the Company's franchisees. This allowed the franchisees to offer Big O brand products to retail customers at lower retail prices which generally allowed the franchisees to be more competitive in their markets / / The program has resulted in an increase in the percent of tires sold that are Big O brand, which generally provide a higher margin than non-Big O brand tires - ------------------------------------------------------------------------------- PaineWebber Incorporated 18 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- COMPANY OVERVIEW -------------------------------------------------------------------- BIG O TIRES OWNERSHIP SUMMARY(1) COMPANY OVERVIEW BIG O TIRES OWNERSHIP SUMMARY (1) [PIE GRAPH APPEARS HERE] DIRECTORS AND EXECUTIVE OFFICERS 5.4% BALBOA INVESTMENT GROUP 9.4% ESOP 19.2% OTHER 66.0% (1) BASED ON THE COMPANY'S PROXY STATEMENT DATED APRIL 29, 1995. _________________ (1) Based on the Company's Proxy Statement dated April 29, 1995. - ------------------------------------------------------------------------------- PaineWebber Incorporated 19 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- EXHIBIT II -- HISTORICAL FINANCIAL PERFORMANCE - ------------------------------------------------------------------------------- PaineWebber Incorporated 20 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- HISTORICAL FINANCIAL PERFORMANCE -------------------------------------------------------------------- BIG O TIRES INCOME STATEMENT DATA --------------------------------------------------------------------
($ IN THOUSANDS, EXCEPT FOR THE NINE MONTHS PER SHARE DATA) FOR THE FISCAL YEARS ENDING DECEMBER 31, ENDING SEPTEMBER 30, -------------------------------------------------------- -------------------- 1989 1990 1991 1992 1993 1994 1994 1995 ------------------------------------------------------------------------------------------------- Net Sales $108,227 $106,902 $113,836 $119,799 $122,960 $127,678 $94,132 $107,672 SALES GROWTH 15.7% (1.2)% 6.5% 5.2% 2.6% 3.8% Cost of Sales 85,627 84,618 88,638 92,150 95,329 97,547 72,203 84,737 -------- -------- -------- -------- ------- ------- ------- -------- Gross Profit 22,600 22,284 25,198 27,649 27,631 30,131 21,929 22,935 GROSS MARGIN 20.9% 20.8% 22.1% 23.1% 22.5% 23.7% 23.3% 21.3% Selling, General and Admin. 18,897 18,823 20,173 21,713 21,815 22,245 16,990 17,645 -------- -------- -------- -------- ------- ------- ------- -------- AS A % OF NET SALES 17.5% 17.6% 17.7% 18.1% 17.7% 17.4% 18.0% 16.4% Operating Income 3,703 3,461 5,025 5,936 5,816 7,886 4,939 5,290 OPERATING MARGIN 3.4% 3.2% 4.4% 5.0% 4.7% 6.2% 5.2% 4.9% Net Interest Expense 1,328 1,891 1,575 1,170 1,219 1,465 1,177 1,199 -------- -------- -------- -------- ------- ------- ------- -------- Pre-Tax Income 2,375(1) 1,570(2) 3,450(3) 4,766 4,597(4) 6,421(5) 3,762(6) 4,091(7) Income Taxes 998 659 1,449 1,983 1,953 2,698 1,580 1,719 -------- -------- -------- -------- ------- ------- ------- -------- Net Income 1,377(1) 911(2) 2,001(3) 2,783 2,644(4) 3,723(5) 2,182(6) 2,372(7) NET MARGIN 1.3% 0.9% 1.8% 2.3% 2.2% 2.9% 2.3% 2.2% Earnings Per Share (8) $0.43 $0.26 $0.57 $0.80 $ 0.78 $ 1.11 $ 0.65 $ 0.70 -------- -------- -------- -------- ------- ------- ------- -------- -------------------------------------------------------------------------------------------------
_________________ (1) Excludes a $314,800 gain on sale of retail stores. A 42.0% tax rate is assumed for net income calculation. (2) Excludes a $305,300 loss on retail stores closed. A 42.0% tax rate is assumed for net income calculation. (3) Excludes a $310,600 loss on retail stores closed. A 42.0% tax rate is assumed for net income calculation. (4) Excludes extraordinary charges totaling $1,317,111. A 42.0% tax rate is assumed for net income calculation. (5) Excludes extraordinary charges totaling $1,780,000 A 42% tax rate is assumed for net income calculation. (6) Excludes $345,000 shareholder proposal expense and $911,000 loss on sale or closure of retail stores. A 42.0% is tax rate is assumed for net income calculation. (7) Excludes $967,000 shareholder proposal expense. $312,000 loss on sale or closure of retail stores and $320,000 warehouse consolidation costs. A 42.0% tax rate is assumed for net income calculation. (8) All earnings per share figures have been adjusted for the Company's 5-for-1 reverse stock split effective June 15, 1992. - ------------------------------------------------------------------------------- PaineWebber Incorporated 21 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- HISTORICAL FINANCIAL PERFORMANCE -------------------------------------------------------------------- BIG O TIRES BALANCE SHEET DATA --------------------------------------------------------------------
($ IN THOUSANDS) AS OF DECEMBER 31, AS OF SEPTEMBER 30, -------------------------------------- ------------------- 1991 1992 1993 1994 1995 - ----------------------------------------------------------------------------------------------- Current Assets Cash and Equivalents $ 1,873 $ 1,590 $ 1,113 $ 4,882 $ 854 Accounts and Other Receivable 13,071 8,835 7,722 11,070 13,638 Inventories 13,839 15,348 11,748 14,219 17,751 Other 3,722 3,721 3,553 3,547 3,321 ------- ------- ------- ------- ------- Total Current Assets 32,505 29,494 24,136 33,718 35,564 Net Property, Plant and Equipment 12,566 12,166 13,153 12,031 19,095 Other Assets 14,860 16,019 19,318 16,219 15,187 ------- ------- ------- ------- ------- Total Assets $59,932 $57,679 $56,607 $61,968 $69,846 ------- ------- ------- ------- ------- Current Liabilities Accounts Payable $ 4,485 $ 5,085 $ 3,613 $ 650 $ 5,418 Current Portion of Long Term Debt 1,558 1,355 2,649 2,066 1,643 Other 5,801 5,721 6,650 6,335 6,750 ------- ------- ------- ------- ------- Total Current Liabilities 11,844 12,161 12,912 9,051 13,811 Long Term Debt 14,648 9,359 11,037 15,906 17,376 Other Long Term Liabilities 2,508 1,969 1,170 1,882 1,499 ------- ------- ------- ------- ------- Total Liabilities 29,000 23,489 25,119 26,839 32,686 Shareholders' Equity 30,932 34,190 31,488 35,129 37,160 ------- ------- ------- ------- ------- Total Liabilities and Shareholders' Equity $59,932 $57,679 $56,607 $61,968 $ 69,846 ------- ------- ------- ------- -------- Total Debt/Total Capitalization 34.4% 23.9% 30.3% 34.0% 33.9% Total Debt/Total Equity 52.4% 31.3% 43.5% 51.2% 51.2% - ----------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------- PaineWebber Incorporated 22 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- EXHIBIT III -- STOCK PRICE AND VOLUME PERFORMANCE - ------------------------------------------------------------------------------- PaineWebber Incorporated 23 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- STOCK PRICE AND VOLUME PERFORMANCE -------------------------------------------------------------------- BIG O TIRES STOCK PRICE -- LATEST 24 MONTHS [GRAPH APPEARS HERE] STOCK PRICE AND VOLUME PERFORMANCE BIG O TIRES STOCK PRICE - LATEST 24 MONTHS DATE STOCK PRICE 11/09/93 15.500000 11/10/93 15.250000 11/11/93 14.880000 11/12/93 14.880000 11/15/93 15.000000 11/16/93 14.750000 11/17/93 14.750000 11/18/93 15.000000 11/19/93 14.630000 11/22/93 14.250000 11/23/93 14.380000 11/24/93 14.250000 11/29/93 14.380000 11/30/93 15.000000 12/01/93 15.250000 12/02/93 15.500000 12/03/93 15.500000 12/06/93 15.250000 12/07/93 15.250000 12/08/93 15.250000 12/09/93 15.125000 12/10/93 15.375000 12/13/93 14.750000 12/14/93 14.250000 12/15/93 14.250000 12/16/93 14.375000 12/17/93 14.125000 12/20/93 13.875000 12/21/93 14.750000 12/22/93 14.500000 12/23/93 14.875000 12/27/93 14.875000 12/28/93 14.625000 12/30/93 14.250000 12/31/93 14.250000 01/01/94 14.250000 01/03/94 14.125000 01/04/94 13.875000 01/05/94 14.000000 01/06/94 14.500000 01/07/94 14.000000 01/10/94 14.000000 01/11/94 13.750000 01/12/94 14.000000 01/13/94 13.500000 01/14/94 13.750000 01/17/94 13.500000 01/18/94 13.000000 01/19/94 13.750000 01/20/94 13.375000 01/21/94 13.500000 01/24/94 13.500000 01/25/94 13.125000 01/26/94 13.125000 01/27/94 13.125000 01/28/94 13.625000 01/31/94 14.250000 02/01/94 15.750000 02/02/94 15.500000 02/03/94 15.750000 02/04/94 15.500000 02/07/94 15.375000 02/08/94 15.000000 02/09/94 14.750000 02/10/94 14.500000 02/11/94 14.500000 02/14/94 14.750000 02/15/94 14.500000 02/16/94 14.500000 02/17/94 14.750000 02/18/94 14.375000 02/22/94 14.375000 02/23/94 14.750000 02/24/94 14.750000 02/25/94 13.750000 02/28/94 13.625000 03/01/94 14.250000 03/02/94 13.375000 03/03/94 14.000000 03/04/94 14.000000 03/07/94 14.625000 03/08/94 14.875000 03/09/94 14.875000 03/10/94 14.500000 03/11/94 14.875000 03/14/94 14.625000 03/15/94 15.250000 03/16/94 14.875000 03/17/94 14.750000 03/18/94 15.250000 03/21/94 15.375000 03/22/94 15.750000 03/23/94 15.750000 03/24/94 15.500000 03/25/94 16.000000 03/28/94 16.000000 03/29/94 15.000000 03/30/94 15.500000 03/31/94 14.750000 04/04/94 13.125000 04/05/94 14.750000 04/06/94 14.000000 04/07/94 14.375000 04/08/94 13.875000 04/11/94 13.750000 04/12/94 14.250000 04/13/94 14.000000 04/14/94 15.000000 04/15/94 15.375000 04/18/94 14.750000 04/19/94 14.500000 04/20/94 14.625000 04/21/94 15.000000 04/22/94 15.375000 04/25/94 15.000000 04/26/94 15.500000 04/28/94 15.500000 04/29/94 15.125000 05/02/94 15.500000 05/03/94 15.750000 05/04/94 15.750000 05/05/94 15.500000 05/06/94 15.000000 05/09/94 15.750000 05/10/94 15.250000 05/11/94 14.750000 05/12/94 14.625000 05/13/94 14.625000 05/17/94 15.250000 05/18/94 15.500000 05/19/94 16.000000 05/20/94 15.500000 05/23/94 15.750000 05/24/94 15.250000 05/25/94 15.000000 05/26/94 15.000000 05/27/94 15.000000 05/31/94 15.000000 06/01/94 15.250000 06/02/94 15.375000 06/03/94 15.250000 06/06/94 15.750000 06/07/94 15.625000 06/08/94 15.625000 06/09/94 16.000000 06/10/94 15.500000 06/13/94 15.500000 06/14/94 15.750000 06/15/94 16.125000 06/16/94 16.375000 06/17/94 16.750000 06/20/94 15.875000 06/21/94 16.250000 06/22/94 15.750000 06/23/94 15.750000 06/24/94 15.250000 06/27/94 16.000000 06/28/94 16.250000 06/29/94 16.250000 06/30/94 15.500000 07/01/94 15.750000 07/05/94 15.250000 07/06/94 14.750000 07/07/94 14.750000 07/08/94 15.250000 07/11/94 15.000000 07/12/94 15.500000 07/13/94 15.630000 07/14/94 15.750000 07/15/94 15.750000 07/18/94 15.000000 07/19/94 16.250000 07/20/94 15.630000 07/21/94 15.630000 07/22/94 16.250000 07/25/94 15.750000 07/26/94 15.880000 07/27/94 15.750000 07/28/94 15.750000 07/29/94 15.750000 08/01/94 15.750000 08/02/94 15.500000 08/03/94 15.630000 08/04/94 15.630000 08/05/94 15.437500 08/08/94 15.000000 08/09/94 15.000000 08/10/94 15.750000 08/11/94 15.000000 08/12/94 15.630000 08/15/94 15.130000 08/16/94 15.630000 08/17/94 15.250000 08/18/94 15.500000 08/19/94 16.000000 08/22/94 15.880000 08/23/94 15.750000 08/24/94 15.380000 08/25/94 15.750000 08/26/94 15.380000 08/29/94 14.880000 08/30/94 15.750000 08/31/94 15.750000 09/01/94 15.880000 09/02/94 16.500000 09/06/94 16.500000 09/07/94 16.500000 09/08/94 15.750000 09/09/94 16.000000 09/12/94 15.750000 09/13/94 15.500000 09/14/94 16.250000 09/15/94 15.750000 09/16/94 16.000000 09/19/94 15.250000 09/20/94 15.250000 09/21/94 16.000000 09/22/94 16.000000 09/23/94 16.000000 09/26/94 15.750000 09/27/94 15.750000 09/28/94 15.500000 09/29/94 15.630000 09/30/94 16.000000 10/03/94 15.500000 10/04/94 15.750000 10/05/94 15.500000 10/06/94 15.500000 10/07/94 16.250000 10/10/94 16.250000 10/11/94 17.000000 10/12/94 17.250000 10/13/94 16.750000 10/14/94 16.625000 10/17/94 16.250000 10/18/94 16.250000 10/19/94 16.625000 10/20/94 16.437500 10/21/94 16.875000 10/24/94 16.625000 10/25/94 16.750000 10/26/94 16.750000 10/27/94 16.750000 10/28/94 16.375000 10/31/94 16.500000 11/01/94 17.000000 11/02/94 17.250000 11/03/94 16.500000 11/04/94 16.000000 11/07/94 16.625000 11/08/94 16.125000 11/09/94 16.500000 11/10/94 15.500000 11/11/94 16.000000 11/14/94 16.000000 11/15/94 15.750000 11/16/94 16.000000 11/17/94 16.250000 11/18/94 15.875000 11/21/94 15.875000 11/22/94 15.875000 11/23/94 16.000000 11/25/94 15.875000 11/28/94 15.875000 11/29/94 16.000000 11/30/94 16.250000 12/01/94 16.000000 12/02/94 16.000000 12/05/94 17.187500 12/06/94 17.125000 12/07/94 17.125000 12/08/94 16.750000 12/09/94 16.500000 12/12/94 16.625000 12/13/94 16.750000 12/14/94 16.250000 12/15/94 16.062500 12/16/94 15.750000 12/20/94 16.375000 12/21/94 16.250000 12/22/94 16.125000 12/23/94 16.000000 12/27/94 15.750000 12/28/94 15.750000 12/29/94 15.250000 12/30/94 15.250000 01/01/95 15.250000 01/03/95 15.750000 01/04/95 16.250000 01/05/95 15.875000 01/06/95 16.000000 01/09/95 15.875000 01/10/95 15.625000 01/11/95 15.875000 01/12/95 15.500000 01/13/95 15.625000 01/16/95 15.500000 01/17/95 15.625000 01/18/95 15.625000 01/19/95 15.500000 01/20/95 15.375000 01/23/95 16.625000 01/24/95 15.250000 01/25/95 15.625000 01/26/95 15.500000 01/27/95 15.562500 01/30/95 15.375000 01/31/95 15.625000 02/01/95 15.750000 02/02/95 15.500000 02/03/95 15.625000 02/06/95 15.937500 02/07/95 15.750000 02/08/95 14.250000 02/09/95 14.375000 02/10/95 14.625000 02/13/95 14.125000 02/14/95 13.750000 02/15/95 13.875000 02/16/95 13.937500 02/17/95 14.000000 02/21/95 13.625000 02/22/95 13.625000 02/23/95 14.000000 02/24/95 14.000000 02/27/95 13.375000 02/28/95 13.250000 03/01/95 13.500000 03/02/95 13.750000 03/03/95 13.625000 03/06/95 13.750000 03/07/95 13.500000 03/08/95 14.000000 03/09/95 14.125000 03/10/95 14.625000 03/13/95 14.375000 03/14/95 14.375000 03/15/95 14.500000 03/16/95 14.250000 03/17/95 14.375000 03/20/95 13.875000 03/21/95 14.125000 03/22/95 13.875000 03/23/95 13.500000 03/24/95 13.250000 03/27/95 13.250000 03/28/95 13.250000 03/29/95 13.250000 03/30/95 13.000000 03/31/95 13.000000 04/03/95 13.000000 04/04/95 13.375000 04/05/95 13.875000 04/06/95 13.750000 04/07/95 13.625000 04/10/95 13.750000 04/11/95 13.750000 04/12/95 13.875000 04/13/95 13.750000 04/17/95 13.750000 04/18/95 13.250000 04/19/95 13.625000 04/20/95 13.625000 04/21/95 13.250000 04/24/95 13.375000 04/25/95 13.250000 04/26/95 13.250000 04/27/95 13.375000 04/28/95 13.750000 05/01/95 14.250000 05/02/95 14.125000 05/03/95 13.750000 05/04/95 14.000000 05/05/95 14.000000 05/08/95 13.500000 05/09/95 14.000000 05/10/95 14.000000 05/11/95 13.750000 05/12/95 13.875000 05/15/95 13.625000 05/16/95 14.500000 05/17/95 13.500000 05/18/95 13.250000 05/19/95 13.250000 05/23/95 13.500000 05/24/95 13.750000 05/25/95 14.000000 05/26/95 13.250000 05/30/95 13.500000 05/31/95 13.750000 06/05/95 14.500000 06/06/95 14.250000 06/07/95 14.000000 06/08/95 15.000000 06/09/95 14.500000 06/12/95 14.625000 06/13/95 14.625000 06/14/95 14.625000 06/15/95 14.750000 06/16/95 14.750000 06/19/95 14.750000 06/20/95 14.750000 06/21/95 15.000000 06/22/95 14.750000 06/23/95 14.625000 06/26/95 14.500000 06/27/95 14.500000 06/28/95 14.625000 06/29/95 14.687500 07/03/95 14.625000 07/05/95 14.625000 07/06/95 14.375000 07/07/95 14.500000 07/10/95 15.000000 07/11/95 14.250000 07/12/95 14.125000 07/13/95 13.625000 07/14/95 14.500000 07/17/95 14.875000 07/18/95 14.375000 07/19/95 14.000000 07/20/95 14.375000 07/21/95 14.375000 07/24/95 14.375000 07/25/95 14.250000 07/26/95 14.750000 07/27/95 14.625000 07/28/95 14.500000 07/31/95 14.250000 08/01/95 14.250000 08/02/95 14.500000 08/03/95 14.250000 08/04/95 14.250000 08/08/95 14.375000 08/09/95 14.000000 08/10/95 14.125000 08/11/95 14.500000 08/14/95 14.500000 08/15/95 14.625000 08/16/95 15.000000 08/17/95 14.500000 08/21/95 14.375000 08/22/95 14.375000 08/23/95 14.625000 08/24/95 14.250000 08/25/95 14.375000 08/28/95 14.250000 08/29/95 14.250000 08/30/95 14.500000 08/31/95 14.125000 09/01/95 14.125000 09/05/95 13.125000 09/06/95 13.750000 09/07/95 13.375000 09/08/95 13.750000 09/11/95 13.500000 09/12/95 13.875000 09/13/95 13.750000 09/14/95 13.625000 09/15/95 13.625000 09/18/95 13.750000 09/19/95 14.000000 09/21/95 14.000000 09/25/95 13.625000 09/26/95 13.625000 09/27/95 13.000000 09/28/95 13.000000 09/29/95 12.750000 10/02/95 13.375000 10/03/95 12.500000 10/04/95 12.375000 10/05/95 12.250000 10/06/95 12.625000 10/09/95 13.750000 10/10/95 13.375000 10/11/95 14.125000 10/12/95 14.500000 10/13/95 14.625000 10/16/95 14.500000 10/17/95 14.875000 10/18/95 14.375000 10/19/95 14.250000 10/20/95 14.000000 10/23/95 14.500000 10/24/95 14.250000 10/25/95 13.250000 10/26/95 14.000000 10/27/95 14.125000 10/30/95 14.687500 10/31/95 14.500000 11/01/95 14.250000 11/02/95 14.687500 11/03/95 14.875000 11/06/95 14.500000 11/07/95 14.750000 11/08/95 14.375000 11/09/95 14.750000 - ------------------------------------------------------------------------------- PaineWebber Incorporated 24 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- STOCK PRICE AND VOLUME PERFORMANCE -------------------------------------------------------------------- BIG O TIRES PERFORMANCE VERSUS COMPARATIVE COMPANIES [GRAPH APPEARS HERE] DATE STOCK PRICE 11/09/93 15.500000 11/10/93 15.250000 11/11/93 14.880000 11/12/93 14.880000 11/15/93 15.000000 11/16/93 14.750000 11/17/93 14.750000 11/18/93 15.000000 11/19/93 14.630000 11/22/93 14.250000 11/23/93 14.380000 11/24/93 14.250000 11/29/93 14.380000 11/30/93 15.000000 12/01/93 15.250000 12/02/93 15.500000 12/03/93 15.500000 12/06/93 15.250000 12/07/93 15.250000 12/08/93 15.250000 12/09/93 15.125000 12/10/93 15.375000 12/13/93 14.750000 12/14/93 14.250000 12/15/93 14.250000 12/16/93 14.375000 12/17/93 14.125000 12/20/93 13.875000 12/21/93 14.750000 12/22/93 14.500000 12/23/93 14.875000 12/27/93 14.875000 12/28/93 14.625000 12/30/93 14.250000 12/31/93 14.250000 01/01/94 14.250000 01/03/94 14.125000 01/04/94 13.875000 01/05/94 14.000000 01/06/94 14.500000 01/07/94 14.000000 01/10/94 14.000000 01/11/94 13.750000 01/12/94 14.000000 01/13/94 13.500000 01/14/94 13.750000 01/17/94 13.500000 01/18/94 13.000000 01/19/94 13.750000 01/20/94 13.375000 01/21/94 13.500000 01/24/94 13.500000 01/25/94 13.125000 01/26/94 13.125000 01/27/94 13.125000 01/28/94 13.625000 01/31/94 14.250000 02/01/94 15.750000 02/02/94 15.500000 02/03/94 15.750000 02/04/94 15.500000 02/07/94 15.375000 02/08/94 15.000000 02/09/94 14.750000 02/10/94 14.500000 02/11/94 14.500000 02/14/94 14.750000 02/15/94 14.500000 02/16/94 14.500000 02/17/94 14.750000 02/18/94 14.375000 02/22/94 14.375000 02/23/94 14.750000 02/24/94 14.750000 02/25/94 13.750000 02/28/94 13.625000 03/01/94 14.250000 03/02/94 13.375000 03/03/94 14.000000 03/04/94 14.000000 03/07/94 14.625000 03/08/94 14.875000 03/09/94 14.875000 03/10/94 14.500000 03/11/94 14.875000 03/14/94 14.625000 03/15/94 15.250000 03/16/94 14.875000 03/17/94 14.750000 03/18/94 15.250000 03/21/94 15.375000 03/22/94 15.750000 03/23/94 15.750000 03/24/94 15.500000 03/25/94 16.000000 03/28/94 16.000000 03/29/94 15.000000 03/30/94 15.500000 03/31/94 14.750000 04/04/94 13.125000 04/05/94 14.750000 04/06/94 14.000000 04/07/94 14.375000 04/08/94 13.875000 04/11/94 13.750000 04/12/94 14.250000 04/13/94 14.000000 04/14/94 15.000000 04/15/94 15.375000 04/18/94 14.750000 04/19/94 14.500000 04/20/94 14.625000 04/21/94 15.000000 04/22/94 15.375000 04/25/94 15.000000 04/26/94 15.500000 04/28/94 15.500000 04/29/94 15.125000 05/02/94 15.500000 05/03/94 15.750000 05/04/94 15.750000 05/05/94 15.500000 05/06/94 15.000000 05/09/94 15.750000 05/10/94 15.250000 05/11/94 14.750000 05/12/94 14.625000 05/13/94 14.625000 05/17/94 15.250000 05/18/94 15.500000 05/19/94 16.000000 05/20/94 15.500000 05/23/94 15.750000 05/24/94 15.250000 05/25/94 15.000000 05/26/94 15.000000 05/27/94 15.000000 05/31/94 15.000000 06/01/94 15.250000 06/02/94 15.375000 06/03/94 15.250000 06/06/94 15.750000 06/07/94 15.625000 06/08/94 15.625000 06/09/94 16.000000 06/10/94 15.500000 06/13/94 15.500000 06/14/94 15.750000 06/15/94 16.125000 06/16/94 16.375000 06/17/94 16.750000 06/20/94 15.875000 06/21/94 16.250000 06/22/94 15.750000 06/23/94 15.750000 06/24/94 15.250000 06/27/94 16.000000 06/28/94 16.250000 06/29/94 16.250000 06/30/94 15.500000 07/01/94 15.750000 07/05/94 15.250000 07/06/94 14.750000 07/07/94 14.750000 07/08/94 15.250000 07/11/94 15.000000 07/12/94 15.500000 07/13/94 15.630000 07/14/94 15.750000 07/15/94 15.750000 07/18/94 15.000000 07/19/94 16.250000 07/20/94 15.630000 07/21/94 15.630000 07/22/94 16.250000 07/25/94 15.750000 07/26/94 15.880000 07/27/94 15.750000 07/28/94 15.750000 07/29/94 15.750000 08/01/94 15.750000 08/02/94 15.500000 08/03/94 15.630000 08/04/94 15.630000 08/05/94 15.437500 08/08/94 15.000000 08/09/94 15.000000 08/10/94 15.750000 08/11/94 15.000000 08/12/94 15.630000 08/15/94 15.130000 08/16/94 15.630000 08/17/94 15.250000 08/18/94 15.500000 08/19/94 16.000000 08/22/94 15.880000 08/23/94 15.750000 08/24/94 15.380000 08/25/94 15.750000 08/26/94 15.380000 08/29/94 14.880000 08/30/94 15.750000 08/31/94 15.750000 09/01/94 15.880000 09/02/94 16.500000 09/06/94 16.500000 09/07/94 16.500000 09/08/94 15.750000 09/09/94 16.000000 09/12/94 15.750000 09/13/94 15.500000 09/14/94 16.250000 09/15/94 15.750000 09/16/94 16.000000 09/19/94 15.250000 09/20/94 15.250000 09/21/94 16.000000 09/22/94 16.000000 09/23/94 16.000000 09/26/94 15.750000 09/27/94 15.750000 09/28/94 15.500000 09/29/94 15.630000 09/30/94 16.000000 10/03/94 15.500000 10/04/94 15.750000 10/05/94 15.500000 10/06/94 15.500000 10/07/94 16.250000 10/10/94 16.250000 10/11/94 17.000000 10/12/94 17.250000 10/13/94 16.750000 10/14/94 16.625000 10/17/94 16.250000 10/18/94 16.250000 10/19/94 16.625000 10/20/94 16.437500 10/21/94 16.875000 10/24/94 16.625000 10/25/94 16.750000 10/26/94 16.750000 10/27/94 16.750000 10/28/94 16.375000 10/31/94 16.500000 11/01/94 17.000000 11/02/94 17.250000 11/03/94 16.500000 11/04/94 16.000000 11/07/94 16.625000 11/08/94 16.125000 11/09/94 16.500000 11/10/94 15.500000 11/11/94 16.000000 11/14/94 16.000000 11/15/94 15.750000 11/16/94 16.000000 11/17/94 16.250000 11/18/94 15.875000 11/21/94 15.875000 11/22/94 15.875000 11/23/94 16.000000 11/25/94 15.875000 11/28/94 15.875000 11/29/94 16.000000 11/30/94 16.250000 12/01/94 16.000000 12/02/94 16.000000 12/05/94 17.187500 12/06/94 17.125000 12/07/94 17.125000 12/08/94 16.750000 12/09/94 16.500000 12/12/94 16.625000 12/13/94 16.750000 12/14/94 16.250000 12/15/94 16.062500 12/16/94 15.750000 12/20/94 16.375000 12/21/94 16.250000 12/22/94 16.125000 12/23/94 16.000000 12/27/94 15.750000 12/28/94 15.750000 12/29/94 15.250000 12/30/94 15.250000 01/01/95 15.250000 01/03/95 15.750000 01/04/95 16.250000 01/05/95 15.875000 01/06/95 16.000000 01/09/95 15.875000 01/10/95 15.625000 01/11/95 15.875000 01/12/95 15.500000 01/13/95 15.625000 01/16/95 15.500000 01/17/95 15.625000 01/18/95 15.625000 01/19/95 15.500000 01/20/95 15.375000 01/23/95 16.625000 01/24/95 15.250000 01/25/95 15.625000 01/26/95 15.500000 01/27/95 15.562500 01/30/95 15.375000 01/31/95 15.625000 02/01/95 15.750000 02/02/95 15.500000 02/03/95 15.625000 02/06/95 15.937500 02/07/95 15.750000 02/08/95 14.250000 02/09/95 14.375000 02/10/95 14.625000 02/13/95 14.125000 02/14/95 13.750000 02/15/95 13.875000 02/16/95 13.937500 02/17/95 14.000000 02/21/95 13.625000 02/22/95 13.625000 02/23/95 14.000000 02/24/95 14.000000 02/27/95 13.375000 02/28/95 13.250000 03/01/95 13.500000 03/02/95 13.750000 03/03/95 13.625000 03/06/95 13.750000 03/07/95 13.500000 03/08/95 14.000000 03/09/95 14.125000 03/10/95 14.625000 03/13/95 14.375000 03/14/95 14.375000 03/15/95 14.500000 03/16/95 14.250000 03/17/95 14.375000 03/20/95 13.875000 03/21/95 14.125000 03/22/95 13.875000 03/23/95 13.500000 03/24/95 13.250000 03/27/95 13.250000 03/28/95 13.250000 03/29/95 13.250000 03/30/95 13.000000 03/31/95 13.000000 04/03/95 13.000000 04/04/95 13.375000 04/05/95 13.875000 04/06/95 13.750000 04/07/95 13.625000 04/10/95 13.750000 04/11/95 13.750000 04/12/95 13.875000 04/13/95 13.750000 04/17/95 13.750000 04/18/95 13.250000 04/19/95 13.625000 04/20/95 13.625000 04/21/95 13.250000 04/24/95 13.375000 04/25/95 13.250000 04/26/95 13.250000 04/27/95 13.375000 04/28/95 13.750000 05/01/95 14.250000 05/02/95 14.125000 05/03/95 13.750000 05/04/95 14.000000 05/05/95 14.000000 05/08/95 13.500000 05/09/95 14.000000 05/10/95 14.000000 05/11/95 13.750000 05/12/95 13.875000 05/15/95 13.625000 05/16/95 14.500000 05/17/95 13.500000 05/18/95 13.250000 05/19/95 13.250000 05/23/95 13.500000 05/24/95 13.750000 05/25/95 14.000000 05/26/95 13.250000 05/30/95 13.500000 05/31/95 13.750000 06/05/95 14.500000 06/06/95 14.250000 06/07/95 14.000000 06/08/95 15.000000 06/09/95 14.500000 06/12/95 14.625000 06/13/95 14.625000 06/14/95 14.625000 06/15/95 14.750000 06/16/95 14.750000 06/19/95 14.750000 06/20/95 14.750000 06/21/95 15.000000 06/22/95 14.750000 06/23/95 14.625000 06/26/95 14.500000 06/27/95 14.500000 06/28/95 14.625000 06/29/95 14.687500 07/03/95 14.625000 07/05/95 14.625000 07/06/95 14.375000 07/07/95 14.500000 07/10/95 15.000000 07/11/95 14.250000 07/12/95 14.125000 07/13/95 13.625000 07/14/95 14.500000 07/17/95 14.875000 07/18/95 14.375000 07/19/95 14.000000 07/20/95 14.375000 07/21/95 14.375000 07/24/95 14.375000 07/25/95 14.250000 07/26/95 14.750000 07/27/95 14.625000 07/28/95 14.500000 07/31/95 14.250000 08/01/95 14.250000 08/02/95 14.500000 08/03/95 14.250000 08/04/95 14.250000 08/08/95 14.375000 08/09/95 14.000000 08/10/95 14.125000 08/11/95 14.500000 08/14/95 14.500000 08/15/95 14.625000 08/16/95 15.000000 08/17/95 14.500000 08/21/95 14.375000 08/22/95 14.375000 08/23/95 14.625000 08/24/95 14.250000 08/25/95 14.375000 08/28/95 14.250000 08/29/95 14.250000 08/30/95 14.500000 08/31/95 14.125000 09/01/95 14.125000 09/05/95 13.125000 09/06/95 13.750000 09/07/95 13.375000 09/08/95 13.750000 09/11/95 13.500000 09/12/95 13.875000 09/13/95 13.750000 09/14/95 13.625000 09/15/95 13.625000 09/18/95 13.750000 09/19/95 14.000000 09/21/95 14.000000 09/25/95 13.625000 09/26/95 13.625000 09/27/95 13.000000 09/28/95 13.000000 09/29/95 12.750000 10/02/95 13.375000 10/03/95 12.500000 10/04/95 12.375000 10/05/95 12.250000 10/06/95 12.625000 10/09/95 13.750000 10/10/95 13.375000 10/11/95 14.125000 10/12/95 14.500000 10/13/95 14.625000 10/16/95 14.500000 10/17/95 14.875000 10/18/95 14.375000 10/19/95 14.250000 10/20/95 14.000000 10/23/95 14.500000 10/24/95 14.250000 10/25/95 13.250000 10/26/95 14.000000 10/27/95 14.125000 10/30/95 14.687500 10/31/95 14.500000 11/01/95 14.250000 11/02/95 14.687500 11/03/95 14.875000 11/06/95 14.500000 11/07/95 14.750000 11/08/95 14.375000 11/09/95 14.750000 COMPARATIVE COMPANIES [MEASUREMENT POINTS WERE NOT PROVIDED IN THE EDGAR FILING WERE NOT PROVIDED BY PAINEWEBBER INCORPORATED BUT WERE TAKEN FROM A VISUAL INSPECTION OF THE LINE GRAPH.] APPROXIMATE HIGH/LOW RANGES MEASURING PT. 100% HIGH LOW 11/09/93 TO 03/10/94 113% 97% 03/10/94 TO 07/10/94 103% 94% 07/10/94 TO 11/09/94 104% 96% 11/09/94 TO 03/10/95 108% 102% 03/10/95 TO 07/10/95 114% 102% 07/10/95 TO 11/09/95 115% 86% Note: Comparative Companies Index is comprised of Bandag, Brad Ragan, Republic Automotive and TBC. - ------------------------------------------------------------------------------- PaineWebber Incorporated 25 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- STOCK PRICE AND VOLUME PERFORMANCE -------------------------------------------------------------------- BIG O TIRES VOLUME TRADED ANALYSIS -- LATEST 12 MONTHS [GRAPH APPEARS HERE] STOCK PRICE AND VOLUME PERFORMANCE BIG O TIRES VOLUME TRADED ANALYSIS - LATEST 12 MONTHS DATE VOLUME 11/09/94 4,850 11/10/94 19,650 11/11/94 15,630 11/14/94 6,325 11/15/94 12,200 11/16/94 3,500 11/17/94 13,000 11/18/94 6,800 11/21/94 400 11/22/94 10,620 11/23/94 10,573 11/25/94 10,565 11/28/94 160 11/29/94 16,300 11/30/94 11,967 12/01/94 3,500 12/02/94 28,550 15/05/94 82,344 12/06/94 44,650 12/07/94 16,884 12/08/94 50,467 12/09/94 11,920 12/12/94 10,353 12/13/94 8,238 12/14/94 3,050 12/15/94 33,521 12/16/94 16,500 12/19/94 2,500 12/20/94 40,102 12/21/94 43,400 12/22/94 18,215 12/23/94 3,300 12/27/94 1,940 12/28/94 2,300 12/29/94 2,200 12/30/94 2,725 01/03/95 18,000 01/04/95 20,950 01/05/95 5,372 01/06/95 25,914 01/09/95 7,485 01/10/95 8,800 01/11/95 20,000 01/12/95 2,600 01/13/95 1,700 01/16/95 100 01/17/95 10,890 01/18/95 500 01/19/95 9,185 01/20/95 4,781 01/23/95 1,650 01/24/95 9,769 01/25/95 2,850 01/26/95 10,400 01/27/95 5,600 01/30/95 6,150 01/31/95 2,600 02/01/95 200 02/02/95 1,475 02/03/95 19,300 02/06/95 15,290 02/07/95 28,275 02/08/95 84,645 02/09/95 54,896 02/10/95 11,120 02/13/95 9,331 02/14/95 12,310 02/15/95 9,730 02/16/95 39,758 02/17/95 25,875 02/21/95 13,700 02/22/95 9,900 02/23/95 13,419 02/24/95 1,000 02/27/95 8,300 02/28/95 11,842 03/01/95 5,700 03/02/95 3,900 03/03/95 7,850 03/06/95 13,050 03/07/95 22,771 03/08/95 22,000 03/09/95 14,024 03/10/95 22,018 03/13/95 2,941 03/14/95 8,467 03/15/95 11,041 03/16/95 2,000 03/17/95 3,100 03/20/95 7,124 03/21/95 7,800 03/22/95 13,500 03/23/95 4,200 03/24/95 11,721 03/27/95 4,139 03/28/95 4,100 03/29/95 7,677 03/30/95 1,250 03/31/95 5,500 04/03/95 1,850 04/04/95 22,250 04/05/95 8,700 04/06/95 2,924 04/07/95 28,174 04/10/95 8,500 04/11/95 5,740 04/12/95 7,400 04/13/95 14,200 04/17/95 9,245 04/18/95 10,441 04/19/95 2,200 04/20/95 1,400 04/21/95 1,500 04/24/95 14,040 04/25/95 1,800 04/26/95 2,000 04/27/95 5,543 04/28/95 7,110 05/01/95 17,100 05/02/95 7,000 05/03/95 2,350 05/04/95 1,250 05/05/95 6,740 05/08/95 4,517 05/09/95 10,700 05/10/95 5,100 05/11/95 1,400 05/12/95 6,000 05/15/95 5,000 05/16/95 19,075 05/17/95 11,600 05/18/95 10,250 05/19/95 8,700 05/23/95 9,500 05/24/95 1,000 05/25/95 10,000 05/26/95 1,100 05/30/95 5,800 05/31/95 14,800 06/05/95 35,601 06/06/95 3,900 06/07/95 3,975 06/08/95 73,793 06/09/95 17,800 06/12/95 5,100 06/13/95 1,300 06/14/95 200 06/15/95 400 06/16/95 774 06/19/95 1,000 06/20/95 7,700 06/21/95 3,200 06/22/95 7,600 06/23/95 5,000 06/26/95 2,600 06/27/95 6,220 06/28/95 800 06/29/95 3,800 07/03/95 300 07/05/95 2,100 07/06/95 4,300 07/07/95 9,070 07/10/95 1,120 07/11/95 2,900 07/12/95 14,400 07/13/95 3,092 07/14/95 69,600 07/17/95 2,200 07/18/95 15,858 07/19/95 5,000 07/20/95 10,800 07/21/95 5,100 07/24/95 4,000 07/25/95 47,300 07/26/95 12,800 07/27/95 4,000 07/28/95 4,800 07/31/95 26,700 08/01/95 1,300 08/02/95 3,600 08/03/95 14,610 08/04/95 600 08/08/95 2,445 08/09/95 9,400 08/10/95 1,600 08/11/95 1,000 08/14/95 3,130 08/15/95 5,325 08/16/95 37,744 08/17/95 14,999 08/21/95 4,750 08/22/95 3,800 08/23/95 6,105 08/24/95 6,217 08/25/95 6,045 08/28/95 3,790 08/29/95 6,850 08/30/95 10,400 08/31/95 7,300 09/01/95 24,200 09/05/95 15,400 09/06/95 9,800 09/07/95 24,500 09/08/95 2,915 09/11/95 13,800 09/12/95 20,863 09/13/95 6,750 09/14/95 500 09/15/95 14,900 09/18/95 15,200 09/19/95 1,200 09/21/95 6,800 09/25/95 300 09/26/95 2,000 09/27/95 33,258 09/28/95 24,100 09/29/95 2,675 10/02/95 11,469 10/03/95 9,575 10/04/95 8,600 10/05/95 15,680 10/06/95 39,410 10/09/95 18,850 10/10/95 30,208 10/11/95 29,850 10/12/95 29,700 10/13/95 8,099 10/16/95 30,100 10/17/95 8,759 10/18/95 8,652 10/19/95 11,569 10/20/95 2,700 10/23/95 23,510 10/24/95 19,000 10/25/95 11,630 10/26/95 45,400 10/27/95 13,251 10/30/95 12,500 10/31/95 1,100 11/01/95 3,159 11/02/95 30,890 11/03/95 8,800 11/06/95 2,775 11/07/95 2,924 11/08/95 2,625 11/09/95 1,100 / / Average Volume Over Latest 12 Months: 10,898 / / Cumulative Shares Traded Over Latest 12 Months: 2,855,300 or approximately 86.1% of the Total Outstanding Shares as of August 10, 1995 - ------------------------------------------------------------------------------- PaineWebber Incorporated 26 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- STOCK PRICE AND VOLUME PERFORMANCE -------------------------------------------------------------------- BIG O TIRES SHARES TRADED AT SPECIFIED PRICES -- LATEST 12 MONTHS / / Average daily closing price during latest 12 months: $14.48 / / Average daily closing price from June 16, 1992 to March 1, 1993 (1): $11.90 [GRAPH] STOCK PRICE AND VOLUME PERFORMANCE [BAR GRAPH APPEARS HERE] BIG O TIRES SHARES TRADED AT SPECIFIC PRICES - LATEST 12 MONTHS - - AVERAGE DAILY CLOSING PRICE DURING LATEST 12 MONTHS: $14.48 - - AVERAGE DAILY CLOSING PRICE FROM JUNE 16, 1992 TO MARCH 1, 1993(1): $11.90 STOCK PRICE VOLUME PERFORMANCE 7 - 8(2) 5.5% 8 - 9(2) 4.3% 9 - 10(2) 5.0% 10 - 11(2) 5.2% 11 - 12(2) 13.3% 12 - 13(2) 28.9% 12 - 13(3) 2.7% 13 - 14(2) 29.0% 13 - 14(3) 24.7% 14 - 15(2) 8.8% 14 - 15(3) 40.5% 15 - 16(3) 13.9% 16 - 17(3) 13.2% 17 - 18(3) 5.0% (2) DATE FOR THE PERIOD JUNE 16, 1992 TO MARCH 1, 1993 (3) LATEST TWELVE MONTHS DATES (1) REPRESENTS TIME FROM LIST AVAILABLE DAY OF STOCK PRICE INFORMATION TO DAY WHEN BALBOA INVESTMENTS FIRST REPORTED ABOVE A 5% INTEREST IN BIG O. __________________________ (1) Represents time from first available day of stock price information to day when Balboa Investments first reported above a 5% interest in Big O. - ------------------------------------------------------------------------------- PaineWebber Incorporated 27 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- PART IV -- VALUATION SUMMARY - ------------------------------------------------------------------------------- PaineWebber Incorporated 28 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- VALUATION SUMMARY - ------------------------------------------------------------------------------- IMPLIED VALUATION SUMMARY
- ------------------------------------------------------------------------------- ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) EQUITY VALUE EQUITY VALUE PER SHARE - ------------------------------------------------------------------------------- Market Value Current (As of 11/10/95) $48.9 $14.75 52-Week High 57.6 17.38 52-Week Low 39.8 12.00 Book Value 37.2 11.20 Discounted Cash Flow Valuation (1) $53.0 - $72.0 $14.95 - $20.32 Comparative Company Valuation (2)(3) No Premium 42.1 - 57.9 11.87 - 16.32 30% Premium (4) 54.7 - 75.2 15.43 - 21.22 - -------------------------------------------------------------------------------
______________________ (1) Based on the Big O Tires Financial Forecast. Assumes terminal EBITDA multiples of 6.0x to 7.0x, and discount rates of 13.0% to 17.0%. (2) Based on median comparative company multiples using recent closing stock prices (as of November 9, 1995) and latest twelve month operating results for the Big O Tires Comparative Companies. Excludes not meaningful numbers. (3) Based on latest twelve months operating results for Big O tires for the period ended September 30, 1995, and for Comparative Companies for the latest twelve months ending June 30, 1995. (4) Premium based on retail industry (as defined by SDC) transactions from January 1, 1990 to November 3, 1995. - ------------------------------------------------------------------------------- PaineWebber Incorporated 29 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- VALUATION SUMMARY - ------------------------------------------------------------------------------- COMPARATIVE REVIEW RELATIVE MULTIPLE ANALYSIS
- ----------------------------------------------------------------------------------------- ($ IN MILLIONS) BIG O TIRES MULTIPLES(1) BIG O TIRES COMPARATIVE COMPANIES(2) BIG O TIRES ------------------------------------------------------------- LTM RESULTS $14.75 MEDIAN RANGE - ----------------------------------------------------------------------------------------- Revenues $141.2 0.45x 0.46x 0.41x - 1.68x EBITDA 9.9 6.4 6.5 6.2 - 6.5 EBIT 8.2 7.7 8.0 7.0 - 8.6 Net Income 3.9 12.5 11.5 8.2 - 25.1 Book Value 37.2 1.32 1.51 1.07 - 2.88 1995E EPS (3) 1.24 11.9x 10.2x 8.2x - 12.9x 1996E EPS (3) 1.57 9.4 7.6 7.2 - 11.5 - -----------------------------------------------------------------------------------------
RELATIVE MARGIN AND GROWTH ANALYSIS
- ------------------------------------------------------------------------------- BIG O TIRES COMPARATIVE COMPANIES(2) ------------------------------------ BIG O TIRES(1) MEDIAN RANGE - ------------------------------------------------------------------------------- Latest Four Quarters EBITDA Margin 7.0% 7.0% (2.4%) - 25.9% EBIT Margin 5.8 5.7 (3.1) - 21.0 Net Margin 2.8 3.4 1.2 - 14.2 Net Income Growth Rates Historical (4) 15.7% 22.8% (3.2%) - 102.3% Projected (5) 12.0 12.0 10.0 - 20.0 - -------------------------------------------------------------------------------
____________________ (1) Based on latest closing price (11/10/95) and latest twelve months operating results for Big O for the period ended September 30, 1995. (2) Based on recent closing stock prices and latest twelve month operating results for the Comparative Company Index. Excludes negative and not meaningful numbers. (3) Based on Company projections for Big O median calendarized IBES estimates for the Comparative Companies as of Octoer, 1995. Excludes unusual and extraordinary items. (4) Compound annual growth rates from 1994 to the latest twelve months for Big O and the Comparative Companies. (5) Median projected 5-year compound annual earnings per share growth for Big O and the Comparative Companies as estimated by IBES. - ------------------------------------------------------------------------------- PaineWebber Incorporated 30 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- VALUATION SUMMARY - ------------------------------------------------------------------------------- COMPARATIVE PUBLIC COMPANY ANALYSIS TOTAL VALUE/LTM REVENUES TOTAL VALUE/LTM EBITDA TOTAL VALUE/LTM EBIT EQUITY VALUE/FY 1995E NET INCOME VALUATION SUMMARY COMPARATIVE PUBLIC COMPANY ANALYSIS [FOUR BAR GRAPHS APPEAR HERE] MEASUREMENT PT- TOTAL VALUE/LTM REVENUES (MEDIAN: 0.46X) COMPANY BIG O (1) 0.51X BANDAG 1.68X BRAD RAGAN 0.44X REPUBLIC AUTOMOTIVE 0.48X TBC 0.41X TOTAL VALUE/LTM EBITDA (MEDIAN: 6.5X) BIG O 7.2X BANDAG 6.5X BRAD RAGAN NMF REPUBLIC AUTOMOTIVE 6.5X TBC 6.2X TOTAL VALUE/LTMEBIT (MEDIAN: 8.0X) BIG O (1) 8.7X BANDAG 8.0X BRAD RAGAN NMF REPUBLIC AUTOMOTIVE 8.6X TBC 7.0X EQUITY VALUE/FY 1995E NET INCOME COMPANY BIG O (1) (2) 13.5X BANDAG 12.9X BRAD RAGAN NMF REPUBLIC AUTOMOTIVE 10.2X TBC 8.2X (1) ASSUMING ACQUISITION PRICE OF $16.50 PER SHARE (2) BASED ON COMPANY PROJECTIONS ____________________ (1) Assuming acquisition price of $16.50 per share. (2) Based on Company projections. - ------------------------------------------------------------------------------- PaineWebber Incorporated 31 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- VALUATION SUMMARY - ------------------------------------------------------------------------------- COMPARATIVE PUBLIC COMPANY ANALYSIS SUMMARY FINANCIAL STATISTICS
- ---------------------------------------------------------------------------------------------- ($ IN MILLIONS) 3-YEAR 3-YEAR LTM REVENUE LTM EBITDA LTM EBIT NET INCOME COMPANY REVENUES GROWTH RATE EBITDA MARGIN EBIT MARGIN GROWTH RATE - ---------------------------------------------------------------------------------------------- Bandag $712.0 4.9% $184.6 26.5% $149.7 21.0% 6.4% Brad Ragan 239.4 4.7 (5.8) (2.6) (7.3) (3.1) 102.3 Republic Automotive 139.3 28.2 10.3 7.1 7.7 5.4 39.1 TBC Corp. 547.8 (1.6) 36.5 6.6 32.4 5.8 (3.2) Average $412.5 9.1% $56.4 9.4% $45.6 7.3% 36.2% BIG O TIRES $141.2 3.2% $9.9 7.0% $8.2 5.8% 15.7% % ABOVE/(BELOW) AVERAGE (65.8)% (64.8)% (82.4)% (25.5)% (82.0)% (20.5)% (56.6)% - ----------------------------------------------------------------------------------------------
BIG O'S OPERATING STATISTICS DO NOT COMPARE FAVORABLY WITH THE INDUSTRY AVERAGES - ------------------------------------------------------------------------------- PaineWebber Incorporated 32 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- VALUATION SUMMARY
- ------------------------------------------------------------------------------- COMPARATIVE PUBLIC COMPANY ANALYSIS - -------------------------------------------------------------------------------------------------------------------------------- ($ IN MILLIONS) MARKET CAPITALIZATION/ MARKET VALUE --------------------------- --------------------------------------------- LTM REVENUE EBITDA EBIT NET INCOME 1995 EPS 1996 EPS BOOK VALUE - -------------------------------------------------------------------------------------------------------------------------------- Median Multiples of Selected Comparative Companies 0.46x 6.5x 8.0x 11.5x 10.2x 7.6x 1.51 Big O Results (1) $141.2 $ 9.9 $ 8.2 $ 3.9 $ 1.24 1.57 $ 37.2 ------ ------ ------ ------ ------ ------ ------ Total Implied Value before Adjustments $ 65.0 $ 64.0 $ 65.9 $ 45.1 $12.59 $11.87 $ 56.1 Corporate Adjustments - --------------------- Less: Total Debt (2) $(19.0) $(19.0) $(19.0) - - - - Plus: Cash and Due from Parent (2) 4.3 4.3 4.3 - - - - ------ ------ ------ ------ ------ ------ ------ Implied Value of Equity before Stock Option Proceeds $ 50.3 $ 49.3 $ 51.2 - - - - - ---------------------------------------------------- Plus: Cash from Exercise of Stock Options 1.8 1.8 1.8 1.8 - - 1.8 ------ ------ ------ ------ ------ ------ ------ Implied Value of Equity after Stock Option Proceeds $ 52.0 $ 51.0 $ 53.0 $ 46.9 $ 44.6 $ 42.1 $ 57.9 - --------------------------------------------------- ------ ------ ------ ------ ------ ------ ------ IMPLIED VALUE OF EQUITY PER SHARE OUTSTANDING (3) $15.14 $14.84 $15.42 $13.59 $ NM $ NM $16.90 IMPLIED VALUE OF EQUITY PER FULLY DILUTED SHARE OUTSTANDING (4) 14.68 14.39 14.94 13.22 12.59 11.87 16.32 - ------------------------------------------------------------------------------------------------------------------------------
SHARE INFORMATION - --------------------------------- BIG O TIRES - --------------------------------- Primary 3.318 Options 0.226 Option Exercise Price $7.88 Fully Diluted 3.544 - ---------------------------------
IMPLIED MARKET MULTIPLE VALUATION - --------------------------------- PER SHARE VALUE - --------------------------------- Valuation Range $11.87 - $16.32 - ---------------------------------
- ----------------- Note: Numbers may not add due to rounding. (1) Based on LTM results as of September 30, 1995. (2) Balance sheet data as of September 30, 1995. (3) Based on 3,317,840 common shares outstanding as of September 10,1995. Excludes proceeds from options. (4) Based on 3,317,840 common shares outstanding as of September 10, 1995, and 226,347 shares issuable upon exercise of options at an average exercise price of $7.88 per share. Includes proceeds from the exercise of options. - ------------------------------------------------------------------------------- PaineWebber Incorporated 33 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- VALUATION SUMMARY
- -------------------------------------------------------------------------------------------------------------------- PREMIUMS PAID ANALYSIS - -------------------------------------------------------------------------------------------------------------------- ONE DAY PRIOR ONE WEEK PRIOR FOUR WEEK PRIOR DATE STOCK PRICE STOCK PRICE STOCK PRICE - -------------------------------------------------------------------------------------------------------------------- Based on Offer from Mgmt./Dealers (1) 12/5/94 $16.00 $15.88 $16.63 Implied Premium to $16.50 Offer 3.1% 3.9% (0.8)% Based on Balboa Inv. Shareholder Proposal (2) 12/21/93 $13.88 $14.25 $14.38 Implied Premium to $16.50 Offer 18.9% 15.8% 14.8% Based on Balboa Inv. Initial 13-D Filing (3) 3/1/93 $13.50 $13.00 $13.50 Implied Premium to $16.50 Offer 22.2% 26.9% 22.2% Historical Medium Premium Paid (4) 25.7% 28.7% 33.7% - --------------------------------------------------------------------------------------------------------------------
- --------------- (1) All prices are based on closing stock prices prior to December 5, 1994, the date of the first public announcement of an offer to purchase Big O Tires. (2) Based on closing stock prices prior to December 21, 1993, which represents the date Balboa Investments delivered a proposal to the Company recommending that the Company hire an investment banking firm to explore alternatives for enhancing shareholder value including, among other options, the sale of the Company. (3) Based on closing stock prices prior to March 1, 1993, the date Balboa Investments filed its initial 13-D. (4) Based on retail industry (as defined by SDC) transactions from January 1, 1990 to November 3, 1995. - ------------------------------------------------------------------------------- PaineWebber Incorporated 34 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- PART V -- SUPPLEMENTAL INFORMATION - ------------------------------------------------------------------------------- PaineWebber Incorporated 35 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- EXHIBIT I -- COMPARATIVE COMPANY ANALYSIS - --------------------------------------------------------------------------- PaineWebber Incorporated 36 - -------------------------------------------------------------------------- Big O Tires, Inc. - --------------------------------------------------------------------------- PROJECT SNOW MANAGEMENT FINANCIAL FORECAST INTEREST EXPENSE SCHEDULE INTEREST EXPENSE Existing Debt RATE Senior Notes 8.71% 697 697 697 647 547 448 Long Term Debt (IN) 8.75% 125 119 115 111 107 103 Long Term Debt (Kelly Springfield)6.25% 228 147 72 10 (13) (13) Other Senior Debt 9.60% 36 0 0 0 0 0 AT&T LTD 10.00% 41 41 41 41 41 41 Prepayment Penalties --- 0 0 0 0 0 0 Revolving Credit Fac. 8.75% 348 0 0 0 0 0 ----- --- --- --- --- --- --- Total Existing Debt Interest Expense 1,475 1,003 924 810 683 579 Acquisition Financing Senior Debt 0.0% 0 0 0 0 0 0 Sub Debt 0.0% 0 0 0 0 0 0 ----- --- --- --- --- --- --- TOTAL INTEREST EXPENSE $1,475 $1,003 $924 $810 $683 $579 Income on Cash 0.0% 0 0 0 0 0 0 Income on Bridge Notes Rec 0.0% 0 0 0 0 0 0 Income on Notes Rec 0.0% 0 0 0 0 0 0 ----- --- --- --- --- --- --- 0.0% 0 0 0 0 0 0 COMPARATIVE COMPANY ANALYSIS ---------------------------------------------------------------------- DESCRIPTION OF COMPARATIVE COMPANIES ---------------------------------------------------------------------- BANDAG, INC. Bandag is engaged in the production and sale of precured tread rubber and equipment used by its franchisees for the retreading of tires for light commercial trucks, buses, industrial equipment, off-the-road equipment and passenger cars. The Corporation and its licensees have 1,363 franchisees worldwide, with 37% located in the United States and 63% internationally. The majority of Bandag's franchisees are independent operators of full service tire distributorships. Bandag's revenues primarily come from the sale of retread material and equipment to its franchisees. BRAD RAGAN INC. In its commercial operations, the company supplies retreaded and new tire services for virtually every kind of vehicular application, through 48 commercial tire centers in 20 states. Brad Ragan is the largest U.S. producer of retreaded off-the-road tires for heavy equipment used in mining, heavy construction, quarrying, agriculture and forest product industries. The company's over-the-highway tires are sold primarily to the medium-duty commercial truck market. In addition, the company's commercial division sells tires for smaller vehicles, including light-duty trucks and automobiles, representing about 5.6% of the division's sales. - ---------------------------------------------------------------------- - --------------------------------------------------------------------------- PaineWebber Incorporated 37 - --------------------------------------------------------------------------- Big O Tires, Inc. - --------------------------------------------------------------------------- COMPARATIVE COMPANY ANALYSIS ---------------------------------------------------------------------- DESCRIPTION OF COMPARATIVE COMPANIES (CONT'D) ---------------------------------------------------------------------- REPUBLIC AUTOMOTIVE Republic Automotive Parts, Inc. distributes a PARTS, INC. wide range of replacement parts (other than body and crash parts, windshields and tires) for substantially all mass-produced domestic makes and models of automobiles manufactured within the past 15 years. The company also distributes a number of replacement parts for heavy-duty trucks, snowmobiles, motorcycles, farm equipment and marine equipment, and other similar types of machinery. Most of the company's sales are derived from the distribution of more than 100,000 different auto parts through 21 distribution centers, which sell to 91 mostly leased jobber stores and more than 3,000 independent stores. Jobber stores sell to service stations, car and truck dealers, auto repair shops, fleet operators, leasing companies, mass merchandisers and directly to the public. TBC CORP. TBC Corporation is one of the largest U.S. distributors of products for the automotive replacement markets. Its lines of tires, tubes, custom wheels, batteries, shock absorbers, brake parts, filters and other items, which are made by others to company specifications, are marketed under the company's own brand names. Through its distributors and their customers, TBC estimates that its products are sold by over 20,000 retail outlets. - --------------------------------------------------------------------------- - --------------------------------------------------------------------------- PaineWebber Incorporated 38 COMPARATIVE COMPANY ANALYSIS - ---------------------------------------------------------------------------
BIG O BANDAG BRAD REPUBLIC TBC ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) TIRES INC. RAGAN AUTOMOTIVE CORP. --------- ---------- -------- ---------- ---------- Ticker BIGO BDG BRD RAUT TBCC Exchange NASDAQ NYSE AMEX NASDAQ NASDAQ Fiscal Year Ended 12/31/94 12/31/94 12/31/94 12/31/94 12/31/94 Stock Price As Of 11/09/95 $14.75 $50.50 $32.50 $13.00 $6.88 Market Value of Common Equity $48.9 $1,270.7 $71.2 $43.1 $170.4 Book Value of Preferred Stock 0.0 0.0 0.0 0.0 0.0 Total Debt 19.0 9.3 35.1 20.3 56.7 Less: Cash & Equivalents (4.3) (81.4) (0.2) (3.0) 0.0 ------- --------- ------- ------- ------- Total Value $63.7 $1,198.6 $106.1 $66.5 $227.1 ======= ========= ======= ======= ======= _______________ VALUATION MULTIPLES BASED ON MEAN MEDIAN LATEST TWELVE MONTHS (LTM) RESULTS ------ -------- Total Value/Revenues 0.45 x 1.68 x 0.44 x 0.48 x 0.41 x 0.75 x 0.46 x Total Value/EBITDA 6.4 6.5 NMF 6.5 6.2 6.4 6.5 Total Value/EBIT 7.7 8.0 NMF 8.6 7.0 7.9 8.0 Total Value/Total Assets 0.9 2.0 0.8 0.8 1.1 1.2 1.0 Total Value/Total Capitalization 1.2 3.3 1.3 1.2 1.4 1.8 1.3 MV Equity/LTM Net Income 12.5 x 12.5 x 25.1 x 10.5 x 8.2 x 14.1 x 11.5 x Price/1995E EPS 11.9 12.9 NA 10.2 8.2 10.4 10.2 Price/1996E EPS 9.4 11.5 NA 7.6 7.2 8.7 7.6 MV Equity/Cash Flow from Operations 8.8 9.3 19.3 6.5 6.6 10.4 8.0 MV Equity/Book Value 1.32 2.9 1.4 1.1 1.6 1.7 1.5 _________________________________________________________________ OPERATING RESULTS FOR LTM ENDED |9/30/95 6/30/95 6/30/95 6/30/95 6/30/95 | |________________________________________________________________| Revenues $141.2 $712.0 $239.4 $139.3 $547.8 EBITDA $9.9 184.6 (5.8) 10.3 36.5 EBIT $8.2 149.7 (7.3) 7.7 32.4 Net Income $3.9 101.4 2.8 4.1 20.7 Cash Flow from Operations $5.6 136.3 3.7 6.7 25.7 MARGINS Gross Margin 22.0 % 41.4 % 30.5 % 37.4 % 9.1 % 29.6 % 33.9 % EBITDA Margin 7.0 25.9 (2.4) 7.4 6.7 9.4 7.0 EBIT Margin 5.8 21.0 (3.1) 5.5 5.9 7.4 5.7 Net Income Margin 2.8 14.2 1.2 2.9 3.8 5.5 3.4 BALANCE SHEET DATA Net Debt/Book Capitalization 28.4 % NMF % 41.3 % 30.0 % 34.5 % 35.3 % 34.5 % Total Debt/Book Equity 51.2 2.1 70.6 50.4 52.7 43.9 51.5 Total Assets $69.8 $592.1 $132.3 $80.1 $208.1 _______________ Total Book Capitalization (net cash) 51.9 368.7 84.6 57.7 164.2 Common Equity 37.2 440.9 49.7 40.3 107.5 Common Shares Outstanding (MM) 3.3 25.2 2.2 3.3 24.8 SHARE PRICE RANGE FOR LTM High $17.38 $60.50 $35.00 $16.75 $11.75 Low $12.00 $47.50 $29.00 $12.75 $6.88 Current Price as % Below High 15.1 % 16.5 % 7.1 % 22.4 41.5 % Current Price as % Above Low 22.9 6.3 12.1 2.0 0.0
- ------------------------------------------------------------------------------- Mergers & Acquisitions Department PaineWebber Incorporated COMPARATIVE COMPANY ANALYSIS - -------------------------------------------------------------------------------
BIG O BANDAG BRAD REPUBLIC TBC TIRES INC. RAGAN AUTOMOTIVE CORP. --------- --------- --------- ------------ --------- PERFORMANCE VARIABLES FOR PERIOD ENDING 12/31/94 12/31/94 12/31/94 12/31/94 12/31/94 ___________________ MEAN MEDIAN ---- ------ 3 YEAR GROWTH RATE Revenues 3.2 % 4.9 % 4.7 % 28.2 (1.6)% 9.0 % 4.8 % EBITDA 11.9 7.3 NMF 44.1 NMF 25.7 25.7 EBIT 15.3 5.9 NMF 44.9 NMF 25.4 25.4 Net Income 15.7 6.4 102.3 39.1 (3.2) 36.2 22.8 3 YEAR GROSS MARGINS Latest FY 23.6 % 42.0 % 30.6 % 36.6 9.4 % 29.7 % 33.6 % Latest FY-1 22.5 40.3 29.8 38.3 9.6 29.5 34.1 Latest FY-2 23.1 42.7 30.4 37.8 9.9 30.2 34.1 3 YEAR EBITDA MARGINS Latest FY 7.5 % 26.5 % (2.6)% 7.1 6.6 % 9.4 % 6.9 % Latest FY-1 6.0 25.3 (3.4) 6.2 6.6 8.7 6.4 Latest FY-2 6.4 25.3 (4.4) 5.7 6.6 8.3 6.1 3 YEAR EBIT MARGINS Latest FY 6.2 % 21.0 % (3.1)% 5.4 5.8 % 7.3 % 5.6 % Latest FY-1 4.7 19.7 (3.9) 4.8 5.9 6.6 5.4 Latest FY-2 5.0 20.6 (5.1) 4.2 6.0 6.4 5.1 3 YEAR S,G&A AS % OF REVENUE Latest FY 17.4 % 21.0 % 33.8 % 31.2 3.6 % 22.4 % 26.1 % Latest FY-1 17.7 20.6 33.8 33.4 3.7 22.9 27.0 Latest FY-2 18.1 22.1 35.4 33.6 3.9 23.8 27.9 ___________________ FOOTNOTES - ----------------------- BIG O TIRES Comparable Company Analysis does not include market value of stock options. September 30, 1995 stub period excludes real estate sales and expenses and excludes shareholder proposal expense, LV consolidation expense and loss on closure of stores totaling $1,599,000. A 42.0% tax rate is assumed. September 30, 1994 stub period excludes extraordinary items totaling $1,256,000. A 42.0% tax rate is assumed. 1994 data excludes extraordinary items totaling $1,780,000. A 42.0% tax rate is assumed. 1993 data excludes extraordinary items totaling $1,317,000. A 42.0% tax rate is assumed. BANDAG INC. Assumes other income is interest/investment income REPUBLIC AUTOMOTIVE Excludes accounting change of $0.9mm in 1993 Excludes a $2.6 million ($1.57 million after-tax) provision for a damage award. TBC CORPORATION 1994 Data excludes a $2.5 million ($1.5 million after-tax) charge for supplemental retirement benefits.
- ------------------------------------------------------------------------------- Mergers & Acquisitions Department - ------------------------------------------------------------------------------ Big O Tires, Inc. - ------------------------------------------------------------------------------ EXHIBIT II -- DISCOUNTED CASH FLOW ANALYSIS - ------------------------------------------------------------------------------ PaineWebber Incorporated 39 PROJECT SNOW DISCOUNTED CASH FLOW ANALYSIS (IN MILLIONS, EXCEPT PER SHARE DATA)
HISTORICAL PROJECTED (A) INCOME STATEMENT DATA ------------------------ ------------------------------------------ 1993 1994 1995E 1996 1997 1998 1999 2000 ------ ------ ------ ------ ------ ------ ------ ------ Net Sales $123.0 $127.7 $136.5 $141.4 $149.5 $157.4 $164.9 $172.5 Cost of Sales (b) 97.8 100.7 109.3 113.3 119.9 126.4 132.7 138.9 Selling, General and Administrative 18.0 17.5 17.1 16.5 16.8 17.2 17.5 17.9 Other Expense 1.0 1.8 0.0 0.0 0.0 0.0 0.0 0.0 Lease Income 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 ------ ------ ------ ------ ------ ------ ------ ------ EBITDA 6.1 7.8 10.1 11.6 12.7 13.8 14.7 15.7 Depreciation 1.2 1.2 1.2 1.1 1.1 1.1 1.1 1.1 Amortization 0.4 0.5 0.4 0.4 0.3 0.3 0.3 0.3 ------ ------ ------ ------ ------ ------ ------ ------ EBIT $ 4.5 $ 6.1 $ 8.5 $ 10.1 $ 11.3 $ 12.5 $ 13.3 $ 14.4 ====== ====== ====== ====== ====== ====== ====== ======
HISTORICAL PROJECTED (A) PERCENTAGE ANALYSIS ------------------------ ------------------------------------------ 1993 1994 1995E 1996 1997 1998 1999 2000 ------ ------ ------ ------ ------ ------ ------ ------ Net Sales Growth 2.6% 3.8% 6.9% 3.5% 5.7% 5.3% 4.8% 4.6% Cost of Sales 79.6% 78.8% 80.1% 80.1% 80.2% 80.3% 80.5% 80.5% Selling, General and Administrative 14.7% 13.7% 12.5% 11.7% 11.3% 10.9% 10.6% 10.4% Other Expense 0.8% 1.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Lease Income 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% ------ ------ ------ ------ ------ ------ ------ ------ EBITDA 4.9% 6.1% 7.4% 8.2% 8.5% 8.8% 8.9% 9.1% Depreciation 0.9% 1.0% 0.9% 0.8% 0.7% 0.7% 0.7% 0.6% Amortization 0.3% 0.4% 0.3% 0.3% 0.2% 0.2% 0.2% 0.2% ------ ------ ------ ------ ------ ------ ------ ------ EBIT 3.7% 4.8% 6.2% 7.2% 7.6% 7.9% 8.1% 8.3% ====== ====== ====== ====== ====== ====== ====== ======
____________________ (a) Projections based on the fiscal 1995 to 2000 financial forecast for Big O provided by Big O management (the "Big O Financial Forecast"). PROJECT SNOW DISCOUNTED CASH FLOW ANALYSIS (IN MILLIONS, EXCEPT PER SHARE DATA)
HISTORICAL PROJECTED (A) FREE CASH FLOW ANALYSIS ------------------------ ------------------------------------------ 1993 1994 1995E 1996 1997 1998 1999 2000 ------ ------ ------ ------ ------ ------ ------ ------ SOURCES OF CASH EBIAT (b) $ 2.6 $ 3.5 $ 4.9 $ 5.9 $ 6.6 $ 7.2 $ 7.7 $ 8.3 Depreciation 1.2 1.2 1.2 1.1 1.1 1.1 1.1 1.1 Amortization 0.4 0.5 0.4 0.4 0.3 0.3 0.3 0.3 ------ ------ ------ ------ ------ ------ ------ ------ Total Sources 4.1 5.2 6.5 7.3 8.0 8.6 9.1 9.7 USES OF CASH Non-Cash Working Capital Changes (4.0) 9.4 (1.2) (2.2) 0.9 0.8 0.8 0.8 Capital Expenditures 1.0 1.9 9.4 1.8 0.9 1.0 1.0 1.0 Proceeds From Sale of Properties (0.0) (1.2) (4.5) 0.0 0.0 0.0 0.0 0.0 ------ ------ ------ ------ ------ ------ ------ ------ Total Uses (3.0) 10.1 3.6 (0.4) 1.7 1.8 1.7 1.7 ------ ------ ------ ------ ------ ------ ------ ------ Free Cash Flow $ 7.2 $ (4.9) $ 2.9 $ 7.7 $ 6.2 $ 6.8 $ 7.3 $ 7.9 ====== ====== ====== ====== ====== ====== ====== ====== OTHER DATA Change in W/Capital / Change in Sales (44.1%) 7.3% (13.9%) (45.5%) 10.6% 10.6% 10.6% 10.4% Capital Expenditures -- % Sales 0.8% 1.5% 6.8% 1.3% 0.6% 0.6% 0.6% 0.6% D&A -- % Capital Expenditures 112.4% 64.1% 12.8% 61.1% 123.7% 113.6% 112.8% 112.0%
___________________________ (a) Projections based on the fiscal 1995 to 2000 financial forecast for Big O provided by Big O management (the "Big O Financial Forecast"). (b) Based on the effective income tax rate for each respective year as per the Big O Financial Forecast. PROJECT SNOW DISCOUNTED CASH FLOW ANALYSIS (IN MILLIONS, EXCEPT PER SHARE DATA)
Discount Rate 13.0% 15.0% 17.0% ------------------------ ------------------------ ------------------------ Terminal EBITDA Multiple 6.0x 6.5x 7.0x 6.0x 6.5x 7.0x 6.0x 6.5x 7.0x ------ ------ ------ ------ ------ ------ ------ ------ ------ 2000 EBITDA $ 15.7 $ 15.7 $ 15.7 $ 15.7 $ 15.7 $ 15.7 $ 15.7 $ 15.7 $ 15.7 Terminal EBITDA Multiple 6.0x 6.5x 7.0x 6.0x 6.5x 7.0x 6.0x 6.5x 7.0x ------ ------ ------ ------ ------ ------ ------ ------ ------ Terminal Enterprise Value $ 94.4 $102.2 $110.1 $ 94.4 $102.2 $110.1 $ 94.4 $102.2 $110.1 ====== ====== ====== ====== ====== ====== ====== ====== ====== Present Value of Terminal Value (a) $ 51.2 $ 55.5 $ 59.8 $ 46.9 $ 50.8 $ 54.7 $ 43.0 $ 46.6 $ 50.2 Present Value of Free Cash Flow (b) 25.2 25.2 25.2 24.0 24.0 24.0 22.9 22.9 22.9 ------ ------ ------ ------ ------ ------ ------ ------ ------ Present Value of Enterprise Value 76.5 80.7 85.0 71.0 74.9 78.8 66.0 69.6 73.1 Less: Total Debt (c) (19.0) (19.0) (19.0) (19.0) (19.0) (19.0) (19.0) (19.0) (19.0) Plus: Cash and Investments (c) 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 Plus: Cash From Exercise of Options (d) 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 ------ ------ ------ ------ ------ ------ ------ ------ ------ Equity Value $ 63.5 $ 67.7 $ 72.0 $ 58.0 $ 61.9 $ 65.8 $ 53.0 $ 56.6 $ 60.2 ====== ====== ====== ====== ====== ====== ====== ====== ====== Equity Value Per Share Primary (e) $18.59 $19.88 $21.17 $16.93 $18.11 $19.29 $15.43 $16.51 $17.60 Fully-Diluted 17.91 19.11 20.32 16.36 17.46 18.56 14.95 15.96 16.98 Common Shares Outstanding Primary (f) 3.318 3.318 3.318 3.318 3.318 3.318 3.318 3.318 3.318 Fully-Diluted (g) 3.544 3.544 3.544 3.544 3.544 3.544 3.544 3.544 3.544
_________________________ (a) Discounted back 5 years to January 1, 1996 at the specified discount rates. (b) Year 1 cash flow discounted back 12 months, year 2 cash flow discounted back 2 years ... year 5 cash flow discounted back 5 years. (c) Balance sheet data is as of September 30, 1995. (d) Based on 226,347 options outstanding at an average exercise price of $7.88 per share as of December 31, 1994. (e) Excludes proceeds from the exercise of options. (f) The number of common shares outstanding as of September 10, 1995 (g) Based on 3,317,840 common shares outstanding and 226,347 options outstanding at an average exercise price of $7.88 per share. - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- Exhibit III -- Premiums Paid Analysis - ------------------------------------------------------------------------------- PaineWebber Incorporated 40 PREMIUMS PAID ANALYSIS(1) - ------------------------------------------------------------------------------- ($ IN MILLIONS, EXCEPT PER SHARE DATA)
OFFER PRICE PREMIUM TO STOCK PRICE TOTAL ------------------------------------ DATE ENTERPRISE OFFER PRICE 1 DAY PRIOR 1 WEEK PRIOR 4 WEEKS PRIOR ANNOUNCED TARGET NAME ACQUIROR NAME VALUE PER SHARE TO ANNCMNT TO ANNCMNT TO ANNCMNT - --------- ----------- ------------- ---------- ----------- ----------- ----------- ----------- 01/08/90 Royal International Optical IPCO Corp $84.2 $12.25 27.2% 34.2% 32.4% 03/29/90 Conston Corp Undisclosed Acquiror 24.4 1.50 20.0% 70.5% 50.0% 05/11/90 Sprouse-Reitz Stores SR Partners Inc NA 17.00 70.0% 94.3% 54.5% 06/21/90 EPIC Health Group Inc Diagnostek Inc 16.7 1.04 65.1% 85.7% 108.0% 07/02/90 Kay Jewelers Inc Ratners Group PLC 456.5 17.00 22.5% 29.5% 33.3% 08/10/90 Webster Clothes Inc Edison Brothers Stores Inc 34.1 6.00 200.0% 242.9% 237.1% 09/25/90 Sunbelt Nursery Group Inc Pier 1 Imports Inc(Intermark) 56.6 12.00 37.1% 35.1% 41.2% 10/30/90 Shirt Shed Inc Signal Apparel Co 48.8 3.34 27.0% 33.6% 11.3% 10/30/90 Neiman-Marcus Group Inc General Cinema Corp 1,270.8 14.40 28.0% 26.5% 26.5% 11/06/90 Warehouse Club Inc Great Atlantic & Pacific Tea 35.8 1.50 70.5% 70.5% 50.0% 12/18/90 Fabricland Inc House of Fabrics Inc 75.3 17.25 72.5% 46.8% 97.1% 04/18/91 Inacomp Computer Centers Inc ValCom Inc 137.5 9.97 13.9% 17.3% 32.9% 05/13/91 BizMart Inc Intelligent Electronics Inc 171.4 16.50 24.5% 46.7% 51.7% 05/30/91 Businessland Inc JWP Inc 303.2 1.00 -33.3% -38.7% -50.0% 07/24/91 Businessland Inc ComputerLand Corp 326.3 1.00 -33.3% -38.7% -50.0% 07/29/92 Fretter Inc Investor Group 103.4 4.00 77.8% 100.0% 52.1% 08/31/92 Diagnostek Inc Medco Containment Services Inc 454.4 18.67 79.9% 86.7% 60.5% 02/02/93 Express Cash Intl Corp Cash America International Inc 11.4 4.60 31.4% 26.7% 93.3% 02/12/93 Home Shopping Network Inc Liberty Media Corp 898.4 8.50 1.4% 11.4% 17.2% 06/16/93 Price Co Costco Wholesale Corp 2,224.7 36.21 12.3% 23.8% 21.7% 07/27/93 Sunbelt Nursery Group Inc General Host Corp 40.9 5.00 -7.1% -13.0% -25.9% 08/20/93 Dart Group Corp Investor NA 80.00 -9.6% -4.2% -3.6% 08/20/93 Dart Group Corp Investor NA 94.65 6.9% 13.4% 14.0% 11/08/93 Weyco Group Inc Investor Group 46.8 34.00 11.5% 11.5% 23.6% 03/16/94 All For A Dollar Inc Pharmhouse 16.3 1.77 -8.8% -11.5% 38.3% 04/04/94 Hook-SupeRx Inc Revco DS Inc(Anac Holding) 618.1 13.75 50.6% 48.6% 66.7% 07/25/94 Nature Food Centres Inc General Nutrition Companies 66.6 12.00 21.5% 37.1% 50.0% 08/25/94 Babbages Software Etc Stores Inc 58.8 11.70 -0.4% 8.8% 11.4% 08/26/94 Griffith Consumers Co Griffith Holdings Inc 84.5 23.00 53.3% 46.0% 61.4% 10/28/94 Younkers Inc Carson Pirie Scott & Co 222.9 19.00 20.6% 26.7% 0.0% 12/27/94 Perry Drug Stores Inc Rite Aid Corp 219.4 11.00 44.2% 44.2% 46.7% 02/07/95 Petstuff Inc PetSmart Inc 91.7 10.29 -6.5% 24.7% 11.2% 03/06/95 A Pea in the Pod Inc Mothers Work Inc 25.3 5.50 37.5% 83.3% 57.1% 03/27/95 Diagnostek Inc Value Health Inc(Warburg Pinc) 425.8 16.60 -10.3% -10.3% 7.9% 04/03/95 Buttrey Food and Drug Stores Undisclosed Acquiror 109.1 10.00 15.9% 19.3% 25.0% 04/20/95 Bruno's Inc Kohlberg Kravis Roberts & Co 966.6 12.00 28.9% 27.9% 33.3% 04/28/95 NuVision Inc American Vision Centers Inc 20.6 7.60 32.2% 38.2% 35.0% 05/03/95 Hills Stores Co Dickstein Partners Inc 772.2 27.00 30.9% 38.5% 35.8% 05/15/95 Random Access Inc Entex Information Svcs(JWP) 39.1 3.25 6.2% 27.0% 23.6%
_______________ (1) Includes M&A transactions within the Retail Industry. The Retail Industry (as defined by SDC) includes SIC Codes from 5211 to 5736 and from 5912 to 5999. PREMIUMS PAID ANALYSIS(1) - ------------------------------------------------------------------------------- ($ IN MILLIONS, EXCEPT PER SHARE DATA)
OFFER PRICE PREMIUM TO STOCK PRICE TOTAL ------------------------------------ DATE ENTERPRISE OFFER PRICE 1 DAY PRIOR 1 WEEK PRIOR 4 WEEKS PRIOR ANNOUNCED TARGET NAME ACQUIROR NAME VALUE PER SHARE TO ANNCMNT TO ANNCMNT TO ANNCMNT - --------- ----------- ------------- ---------- ----------- ----------- ----------- ----------- 06/01/95 Hi-Lo Automotive Inc Chief Auto Parts(Trust Co of) 161.1 11.00 23.9% 27.5% 22.2% 06/14/95 Lillian Vernon Corp Freeman Spogli & Co 172.1 19.00 -5.6% -7.3% -8.4% 06/16/95 Sunshine Jr Stores Inc E-Z Serve Corp 29.5 12.00 60.0% 81.0% 54.8% 06/26/95 Super Rite Corp Richfood Holdings Inc 330.8 23.46 26.8% 26.8% 49.0% 07/27/95 Ben Franklin Retail Stores Inc Shareholders NA 4.00 -18.0% -20.0% -23.8% 08/07/95 Cosmetic Center Inc Perfumania Inc 63.2 13.00 50.6% 59.9% 73.3% 08/14/95 Broadway Stores Federated Department Stores 1,667.9 8.00 177.8% 390.8% 55.9% 08/14/95 National Convenience Stores Circle K Corp 198.0 20.00 45.5% 53.8% 61.6% 08/28/95 Medicine Shoppe International Cardinal Health Inc 345.3 45.00 16.1% 15.4% 29.5% 08/30/95 Syms Corp Investor Group 160.7 8.75 11.0% 9.4% 25.0% 09/08/95 Sunbelt Cos Inc Pelican Cos Inc 33.1 7.95 17.8% 13.6% 22.3% 09/19/95 Huffman Koos(SGH/JG Inds Inc) Home Furnishings(Breuners) 39.3 9.38 50.1% 39.0% 34.0% 10/23/95 Younkers Inc Proffitt's Inc 219.5 28.18 47.8% 57.6% 65.8% All Transactions (57 Transactions) ---------------------------------- Mean 31.5% 42.5% 37.4% Median 25.7% 28.7% 33.7% ----------------------------------
Source: Securities Data Company, Inc. _______________ (1) Includes M&A transactions within the Retail Industry. The Retail Industry (as defined by SDC) includes SIC Codes from 5211 to 5736 and from 5912 to 5999. - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- -------------------------------------------------------------------- EXHIBIT IV -- MANAGEMENT FINANCIAL FORECAST - ------------------------------------------------------------------------------- PaineWebber Incorporated 41 - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- PROJECT SNOW MANAGEMENT FINANCIAL FORECAST - ------------------------------------------------------------------------------- Page 1
SUMMARY STATISTICS HISTORICAL PROJECTED ------------------------------ --------------------------------------------------------------- INCOME STATEMENT SUMMARY 1992 1993 1994 1995 1996 1997 1998 1999 2000 Net Sales $119,799 $122,960 $127,678 $136,524 $141,363 $149,464 $157,395 $164,892 $172,506 EBITDA 7,624 6,058 7,774 7,878 11,584 12,745 13,844 14,716 15,731 EBIT 5,936 4,500 6,106 6,437 10,116 11,342 12,450 13,331 14,352 Total Interest 1,170 1,219 1,465 1,475 1,003 924 810 683 579 Net Interest 1,170 1,219 1,465 1,475 1,003 924 810 683 579 Net Income $ 2,783 $ 1,881 $ 2,691 $ 2,873 $ 5,276 $ 6,031 $ 6,733 $ 7,316 $ 7,967 Earnings Per Share $ 0.80 $ 0.55 $ 0.80 $ 0.86 $ 1.57 $ 1.79 $ 2.00 $ 2.17 $ 2.35 GROWTH/MARGIN ANALYSIS Net Sales Growth 5.2% 2.6% 3.8% 6.9% 3.5% 5.7% 5.3% 4.8% 4.6% Gross Margin 20.9% 20.4% 21.2% 19.9% 19.9% 19.8% 19.7% 19.5% 19.5% EBITDA Margin 6.4% 4.9% 6.1% 5.8% 8.2% 8.5% 8.8% 8.9% 9.1% EBIT Margin 5.0% 3.7% 4.8% 4.7% 7.2% 7.6% 7.9% 8.1% 8.3% Net Income Margin 2.3% 1.5% 2.1% 2.1% 3.7% 4.0% 4.3% 4.4% 4.6% COVERAGES EBITDA/Total Interest 6.5x 5.0x 5.3x 5.3x 11.5x 13.8x 17.1x 21.6x 27.2x EBITDA/Net Interest 6.5x 5.0x 5.3x 5.3x 11.5x 13.8x 17.1x 21.6x 27.2x EBITDA-Cap Ex/Tot. Interest 5.9x 3.2x 4.0x -2.5x 9.7x 12.8x 15.9x 20.2x 25.5x EBIT/Total Interest 5.1x 3.7x 4.2x 4.4x 10.1x 12.3x 15.4x 19.5x 24.8x EBIT/Net Interest 5.1x 3.7x 4.2x 4.4x 10.1x 12.3x 15.4x 19.5x 24.8x Total Debt/EBITDA 1.4x 2.3x 2.3x 1.6x 1.0x 0.8x 0.6x 0.5x 0.4x Debt/Total Capitalization 30.3% 33.8% 0.0% 25.0% 20.8% 17.1% 12.8% 10.0% 0.0% Debt/Equity 0.4x 0.5x 0.5x 0.3x 0.3x 0.2x 0.1x 0.1x 0.0x STORE COUNT (END OF PERIOD) Franchise Stores 344 362 374 384 407 430 450 470 490 Company Stores 10 8 4 4 4 4 4 4 4 Total Stores 354 370 378 388 411 434 454 474 494
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HISTORICAL PROJECTED ------------------------------ --------------------------------------------------------------- INCOME STATEMENT YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, ------------------------------ --------------------------------------------------------------- (In thousands) 1992 1993 1994 1995 1996 1997 1998 1999 2000 ------- ------ ------ ------ ------ ------ ------ ------ ------ RSC Sales $111,657 $113,225 $117,002 $127,827 $132,359 $139,965 $147,419 $154,456 $161,598 Incremental Retail Sales 1,816 3,238 3,487 1,245 1,245 1,245 1,245 1,245 1,245 Franchise Fee Income 5,856 6,116 6,772 7,072 7,373 7,853 8,330 8,789 9,261 O Advertising 470 381 417 379 386 402 402 402 402 -------- -------- -------- -------- -------- -------- -------- -------- -------- Net Sales 119,799 122,960 127,678 136,524 141,363 149,464 157,395 164,892 172,506 Cost of Goods Sold(1) 94,720 97,829 100,660 109,342 113,279 119,889 126,385 132,666 138,915 -------- -------- -------- -------- -------- -------- -------- -------- -------- Gross Profit 25,078 25,131 27,018 27,182 28,084 29,575 31,011 32,226 33,591 Selling Gen. & Admin 17,455 18,035 17,464 17,108 16,500 16,830 17,167 17,510 17,860 Depreciation 1,120 1,168 1,215 1,060 1,108 1,094 1,085 1,077 1,069 Amort. of Financing Costs 0 0 0 0 0 0 0 0 0 Goodwill Amortization 0 0 0 0 0 0 0 0 0 Other Amortization 568 390 453 381 360 310 309 309 309 -------- -------- -------- -------- -------- -------- -------- -------- -------- Total S G & A(1) 19,143 19,593 19,132 18,549 17,968 18,234 18,561 18,896 19,238 Operating Income 5,936 5,538 7,886 8,633 10,116 11,342 12,450 13,331 14,352 Lease (Income) -- 10% 0 0 0 0 0 0 0 0 0 Other Expense(2) 0 1,038 1,780 2,196 0 0 0 0 0 ------- ------- ------- ------- ------- ------- ------- ------- ------- EBIT 5,936 4,500 6,106 6,437 10,116 11,342 12,450 13,331 14,352 Interest Expense Existing Debt 1,170 1,219 1,465 1,475 1,003 924 810 683 579 Acquisition Financing Senior Debt 0 0 0 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 0 0 0 -------- -------- -------- -------- -------- -------- -------- -------- -------- Interest Expense 1,170 1,219 1,465 1,475 1,003 924 810 683 579 Interest Income 0 0 0 0 0 0 0 0 0 -------- -------- -------- -------- -------- -------- -------- -------- -------- Net Interest Expense 1,170 1,219 1,465 1,475 1,003 924 810 683 579 Earnings Before Taxes 4,766 3,281 4,641 4,962 9,113 10,417 11,640 12,648 13,773 Income Taxes 1,983 1,400 1,950 2,089 3,837 4,386 4,908 5,332 5,807 -------- -------- -------- -------- -------- -------- -------- -------- -------- Net Income 2,783 1,881 2,691 2,873 5,276 6,031 6,733 7,316 7,967 Net Income to Common $ 2,783 $ 1,881 $ 2,691 $ 2,873 $ 5,276 $ 6,031 $ 6,733 $ 7,316 $7,967 ======== ======== ======== ======= ======= ======= ======= ======= ====== Earnings Per Share Actual $ 0.00 $ 0.55 $ 0.80 $ 0.84 $ 1.57 $ 1.79 $ 2.00 $ 2.17 $ 2.35 Excl. One-Time Items $ 0.73 $ 1.11 $ 1.24 Weighted Average Shares 3,497 3,410 3,348 3,346 3,354 3,362 3,370 3,378 3,386
__________________ (1) All freight expense is in COGS. (2) Other expense in 1995 includes real estate revenues and costs, shareholder proposal expense, warehouse consolidation expense, and loss on retail stores. - ------------------------------------------------------------------------------- PaineWebber Incorporated - ------------------------------------------------------------------------------- Big O Tires, Inc. - ------------------------------------------------------------------------------- PROJECT SNOW MANAGEMENT FINANCIAL FORECAST - ------------------------------------------------------------------------------- Page 3
BALANCE SHEET HISTORICAL PROJECTED ------------------------------ -------------------------------------------------------------- (in thousands) YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, ------------------------------ -------------------------------------------------------------- ASSETS 1992 1993 1994 1995 1996 1997 1998 1999 2000 ------- ------ ------ ------ ------ ------ ------ ------ ------ Current Assets Cash/Investments $ 1,590 $ 1,113 $ 4,882 $ 202 $ 6,075 $10,555 $14,972 $20,764 $27,197 Receivables 8,835 7,722 11,070 9,456 9,791 10,352 10,902 11,421 11,948 Inventory 15,348 11,748 14,219 16,320 15,104 15,985 16,851 17,689 18,522 Deferred Income Taxes 1,970 1,802 2,126 2,581 2,929 3,277 3,625 3,973 4,321 Other Current Assets 443 758 688 688 688 688 688 688 688 ------- ------- ------- ------- ------- ------- ------- ------- ------- Total Current Assets 28,186 23,143 32,985 29,246 34,587 40,857 47,038 54,534 62,676 Real Estate Retained 0 0 0 0 0 0 0 0 0 Real Estate CIP 0 0 2,169 0 0 0 0 0 0 Other Property and Equipment, net 12,166 13,153 9,862 15,828 16,533 16,323 16,193 16,071 15,957 ------- ------- ------- ------- ------- ------- ------- ------- ------- Total PP&E 12,166 13,153 12,031 15,828 16,533 16,323 16,193 16,071 15,957 Investment/Other Asset 1,969 2,955 2,820 2,960 3,100 3,240 3,380 3,520 3,660 Invst in Oper JV 1,609 1,385 1,129 1,129 1,129 1,129 1,129 1,129 1,129 Invst in Dev JV 0 0 0 0 0 0 0 0 0 Invst in Conversions 0 0 0 0 0 0 0 0 0 Bridge Loan Receivable 0 0 0 0 0 0 0 0 0 Notes Receivable 4,915 6,616 3,926 3,726 3,526 3,326 3,126 2,926 2,726 Distribution Rights 8,834 9,355 9,077 8,828 8,549 8,271 7,995 7,719 7,443 Other Non Current Assets 0 0 0 0 0 0 0 0 0 Total Assets $57,679 $56,607 $61,968 $61,717 $67,424 $73,146 $78,861 $85,900 $93,592 ======= ======= ======= ======= ======= ======= ======= ======= ======= Current Liabilities Accounts Payable 5,085 3,613 650 2,217 2,297 2,431 2,563 2,690 2,817 Accrued Expenses 3,067 3,396 2,485 2,492 3,482 3,682 3,877 4,061 4,249 Warranty Reserve 2,654 3,254 3,850 4,450 5,050 5,650 6,250 6,850 7,450 ------- ------- ------- ------- ------- ------- ------- ------- ------- Total Current Liabilities 10,806 10,263 6,985 9,159 10,830 11,763 12,689 13,601 14,516 Deferred Income Taxes 500 38 0 0 0 0 0 0 0 ESOP Obligation 1,277 975 449 192 0 0 0 0 0 Other Long-term Liabilities 192 157 1,433 1,375 1,375 1,375 1,375 1,375 1,375 Existing Debt Senior Notes 0 0 8,000 8,000 8,000 8,000 6,857 5,714 4,571 Long Term Debt(IN) 0 0 1,475 1,375 1,335 1,292 1,246 1,200 1,154 Long Term Debt (Kelly Springfield) 440 5,600 4,355 2,945 1,745 545 (210) (210) (210) Other Senior Debt 7,324 6,686 745 0 0 0 0 0 0 AT&T LTD 0 0 412 412 412 412 412 412 412 Revolving Credit Fac. 950 0 2,985 0 0 0 0 0 0 ------- ------- ------- ------- ------- ------- ------- ------- ------- Total Debt 10,714 13,686 17,972 12,732 11,492 10,249 8,305 7,116 5,927 ------- ------- ------- ------- ------- ------- ------- ------- ------- Total Liabilities 23,489 25,119 26,839 23,458 23,697 23,387 22,369 22,092 21,818 Common Stock 19,334 14,735 15,159 15,159 15,159 15,159 15,159 15,159 15,159 ESOP Obligation (1,277) (975) (449) (192) 0 0 0 0 0 Retained Earnings 16,133 17,728 20,419 23,292 28,569 34,600 41,333 48,648 56,615 ------- ------- ------- ------- ------- ------- ------- ------- ------- Total Equity 34,190 31,488 35,129 38,259 43,728 49,759 56,492 63,807 71,774 Total Liab. and Equity $57,679 $56,607 $61,968 $61,717 $67,424 $73,146 $78,861 $85,900 $93,592 ======= ======= ======= ======= ======= ======= ======= ======= ======= Debt/Total Cap. 23.9% 30.3% 33.8% 33.8% 25.0% 20.8% 17.1% 12.8% 10.0% Debt/Equity 0.3x 0.4x 0.5x 0.5x 0.3x 0.3x 0.2x 0.1x 0.1x
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CASH FLOW STATEMENT PROJECTED --------------------------------------------------------- (In thousands) YEAR ENDED DECEMBER 31, --------------------------------------------------------- 1995 1996 1997 1998 1999 2000 ------ ------ ------ ------ ------ ------ CASH FLOW FROM OPERATIONS Net income $ 2,873 $ 5,276 $ 6,031 $ 6,733 $ 7,316 $ 7,967 Depreciation 1,060 1,108 1,094 1,085 1,077 1,069 Amortization 381 360 310 309 309 309 Increase Deferred Income/Taxes (58) 0 0 0 0 0 ------- ------- ------- ------- ------- ------- Total Cash Flow From Operations 4,257 6,744 7,435 8,127 8,701 9,345 CHANGES IN WORKING CAPITAL Accounts Receivable 1,614 (335) (561) (549) (519) (527) Inventories (2,101) 1,216 (881) (866) (838) (833) Deferred Income Taxes (455) (348) (348) (348) (348) (348) Other Current Assets 0 0 0 0 0 0 Accounts Payable 1,567 80 134 132 127 127 Accrued Expenses 7 991 200 194 185 188 Warranty Reserve 600 600 600 600 600 600 ------- ------- ------- ------- ------- ------- Total Changes in Working Capital 1,232 2,203 (857) (837) (793) (794) CASH (USED FOR) GENERATED BY INVESTMENTS Capital Expenditures (9,350) (1,813) (884) (955) (955) (955) Proceeds From Sale of Properties 4,493 0 0 0 0 0 Investment in Oper JV 0 0 0 0 0 0 Investment in Dev JV 0 0 0 0 0 0 Investment in Conversions 0 0 0 0 0 0 Real Estate Retained 0 0 0 0 0 0 Real Estate CIP 0 0 0 0 0 0 Bridge Loan 0 0 0 0 0 0 ------- ------- ------- ------- ------- ------- Total Investments (4,857) (1,813) (884) (955) (955) (955) CHANGES IN OTHER ASSETS Investments/Other Assets (140) (140) (140) (140) (140) (140) Notes Receivable 200 200 200 200 200 200 Distribution Rights 249 279 278 276 276 276 Note Pay Fees Expenses 0 0 0 0 0 0 Less: Amortization (381) (360) (310) (309) (309) (309) ------- ------- ------- ------- ------- ------- Total Other (72) (21) 28 27 27 27 Net From Operations 560 7,114 5,722 6,361 6,981 7,622 CASH FLOW FROM FINANCING ACTIVITIES Existing Debt (5,240) (1,240) (1,243) (1,944) (1,189) (1,189) Common Stock 0 0 0 0 0 0 ------- ------- ------- ------- ------- ------- Net cash used in financing activities (5,240) (1,240) (1,243) (1,944) (1,189) (1,189) Net Increase (Decrease) in Cash (4,680) 5,874 4,479 4,417 5,792 6,433 Cash, Beginning of Period 4,882 202 6,075 10,555 14,972 20,764 Cash Generated (Used) (4,680) 5,874 4,479 4,417 5,792 6,433 ------- ------- ------- ------- ------- ------- Cash, End of Period $ 202 $ 6,075 $10,555 $14,972 $20,764 $27,197
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DEBT SCHEDULE PROJECTED (In thousands) ---------------------------------------------------------- YEAR ENDED DECEMBER 31, ---------------------------------------------------------- 1995 1996 1997 1998 1999 2000 ------ ------ ------ ------ ------ ------ BEGINNING DEBT BALANCE Existing Debt Senior Notes 8,000 8,000 8,000 8,000 6,857 5,714 Long Term Debt(IN) 1,475 1,375 1,335 1,292 1,246 1,200 Long Term Debt (Kelly Springfield) 4,355 2,945 1,745 545 (210) (210) Other Senior Debt 745 0 0 0 0 0 AT&T LTD 412 412 412 412 412 412 Revolving Credit Fac. 2,985 0 0 0 0 0 Acquisition Financing Senior Debt 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 ------ ------ ------ ------ ------ ------ Total Beginning Debt Balance 17,972 12,732 11,492 10,249 8,305 7,116 DEBT (REPAYMENT) BORROWINGS Existing Debt Senior Notes 0 0 0 (1,143) (1,143) (1,143) Long Term Debt(IN) (100) (40) (43) (46) (46) (46) Long Term Debt (Kelly Springfield) (1,410) (1,200) (1,200) (755) 0 0 Other Senior Debt (745) 0 0 0 0 0 AT&T LTD 0 0 0 0 0 0 Revolving Credit Fac. (2,985) 0 0 0 0 0 ------ ------ ------ ------ ------ ------ Total Existing Debt Borrowing (Repayment) (5,240) (1,240) (1,243) (1,944) (1,189) (1,189) Acquisition Financing Senior Debt 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 ------ ------ ------ ------ ------ ------ Total Borrowing (Repayment) (5,240) (1,240) (1,243) (1,944) (1,189) (1,189) ENDING DEBT BALANCE Existing Debt Senior Notes 8,000 8,000 8,000 6,857 5,714 4,571 Long Term Debt(IN) 1,375 1,335 1,292 1,246 1,200 1,154 Long Term Debt (Kelly Springfield) 2,945 1,745 545 (210) (210) (210) Other Senior Debt 0 0 0 0 0 0 AT&T LTD 412 412 412 412 412 412 Revolving Credit Fac. 0 0 0 0 0 0 Acquisition Financing Senior Debt 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 ------ ------ ------ ------ ------ ------ Total Ending Debt Balance 12,732 11,492 10,249 8,305 7,116 5,927
- ------------------------------------------------------------------------------ PaineWebber Incorporated PROJECT SNOW MANAGEMENT FINANCIAL FORECAST - ------------------------------------------------------------------------------ Page 6
INTEREST EXPENSE SCHEDULE PROJECTED --------------------------------------------------------- YEAR ENDED DECEMBER 31, --------------------------------------------------------- 1995 1996 1997 1998 1999 2000 ------ ------ ------ ------ ------ ------ Interest Expense Existing Debt RATE ---- Senior Notes 8.71% 697 697 697 647 547 448 Long Term Debt(IN) 8.75% 125 119 115 111 107 103 Long Term Debt (Kelly Springfield) 6.25% 228 147 72 10 (13) (13) Other Senior Debt 9.60% 36 0 0 0 0 0 AT&T LTD 10.00% 41 41 41 41 41 41 Prepayment Penalties -- 0 0 0 0 0 0 Revolving Credit Fac. 8.85% 348 0 0 0 0 0 ------ ------ ---- ---- ---- ---- Total Existing Debt Interest Expense 1,475 1,003 924 810 683 579 Acquisition Financing Senior Debt 0.0% 0 0 0 0 0 0 Sub Debt 0.0% 0 0 0 0 0 0 Total Interest Expense $1,475 $1,003 $924 $810 $683 $579 ------ ------ ---- ---- ---- ---- Income on Cash 0.00% 0 0 0 0 0 0 Income on Bridge Notes Rec 0.00% 0 0 0 0 0 0 Income on Notes Rec 0.00% 0 0 0 0 0 0 ------ ------ ---- ---- ---- ---- $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
- ------------------------------------------------------------------------------ PaineWebber Incorporated EX-4 5 EXHIBIT (B)(2) BIG O TIRES, INC. RIGHTS AGREEMENT BACKGROUND INFORMATION APRIL 14, 1994 TABLE OF CONTENTS Part I Scope of Assignment Part II Current Defense Profile Part III Historical and Projected Summary Financial Statistics Part IV Price/Earnings Multiple Analysis Part V Selected Comparable Company Analysis Part VI Determination of Exercise Price Part VII Hypothetical Effect on Capitalization Part VIII Selected Unsolicited Takeover Bids Part IX Selected Redeemed Shareholders' Rights Plans Part X Pricing and Trading Information on Selected Companies Adopting Shareholders' Rights Plan Part XI Summary of Selected Shareholders' Rights Plan PART I SCOPE OF ASSIGNMENT SCOPE OF ASSIGNMENT PaineWebber Incorporated has been retained by the Company in connection with the possible adoption by the Company of a Shareholders' Rights Plan (the "Plan"). PaineWebber will review and analyze the following in order to determine an appropriate exercise price for a shareholder right under the Plan: - Current Defense Profile - Historical and Projected Summary Financial Statistics - Historical Price/Earnings Multiple Analysis - Selected Comparable Company Analysis - Determination of Exercise Price - Hypothetical Effect on Capitalization - Selected Unsolicited Takeover Bids - Selected Redeemed Shareholders' Rights Plan - Pricing and Trading Information on Companies Adopting Shareholders' Rights Plans - Summary of Selected Shareholders' Rights Plan PART II CURRENT DEFENSE PROFILE
YES NO COMMENTS 1. Staggered Board of Directors X 3-15 directors as determined by the board, 3 equal classes 2. Excess Common X 3. Super Majority Voting Provision X 4. Blank Check Preferred X 5. 2 Classes Common X 6. Golden/Tin Parachute X 7. ESOP X ESOP owns 18.0% of Common Stock 8. Incorporated in Delaware X Nevada 9. No stockholder action by written consent X Articles and Bylaws silent; Permitted under Nevada law 10.Shareholders can call special X Upon the written request of one-tenth of all the shares entitled to votes 11.Shareholders nominations or other proposals must be provided in advance notice X For inclusion in company's 1994 proxy materials, proposals must have been received by the company by December 24, 1993 12.Anti-Greenmail provision X 13.Fair Price provision X
PART III HISTORICAL AND PROJECTED SUMMARY FINANCIAL STATISTICS HISTORICAL SUMMARY FINANCIAL STATISTICS(1) ($ IN MILLIONS, EXCEPT PER SHARE DATA)
For the Fiscal Years Ending 1988 1989 1990 1991 1992 1993 __________________________________________________________________ Net Sales $93.52 $108.23 $106.90 $113.84 $119.80 $122.96 Growth Rate -3.0% 15.7% -1.2% 6.5% 5.2% 2.6% COGS 72.73 85.63 84.62 88.64 93.78 96.88 % of Sales 77.8% 79.1% 79.2% 77.9% 78.3% 78.8% _____ _____ _____ _____ _____ _____ Gross Profit 20.79 22.60 22.28 25.20 26.02 26.08 Gross Margin 22.2% 20.9% 20.8% 22.1% 21.7% 21.2% Operating Expenses 17.20 18.90 19.13 20.17 20.08 20.55 % of Sales 18.4% 17.5% 17.9% 17.7% 16.8% 16.7% _____ _____ _____ _____ _____ _____ Operating Income 3.59 3.70 3.15 5.03 5.94 5.54 Operating Margin 3.8% 3.4% 3.0% 4.4% 5.0% 4.5% Interest Expense/ (Income) 1.23 1.33 1.89 1.58 1.17 1.22 % of Sales 1.3% 1.2% 1.8% 1.4% 1.0% 1.0% ____ ____ ____ ____ ____ ____ Pre-Tax Income 2.36 2.38 1.26 3.45 4.77 4.32 % of Sales 2.5% 2.2% 1.2% 3.0% 4.0% 3.5% Income Taxes 1.10 1.08 0.56 1.52 1.98 1.84 Tax Rate 46.4% 45.4% 44.1% 44.2% 41.6% 42.7% _____ _____ _____ _____ _____ _____ Net Income $1.27 $1.30 $0.71 $1.93 $2.78 $2.47 _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ Earnings Per Share $0.43 $0.40 $0.20 $0.55 $0.80 $0.73 Shares Outstanding 2.94 3.22 3.50 3.51 3.50 3.41
______________________________ (1) Data excludes extraordinary items and is adjusted for stock splits. PROJECTED SUMMARY FINANCIAL STATISTICS(1) ($ IN MILLIONS, EXPECT PER SHARE DATA)
For the Fiscal Years Ending ____________________________________________________________________________________________________________________________________ 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 ____ ____ ____ ____ ____ ____ ____ ____ ____ ____ ____ Net Sales $132.43 $140.14 $150.04 $161.64 $171.86 $181.90 $191.95 $201.98 $212.49 $223.54 $235.16 Growth Rate 7.7% 5.8% 7.1% 7.7% 6.3% 5.8% 5.5% 5.2% 5.2% 5.2% 5.2% COGS 103.84 110.91 120.58 130.72 138.51 146.54 154.33 162.01 169.99 178.83 188.13 % of Sales 78.4% 79.1% 80.4% 80.9% 80.6% 80.6% 80.4% 80.2% 80.0% 80.0% 80.0% ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Gross Profit 28.58 29.24 29.46 30.93 33.35 35.36 37.62 39.97 42.50 44.71 47.03 Gross Margin 21.6% 20.9% 19.6% 19.1% 19.4% 19.4% 19.6% 19.8% 20.0% 20.0% 20.0% Operating Expenses 21.39 20.76 20.01 20.19 21.61 22.84 24.15 25.48 26.77 28.17 29.63 % of Sales 16.2% 14.8% 13.3% 12.5% 12.6% 12.6% 12.6% 12.6% 12.6% 12.6% 12.6% _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ Operating Income 7.19 8.48 9.45 10.74 11.74 12.52 13.47 14.49 15.72 16.54 17.40 Operating Margin 5.4% 6.0% 6.3% 6.6% 6.8% 6.9% 7.0% 7.2% 7.4% 7.4% 7.4% Interest Expense/(Income) 1.13 1.35 1.13 0.97 0.72 0.43 0.13 (0.24) (0.21) (0.22) (0.24) % of Sales 0.9% 1.0% 0.8% 0.6% 0.4% 0.2% 0.1% -0.1% -0.1% -0.1% -0.1% _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ Pre-Tax Income 6.06 7.13 8.32 9.77 11.03 12.08 13.34 14.73 15.94 16.77 17.64 % of Sales 4.6% 5.1% 5.5% 6.0% 6.4% 6.6% 6.9% 7.3% 7.5% 7.5% 7.5% Income Taxes 2.55 3.00 3.50 4.11 4.65 5.11 5.65 6.25 6.76 7.11 7.48 Tax Rate 42.1% 42.1% 42.1% 42.1% 42.2% 42.3% 42.3% 42.4% 42.4% 42.4% 42.4% _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ Net Income $3.51 $4.13 $4.82 $5.66 $6.37 $6.98 $7.69 $8.48 $9.18 $9.66 $10.16 _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ ______ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ ______ Earnings Per Share $1.01 $1.16 $1.33 $1.53 $1.69 $1.82 $1.97 $2.13 $2.31 $2.42 $2.55 % Growth 14.9% 14.7% 15.0% 10.5% 7.7% 8.2% 8.1% 8.2% 5.2% 5.2% 10-year avg. growth 9.8% Number of Shares Outstanding 3.47 3.56 3.62 3.70 3.77 3.83 3.90 3.98 3.98 3.98 3.98
___________________________ (1) Based on projections provided by the Company and modified by PaineWebber Incorporated. PART IV PRICE/EARNINGS MULTIPLE ANALYSIS PRICE/EARNINGS MULTIPLE ANALYSIS - TEN-YEAR AVERAGE P/E RATIOS [LINE GRAPH APPEARS HERE - PAGE 9] PaineWebber Incorporated P/E Ratios Weekly: April 2, 1984 to August 17, 1994 S&P (400 INDUSTRIALS) INDEX1 INDEX2 06-Apr-84 10.91 8.64 #N/A 13-Apr-84 11.05 8.63 #N/A 20-Apr-84 11.10 8.64 #N/A 27-Apr-84 11.26 8.66 #N/A 04-May-84 11.18 8.54 #N/A 11-May-84 11.13 8.60 #N/A 18-May-84 10.96 7.97 #N/A 25-May-84 10.67 7.72 #N/A 01-Jun-84 10.79 7.81 #N/A 08-Jun-84 10.95 7.87 #N/A 15-Jun-84 10.49 7.92 #N/A 22-Jun-84 10.90 7.77 #N/A 29-Jun-84 10.83 7.90 #N/A 06-Jul-84 9.92 7.66 #N/A 13-Jul-84 9.81 7.47 #N/A 20-Jul-84 9.73 7.42 #N/A 27-Jul-84 9.82 7.43 #N/A 03-Aug-84 10.55 7.86 #N/A 10-Aug-84 10.77 7.92 #N/A 17-Aug-84 10.68 7.80 #N/A 24-Aug-84 10.90 8.02 #N/A 31-Aug-84 10.85 7.93 #N/A 07-Sep-84 10.69 8.04 #N/A 14-Sep-84 10.94 7.91 #N/A 21-Sep-84 10.70 8.05 #N/A 28-Sep-84 10.73 8.34 #N/A 05-Oct-84 10.27 7.93 #N/A 12-Oct-84 10.34 7.93 #N/A 19-Oct-84 10.55 8.27 #N/A 26-Oct-84 10.41 8.47 #N/A 02-Nov-84 10.53 8.55 #N/A 09-Nov-84 10.54 8.68 #N/A 16-Nov-84 10.31 8.58 #N/A 23-Nov-84 10.48 8.38 #N/A 30-Nov-84 10.24 8.59 #N/A 07-Dec-84 10.16 8.23 #N/A 14-Dec-84 10.16 8.62 #N/A 21-Dec-84 10.34 8.81 #N/A 28-Dec-84 10.39 8.62 #N/A 04-Jan-85 10.14 8.08 #N/A 11-Jan-85 10.41 8.12 #N/A 18-Jan-85 10.64 8.38 #N/A 25-Jan-85 11.04 8.77 #N/A 01-Feb-85 11.12 8.94 #N/A 08-Feb-85 11.34 9.01 #N/A 15-Feb-85 11.27 9.24 #N/A 22-Feb-85 11.14 9.17 #N/A 01-Mar-85 11.41 9.53 #N/A 08-Mar-85 11.14 9.18 #N/A 15-Mar-85 10.95 9.09 #N/A 22-Mar-85 11.11 9.02 #N/A 29-Mar-85 11.22 9.21 #N/A 05-Apr-85 11.32 9.16 #N/A 12-Apr-85 11.41 9.26 #N/A 19-Apr-85 11.44 8.93 #N/A 26-Apr-85 11.48 8.93 #N/A 03-May-85 11.33 9.06 #N/A 10-May-85 11.57 9.15 #N/A 17-May-85 11.74 9.13 #N/A 24-May-85 11.84 9.30 #N/A 31-May-85 11.90 9.33 #N/A 07-Jun-85 11.88 9.33 #N/A 14-Jun-85 11.71 9.21 #N/A 21-Jun-85 11.85 8.00 #N/A 28-Jun-85 12.02 7.86 #N/A 05-Jul-85 12.99 8.31 #N/A 12-Jul-85 13.00 8.51 #N/A 19-Jul-85 13.21 8.90 #N/A 26-Jul-85 13.13 8.55 #N/A 02-Aug-85 13.05 8.55 #N/A 09-Aug-85 12.82 8.43 #N/A 16-Aug-85 12.66 8.35 #N/A 23-Aug-85 12.72 8.45 #N/A 30-Aug-85 12.83 8.45 #N/A 06-Sep-85 12.82 8.47 #N/A 13-Sep-85 12.49 8.21 #N/A 20-Sep-85 12.41 8.03 #N/A 27-Sep-85 12.40 8.31 #N/A 04-Oct-85 13.15 9.52 #N/A 11-Oct-85 13.21 9.79 #N/A 18-Oct-85 13.41 9.85 #N/A 25-Oct-85 13.42 9.97 #N/A 01-Nov-85 13.68 10.10 #N/A 08-Nov-85 13.81 10.42 #N/A 15-Nov-85 14.14 10.86 #N/A 22-Nov-85 14.41 10.86 #N/A 29-Nov-85 14.47 11.05 #N/A 06-Dec-85 14.52 11.51 #N/A 13-Dec-85 15.00 11.91 #N/A 20-Dec-85 15.05 11.89 #N/A 27-Dec-85 14.98 11.71 #N/A 03-Jan-86 15.35 13.13 #N/A 10-Jan-86 14.99 12.15 #N/A 17-Jan-86 15.15 12.52 #N/A 24-Jan-86 14.97 12.59 #N/A 31-Jan-86 15.31 12.91 #N/A 07-Feb-86 15.54 13.49 #N/A 14-Feb-86 15.89 13.48 #N/A 21-Feb-86 16.25 13.78 #N/A 28-Feb-86 16.41 13.47 #N/A 07-Mar-86 16.28 13.87 #N/A 14-Mar-86 17.09 14.08 #N/A 21-Mar-86 16.93 14.15 #N/A 28-Mar-86 17.32 14.64 #N/A 04-Apr-86 16.83 14.33 #N/A 11-Apr-86 17.41 13.93 #N/A 18-Apr-86 17.91 14.60 #N/A 25-Apr-86 17.99 14.63 #N/A 02-May-86 17.45 14.60 #N/A 09-May-86 17.72 15.16 #N/A 16-May-86 17.33 14.19 #N/A 23-May-86 17.96 14.07 #N/A 30-May-86 18.42 14.16 #N/A 06-Jun-86 18.35 14.15 #N/A 13-Jun-86 18.35 14.75 #N/A 20-Jun-86 18.44 14.35 #N/A 27-Jun-86 18.56 14.80 #N/A 04-Jul-86 18.17 13.94 #N/A 11-Jul-86 17.38 12.96 #N/A 18-Jul-86 16.90 12.90 #N/A 25-Jul-86 17.15 12.92 #N/A 01-Aug-86 16.76 13.01 #N/A 08-Aug-86 16.92 12.95 #N/A 15-Aug-86 17.64 13.37 #N/A 22-Aug-86 17.79 13.16 #N/A 29-Aug-86 17.98 12.96 #N/A 05-Sep-86 17.92 13.17 #N/A 12-Sep-86 16.53 12.84 #N/A 19-Sep-86 16.62 13.09 #N/A 26-Sep-86 16.59 13.45 #N/A 03-Oct-86 16.63 12.09 #N/A 10-Oct-86 16.76 11.90 #N/A 17-Oct-86 17.04 12.07 #N/A 24-Oct-86 17.01 13.09 #N/A 31-Oct-86 17.42 13.82 #N/A 07-Nov-86 17.58 13.93 #N/A 14-Nov-86 17.52 14.10 #N/A 21-Nov-86 17.60 13.57 #N/A 28-Nov-86 17.86 13.39 #N/A 05-Dec-86 17.97 13.78 #N/A 12-Dec-86 17.70 13.25 #N/A 19-Dec-86 17.87 13.98 #N/A 26-Dec-86 17.69 13.78 #N/A 02-Jan-87 19.06 12.99 #N/A 09-Jan-87 20.02 13.42 #N/A 16-Jan-87 20.70 14.40 #N/A 23-Jan-87 21.01 14.87 #N/A 30-Jan-87 21.40 14.88 #N/A 06-Feb-87 21.95 16.13 #N/A 13-Feb-87 22.03 15.99 #N/A 20-Feb-87 22.45 16.23 #N/A 27-Feb-87 22.40 15.52 #N/A 06-Mar-87 23.00 16.55 #N/A 13-Mar-87 22.99 17.15 #N/A 20-Mar-87 23.73 16.50 #N/A 27-Mar-87 23.62 16.37 #N/A 03-Apr-87 22.94 14.86 #N/A 10-Apr-87 22.43 14.77 #N/A 17-Apr-87 21.98 14.09 #N/A 24-Apr-87 21.59 14.38 #N/A 01-May-87 22.08 14.49 #N/A 08-May-87 22.53 15.10 #N/A 15-May-87 22.10 15.07 #N/A 22-May-87 21.68 14.46 #N/A 29-May-87 22.25 14.57 #N/A 05-Jun-87 22.49 14.36 #N/A 12-Jun-87 23.06 15.10 #N/A 19-Jun-87 23.50 14.61 #N/A 26-Jun-87 23.55 15.01 #N/A 03-Jul-87 21.93 14.07 #N/A 10-Jul-87 22.23 14.11 #N/A 17-Jul-87 22.75 14.24 #N/A 24-Jul-87 22.36 14.29 #N/A 31-Jul-87 23.06 14.96 #N/A 07-Aug-87 23.36 15.05 #N/A 14-Aug-87 24.05 15.73 #N/A 21-Aug-87 24.23 16.02 #N/A 28-Aug-87 23.62 15.31 #N/A 04-Sep-87 22.86 15.02 #N/A 11-Sep-87 23.29 15.17 #N/A 18-Sep-87 22.73 14.81 #N/A 25-Sep-87 23.10 14.14 #N/A 02-Oct-87 21.24 14.09 #N/A 09-Oct-87 20.02 13.49 #N/A 16-Oct-87 18.03 12.04 #N/A 23-Oct-87 15.63 10.22 #N/A 30-Oct-87 15.99 9.49 #N/A 06-Nov-87 15.83 9.70 #N/A 13-Nov-87 15.58 10.22 #N/A 20-Nov-87 15.34 10.40 #N/A 27-Nov-87 15.25 11.05 #N/A 04-Dec-87 14.15 10.34 #N/A 11-Dec-87 15.03 10.14 #N/A 18-Dec-87 15.93 10.91 #N/A 25-Dec-87 16.20 11.70 #N/A 01-Jan-88 14.09 10.34 #N/A 08-Jan-88 13.84 10.21 #N/A 15-Jan-88 14.32 9.97 #N/A 22-Jan-88 13.92 9.96 #N/A 29-Jan-88 14.48 10.41 #N/A 05-Feb-88 14.12 10.53 #N/A 12-Feb-88 14.59 10.61 #N/A 19-Feb-88 14.86 11.44 #N/A 26-Feb-88 14.92 11.46 #N/A 04-Mar-88 15.23 11.65 #N/A 11-Mar-88 15.15 11.89 #N/A 18-Mar-88 15.51 12.79 #N/A 25-Mar-88 14.76 12.42 #N/A 01-Apr-88 13.61 12.14 #N/A 08-Apr-88 14.21 12.55 #N/A 15-Apr-88 13.72 11.79 #N/A 22-Apr-88 13.73 11.51 #N/A 29-Apr-88 13.80 11.81 #N/A 06-May-88 13.59 11.97 #N/A 13-May-88 13.51 11.96 #N/A 20-May-88 13.30 12.39 #N/A 27-May-88 13.26 12.50 #N/A 03-Jun-88 13.94 12.54 #N/A 10-Jun-88 14.21 12.49 #N/A 17-Jun-88 14.17 12.20 #N/A 24-Jun-88 14.33 12.32 #N/A 01-Jul-88 13.21 12.47 #N/A 08-Jul-88 13.14 12.08 #N/A 15-Jul-88 13.23 12.31 #N/A 22-Jul-88 12.81 12.36 #N/A 29-Jul-88 13.22 12.18 #N/A 05-Aug-88 13.14 11.95 #N/A 12-Aug-88 12.71 11.77 #N/A 19-Aug-88 12.56 12.00 #N/A 26-Aug-88 12.54 11.69 #N/A 02-Sep-88 12.77 11.50 #N/A 09-Sep-88 12.88 11.25 #N/A 16-Sep-88 13.08 11.83 #N/A 23-Sep-88 13.02 13.86 #N/A 30-Sep-88 13.12 13.55 #N/A 07-Oct-88 12.80 13.27 14-Oct-88 12.70 13.77 #N/A 21-Oct-88 13.11 14.17 #N/A 28-Oct-88 12.86 13.39 #N/A 04-Nov-88 12.76 13.29 #N/A 11-Nov-88 12.36 13.28 #N/A 18-Nov-88 12.29 11.64 #N/A 25-Nov-88 12.34 12.67 #N/A 02-Dec-88 12.56 12.76 #N/A 09-Dec-88 12.80 13.22 #N/A 16-Dec-88 12.78 13.02 #N/A 23-Dec-88 12.89 13.14 #N/A 30-Dec-88 12.89 13.17 #N/A 06-Jan-89 12.48 12.10 #N/A 13-Jan-89 12.63 11.94 #N/A 20-Jan-89 12.73 11.78 #N/A 27-Jan-89 13.05 11.45 #N/A 03-Feb-89 13.21 11.50 #N/A 10-Feb-89 12.96 13.05 #N/A 17-Feb-89 13.16 12.50 #N/A 24-Feb-89 12.73 12.31 #N/A 03-Mar-89 12.92 12.95 #N/A 10-Mar-89 12.99 13.01 #N/A 17-Mar-89 12.98 12.58 #N/A 24-Mar-89 12.79 12.41 #N/A 31-Mar-89 13.04 12.91 #N/A 07-Apr-89 12.57 12.24 #N/A 14-Apr-89 12.77 12.29 #N/A 21-Apr-89 13.12 12.17 #N/A 28-Apr-89 13.09 12.12 #N/A 05-May-89 13.00 11.92 #N/A 12-May-89 13.25 12.37 #N/A 19-May-89 13.54 13.14 #N/A 26-May-89 13.55 13.27 #N/A 02-Jun-89 13.69 13.44 #N/A 09-Jun-89 13.71 13.36 #N/A 16-Jun-89 13.50 13.54 #N/A 23-Jun-89 13.77 13.86 #N/A 30-Jun-89 13.34 13.23 #N/A 07-Jul-89 13.58 12.36 #N/A 14-Jul-89 13.86 12.26 #N/A 21-Jul-89 14.10 13.27 #N/A 28-Jul-89 14.32 14.23 #N/A 04-Aug-89 14.39 14.36 #N/A 11-Aug-89 14.44 15.32 #N/A 18-Aug-89 14.49 14.82 #N/A 25-Aug-89 14.71 14.04 #N/A 01-Sep-89 14.83 14.51 #N/A 08-Sep-89 14.62 14.61 #N/A 15-Sep-89 14.44 14.13 #N/A 22-Sep-89 14.49 14.51 #N/A 29-Sep-89 14.57 14.99 #N/A 06-Oct-89 15.17 14.45 #N/A 13-Oct-89 14.08 13.48 #N/A 20-Oct-89 14.69 13.79 #N/A 27-Oct-89 14.17 13.18 #N/A 03-Nov-89 14.27 13.07 #N/A 10-Nov-89 14.33 13.30 #N/A 17-Nov-89 14.46 13.61 #N/A 24-Nov-89 14.57 13.65 #N/A 01-Dec-89 14.86 14.02 #N/A 08-Dec-89 14.80 14.02 #N/A 15-Dec-89 14.83 13.34 #N/A 22-Dec-89 14.70 12.87 #N/A 29-Dec-89 14.96 12.77 #N/A 05-Jan-90 15.39 12.29 #N/A 12-Jan-90 14.88 11.88 #N/A 19-Jan-90 14.86 11.27 #N/A 26-Jan-90 14.27 11.05 #N/A 02-Feb-90 14.52 11.73 #N/A 09-Feb-90 14.69 12.23 #N/A 16-Feb-90 14.62 12.23 #N/A 23-Feb-90 14.22 12.07 #N/A 02-Mar-90 14.71 12.92 #N/A 09-Mar-90 14.87 12.96 #N/A 16-Mar-90 15.10 13.25 #N/A 23-Mar-90 14.91 13.40 #N/A 30-Mar-90 15.02 13.42 #N/A 06-Apr-90 15.85 12.80 #N/A 13-Apr-90 16.02 13.01 #N/A 20-Apr-90 15.62 13.45 #N/A 27-Apr-90 15.35 12.89 #N/A 04-May-90 15.79 13.05 #N/A 11-May-90 16.40 13.25 #N/A 18-May-90 16.54 12.94 #N/A 25-May-90 16.57 12.59 #N/A 01-Jun-90 16.99 12.90 #N/A 08-Jun-90 16.72 13.14 #N/A 15-Jun-90 17.02 13.40 #N/A 22-Jun-90 16.71 13.01 #N/A 29-Jun-90 16.85 12.14 #N/A 06-Jul-90 17.08 11.28 #N/A 13-Jul-90 17.61 12.24 #N/A 20-Jul-90 17.33 12.46 #N/A 27-Jul-90 16.90 12.70 #N/A 03-Aug-90 16.46 11.17 #N/A 10-Aug-90 16.01 9.98 #N/A 17-Aug-90 15.64 9.89 #N/A 24-Aug-90 14.91 8.97 #N/A 31-Aug-90 15.45 9.93 #N/A 07-Sep-90 15.47 9.86 #N/A 14-Sep-90 15.15 9.71 #N/A 21-Sep-90 14.84 9.80 #N/A 28-Sep-90 14.58 9.73 #N/A 05-Oct-90 15.10 9.16 #N/A 12-Oct-90 14.46 8.23 #N/A 19-Oct-90 15.11 9.10 #N/A 26-Oct-90 14.75 9.63 #N/A 02-Nov-90 15.01 9.97 #N/A 09-Nov-90 15.10 10.18 #N/A 16-Nov-90 15.26 10.96 #N/A 23-Nov-90 15.21 10.64 #N/A 30-Nov-90 15.55 11.20 #N/A 07-Dec-90 15.78 10.90 #N/A 14-Dec-90 15.74 11.39 #N/A 21-Dec-90 15.96 11.54 #N/A 28-Dec-90 15.85 11.44 #N/A 04-Jan-91 15.48 10.83 #N/A 11-Jan-91 15.21 11.57 #N/A 18-Jan-91 16.08 11.77 #N/A 25-Jan-91 16.33 11.88 #N/A 01-Feb-91 16.68 12.39 #N/A 08-Feb-91 17.45 13.00 #N/A 15-Feb-91 17.93 13.50 #N/A 22-Feb-91 17.81 13.29 #N/A 01-Mar-91 18.06 13.58 #N/A 08-Mar-91 18.38 13.78 #N/A 15-Mar-91 18.28 14.56 #N/A 22-Mar-91 17.94 14.98 #N/A 29-Mar-91 18.29 14.87 #N/A 05-Apr-91 18.88 15.80 28.79 12-Apr-91 19.16 15.35 32.95 19-Apr-91 19.38 14.84 32.45 26-Apr-91 19.11 14.64 32.32 03-May-91 19.22 15.04 33.33 10-May-91 19.03 15.65 32.07 17-May-91 18.83 15.89 30.45 24-May-91 19.11 16.11 31.62 31-May-91 19.75 17.03 30.67 07-Jun-91 19.19 17.03 30.00 14-Jun-91 19.35 18.25 30.56 21-Jun-91 19.14 18.28 30.23 28-Jun-91 18.78 17.90 30.66 05-Jul-91 20.73 17.44 34.57 12-Jul-91 21.08 17.56 34.57 19-Jul-91 21.30 17.64 35.57 26-Jul-91 21.07 17.33 34.88 02-Aug-91 21.45 17.85 34.37 09-Aug-91 21.43 19.29 35.50 16-Aug-91 21.28 18.79 34.24 23-Aug-91 21.79 19.35 36.18 30-Aug-91 21.87 21.21 36.98 06-Sep-91 21.47 20.29 30.63 13-Sep-91 21.13 19.36 31.19 20-Sep-91 21.35 20.06 35.65 27-Sep-91 21.21 20.56 34.21 04-Oct-91 23.38 18.98 34.09 11-Oct-91 23.38 18.90 33.22 18-Oct-91 24.12 20.84 34.93 25-Oct-91 23.58 21.66 33.64 01-Nov-91 23.95 21.97 36.11 08-Nov-91 24.01 22.34 38.32 15-Nov-91 23.38 21.15 40.57 22-Nov-91 23.04 21.30 40.19 29-Nov-91 22.96 21.46 39.19 06-Dec-91 23.18 21.60 40.98 13-Dec-91 23.50 23.20 40.18 20-Dec-91 23.66 24.62 41.55 27-Dec-91 24.88 26.39 45.07 03-Jan-92 29.62 24.77 47.84 10-Jan-92 29.40 23.16 49.08 17-Jan-92 29.76 24.72 47.00 24-Jan-92 29.44 24.54 46.11 31-Jan-92 29.01 23.71 48.77 07-Feb-92 29.25 24.24 57.02 14-Feb-92 29.33 25.11 54.06 21-Feb-92 29.26 25.78 55.50 28-Feb-92 29.34 25.38 54.92 06-Mar-92 28.77 25.75 48.67 13-Mar-92 28.86 25.84 48.45 20-Mar-92 29.22 26.29 50.72 27-Mar-92 28.69 26.66 52.87 03-Apr-92 28.33 23.73 46.97 10-Apr-92 28.51 23.11 48.45 17-Apr-92 29.30 24.84 49.81 24-Apr-92 28.64 24.32 46.70 01-May-92 28.92 23.92 48.35 08-May-92 29.12 24.44 49.23 15-May-92 28.63 24.28 46.96 22-May-92 28.95 24.31 46.39 29-May-92 29.12 23.84 47.11 05-Jun-92 28.95 23.98 41.31 12-Jun-92 28.61 22.45 37.82 19-Jun-92 28.14 21.36 33.99 26-Jun-92 28.08 22.46 35.80 03-Jul-92 27.00 21.60 35.51 10-Jul-92 27.13 22.69 35.38 17-Jul-92 27.26 22.20 36.12 24-Jul-92 26.96 22.39 37.30 31-Jul-92 27.81 24.42 39.06 07-Aug-92 27.45 24.34 36.65 14-Aug-92 27.52 24.02 40.45 21-Aug-92 27.16 23.53 39.93 28-Aug-92 27.23 22.82 37.20 04-Sep-92 27.41 23.55 36.18 11-Sep-92 27.69 24.71 35.73 18-Sep-92 27.91 25.10 38.84 25-Sep-92 27.20 24.60 38.91 02-Oct-92 25.54 23.13 38.30 09-Oct-92 25.03 21.99 36.64 16-Oct-92 25.58 23.87 37.47 23-Oct-92 25.81 25.59 37.76 30-Oct-92 26.06 25.05 38.70 06-Nov-92 26.02 25.54 40.27 13-Nov-92 26.34 25.98 42.76 20-Nov-92 26.59 26.34 43.03 27-Nov-92 26.78 26.61 43.79 04-Dec-92 26.93 27.12 45.22 11-Dec-92 26.99 26.33 43.03 18-Dec-92 27.39 26.49 43.01 25-Dec-92 27.23 28.64 44.08 01-Jan-93 26.06 25.85 43.96 08-Jan-93 25.65 26.30 42.63 15-Jan-93 26.04 26.59 42.50 22-Jan-93 25.91 25.67 40.52 29-Jan-93 26.12 25.62 40.00 05-Feb-93 26.63 27.16 41.25 12-Feb-93 26.35 26.82 41.22 19-Feb-93 25.61 25.26 41.21 26-Feb-93 26.16 25.59 42.21 05-Mar-93 26.36 27.30 42.83 12-Mar-93 26.58 28.08 45.09 19-Mar-93 26.59 28.20 46.07 26-Mar-93 26.35 28.80 45.99 02-Apr-93 24.93 27.46 44.19 09-Apr-93 24.81 27.61 43.25 16-Apr-93 25.13 27.60 45.83 23-Apr-93 24.66 25.46 43.21 30-Apr-93 24.95 24.87 41.54 07-May-93 25.16 25.50 44.41 14-May-93 25.08 22.35 44.82 21-May-93 25.53 23.13 47.79 28-May-93 25.74 23.44 49.51 04-Jun-93 25.72 23.89 48.15 11-Jun-93 25.51 17.62 46.30 18-Jun-93 25.24 18.52 44.82 25-Jun-93 25.33 18.60 43.96 02-Jul-93 27.24 17.84 46.52 09-Jul-93 27.32 17.50 45.63 16-Jul-93 27.14 18.77 45.66 23-Jul-93 27.20 18.50 45.93 30-Jul-93 27.18 19.06 46.43 06-Aug-93 27.21 18.47 47.49 13-Aug-93 27.23 18.54 49.39 20-Aug-93 27.81 19.57 51.59 27-Aug-93 27.98 19.52 50.62 03-Sep-93 27.98 19.15 49.83 10-Sep-93 27.85 19.70 49.58 17-Sep-93 27.66 20.42 49.19 24-Sep-93 27.68 18.58 47.47 01-Oct-93 26.44 18.70 45.85 08-Oct-93 26.46 18.77 46.05 15-Oct-93 27.15 16.39 47.27 22-Oct-93 26.91 16.60 46.85 29-Oct-93 27.25 16.81 49.37 05-Nov-93 26.94 16.43 48.81 12-Nov-93 27.41 16.76 50.75 19-Nov-93 27.33 16.55 49.31 26-Nov-93 27.27 16.24 49.38 03-Dec-93 27.35 17.43 50.54 10-Dec-93 27.31 17.58 50.60 17-Dec-93 27.39 18.54 48.44 24-Dec-93 27.46 18.41 47.92 31-Dec-93 27.49 19.01 50.04 07-Jan-94 24.91 19.22 48.56 14-Jan-94 25.17 20.59 48.87 21-Jan-94 25.20 20.99 49.20 28-Jan-94 25.28 20.12 50.16 04-Feb-94 24.93 21.31 48.69 11-Feb-94 25.00 21.37 49.81 18-Feb-94 24.98 21.42 48.57 25-Feb-94 24.84 21.59 49.34 04-Mar-94 24.81 22.44 48.61 11-Mar-94 24.93 21.51 49.49 18-Mar-94 25.19 21.82 50.39 25-Mar-94 24.57 21.45 48.53 01-Apr-94 22.84 20.04 45.99 08-Apr-94 22.90 20.86 46.77 15-Apr-94 22.70 20.63 46.46 22-Apr-94 22.75 21.39 46.01 29-Apr-94 23.01 20.49 48.48 06-May-94 22.91 20.38 48.09 13-May-94 22.77 19.48 45.50 20-May-94 23.25 20.47 44.50 27-May-94 23.37 20.79 45.87 03-Jun-94 23.48 20.49 43.56 10-Jun-94 23.31 20.43 43.89 17-Jun-94 23.36 19.77 42.61 24-Jun-94 22.58 18.95 38.34 01-Jul-94 19.59 18.04 40.14 08-Jul-94 19.77 18.28 37.92 15-Jul-94 19.98 18.88 37.90 22-Jul-94 19.97 18.35 37.26 29-Jul-94 20.18 18.79 38.21 05-Aug-94 20.11 18.74 37.43 12-Aug-94 20.34 18.20 36.30 17-Aug-94 20.55 18.66 36.18 PW COMPARABLE COMPANY INDEX1 IS A COMPOSITE OF: BRD, CTB, SAME, TBCC PW COMPARABLE COMPANY INDEX2 IS A COMPOSITE OF: DAP, AZO, HLO, ORLY SOURCE: TRADELINE DAILY PRICES / S&P COMPUSTAT 12-MONTH EARNINGS PART V SELECTED COMPARABLE COMPANY ANALYSIS
Cooper Tire & ($ in millions, except share data) Big O Tires Inc Brad Ragan, Inc. Rubber Co. S & M Co TBC Corp. ______________________________________________________________________________________________________________________________ PRICE & CAPITALIZATION DATA Latest Price per Share $14.38 $28.00 $26.13 $1.06 $12.75 Market Value of Common Equity $49.0 $61.3 $2,182.7 $1.5 $369.1 Total Preferred Equity Total Debt 13.2 30.3 44.1 4.4 26.1 Other Long-Term Liabilities 1.4 4.3 173.5 0.3 Less: Cash & Equivalents (1.1) (0.1) (25.8) (0.1) ________________________________________________________________________ TOTAL VALUE $62.6 $95.8 $2,374.5 $6.1 $395.1 _____________________________________________________________________________________________________________________ VALUATION DATA MEAN MEDIAN Total Value/LTM Revenues 0.5 x 0.4 x 2.0 x 0.3 x 0.7 x 0.8x 0.5x Total Value/LTM EBITDA 8.8 13.8 11.2 7.4 10.5 10.7 10.8 Total Value/3-yr Avg. EBITDA 8.7 NMF 12.2 6.6 11.3 10.0 11.3 Total Value/LTM EBIT 11.3 16.7 14.3 12.7 11.7 13.8 13.5 Total Value/Total Capitalization 1.4 1.2 3.0 0.8 2.8 1.9 2.0 Total Value/Total Assets 1.1 0.8 2.7 0.6 2.4 1.6 1.6 Price/LTM EPS 19.8 x 15.1 x 21.4 x 19.1 x 17.2 18.2x 18.2x Price/Projected 1994 EPS NA NA 18.1 NA 15.0 16.6 16.6 Price/Projected 1995 EPS NA NA 16.0 NA 13.4 14.7 14.7 Equity Value/LTM Cash Flow 9.8 13.2 13.7 3.2 14.1 11.1 13.4 Equity Value/Book Value 1.6 1.4 4.0 0.5 3.2 2.3 2.3 _____________________________________________________________________________________________________________________ OPERATING DATA FOR LTM ENDING Dec-1993 Dec-1993 Dec-1993 Dec-1993 Dec-1993 Total Revenues $123.0 $242.7 $1.194.2 $19.0 $568.7 EBIT 5.5 5.7 166.6 0.5 33.7 EBITDA 7.1 6.9 213.0 0.8 37.7 Net Income 2.5 4.1 102.2 0.1 21.4 Cash Flow 5.0 4.7 159.1 0.5 26.2 EBIT Margin 4.5% 2.4% 14.0% 2.5% 5.9% 6.2% 4.2% EBITDA Margin 5.8 2.9 17.8 4.3 6.6 7.9 5.5 Return on Avg. Net Capitalization 24.6 14.6 44.9 12.7 47.3 29.9 29.7% Net Income Margin 2.0 1.7 8.6 0.4 3.8 3.6 2.7 Return on Avg. Return on Avg. Common Equity 15.7 18.3 37.2 5.2 36.7 24.3 27.5 Cash Flow/Total Assets 8.8 4.1 17.9 4.8 15.7 10.6 10.2
Cooper Tire & ($ in millions, except share data) Big O Tires Inc Brad Ragan, Inc. Rubber Co. S & M Co TBC Corp. ______________________________________________________________________________________________________________________________ BALANCE SHEET DATA Total Assets $56.6 $114.0 $889.6 $9.8 $166.7 Total Capitalization 46.2 79.0 786.7 7.7 142.6 Common Equity 31.5 44.5 550.2 3.0 116.5 Debt/Total Capitalization 28.7% 38.3% 5.6% 56.5% 18.3% Shares Outstanding 3.4 2.2 83.5 1.4 28.9 _____________________________________________________________________________________________________________________________ PERFORMANCE VARIABLES 3-YEAR GROWTH RATES Total Revenues 3.9% 8.1% 9.2 0.8% 6.7% EBITDA 2.1 NMF 15.0 (9.0) 11.9 Net Income 13.4 NMF 13.4 (34.0) 10.0 Cash Flow (1.8) NMF 16.6 (6.4) 15.2 Total Assets (0.4) 3.9 15.2 0.4 11.0 3-YEAR AVERAGES EBITDA Margin 6.0% 1.2% 17.3% 4.9% 6.4% Net Income Margin 2.0 (0.1) 8.6 0.8 3.7
SUMMARY OF SELECTED AUTO RETAIL COMPANIES
Discount Auto Hi-Lo O Reilly ($ in millions, except share data) Big O Tires Inc Autozone Inc PTS Inc Automotive Inc Automotive Inc ____________________________________________________________________________________________________________________________________ PRICE & CAPITALIZATION DATA Latest Price per Share $14.38 $54.25 $24.13 $11.88 $28.00 Market Value of Common Equity $49.0 $4,033.5 $336.6 $125.2 $230.6 Total Preferred Equity Total Debt 13.2 4.4 59.9 32.4 1.2 Other Long-Term Liabilities 1.4 9.4 3.8 0.5 Less: Cash & Equivalents (1.1) (60.7) (8.2) (1.7) (12.0) TOTAL VALUE $62.6 $3,986.6 $388.3 $159.6 $220.3 ____________________________________________________________________________________________________________________________________ VALUATION DATA MEAN MEDIAN Total Value/LTM Revenues 0.5 x 3.0 x 2.0 x 0.8 x 1.6 x 1.8x 1.8x Total Value/LTM EBITDA 8.8 21.7 13.6 9.1 14.4 14.7 14.0 Total Value/3-yr Avg. EBITDA 8.7 32.3 18.6 8.1 17.3 19.1 17.9 Total Value/LTM EBIT 11.3 25.3 16.3 12.7 17.6 18.0 16.9 Total Value/Total Capitalization 1.4 8.6 2.6 1.1 3.7 4.0 3.1 Total Value/Total Assets 1.1 5.2 2.2 1.0 3.0 2.9 2.6 Price/LTM EPS 19.8 x 41.4 x 25.7 x 18.6 x 28.0 x 28.4x 26.8x Price/Projected Est. 1 EPS NA 36.2 23.2 14.8 23.3 24.4 23.3 Price/Projected Est. 2 EPS NA 29.3 18.6 12.5 19.2 19.9 18.9 Equity Value/LTM Cash Flow 9.8 34.8 20.8 11.0 20.4 21.8 20.6 Equity Value/Book Value 1.6 9.0 3.7 1.2 4.0 4.5 3.9 ____________________________________________________________________________________________________________________________________ OPERATING DATA FOR LTM ENDING Dec-1993 Feb-1994 Nov-1993 Dec-1993 Dec-1993 Total Revenues $123.0 $1,348.1 $191.2 $205.2 $137.2 EBIT 5.5 157.7 23.8 12.5 12.5 EBITDA 7.1 183.3 28.6 17.5 15.3 Net Income 2.5 96.7 11.5 6.7 8.2 Cash Flow 5.0 115.7 16.2 11.4 11.3 EBIT Margin 4.5% 11.7% 12.4% 6.1% 9.1% 9.8% 10.4% EBITDA Margin 5.8 13.6 14.9 8.5 11.2 12.1 12.4 Return on Avg. Net Capitalization 24.6 48.8 19.6 18.4 52.8 34.9 34.2 Net Income Margin 2.0 7.2 6.0 3.3 6.0 5.6 6.0 Return on Avg. Common Equity 15.7 25.7 13.7 13.2 28.5 20.3 19.7 Cash Flow/Total Assets 8.8 15.1 9.1 7.4 15.4 11.8 12.1
Discount Auto Hi-Lo O Reilly ($ in millions, except share data) Big O Tires Inc Autozone Inc PTS Inc Automotive Inc Automotive Inc ____________________________________________________________________________________________________________________________________ BALANCE SHEET DATA Total Assets $56.6 $766.4 $176.9 $154.6 $73.1 Total Capitalization 46.2 466.0 149.9 141.7 59.7 Common Equity 31.5 448.5 90.0 101.8 57.8 Debt/Total Capitalization 28.7% 0.9% 40.0% 22.8% 2.1% Shares Outstanding 3.4 74.4 14.0 10.5 8.2 PERFORMANCE VARIABLES 3-YEAR GROWTH RATES Total Revenues 3.9% 22.0% 27.5% 14.8% 20.2% EBITDA 2.1 34.7 29.2 (6.3) 19.3 Net Income 13.4 40.3 46.2 (1.4) 22.9 Cash Flow (1.8) 42.7 36.3 (6.2) 22.6 Total Assets (0.4) 32.2 25.8 12.3 21.5 3-YEAR AVERAGES EBITDA Margin 6.0% 12.0% 14.6% 11.0% 11.2% Net Income Margin 2.0 6.3 6.3 4.1 5.8
BIG O TIRES INC HISTORICAL FINANCIAL SUMMARY (dollar amounts in millions except share data)
VALUATION DATA Fiscal LTM Fiscal 1994E DEC-1993 1993 ------------------------------- Price Per Share (6-Apr-94) $14.38 Price Earnings Ratio NA 19.8x 19.8x Shares Outstanding (Dec-1993) 3.410 Price/Book Value Ratio 1.6x 1.6x Aggregate Market Value $49.0 Price/Cash Flow Ratio 9.8x 9.8x LTM Ended 12/31/93 Total Value/EBIT 11.5x 11.5x Latest Fiscal Year End 12/31/93 Indicated Annual Dividend $0.00 $0.00 Earnings Forecast as of 3/17/94 Indicated Dividend Yield 0.00%
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OPERATING DATA Operating EBITDA EBIT PreTax PreTax Net Net Deprec& Cash Flow Capital Revenues EBITDA Margin EBIT Margin Income Margin Income Margin Amort. Operations Expenditures --------- ------ ------ ---- ------ ------ ------ ------ ------ ------- ---------- ------------ LTM (Ended Dec-1993) $123.0 $7.1 5.8% $5.5 4.5% $4.3 3.5% $2.5 2.0% $1.6 $5.0 $1.0 1993 123.0 7.1 5.8 5.5 4.5 4.3 3.5 2.5 2.0 1.6 5.0 1.0 1992 119.8 7.6 6.4 5.9 5.0 4.8 4.0 2.8 2.3 1.7 6.0 0.8 1992 113.8 6.8 6.0 5.0 4.4 3.5 3.0 1.9 1.7 1.8 5.2 0.5 1991-1993 Growth Rate 3.9% 2.1% 5.0% 11.9% 13.4% (6.4%) (1.8)% 37.6% 1991-1993 Average 6.0% 4.6% 3.5% 2.0%
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BALANCE SHEET AND RATIOS Total Working Net Total Capital Net Net Debt/ EBIT/ Current EBIT/Avg Return Avg Assets Capital PP&E (net of cash) Debt Net Cap Interest Ratio Net Cap Com. Equity LTM (Ended Dec-1993) $56.6 $11.2 $13.2 $45.0 $12.1 26.9% 4.5x 1.9x 24.6% 15.7% 1993 56.6 11.2 13.2 45.0 12.1 26.9 4.5 1.9 12.3 7.5 1992 57.7 17.3 12.2 45.0 8.4 18.6 5.1 2.4 12.8 8.5 1991 57.1 20.7 12.6 47.8 14.3 30.0 3.2 3.3 21.0 12.4 1991-1993 Growth Rate (0.4)% (26.3)% 2.3% (2.9)% (8.1)% 1991-1993 Average 25.2% 4.3x 2.5x 15.4% 9.5%
BIG O TIRES INC HISTORICAL FINANCIAL SUMMARY (dollar amounts in millions except share data) - --------------------------------------------------------------------------------
PER SHARE AND MARKET DATA Earnings Dividends Payout % Book Val. 52 Wk. Price Range P/E Range Yield Range Market/Book Range ------------------------------------------------------------------------------------------------------------ LTM (Ended Dec-1993) $0.73 $0.00 0.0 $9.2 $4.85 - 15.00 6.7-20.7x 0.00 - 0.00% 0.52 - 1.62x 1993 0.73 0.00 0.0 9.2 4.85 - 15.00 6.7-20.7 0.00 - 0.00 0.52 - 1.62 1992 0.80 0.00 0.0 9.8 2.19 - 5.63 2.7-7.0 0.00 - 0.00 0.22 - 0.58 1991 0.55 0.00 0.0 8.8 2.81 - 8.75 5.1-15.9 0.00 - 0.00 0.32 - 0.99 1991-1993 Growth Rate 15.0 NA% 2.3% 1991-1993 Average 0.0%
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CAPITALIZATION % of Total Capitalization -------------------------- Excluding Including Dec-1993 S-T Debt S-T Debt -------------------------------------------- Short Term Debt $2.4 -- 5.3% Total Long-Term Debt 10.8 24.7 23.4 Deferred Taxes 0.0 0.1 0.1 Other L-T Liabilities 1.4 3.2 3.0 Preferred Equity 0.0 0.0 0.0 Common Equity 31.5 72.1 68.2 -------------------------------------------- Total Capitalization $46.1 100.0 100.0% Less: Cash & Equivalents (1.1) ------- Adjusted Total Capitalization $45.0 -------
[GRAPH APPEARS HERE] PaineWebber Incorporated Big O Tires Inc (COM PAR $0.10) Price/Volume Analysis Weekly: November 18, 1992 to April 1, 1994 - --------------------------------------------------------------- Total Close High Low Closing Trading as a % of Date Price Price Price Volume 11/20/92 20-Nov-92 $14.500 $12.750 $13.750 "208,100 "100.0% 27-Nov-92 14.250 13.500 14.250 "28,600 " 103.6% 04-Dec-92 15.000 13.750 14.125 "157,900 "102.7% 11-Dec-92 14.875 12.500 12.750 "239,200 "92.7% 18-Dec-92 13.875 12.750 13.500 "130,200 "98.2% 25-Dec-92 13.875 13.000 13.375 "56,900 "97.3% 01-Jan-93 13.750 13.000 13.125 "52,900 " 95.5% 08-Jan-93 13.750 13.000 13.375 "82,400 " 97.3% 15-Jan-93 13.375 12.125 12.625 "169,600 "91.8% 22-Jan-93 12.625 11.125 12.250 "211,400 "89.1% 29-Jan-93 14.000 11.750 13.750 "233,100 "100.0% 05-Feb-93 14.000 12.250 12.500 "120,800 "90.9% 12-Feb-93 14.250 12.000 13.625 "214,700 "99.1% 19-Feb-93 13.750 12.500 13.375 "132,400 "97.3% 26-Feb-93 14.000 12.375 13.500 "116,800 "98.2% 05-Mar-93 14.250 12.750 12.875 "217,800 "93.6% 12-Mar-93 13.500 12.000 12.000 "96,200 "87.3% 19-Mar-93 12.625 12.000 12.375 "35,200 "90.0% 26-Mar-93 12.500 11.750 12.250 "107,600 "89.1% 02-Apr-93 12.500 11.500 12.000 "76,400 "87.3% 09-Apr-93 13.500 10.875 13.250 "246,000 "96.4% 16-Apr-93 14.250 12.250 12.250 "149,000 "89.1% 23-Apr-93 13.000 11.875 12.750 "131,800 "92.7% 30-Apr-93 13.125 12.625 12.750 "22,200 "92.7% 07-May-93 13.750 12.750 13.250 "133,000 "96.4% 14-May-93 13.625 13.000 13.125 "58,300 "95.5% 21-May-93 13.625 13.000 13.625 "69,100 "99.1% 28-May-93 13.750 13.000 13.625 "67,900 "99.1% 04-Jun-93 16.125 13.250 15.750 "387,100 "114.5% 11-Jun-93 16.375 14.500 14.500 "428,500 "105.5% 18-Jun-93 15.250 13.875 14.500 "172,000 "105.5% 25-Jun-93 15.000 14.000 15.000 "66,400 "109.1% 02-Jul-93 15.500 14.750 15.250 "107,800 "110.9% 09-Jul-93 15.500 14.000 14.000 "66,200 "101.8% 16-Jul-93 15.375 13.250 15.125 "94,600 "110.0% 23-Jul-93 15.250 14.250 15.000 "124,500 "109.1% 30-Jul-93 15.750 14.500 15.625 "103,100 "113.6% 06-Aug-93 $16.875 $15.250 $15.875 "167,000 "115.5% 13-Aug-93 17.250 15.875 16.750 "108,200 "121.8% 20-Aug-93 17.000 16.000 16.625 "116,400 "120.9% 27-Aug-93 16.750 16.000 16.375 "96,800 "119.1% 03-Sep-93 17.250 16.000 17.000 "127,200 "123.6% 10-Sep-93 17.000 15.750 16.000 "354,800 "116.4% 17-Sep-93 16.500 15.250 16.250 "105,500 "118.2% 24-Sep-93 16.250 15.000 15.000 "97,900 "109.1% 01-Oct-93 15.250 14.750 15.000 "112,300 "109.1% 08-Oct-93 15.375 14.750 15.250 "95,700 "110.9% 15-Oct-93 16.250 14.625 16.000 "272,800 "116.4% 22-Oct-93 16.500 14.750 14.750 "130,100 "107.3% 29-Oct-93 16.250 15.000 16.125 "120,300 "117.3% 05-Nov-93 16.250 14.500 14.625 "49,500 "106.4% 12-Nov-93 15.625 14.500 14.875 "48,000 "108.2% 19-Nov-93 15.000 14.000 14.625 "163,100 "106.4% 26-Nov-93 14.750 13.750 14.250 "57,900 "103.6% 03-Dec-93 15.500 14.125 15.500 "79,600 "112.7% 10-Dec-93 15.500 14.500 15.375 "50,300 "111.8% 17-Dec-93 15.375 13.750 14.125 "96,800 "102.7% 24-Dec-93 15.000 13.500 14.875 "80,000 "108.2% 31-Dec-93 15.000 14.250 14.250 "26,600 "103.6% 07-Jan-94 14.500 13.750 14.000 "21,700 "101.8% 14-Jan-94 14.500 13.000 13.750 "88,800 "100.0% 21-Jan-94 13.875 13.000 13.500 "37,300 "98.2% 28-Jan-94 13.875 12.750 13.625 "88,400 "99.1% 04-Feb-94 16.750 13.250 15.500 "235,500 "112.7% 11-Feb-94 15.750 14.500 14.500 "67,400 "105.5% 18-Feb-94 15.250 14.000 14.375 "73,400 "104.5% 25-Feb-94 15.250 13.750 13.750 "47,500 "100.0% 04-Mar-94 14.250 13.375 14.000 "33,000 "101.8% 11-Mar-94 15.250 14.000 14.875 "90,500 "108.2% 18-Mar-94 15.750 14.500 15.250 "107,500 "110.9% 25-Mar-94 16.000 15.250 16.000 "71,700 "116.4% 01-Apr-94 16.250 14.250 14.750 "88,000 "107.3% (i) EBITDA, EBIT, and Pretax Income exclude Special Items (ii)Income Available to Common excludes Extraordinary Items & Discontinued Operations (iii) Net Interest Expense=Gross Interest Expense-Interest Income-Capitalized Interest (iv) Cash Flow=Income Available to Common + Depreciation, Depletion, & Amortization + Deferred Taxes - Unremitted earnings +/- any other non-cash items (v) Financials have been adjusted for stock splits where applicable (vi) 1993 Net income excludes extraordinary items totaling $1.038 million. A 43% tax rate is assumed. (vii) 1991 Net income excludes loss on sale or closure of retail stores of $.311 million. A 44% tax rate is assumed. BRAD RAGAN, INC. HISTORICAL FINANCIAL SUMMARY (dollar amounts in millions except share data)
VALUATION DATA Fiscal LTM Fiscal 1994E DEC-1993 1993 ------------------------------- Price Per Share (6-Apr-94) $28.00 Price Earnings Ratio NA 15.1x 15.1x Shares Outstanding (Dec-1993) 2.191 Price/Book Value Ratio 1.4x 1.4x Aggregate Market Value $61.3 Price/Cash Flow Ratio 13.2x 13.2x LTM Ended 12/31/93 Total Value/EBIT 16.7x 16.7x Latest Fiscal Year End 12/31/93 Indicated Annual Dividend $0.00 $0.00 Earnings Forecast as of 3/17/94 Indicated Dividend Yield 0.00%
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OPERATING DATA Operating EBITDA EBIT PreTax PreTax Net Net Deprec& Cash Flow Capital Revenues EBITDA Margin EBIT Margin Income Margin Income Margin Amort. Operations Expenditures --------- ------ ------ ---- ------ ------ ------ ------ ------ ------- ---------- ------------ LTM (Ended Dec-1993) $242.7 $6.9 2.9 $5.7 2.4 $4.1 1.7% $4.1 1.7 $1.2 $4.7 $1.1 1993 242.7 6.9 2.9 5.7 2.4 4.1 1.7 4.1 1.7 1.2 4.7 1.1 1992 227.5 3.4 1.5 2.0 0.9 0.0 0.0 0.9 0.4 1.3 1.9 1.1 1992 207.7 (1.4) (0.7) (3.0)(1.5) (5.5) (2.6) (5.2) (2.5) 1.6 (3.7) 0.3 1991-1993 Growth Rate 8.1 NMF NMF NMF NMF (14.3) NMF 83.7% 1991-1993 Average 1.2% 0.6% (0.3)% (0.1)%
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BALANCE SHEET AND RATIOS Total Working Net Total Capital Net Net Debt/ EBIT/ Current EBIT/Avg Return Avg Assets Capital PP&E (net of cash) Debt Net Cap Interest Ratio Net Cap Com. Equity LTM (Ended Dec-1993) $114.0 $40.2 $5.7 $78.9 $30.2 38.2 3.4x 1.6x 14.6 18.3% 1993 114.0 40.2 5.7 78.9 30.2 38.2 3.4 1.6 7.5 9.4 1992 109.9 42.4 6.1 74.8 30.5 40.7 1.0 1.7 2.7 2.3 1991 105.6 48.1 6.4 76.2 33.1 43.4 (1.2) 2.0 (8.0) (24.8) 1991-1993 Growth Rate 3.9 (8.5) (5.1) 1.7 (4.5)% 1991-1993 Average 40.8 1.1x 1.8x 0.7 (4.4)%
BRAD RAGAN, INC. HISTORICAL FINANCIAL SUMMARY (dollar amounts in millions except share data) - --------------------------------------------------------------------------------
PER SHARE AND MARKET DATA Earnings Dividends Payout % Book Val. 52 Wk. Price Range P/E Range Yield Range Market/Book Range --------------------------------------------------------------------------------------------------------------- LTM (Ended Dec-1993) $1.85 $0.00 0.0 $20.3 $20.25-28.00 10.9-15.1x 0.00 - 0.00% 1.00 - 1.38x 1993 1.85 0.00 0.0 20.3 20.25-28.00 10.9-15.1 0.00 - 0.00 1.00 - 1.38 1992 0.42 0.00 0.0 19.0 19.50-23.75 46.4-56.5 0.00 - 0.00 1.03 - 1.25 1991 (2.35) 0.12 (5.1) 19.0 16.75-23.00 (7.1)-(9.8) 0.52 - 0.72 0.88 - 1.21 1991-1993 Growth Rate NMF NMF 3.4% 1991-1993 Average (1.7)%
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CAPITALIZATION % of Total Capitalization -------------------------- Excluding Including Dec-1993 S-T Debt S-T Debt -------------------------------------------- Short Term Debt $30.3 -- 38.3% Total Long-Term Debt 0.0 0.0 0.0 Deferred Taxes 0.0 0.0 0.0 Other L-T Liabilities 4.3 8.7 5.4 Preferred Equity 0.0 0.0 0.0 Common Equity 44.5 91.2 56.3 -------------------------------------------- Total Capitalization $79.0 100.0 100.0% Less: Cash & Equivalents (0.1) ------- Adjusted Total Capitalization $78.9 -------
[GRAPH APPEARS HERE] PaineWebber Incorporated Ragan Brad Inc Price/Volume Analysis Weekly: November 18, 1992 to April 1, 1994
Total Close High Low Closing Trading as a % of Date Price Price Price Volume 11/20/92 20-Nov-92 $26.000 $25.500 $25.500 400 100.0% 27-Nov-92 26.000 24.500 24.500 600 96.1% 04-Dec-92 26.500 24.500 26.500 700 103.9% 11-Dec-92 28.000 26.000 26.000 "1,300 " 102.0% 18-Dec-92 27.000 24.000 24.000 "1,200 " 94.1% 25-Dec-92 24.000 22.000 22.000 "1,300 " 86.3% 01-Jan-93 23.000 20.250 23.000 "4,200 " 90.2% 08-Jan-93 24.500 23.500 24.000 "1,300 " 94.1% 15-Jan-93 25.500 24.500 25.500 "1,200 " 100.0% 22-Jan-93 26.000 25.000 25.000 600 98.0% 29-Jan-93 26.000 25.000 25.000 500 98.0% 05-Feb-93 25.500 24.500 24.500 200 96.1% 12-Feb-93 25.000 24.000 24.000 #N/A 94.1% 19-Feb-93 25.000 24.000 24.000 #N/A 94.1% 26-Feb-93 26.000 24.500 25.500 700 100.0% 05-Mar-93 26.000 25.500 25.500 #N/A 100.0% 12-Mar-93 27.500 26.000 27.000 "1,900 " 105.9% 19-Mar-93 27.625 25.500 25.500 400 100.0% 26-Mar-93 26.500 25.500 25.500 #N/A 100.0% 02-Apr-93 26.500 25.500 25.500 #N/A 100.0% 09-Apr-93 26.500 25.500 25.500 400 100.0% 16-Apr-93 25.500 24.000 24.000 "1,000 " 94.1% 23-Apr-93 25.000 24.000 24.000 #N/A 94.1% 30-Apr-93 25.500 24.000 25.000 200 98.0% 07-May-93 25.500 24.500 24.500 #N/A 96.1% 14-May-93 26.000 25.000 25.000 200 98.0% 21-May-93 26.500 25.500 25.500 200 100.0% 28-May-93 26.500 25.500 26.500 100 103.9% 04-Jun-93 28.000 26.500 27.500 600 107.8% 11-Jun-93 28.500 27.000 28.500 300 111.8% 18-Jun-93 29.000 28.500 28.500 600 111.8% 25-Jun-93 28.500 27.500 27.500 200 107.8% 02-Jul-93 27.500 24.000 24.000 "5,900 " 94.1% 09-Jul-93 25.000 23.500 24.500 "4,300 " 96.1% 16-Jul-93 25.500 24.000 25.500 400 100.0% 23-Jul-93 26.000 24.500 25.000 "1,400 " 98.0% 30-Jul-93 26.000 24.000 26.000 500 102.0% 06-Aug-93 $26.500 $25.500 $25.500 #N/A 100.0% 13-Aug-93 26.500 25.500 25.500 #N/A 100.0% 20-Aug-93 27.000 25.500 26.000 "3,000 " 102.0% 27-Aug-93 27.000 25.500 25.500 200 100.0% 03-Sep-93 27.000 25.000 25.000 "2,400 " 98.0% 10-Sep-93 26.000 25.000 25.000 200 98.0% 17-Sep-93 26.500 25.000 25.500 200 100.0% 24-Sep-93 26.500 25.500 26.500 100 103.9% 01-Oct-93 28.000 27.000 27.000 200 105.9% 08-Oct-93 28.000 27.000 27.000 #N/A 105.9% 15-Oct-93 29.500 27.500 29.500 "2,600 " 115.7% 22-Oct-93 30.000 29.000 30.000 200 117.6% 29-Oct-93 30.500 29.500 29.750 100 116.7% 05-Nov-93 30.250 29.250 29.250 #N/A 114.7% 12-Nov-93 30.750 29.250 29.750 300 116.7% 19-Nov-93 30.750 29.750 29.750 #N/A 116.7% 26-Nov-93 30.250 29.250 29.250 200 114.7% 03-Dec-93 30.250 29.250 29.750 600 116.7% 10-Dec-93 30.250 29.250 29.250 #N/A 114.7% 17-Dec-93 30.250 28.500 28.500 600 111.8% 24-Dec-93 29.500 28.500 29.000 100 113.7% 31-Dec-93 29.500 28.000 28.000 200 109.8% 07-Jan-94 29.000 28.000 28.000 #N/A 109.8% 14-Jan-94 30.000 28.000 29.000 700 113.7% 21-Jan-94 30.000 29.000 30.000 "1,100 " 117.6% 28-Jan-94 29.875 29.250 29.250 "1,000 " 114.7% 04-Feb-94 30.250 29.000 29.000 900 113.7% 11-Feb-94 30.000 28.500 28.500 200 111.8% 18-Feb-94 32.000 27.750 30.500 "8,100 " 119.6% 25-Feb-94 30.500 29.500 29.500 400 115.7% 04-Mar-94 30.000 28.000 28.000 800 109.8% 11-Mar-94 27.500 27.000 27.000 "1,400 " 105.9% 18-Mar-94 28.000 26.500 28.000 "4,000 " 109.8% 25-Mar-94 29.000 27.500 29.000 "2,900 " 113.7% 01-Apr-94 29.000 27.500 27.500 "1,400 " 107.8%
FOOTNOTES (i) EBITDA, EBIT, and Pretax Income exclude Special Items (ii)Income Available to Common excludes Extraordinary Items & Discontinued Operations (iii) Net Interest Expense=Gross Interest Expense-Interest Income-Capitalized Interest (iv) Cash Flow=Income Available to Common + Depreciation, Depletion, & Amortization + Deferred Taxes - Unremitted earnings +/- any other non-cash items (v) Financials have been adjusted for stock splits where applicable COOPER TIRE & RUBBER CO. HISTORICAL FINANCIAL SUMMARY (dollar amounts in millions except share data)
VALUATION DATA Fiscal LTM Fiscal 1994E DEC-1993 1993 ------------------------------- Price Per Share (5-Apr-94) $26.13 Price Earnings Ratio 18.1x 21.4x 21.4x Shares Outstanding (Dec-1993) 83.550 Price/Book Value Ratio 4.0x 4.0x Aggregate Market Value $2,182.7 Price/Cash Flow Ratio 13.7x 13.7x LTM Ended 12/31/93 Total Value/EBIT 14.4x 14.4x Latest Fiscal Year End 12/31/93 Indicated Annual Dividend $0.00 $0.20 Earnings Forecast as of 3/17/94 Indicated Dividend Yield 0.00%
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OPERATING DATA Operating EBITDA EBIT PreTax PreTax Net Net Deprec& Cash Flow Capital Revenues EBITDA Margin EBIT Margin Income Margin Income Margin Amort. Operations Expenditures --------- ------ ------ ---- ------ ------ ------ ------ ------ ------- ---------- ------------ LTM (Ended Dec-1993)$1,194.2 $213.0 17.8 $166.6 14.0 $164.3 13.8% $102.2 8.6 $46.4 $159.1 $117.2 1993 1,194.2 213.0 17.8 166.6 14.0 164.3 13.8 102.2 8.6 46.4 159.1 117.2 1992 1,176.0 210.0 17.9 171.9 14.6 169.8 14.4 108.2 9.2 38.1 112.7 110.2 1991 1,001.6 161.0 16.1 129.0 12.9 124.5 12.4 79.4 7.9 32.0 117.0 86.0 1991-1993 Growth Rate 9.2 15.0% 13.6% 14.9% 13.4% 20.4 16.6 16.8% 1991-1993 Average 17.3% 13.8% 13.5% 8.6%%
BALANCE SHEET AND RATIOS Total Working Net Total Capital Net Net Debt/ EBIT/ Current EBIT/Avg Return Avg Assets Capital PP&E (net of cash) Debt Net Cap Interest Ratio Net Cap Com. Equity LTM (Ended Dec-1993) $889.6 $204.9 $527.9 $742.0 $18.3 2.5 70.8x 2.6x 44.9 37.2% 1993 889.6 204.9 527.9 742.0 18.3 2.5 70.8 2.6 24.7 20.0 1992 796.9 175.2 460.4 607.5 (1.7) (0.3) 82.6 2.3 30.1 23.7 1991 670.6 144.3 388.6 534.8 35.2 6.6 28.4 2.2 48.2 36.1 1991-1993 Growth Rate 15.2 19.2 16.6 17.8 (28.0)% 1991-1993 Average 2.9 60.6x 2.4x 34.3 26.6%
COOPER TIRE & RUBBER CO. HISTORICAL FINANCIAL SUMMARY (dollar amounts in millions except share data) - --------------------------------------------------------------------------------
PER SHARE AND MARKET DATA Earnings Dividends Payout % Book Val. 52 Wk. Price Range P/E Range Yield Range Market/Book Range --------------------------------------------------------------------------------------------------------------- LTM (Ended Dec-1993) $1.22 $0.20 16.4 $6.6 $23.38-29.50 19.2-24.2x 0.68 - 0.86% 3.55 - 4.48x 1993 1.22 0.20 16.4 6.6 23.38-29.50 19.2-24.2 0.68 - 0.86 3.55 - 4.48 1992 1.30 0.17 13.1 5.7 7.88-26.38 6.1-20.3 0.64 - 2.16 1.39 - 4.66 1991 0.96 0.13 13.5 5.3 6.19-10.50 6.4-10.9 1.24 - 2.10 1.16 - 1.98 1991-1993 Growth Rate 12.7 24.0% 11.3% 1991-1993 Average 14.3%
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CAPITALIZATION % of Total Capitalization -------------------------- Excluding Including Dec-1993 S-T Debt S-T Debt -------------------------------------------- Short Term Debt $5.3 -- 0.7% Total Long-Term Debt 38.7 5.1 5.0 Deferred Taxes 19.0 2.5 2.5 Other L-T Liabilities 154.6 20.3 20.1 Preferred Equity 0.0 0.0 0.0 Common Equity 550.2 72.2 71.7 -------------------------------------------- Total Capitalization $767.8 100.0 100.0% Less: Cash & Equivalents (25.8) ------- Adjusted Total Capitalization $742.0 -------
[GRAPH APPEARS HERE] PaineWebber Incorporated Cooper Tire & Rubr Co Price/Volume Analysis "Weekly: November 20, 1992 to April 5, 1994"
Total Close High Low Closing Trading as a % of Date Price Price Price Volume 11/20/92 20-Nov-92 $32.625 $31.750 $32.375 "140,600 " 100.0% 27-Nov-92 33.000 32.250 32.625 "410,000 " 100.8% 04-Dec-92 33.375 32.125 33.125 "862,500 " 102.3% 11-Dec-92 33.500 31.625 32.250 "520,900 " 99.6% 18-Dec-92 33.125 31.750 32.500 "589,300 " 100.4% 25-Dec-92 35.625 32.125 35.250 "594,800 " 108.9% 01-Jan-93 35.375 34.000 34.000 "362,000 " 105.0% 08-Jan-93 35.875 34.125 34.625 "940,400 " 106.9% 15-Jan-93 35.500 33.750 34.875 "870,400 " 107.7% 22-Jan-93 35.000 33.375 33.500 "728,500 " 103.5% 29-Jan-93 35.000 33.000 33.500 "740,900 " 103.5% 05-Feb-93 36.375 33.625 35.875 "709,600 " 110.8% 12-Feb-93 35.750 33.875 34.875 "499,500 " 107.7% 19-Feb-93 35.250 32.375 32.875 "568,400 " 101.5% 26-Feb-93 34.375 30.500 33.250 "1,180,800 " 102.7% 05-Mar-93 36.250 32.125 35.875 "869,500 " 110.8% 12-Mar-93 38.000 35.625 36.625 "849,300 " 113.1% 19-Mar-93 37.375 36.250 36.875 "604,500 " 113.9% 26-Mar-93 38.250 36.375 37.750 "951,600 " 116.6% 02-Apr-93 39.500 37.625 38.125 "862,900 " 117.8% 09-Apr-93 38.375 36.625 38.250 "745,100 " 118.1% 16-Apr-93 39.625 37.750 38.250 "881,400 " 118.1% 23-Apr-93 38.125 32.750 35.000 "2,226,200 " 108.1% 30-Apr-93 34.875 33.625 34.250 "1,319,200 " 105.8% 07-May-93 35.875 33.750 35.125 "851,200 " 108.5% 14-May-93 35.375 29.375 30.375 "3,521,600 " 93.8% 21-May-93 32.500 29.000 31.500 "2,504,200 " 97.3% 28-May-93 32.250 31.000 31.750 "1,225,000 " 98.1% 04-Jun-93 32.875 31.125 32.875 "1,431,800 " 101.5% 11-Jun-93 31.750 23.875 23.875 "11,878,800 " 73.7% 18-Jun-93 25.625 21.500 25.500 "7,523,300 " 78.8% 25-Jun-93 26.375 24.625 25.500 "2,900,500 " 78.8% 02-Jul-93 26.000 24.250 24.250 "1,433,300 " 74.9% 09-Jul-93 25.125 23.125 23.625 "1,995,900 " 73.0% 16-Jul-93 25.875 22.875 25.625 "3,455,800 " 79.2% 23-Jul-93 25.875 23.750 25.250 "1,811,200 " 78.0% 30-Jul-93 26.375 25.250 26.000 "1,460,200 " 80.3% 06-Aug-93 $26.000 $24.375 $25.000 "1,297,500 " 77.2% 13-Aug-93 25.625 24.250 25.125 "1,255,100 " 77.6% 20-Aug-93 27.375 25.375 26.750 "1,352,200 " 82.6% 27-Aug-93 26.875 26.250 26.500 "973,200 " 81.9% 03-Sep-93 26.875 25.250 26.000 "928,400 " 80.3% 10-Sep-93 26.875 25.250 26.875 "969,400 " 83.0% 17-Sep-93 28.625 26.875 27.875 "2,061,900 " 86.1% 24-Sep-93 28.000 23.625 25.125 "3,100,500 " 77.6% 01-Oct-93 26.250 24.250 24.375 "1,066,600 " 75.3% 08-Oct-93 25.500 24.250 24.625 "868,000 " 76.1% 15-Oct-93 25.000 20.000 21.000 "4,654,100 " 64.9% 22-Oct-93 22.000 21.125 21.500 "4,149,000 " 66.4% 29-Oct-93 22.250 21.250 21.750 "1,817,000 " 67.2% 05-Nov-93 22.000 21.250 21.250 "1,115,600 " 65.6% 12-Nov-93 21.750 20.625 21.750 "1,206,000 " 67.2% 19-Nov-93 22.125 21.250 21.500 "1,219,100 " 66.4% 26-Nov-93 23.250 20.500 21.250 "1,089,700 " 65.6% 03-Dec-93 23.500 21.250 22.750 "2,029,900 " 70.3% 10-Dec-93 22.875 22.250 22.875 "1,259,500 " 70.7% 17-Dec-93 24.750 23.000 24.375 "2,364,200 " 75.3% 24-Dec-93 24.375 23.375 24.125 "1,581,200 " 74.5% 31-Dec-93 25.500 23.875 25.000 "1,236,300 " 77.2% 07-Jan-94 25.250 23.375 24.000 "1,135,800 " 74.1% 14-Jan-94 26.000 24.000 25.875 "1,534,600 " 79.9% 21-Jan-94 27.375 25.875 26.500 "1,737,600 " 81.9% 28-Jan-94 26.500 24.875 25.250 "1,206,200 " 78.0% 04-Feb-94 27.750 25.000 27.000 "2,337,200 " 83.4% 11-Feb-94 28.250 26.000 26.875 "2,141,500 " 83.0% 18-Feb-94 27.375 26.375 26.875 "1,268,200 " 83.0% 25-Feb-94 27.375 26.375 27.000 "687,400 " 83.4% 04-Mar-94 28.375 26.250 28.250 "1,323,500 " 87.3% 11-Mar-94 28.500 26.750 26.875 "948,500 " 83.0% 18-Mar-94 27.875 26.750 27.375 "1,315,000 " 84.6% 25-Mar-94 29.500 26.875 26.875 "1,275,400 " 83.0% 01-Apr-94 27.250 25.000 25.500 "1,219,000 " 78.8% 05-Apr-94 25.250 23.375 25.125 "1,001,900 " 77.6%
FOOTNOTES (i) EBITDA, EBIT, and Pretax Income exclude Special Items (ii)Income Available to Common excludes Extraordinary Items & Discontinued Operations (iii) Net Interest Expense=Gross Interest Expense-Interest Income-Capitalized Interest (iv) Cash Flow=Income Available to Common + Depreciation, Depletion, & Amortization + Deferred Taxes - Unremitted earnings +/- any other non-cash items (v) Financials have been adjusted for stock splits where applicable S & M COMPANY HISTORICAL FINANCIAL SUMMARY (dollar amounts in millions except share data)
VALUATION DATA Fiscal LTM Fiscal 1994E DEC-1993 1993 ------------------------------- Price Per Share (5-Apr-94) $1.06 Price Earnings Ratio NA 19.1x 19.1x Shares Outstanding (Dec-1993) 1.418 Price/Book Value Ratio 0.5x 0.5x Aggregate Market Value $1.5 Price/Cash Flow Ratio 3.2x 3.2x LTM Ended 12/31/93 Total Value/EBIT NA NA Latest Fiscal Year End 12/31/93 Indicated Annual Dividend $0.00 $0.00 Earnings Forecast as of 3/17/94 Indicated Dividend Yield 0.00%
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OPERATING DATA Operating EBITDA EBIT PreTax PreTax Net Net Deprec& Cash Flow Capital Revenues EBITDA Margin EBIT Margin Income Margin Income Margin Amort. Operations Expenditures --------- ------ ------ ---- ------ ------ ------ ------ ------ ------- ---------- ------------ LTM (Ended Dec-1993) $19.0 $0.8 4.3 $0.5 2.5 $0.2 0.8 $0.1 0.4 $0.3 $0.5 $0.2 1993 19.0 0.8 4.3 0.5 2.5 0.2 0.8 0.1 0.4 0.3 0.5 0.2 1992 18.7 0.9 5.1 0.7 3.5 0.3 1.8 0.2 1.1 0.3 0.5 0.3 1991 18.7 1.0 5.3 0.7 3.6 0.3 1.7 0.2 1.0 0.3 0.5 0.1 1991-1993 Growth Rate 0.8 (9.0%) (15.2%) (30.6%) (34.0) 2.6 (6.4) 24.7% 1991-1993 Average 4.9% 3.2% 1.4% 0.8%
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BALANCE SHEET AND RATIOS BALANCE SHEET DATA SELECTED FINANCIAL STATISTICS Total Working Net Total Capital Net Net Debt/ EBIT/ Current EBIT/Avg Return Avg Assets Capital PP&E (net of cash) Debt Net Cap Interest Ratio Net Cap Com. Equity LTM (Ended Dec-1993) $9.8 $1.4 $2.3 $7.6 $4.3 56.5 1.5x 1.3x 12.7 5.2% 1993 9.8 1.4 2.3 7.6 4.3 56.5 1.5 1.3 6.6 2.6 1992 9.5 1.4 2.4 7.0 3.7 53.2 2.1 1.3 9.7 7.3 1991 9.7 1.2 2.5 6.6 3.6 54.7 1.9 1.3 20.1 13.3. 1991-1993 Growth Rate 0.4 6.6 (2.7) 7.0 8.7% 1991-1993 Average 54.8 1.8x 1.3x 12.1 7.7%
S&M COMPANY HISTORICAL FINANCIAL SUMMARY (dollar amounts in millions except share data) PER SHARE AND MARKET DATA
Earnings Dividends Payout % Book Val. 52 Wk. Price Range P/E Range Yield Range Market/Book Range --------------------------------------------------------------------------------------------------------------- LTM (Ended Dec-1993) $0.06 $0.00 0.0 $2.1 $0.75-2.00 13.5-36.0x 0.00 - 0.00% 0.35 - 0.94x 1993 0.06 0.00 0.0 2.1 0.75-2.00 13.5-36.0 0.00 - 0.00 3.35 - 0.94 1992 0.12 0.00 0.0 2.0 0.88-1.50 7.3-12.5 0.00 - 0.00 0.43 - 0.74 1991 0.04 0.00 0.0 1.8 1.00-1.75 25.0-43.8 0.00 - 0.00 0.55 - 0.97 1991-1993 Growth Rate 17.9 NA 8.2% 1991-1993 Average 0.0%
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CAPITALIZATION % of Total Capitalization -------------------------- Excluding Including Dec-1993 S-T Debt S-T Debt -------------------------------------------- Short Term Debt $2.6 -- 34.0% Total Long-Term Debt 1.7 34.6 22.8 Deferred Taxes 0.1 1.0 0.7 Other L-T Liabilities 0.3 5.0 3.3 Preferred Equity 0.0 0.0 0.0 Common Equity 3.0 59.5 39.3 -------------------------------------------- Total Capitalization $7.7 100.0 100.0% Less: Cash & Equivalents (0.1) ------- Adjusted Total Capitalization $7.6 -------
[GRAPH APPEARS HERE] PaineWebber Incorporated S & M Co Price/Volume Analysis "Weekly: November 20, 1992 to April 5, 1994" Total Close High Low Closing Trading as a % of Date Price Price Price Volume 11/20/92 20-Nov-92 $1.250 $1.125 $1.125 #N/A 100.0% 27-Nov-92 1.250 1.125 1.125 #N/A 100.0% 04-Dec-92 1.250 1.125 1.125 "1,200 " 100.0% 11-Dec-92 1.250 1.125 1.125 400 100.0% 18-Dec-92 1.250 1.125 1.125 #N/A 100.0% 25-Dec-92 1.250 1.125 1.125 #N/A 100.0% 01-Jan-93 1.250 1.125 1.125 100 100.0% 08-Jan-93 1.250 1.125 1.125 100 100.0% 15-Jan-93 1.250 1.125 1.125 #N/A 100.0% 22-Jan-93 1.250 1.125 1.125 #N/A 100.0% 29-Jan-93 1.250 1.125 1.125 #N/A 100.0% 05-Feb-93 1.250 1.000 1.000 #N/A 88.9% 12-Feb-93 1.250 0.875 0.875 200 77.8% 19-Feb-93 1.250 0.750 0.750 "1,000 " 66.7% 26-Feb-93 1.500 0.875 0.875 "4,300 " 77.8% 05-Mar-93 1.500 1.250 1.250 "1,500 " 111.1% 12-Mar-93 1.750 1.250 1.250 "53,600 " 111.1% 19-Mar-93 1.750 1.375 1.375 "10,400 " 122.2% 26-Mar-93 1.875 1.375 1.375 #N/A 122.2% 02-Apr-93 1.875 1.375 1.375 #N/A 122.2% 09-Apr-93 1.875 1.375 1.375 "3,300 " 122.2% 16-Apr-93 1.750 1.250 1.250 "5,600 " 111.1% 23-Apr-93 1.750 1.250 1.250 "1,100 " 111.1% 30-Apr-93 1.750 1.375 1.375 "12,900 " 122.2% 07-May-93 1.750 1.375 1.375 "2,600 " 122.2% 14-May-93 1.500 1.250 1.250 #N/A 111.1% 21-May-93 1.500 1.250 1.250 "1,100 " 111.1% 28-May-93 1.500 1.250 1.250 #N/A 111.1% 04-Jun-93 1.500 1.250 1.250 "6,300 " 111.1% 11-Jun-93 1.500 1.250 1.250 "2,500 " 111.1% 18-Jun-93 1.500 1.250 1.250 600 111.1% 25-Jun-93 1.500 1.250 1.250 "2,000 " 111.1% 02-Jul-93 1.500 1.250 1.250 500 111.1% 09-Jul-93 1.375 1.250 1.250 "2,200 " 111.1% 16-Jul-93 1.375 1.250 1.250 "6,000 " 111.1% 23-Jul-93 1.375 1.250 1.250 "6,400 " 111.1% 30-Jul-93 1.875 1.250 1.250 400 111.1% 06-Aug-93 $1.875 $1.250 $1.250 800 111.1% 13-Aug-93 1.875 0.750 0.750 "9,100 " 66.7% 20-Aug-93 1.250 0.750 0.750 #N/A 66.7% 27-Aug-93 1.250 0.750 0.750 "11,100 " 66.7% 03-Sep-93 1.250 0.750 0.750 #N/A 66.7% 10-Sep-93 1.250 0.750 0.750 #N/A 66.7% 17-Sep-93 1.125 0.750 0.750 "4,000 " 66.7% 24-Sep-93 1.125 0.750 0.750 #N/A 66.7% 01-Oct-93 1.125 0.750 0.750 "1,400 " 66.7% 08-Oct-93 1.125 0.750 0.750 "1,000 " 66.7% 15-Oct-93 1.125 0.750 0.750 500 66.7% 22-Oct-93 1.125 0.750 0.750 #N/A 66.7% 29-Oct-93 1.125 0.750 0.750 "15,300 " 66.7% 05-Nov-93 1.125 0.750 0.750 "4,000 " 66.7% 12-Nov-93 1.125 0.750 0.750 "2,800 " 66.7% 19-Nov-93 1.125 0.750 0.750 "9,400 " 66.7% 26-Nov-93 1.250 0.750 0.750 "1,000 " 66.7% 03-Dec-93 1.250 0.750 0.750 "2,300 " 66.7% 10-Dec-93 1.500 0.750 0.750 "4,600 " 66.7% 17-Dec-93 1.500 0.750 0.750 "20,900 " 66.7% 24-Dec-93 1.375 0.750 0.750 "2,300 " 66.7% 31-Dec-93 1.375 0.875 0.875 "17,400 " 77.8% 07-Jan-94 1.375 0.875 0.875 #N/A 77.8% 14-Jan-94 1.375 0.875 0.875 "5,000 " 77.8% 21-Jan-94 1.375 0.875 0.875 #N/A 77.8% 28-Jan-94 1.375 0.875 0.875 "5,000 " 77.8% 04-Feb-94 1.375 0.875 0.875 #N/A 77.8% 11-Feb-94 1.375 0.875 0.875 500 77.8% 18-Feb-94 1.375 0.875 0.875 "1,000 " 77.8% 25-Feb-94 1.375 0.875 0.875 #N/A 77.8% 04-Mar-94 1.375 0.875 0.875 "11,800 " 77.8% 11-Mar-94 1.375 0.875 0.875 #N/A 77.8% 18-Mar-94 1.375 0.875 0.875 #N/A 77.8% 25-Mar-94 1.438 0.875 0.875 "7,200 " 77.8% 01-Apr-94 1.438 1.000 1.000 #N/A 88.9% 05-Apr-94 1.438 1.000 1.000 #N/A 88.9% FOOTNOTES (i) EBITDA, EBIT, and Pretax Income exclude Special Items (ii)Income Available to Common excludes Extraordinary Items & Discontinued Operations (iii) Net Interest Expense=Gross Interest Expense-Interest Income-Capitalized Interest (iv) Cash Flow=Income Available to Common + Depreciation, Depletion, & Amortization + Deferred Taxes - Unremitted earnings +/- any other non-cash items (v) Financials have been adjusted for stock splits where applicable (vi) 1993 Pre-tax income and net income exclude a loss on disposal of tire service center location of $42,700. TCB CORP. HISTORICAL FINANCIAL SUMMARY (dollar amounts in millions except share data)
VALUATION DATA Fiscal LTM Fiscal 1994E DEC-1993 1993 ------------------------------- Price Per Share (5-Apr-94) $12.75 Price Earnings Ratio 15.0X 17.2x 17.2x Shares Outstanding (Dec-1993) 28.945 Price/Book Value Ratio 3.2x 3.2x Aggregate Market Value $369.1 Price/Cash Flow Ratio 14.1x 14.1x LTM Ended 12/31/93 Total Value/EBIT 11.7X 11.7X Latest Fiscal Year End 12/31/93 Indicated Annual Dividend $0.00 $0.00 Earnings Forecast as of 3/17/94 Indicated Dividend Yield 0.00%
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OPERATING DATA Operating EBITDA EBIT PreTax PreTax Net Net Deprec& Cash Flow Capital Revenues EBITDA Margin EBIT Margin Income Margin Income Margin Amort. Operations Expenditures --------- ------ ------ ---- ------ ------ ------ ------ ------ ------- ---------- ------------ LTM (Ended Dec-1993) $568.7 $37.7 6.6% $33.7 5.9% $34.6 6.1% $21.4 3.8% $3.9 $26.2 $3.1 1993 568.7 37.7 6.6 33.7 5.9 34.6 6.1 21.4 3.8 3.9 26.2 3.1 1992 569.5 37.4 6.6 34.1 6.0 35.6 6.2 22.5 3.9 3.3 25.0 6.8 1991 499.5 30.1 6.0 27.4 5.5 28.1 5.6 17.7 3.5 2.7 19.7 10.3 1991-1993 Growth Rate 6.7% 11.9% 10.9% 11.0% 10.0% 21.7% 15.2% (45.4)% 1991-1993 Average 6.4% 5.8% 6.0% 3.7%
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BALANCE SHEET AND RATIOS BALANCE SHEET DATA SELECTED FINANCIAL STATISTICS Total Working Net Total Capital Net Net Debt/ EBIT/ Current EBIT/Avg Return Avg Assets Capital PP&E (net of cash) Debt Net Cap Interest Ratio Net Cap Com. Equity LTM (Ended Dec-1993) $166.7 $95.1 $15.4 $142.6 $26.1 18.3% NAx 2.9x 47.3% 36.7% 1993 166.7 95.1 15.4 142.6 26.1 18.3 NA 2.9 24.3 19.5 1992 176.9 80.6 16.2 134.7 31.7 23.6 NA1 2.1 28.8 23.2 1991 135.3 72.0 12.9 102.0 11.4 11.2 NA 2.6 53.8 39.1 1991-1993 Growth Rate 11.0% 15.0% 9.5% 18.3% 51.4% 1991-1993 Average 17.7% NAx 2.5X 35.6% 27.3%
TBC CORP. HISTORICAL FINANCIAL SUMMARY (dollar amounts in millions except share data)
PER SHARE AND MARKET DATA Earnings Dividends Payout % Book Val. 52 Wk. Price Range P/E Range Yield Range Market/Book Range --------------------------------------------------------------------------------------------------------------- LTM (Ended Dec-1993) $0.74 $0.00 0.0 $4.0 $10.25-18.25 13.9-24.7x 0.00 - 0.00% 2.55 - 4.53x 1993 0.74 0.00 0.0 4.0 10.25-18.25 13.9-24.7X 0.00 - 0.00 2.55 - 4.53 1992 0.76 0.00 0.0 3.5 9.08-16.00 12.0-21.1 0.00 - 0.00 2.61 - 4.60 1991 0.59 0.00 0.0 3.0 4.94-9.25 8.4-15.8 0.00 - 0.00 1.65 - 3.08 1991-1993 Growth Rate 12.3 NA 15.8% 1991-1993 Average 0.0%
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CAPITALIZATION % of Total Capitalization -------------------------- Excluding Including Dec-1993 S-T Debt S-T Debt -------------------------------------------- Short Term Debt $26.1 -- 18.3% Total Long-Term Debt 0.0 0.0 0.0 Deferred Taxes 0.0 0.0 0.0 Other L-T Liabilities 0.0 0.0 0.0 Preferred Equity 0.0 0.0 0.0 Common Equity 116.5 100.0 81.7 -------------------------------------------- Total Capitalization $142.6 100.0 100.0% Less: Cash & Equivalents 0.0 ------- Adjusted Total Capitalization $142.6 -------
[GRAPH APPEARS HERE] PaineWebber Incorporated TBC Corp Price/Volume Analysis "Weekly: November 20, 1992 to April 5, 1994" 20-Nov-92 $13.667 $13.417 $13.583 "208,200 " 100.0% 27-Nov-92 14.500 13.500 14.000 "591,450 " 103.1% 04-Dec-92 14.750 13.833 14.750 "448,050 " 108.6% 11-Dec-92 15.083 13.750 14.000 "793,950 " 103.1% 18-Dec-92 14.250 13.625 13.875 "422,600 " 102.1% 25-Dec-92 14.625 13.750 14.625 "585,700 " 107.7% 01-Jan-93 16.000 14.500 15.750 "468,000 " 116.0% 08-Jan-93 16.250 15.500 15.875 "749,500 " 116.9% 15-Jan-93 16.625 15.750 16.375 "995,000 " 120.6% 22-Jan-93 16.500 16.125 16.375 "244,400 " 120.6% 29-Jan-93 16.375 15.750 16.125 "267,600 " 118.7% 05-Feb-93 16.375 15.750 16.000 "443,800 " 117.8% 12-Feb-93 18.000 15.750 17.750 "801,900 " 130.7% 19-Feb-93 18.000 15.625 16.500 "478,500 " 121.5% 26-Feb-93 17.000 16.375 16.750 "282,100 " 123.3% 05-Mar-93 16.875 16.375 16.625 "334,000 " 122.4% 12-Mar-93 18.125 16.625 18.000 "868,600 " 132.5% 19-Mar-93 18.250 17.625 17.875 "281,900 " 131.6% 26-Mar-93 18.250 17.625 18.000 "302,700 " 132.5% 02-Apr-93 18.000 17.375 17.500 "226,300 " 128.8% 09-Apr-93 18.000 17.250 17.875 "722,600 " 131.6% 16-Apr-93 18.000 17.625 18.000 "296,300 " 132.5% 23-Apr-93 18.250 17.375 17.375 "815,700 " 127.9% 30-Apr-93 17.625 16.375 16.625 "425,600 " 122.4% 07-May-93 17.125 16.375 17.125 "397,800 " 126.1% 14-May-93 17.125 16.125 16.125 "453,800 " 118.7% 21-May-93 16.500 15.750 16.500 "476,000 " 121.5% 28-May-93 17.625 16.375 17.250 "493,500 " 127.0% 04-Jun-93 17.625 15.500 15.750 "1,153,600 " 116.0% 11-Jun-93 14.000 11.625 12.125 "3,959,300 " 89.3% 18-Jun-93 12.125 11.250 11.500 "1,929,400 " 84.7% 25-Jun-93 12.125 11.375 12.000 "927,700 " 88.3% 02-Jul-93 12.625 11.625 12.250 "880,900 " 90.2% 09-Jul-93 13.250 12.000 12.500 "799,300 " 92.0% 16-Jul-93 12.625 12.125 12.500 "288,200 " 92.0% 23-Jul-93 12.500 11.750 12.375 "925,800 " 91.1% 30-Jul-93 12.750 12.125 12.750 "340,500 " 93.9% 06-Aug-93 $13.000 $12.500 $13.000 "478,700 " 95.7% 13-Aug-93 13.125 12.750 13.000 "310,800 " 95.7% 20-Aug-93 13.250 12.875 13.000 "264,300 " 95.7% 27-Aug-93 13.625 13.000 13.625 "423,500 " 100.3% 03-Sep-93 13.625 13.125 13.375 "829,400 " 98.5% 10-Sep-93 13.625 13.250 13.375 "212,700 " 98.5% 17-Sep-93 14.250 13.125 13.875 "832,700 " 102.1% 24-Sep-93 13.875 12.875 13.125 "420,000 " 96.6% 01-Oct-93 13.375 13.000 13.000 "179,600 " 95.7% 08-Oct-93 13.250 12.500 12.500 "786,700 " 92.0% 15-Oct-93 12.750 11.875 12.125 "1,889,900 " 89.3% 22-Oct-93 12.250 11.000 11.500 "936,500 " 84.7% 29-Oct-93 11.750 11.375 11.750 "192,500 " 86.5% 05-Nov-93 11.750 11.250 11.500 "679,900 " 84.7% 12-Nov-93 11.625 11.250 11.500 "812,600 " 84.7% 19-Nov-93 11.625 11.000 11.250 "595,900 " 82.8% 26-Nov-93 11.250 10.375 10.500 "521,300 " 77.3% 03-Dec-93 12.375 10.250 11.625 "580,200 " 85.6% 10-Dec-93 12.000 11.375 12.000 "445,400 " 88.3% 17-Dec-93 12.125 11.625 12.000 "362,000 " 88.3% 24-Dec-93 12.125 11.625 12.125 "283,300 " 89.3% 31-Dec-93 12.500 12.000 12.375 "764,700 " 91.1% 07-Jan-94 12.375 11.625 11.875 "287,600 " 87.4% 14-Jan-94 12.500 11.500 12.250 "575,500 " 90.2% 21-Jan-94 12.625 11.875 12.000 "471,200 " 88.3% 28-Jan-94 12.250 11.250 12.000 "1,095,300 " 88.3% 04-Feb-94 12.250 11.625 12.000 "510,900 " 88.3% 11-Feb-94 12.750 11.875 12.750 "496,600 " 93.9% 18-Feb-94 13.000 12.375 12.875 "909,200 " 94.8% 25-Feb-94 13.500 12.750 13.375 "420,300 " 98.5% 04-Mar-94 13.625 13.000 13.500 "232,600 " 99.4% 11-Mar-94 13.875 13.375 13.625 "372,900 " 100.3% 18-Mar-94 13.625 13.250 13.375 "274,400 " 98.5% 25-Mar-94 13.500 13.000 13.125 "547,200 " 96.6% 01-Apr-94 13.250 12.375 12.750 "319,800 " 93.9% 05-Apr-94 13.000 12.375 12.750 "65,700 " 93.9% FOOTNOTES (i) EBITDA, EBIT, and Pretax Income exclude Special Items (ii)Income Available to Common excludes Extraordinary Items & Discontinued Operations (iii) Net Interest Expense=Gross Interest Expense-Interest Income-Capitalized Interest (iv) Cash Flow=Income Available to Common + Depreciation, Depletion, & Amortization + Deferred Taxes - Unremitted earnings +/- any other non-cash items (v) Financials have been adjusted for stock splits where applicable AUTOZONE INC HISTORICAL FINANCIAL SUMMARY (dollar amounts in millions except share data)
VALUATION DATA Fiscal LTM Fiscal 1994E DEC-1993 1993 ------------------------------- Price Per Share (5-Apr-94) $54.25 Price Earnings Ratio 36.2X 41.4x 46.0x Shares Outstanding (Dec-1993) 74.350 Price/Book Value Ratio 9.0x 10.1x Aggregate Market Value $4,033.5 Price/Cash Flow Ratio 34.8X 39.4x LTM Ended FEB-1994 Total Value/EBIT 25.7X 28.8X Latest Fiscal Year End 08/31/93 Indicated Annual Dividend $0.00 $0.00 Earnings Forecast as of 03/29/94 Indicated Dividend Yield 0.00%
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OPERATING DATA Operating EBITDA EBIT PreTax PreTax Net Net Deprec& Cash Flow Capital Revenues EBITDA Margin EBIT Margin Income Margin Income Margin Amort. Operations Expenditures --------- ------ ------ ---- ------ ------ ------ ------ ------ ------- ---------- ------------ LTM (Ended Dec-1993)$1,348.1 $183.3 13.6% $157.7 11.7%$160.5 11.9% $96.7 7.2% $25.6 $115.7 $153.7 1993 1,216.8 162.8 13.4 140.8 11.6 143.2 11.8 86.9 7.1 22.0 102.3 120.6 1992 1,002.3 118.0 11.8 103.7 10.3 104.5 10.4 63.3 6.3 14.3 75.4 70.8 1991 818.0 89.7 11.0 79.3 9.7 72.1 8.8 44.2 5.4 10.3 50.3 41.1 1991-1993 Growth Rate 22.0% 34.7% 33.2% 41.0% 40.3% 46.0% 42.7% 71.2% 1991-1993 Average 12.0% 10.5% 10.3% 6.3%
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BALANCE SHEET AND RATIOS BALANCE SHEET DATA SELECTED FINANCIAL STATISTICS Total Working Net Total Capital Net Net Debt/ EBIT/ Current EBIT/Avg Return Avg Assets Capital PP&E (net of cash) Debt Net Cap Interest Ratio Net Cap Com. Equity LTM (Ended Dec-1993) $766.4 $86.7 $355.2 $401.6 ($56.3) NMF NAx 1.3x 48.8% 25.7% 1993 696.5 92.3 297.4 326.1 (80.1) NMF NA 1.3 50.0 25.8 1992 501.0 72.3 199.8 236.4 (50.7) NMF NA 1.3 46.2 26.0 1991 398.8 56.9 142.8 212.4 (1.8) NMF 10.9 1.3 42.2 30.1 1991-1993 Growth Rate 32.2% 27.4% 44.3% 23.9% 566.9% 1991-1993 Average NMF 10.9X 1.3X 46.2% 27.3%
AUTOZONE HISTORICAL FINANCIAL SUMMARY (dollar amounts in millions except share data) PER SHARE AND MARKET DATA
Earnings Dividends Payout % Book Val. 52 Wk. Price Range P/E Range Yield Range Market/Book Range --------------------------------------------------------------------------------------------------------------- LTM (Ended Dec-1994) $1.31 $0.00 0.0 $6.0 $38.63-61.50 29.5-46.9x 0.00 - 0.00% 6.40 -10.20x 1993 1.18 0.00 0.0 5.4 33.75-59.00 28.6-50.0X 0.00 - 0.00 6.28 -10.98 1992 0.87 0.00 0.0 3.8 25.13-42.00 28.9-48.3 0.00 - 0.00 6.59 -11.02 1991 0.66 0.00 0.0 3.1 13.13-33.94 19.9-51.4 0.00 - 0.00 4.24 -10.95 1991-1993 Growth Rate 33.7 NA% 31.7% 1991-1993 Average 0.0%
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CAPITALIZATION % of Total Capitalization -------------------------- Excluding Including FEB-1994 S-T Debt S-T Debt -------------------------------------------- Short Term Debt $0.2 -- 0.0% Total Long-Term Debt 4.2 0.9 0.9 Deferred Taxes 3.7 0.8 0.8 Other L-T Liabilities 5.7 1.2 1.2 Preferred Equity 0.0 0.0 0.0 Common Equity 448.5 97.1 97.0 -------------------------------------------- Total Capitalization $462.3 100.0 100.0% Less: Cash & Equivalents (60.7) ------- Adjusted Total Capitalization $401.6 -------
[GRAPH APPEARS HERE] PaineWebber Incorporated Autozone Inc Price/Volume Analysis "Weekly: November 20, 1992 to April 5, 1994" Total Close High Low Closing Trading as a % of Date Price Price Price Volume 11/20/92 20-Nov-92 $18.438 $18.188 $18.438 "108,800 " 100.0% 27-Nov-92 18.750 18.000 18.688 "462,400 " 101.4% 04-Dec-92 20.000 18.813 20.000 "1,057,600 " 108.5% 11-Dec-92 20.125 18.875 19.063 "920,600 " 103.4% 18-Dec-92 19.000 18.750 18.875 "673,800 " 102.4% 25-Dec-92 19.688 18.750 19.563 "919,000 " 106.1% 01-Jan-93 19.813 18.813 19.625 "934,000 " 106.4% 08-Jan-93 19.750 18.750 19.000 "962,600 " 103.1% 15-Jan-93 19.438 18.938 19.000 "587,400 " 103.1% 22-Jan-93 19.000 17.625 17.875 "1,395,600 " 96.9% 29-Jan-93 18.438 17.313 17.563 "968,600 " 95.3% 05-Feb-93 18.313 16.875 18.063 "2,502,600 " 98.0% 12-Feb-93 18.500 17.500 18.188 "717,200 " 98.6% 19-Feb-93 18.500 17.375 18.313 "779,000 " 99.3% 26-Feb-93 19.125 17.250 18.875 "2,362,600 " 102.4% 05-Mar-93 20.438 19.250 19.750 "2,350,800 " 107.1% 12-Mar-93 20.938 19.688 20.750 "1,227,800 " 112.5% 19-Mar-93 21.438 20.750 21.375 "879,800 " 115.9% 26-Mar-93 21.750 21.000 21.625 "2,353,600 " 117.3% 02-Apr-93 21.875 20.438 20.750 "825,400 " 112.5% 09-Apr-93 20.938 20.000 20.188 "1,219,400 " 109.5% 16-Apr-93 21.875 20.375 21.563 "956,000 " 116.9% 23-Apr-93 21.625 19.813 20.313 "816,200 " 110.2% 30-Apr-93 20.313 19.313 19.438 "1,615,400 " 105.4% 07-May-93 21.313 19.438 20.875 "1,133,600 " 113.2% 14-May-93 21.625 20.625 20.875 "1,086,000 " 113.2% 21-May-93 22.938 20.688 22.813 "1,720,800 " 123.7% 28-May-93 23.688 22.750 23.625 "1,007,600 " 128.1% 04-Jun-93 24.563 23.375 24.125 "967,600 " 130.8% 11-Jun-93 24.188 22.313 23.188 "845,200 " 125.8% 18-Jun-93 23.188 22.000 22.563 "618,800 " 122.4% 25-Jun-93 22.875 21.750 22.188 "581,000 " 120.3% 02-Jul-93 23.938 22.250 23.813 "925,400 " 129.2% 09-Jul-93 24.000 22.875 23.188 "816,200 " 125.8% 16-Jul-93 23.750 23.000 23.188 "583,000 " 125.8% 23-Jul-93 24.375 23.000 23.625 "813,200 " 128.1% 30-Jul-93 24.000 23.500 23.688 "244,800 " 128.5% 06-Aug-93 $24.500 $22.625 $24.188 "784,400 " 131.2% 13-Aug-93 25.750 24.313 25.375 "1,051,800 " 137.6% 20-Aug-93 26.750 24.813 26.750 "1,675,400 " 145.1% 27-Aug-93 27.563 26.000 26.125 "1,535,800 " 141.7% 03-Sep-93 27.688 25.875 27.125 "643,000 " 147.1% 10-Sep-93 27.313 26.375 26.938 "522,600 " 146.1% 17-Sep-93 27.188 26.375 26.875 "564,600 " 145.8% 24-Sep-93 27.438 25.875 25.938 "955,200 " 140.7% 01-Oct-93 26.500 24.688 24.813 "5,757,200 " 134.6% 08-Oct-93 25.750 24.625 25.125 "2,606,800 " 136.3% 15-Oct-93 26.188 25.063 25.688 "864,200 " 139.3% 22-Oct-93 25.688 24.125 25.250 "1,818,000 " 136.9% 29-Oct-93 26.750 25.000 26.625 "951,200 " 144.4% 05-Nov-93 27.563 25.375 26.500 "1,115,000 " 143.7% 12-Nov-93 27.938 26.188 27.750 "794,600 " 150.5% 19-Nov-93 27.750 26.563 26.750 "1,062,000 " 145.1% 26-Nov-93 27.375 26.000 26.875 "609,200 " 145.8% 03-Dec-93 29.250 26.875 29.063 "934,000 " 157.6% 10-Dec-93 29.500 28.813 29.000 "784,000 " 157.3% 17-Dec-93 28.875 27.375 27.500 "1,164,800 " 149.2% 24-Dec-93 28.125 26.875 27.125 "1,212,000 " 147.1% 31-Dec-93 28.625 26.750 28.625 "1,293,200 " 155.3% 07-Jan-94 28.375 26.750 27.313 "1,226,200 " 148.1% 14-Jan-94 27.438 26.688 27.313 "1,808,600 " 148.1% 21-Jan-94 28.000 27.188 27.438 "745,200 " 148.8% 28-Jan-94 28.313 27.188 28.125 "596,000 " 152.5% 04-Feb-94 28.500 27.063 27.250 "953,600 " 147.8% 11-Feb-94 28.125 27.063 28.000 "832,200 " 151.9% 18-Feb-94 28.125 27.313 27.500 "433,000 " 149.2% 25-Feb-94 28.250 27.063 28.063 "1,248,800 " 152.2% 04-Mar-94 29.250 27.625 28.875 "1,418,000 " 156.6% 11-Mar-94 29.875 29.188 29.313 "1,086,000 " 159.0% 18-Mar-94 30.750 29.313 29.813 "1,884,200 " 161.7% 25-Mar-94 29.875 28.375 28.625 "3,993,800 " 155.3% 01-Apr-94 28.750 26.688 27.125 "1,328,800 " 147.1% 05-Apr-94 27.875 26.375 27.875 "1,080,000 " 151.2% FOOTNOTES (i) EBITDA, EBIT, and Pretax Income exclude Special Items (ii)Income Available to Common excludes Extraordinary Items & Discontinued Operations (iii) Net Interest Expense=Gross Interest Expense-Interest Income-Capitalized Interest (iv) Cash Flow=Income Available to Common + Depreciation, Depletion, & Amortization + Deferred Taxes - Unremitted earnings +/- any other non-cash items (v) Financials have been adjusted for stock splits where applicable DISCOUNT AUTO PARTS INC HISTORICAL FINANCIAL SUMMARY (dollar amounts in millions except share data)
VALUATION DATA Fiscal LTM Fiscal 1994E DEC-1993 1993 ------------------------------- Price Per Share (1-Apr-94) $24.13 Price Earnings Ratio 23.2X 25.7x 26.5x Shares Outstanding (NOV-1993) 13.952 Price/Book Value Ratio 3.7x 3.8x Aggregate Market Value 336.6 Price/Cash Flow Ratio 20.8X 20.6x LTM Ended 11/30/93 Total Value/EBIT 16.7X 18.2X Latest Fiscal Year End JUN-1993 Indicated Annual Dividend $0.00 $0.00 Earnings Forecast as of 03/29/94 Indicated Dividend Yield 0.00%
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OPERATING DATA Operating EBITDA EBIT PreTax PreTax Net Net Deprec& Cash Flow Capital Revenues EBITDA Margin EBIT Margin Income Margin Income Margin Amort. Operations Expenditures --------- ------ ------ ---- ------ ------ ------ ------ ------ ------- ---------- ------------ LTM (Ended NOV-1993) $191.2 $28.6 14.9 $23.8 12.4 $21.1 11.1 $11.5 6.0 $4.8 $16.2 $37.3 1992 176.8 26.4 15.0 21.8 12.3 18.9 10.7 11.9 6.7 4.7 16.3 22.5 1991 141.2 20.3 14.4 16.4 11.6 12.2 8.7 9.8 6.9 3.9 13.7 16.1 1990 108.8 15.8 14.6 12.7 11.6 8.6 7.9 5.6 5.1 3.2 8.8 14.6 1990-1992 Growth Rate 27.5 29.2% 31.2% 48.2% 46.2% 20.9% 36.3% 23.9% 1990-1992 Average 14.6% 11.9% 9.1% 6.3%
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BALANCE SHEET AND RATIOS BALANCE SHEET DATA SELECTED FINANCIAL STATISTICS Total Working Net Total Capital Net Net Debt/ EBIT/ Current EBIT/Avg Return Avg Assets Capital PP&E (net of cash) Debt Net Cap Interest Ratio Net Cap Com. Equity LTM (Ended NOV-1993) $176.9 $36.1 $108.7 $141.7 $51.7 36.5 9.0X 2.2x 19.6 13.7% 1992 159.1 33.8 89.3 113.9 31.1 27.3 7.6 2.0 21.4 20.2 1991 124.8 22.2 71.5 89.4 54.0 60.4 3.9 1.8 20.3 31.0 1990 100.6 20.0 59.3 72.4 44.7 61.7 3.1 2.0 35.0 40.2 1990-1992 Growth Rate 25.8 30.1 22.8 25.4 (16.6)% 1990-1992 Average 49.8 4.9X 1.9X 25.6 30.5%
DISCOUNT AUTO PARTS INC. HISTORICAL FINANCIAL SUMMARY (dollar amounts in millions except share data) PER SHARE AND MARKET DATA
Earnings Dividends Payout % Book Val. 52 Wk. Price Range P/E Range Yield Range Market/Book Range --------------------------------------------------------------------------------------------------------------- LTM (Ended NOV-1993) $0.94 $0.00 0.0 $6.4 $20.63-31.00 21.9-33.0x 0.00 - 0.00% 3.20 -4.81x 1992 0.91 0.00 0.0 6.3 20.75-28.13 22.8-30.9 0.00 - 0.00 3.29 -4.46 1991 0.78 0.00 0.0 3.5 0.00-0.00 0.0-0.0 NA - NA 0.00 -0.00 1990 0.56 0.00 0.0 2.8 0.00-0.00 0.0-0.04 NA - NA 0.00 -0.00 1990-1992 Growth Rate 27.5 NA% 50.9% 1990-1992 Average 0.0%
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CAPITALIZATION % of Total Capitalization -------------------------- Excluding Including FEB-1994 S-T Debt S-T Debt -------------------------------------------- Short Term Debt $3.4 -- 2.3% Total Long-Term Debt 56.5 38.6 37.7 Deferred Taxes 0.0 0.0 0.0 Other L-T Liabilities 0.0 0.0 0.0 Preferred Equity 0.0 0.0 0.0 Common Equity 90.0 61.4 60.0 -------------------------------------------- Total Capitalization $149.9 100.0 100.0% Less: Cash & Equivalents (8.2) ------- Adjusted Total Capitalization $141.7 -------
[GRAPH APPEARS HERE] PaineWebber Incorporated Discount Auto PTS Inc Price/Volume Analysis "Weekly: November 18, 1992 to April 1, 1994" Total Close High Low Closing Trading as a % of Date Price Price Price Volume 11/20/92 20-Nov-92 $25.625 $24.625 $25.500 "47,800 " 100.0% 27-Nov-92 26.500 25.125 26.250 "157,800 " 102.9% 04-Dec-92 28.125 25.875 27.000 "136,500 " 105.9% 11-Dec-92 27.000 24.875 25.000 "167,700 " 98.0% 18-Dec-92 28.125 25.125 27.375 "147,300 " 107.4% 25-Dec-92 27.375 26.125 26.375 "83,000 " 103.4% 01-Jan-93 26.625 25.500 25.625 "143,100 " 100.5% 08-Jan-93 25.875 24.750 24.875 "258,300 " 97.5% 15-Jan-93 24.875 24.125 24.250 "110,700 " 95.1% 22-Jan-93 25.875 23.250 25.375 "228,300 " 99.5% 29-Jan-93 25.750 24.500 25.000 "90,800 " 98.0% 05-Feb-93 27.375 25.625 26.375 "275,800 " 103.4% 12-Feb-93 26.750 25.750 25.750 "84,200 " 101.0% 19-Feb-93 26.000 24.750 25.500 "36,700 " 100.0% 26-Feb-93 25.875 24.250 25.250 "198,300 " 99.0% 05-Mar-93 27.500 25.500 27.500 "120,900 " 107.8% 12-Mar-93 30.375 27.750 30.125 "362,300 " 118.1% 19-Mar-93 31.125 28.375 29.750 "318,600 " 116.7% 26-Mar-93 29.875 28.375 28.500 "129,100 " 111.8% 02-Apr-93 29.125 27.000 27.000 "103,200 " 105.9% 09-Apr-93 27.375 26.625 27.375 "35,500 " 107.4% 16-Apr-93 28.000 27.125 27.500 "55,900 " 107.8% 23-Apr-93 27.750 26.750 26.875 "63,400 " 105.4% 30-Apr-93 27.500 26.625 26.625 "56,100 " 104.4% 07-May-93 28.625 26.500 28.250 "94,000 " 110.8% 14-May-93 29.000 28.375 28.750 "28,600 " 112.7% 21-May-93 29.000 27.625 28.500 "54,100 " 111.8% 28-May-93 29.250 28.625 29.250 "50,500 " 114.7% 04-Jun-93 31.000 28.875 30.625 "76,200 " 120.1% 11-Jun-93 30.750 28.625 28.750 "78,900 " 112.7% 18-Jun-93 28.750 27.250 27.500 "75,200 " 107.8% 25-Jun-93 27.250 26.000 26.375 "69,200 " 103.4% 02-Jul-93 27.125 24.875 25.375 "294,700 " 99.5% 09-Jul-93 25.500 24.875 25.375 "238,200 " 99.5% 16-Jul-93 26.250 25.000 25.500 "105,100 " 100.0% 23-Jul-93 25.375 22.125 23.250 "215,100 " 91.2% 30-Jul-93 25.750 23.250 25.375 "271,100 " 99.5% 06-Aug-93 $26.125 $25.375 $26.125 "39,800 " 102.5% 13-Aug-93 26.250 25.750 26.000 "24,000 " 102.0% 20-Aug-93 26.375 25.625 26.125 "35,700 " 102.5% 27-Aug-93 25.875 25.375 25.625 "43,000 " 100.5% 03-Sep-93 26.500 25.625 26.375 "52,300 " 103.4% 10-Sep-93 26.875 26.250 26.875 "169,500 " 105.4% 17-Sep-93 27.000 25.500 25.500 "132,900 " 100.0% 24-Sep-93 25.500 23.125 23.750 "469,200 " 93.1% 01-Oct-93 24.750 23.625 24.000 "183,700 " 94.1% 08-Oct-93 24.000 22.375 22.625 "110,900 " 88.7% 15-Oct-93 23.625 20.625 23.125 "388,800 " 90.7% 22-Oct-93 24.500 23.000 24.375 "135,600 " 95.6% 29-Oct-93 25.500 24.000 25.500 "88,900 " 100.0% 05-Nov-93 26.000 24.125 24.125 "52,400 " 94.6% 12-Nov-93 24.625 24.000 24.375 "79,600 " 95.6% 19-Nov-93 25.750 24.375 25.625 "112,900 " 100.5% 26-Nov-93 25.500 25.000 25.000 "163,000 " 98.0% 03-Dec-93 26.000 24.875 25.875 "62,300 " 101.5% 10-Dec-93 26.750 25.875 26.625 "35,400 " 104.4% 17-Dec-93 27.375 26.625 27.250 "59,300 " 106.9% 24-Dec-93 28.125 27.250 28.125 "51,900 " 110.3% 31-Dec-93 28.125 27.500 27.500 "28,200 " 107.8% 07-Jan-94 27.500 25.875 26.500 "157,900 " 103.9% 14-Jan-94 26.750 25.875 26.000 "237,400 " 102.0% 21-Jan-94 27.500 26.250 27.500 "51,100 " 107.8% 28-Jan-94 27.375 26.500 27.000 "67,600 " 105.9% 04-Feb-94 27.625 26.125 26.125 "96,700 " 102.5% 11-Feb-94 26.000 25.250 25.625 "22,600 " 100.5% 18-Feb-94 25.625 23.250 23.625 "159,600 " 92.6% 25-Feb-94 24.375 23.500 24.250 "73,800 " 95.1% 04-Mar-94 25.000 23.875 24.000 "147,200 " 94.1% 11-Mar-94 26.000 24.125 25.750 "47,900 " 101.0% 18-Mar-94 26.750 25.375 25.875 "224,600 " 101.5% 25-Mar-94 26.125 25.000 25.250 "113,800 " 99.0% 01-Apr-94 25.125 23.875 24.125 "70,500 " 94.6% FOOTNOTES (i) EBITDA, EBIT, and Pretax Income exclude Special Items (ii)Income Available to Common excludes Extraordinary Items & Discontinued Operations (iii) Net Interest Expense=Gross Interest Expense-Interest Income-Capitalized Interest (iv) Cash Flow=Income Available to Common + Depreciation, Depletion, & Amortization + Deferred Taxes - Unremitted earnings +/- any other non-cash items (v) Financials have been adjusted for stock splits where applicable HI-LO AUTOMOTIVE INC HISTORICAL FINANCIAL SUMMARY (dollar amounts in millions except share data)
VALUATION DATA Fiscal LTM Fiscal 1994E DEC-1993 1993 ------------------------------- Price Per Share (12Apr-94) $11.88 Price Earnings Ratio 14.8X 18.6x 18.6x Shares Outstanding (DEC-1993) 10.543 Price/Book Value Ratio 1.2x 1.2x Aggregate Market Value 125.2 Price/Cash Flow Ratio 11.0X 11.0x LTM Ended DEC-1993 Total Value/EBIT 12.9X 12.9X Latest Fiscal Year End DEC-1993 Indicated Annual Dividend $0.00 $0.00 Earnings Forecast as of 03/29/94 Indicated Dividend Yield 0.00%
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OPERATING DATA Operating EBITDA EBIT PreTax PreTax Net Net Deprec& Cash Flow Capital Revenues EBITDA Margin EBIT Margin Income Margin Income Margin Amort. Operations Expenditures --------- ------ ------ ---- ------ ------ ------ ------ ------ ------- ---------- ------------ LTM (Ended DEC-1993) $205.2 $17.5 8.5 $12.5 6.1 $10.7 5.2 $6.7 3.3 $5.0 $11.4 $19.2 1993 205.2 17.5 8.5 12.5 6.1 10.7 5.2 6.7 3.3 5.0 11.4 19.2 1992 187.2 21.7 11.6 16.6 8.9 13.6 7.3 8.7 4.6 5.1 13.5 12.9 1991 155.7 20.0 12.8 15.6 10.0 10.9 7.0 6.9 4.4 4.3 13.0 5.6 1991-1993 Growth Rate 14.8 (6.3)% (10.5)% (0.9)% (1.4)% 7.3% (6.2) 85.1 1991-1993 Average 11.0% 8.3% 6.5% 4.1%
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BALANCE SHEET AND RATIOS BALANCE SHEET DATA SELECTED FINANCIAL STATISTICS Total Working Net Total Capital Net Net Debt/ EBIT/ Current EBIT/Avg Return Avg Assets Capital PP&E (net of cash) Debt Net Cap Interest Ratio Net Cap Com. Equity LTM (Ended DEC-1993) $154.6 $54.2 $44.7 $136.2 $30.6 22.5 7.0X 3.6x 18.4 13.2% 1993 154.6 54.2 44.7 136.2 30.6 22.5 7.0 3.6 9.8 7.5 1992 139.5 51.4 32.4 120.4 40.3 33.4 5.6 3.6 14.8 12.0 1991 122.5 41.2 24.7 103.9 31.4 30.2 3.3 3.1 15.5 14.6 1991-1993 Growth Rate 12.3 14.7 34.6 14.5 (1.2)% 1991-1993 Average 28.7 5.3X 3.4X 13.4 11.3%
HI-LO AUTOMOTIVE INC HISTORICAL FINANCIAL SUMMARY (dollar amounts in millions except share data)
PER SHARE AND MARKET DATA Earnings Dividends Payout % Book Val. 52 Wk. Price Range P/E Range Yield Range Market/Book Range --------------------------------------------------------------------------------------------------------------- LTM (Ended DEC-1993) $0.64 $0.00 0.0 $9.7 $13.00-21.50 20.3-33.6x 0.00 - 0.00% 1.35 -2.23x 1993 0.64 0.00 0.0 9.7 13.00-21.50 20.3-33.6 0.00 - 0.00 1.35 -2.23 1992 0.89 0.00 0.0 7.9 9.38-15.25 10.5-17.1 0.00 - 0.00 1.19 -1.94 1991 0.80 0.00 0.0 7.9 9.38-15.25 11.7-19.1 0.00 - 0.00 1.19 -1.94 1991-1993 Growth Rate (10.6) NA% 10.7% 1991-1993 Average 0.0%
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CAPITALIZATION % of Total Capitalization -------------------------- Excluding Including DEC-1994 S-T Debt S-T Debt -------------------------------------------- Short Term Debt $3.9 -- 2.8% Total Long-Term Debt 28.4 21.2 20.6 Deferred Taxes 3.7 2.8 2.7 Other L-T Liabilities 0.1 0.0 0.0 Preferred Equity 0.0 0.0 0.0 Common Equity 101.8 76.0 73.8 -------------------------------------------- Total Capitalization $137.9 100.0 100.0% Less: Cash & Equivalents (1.7) ------- Adjusted Total Capitalization $136.2 -------
[GRAPH APPEARS HERE] PaineWebber Incorporated Hi-Lo Automotive Inc Price/Volume Analysis "Weekly: November 18, 1992 to April 1, 1994" Total Close High Low Closing Trading as a % of Date Price Price Price Volume 11/20/92 20-Nov-92 $19.750 $18.625 $18.875 "33,900 " 100.0% 27-Nov-92 19.750 18.375 19.750 "70,100 " 104.6% 04-Dec-92 21.500 19.250 21.250 "115,500 "112.6% 11-Dec-92 21.500 20.750 20.875 "61,300 " 110.6% 18-Dec-92 21.000 19.375 19.625 "54,100 " 104.0% 25-Dec-92 19.875 18.750 19.750 "18,700 " 104.6% 01-Jan-93 20.250 19.750 20.250 "34,600 " 107.3% 08-Jan-93 20.125 19.750 20.000 "37,400 " 106.0% 15-Jan-93 20.250 19.625 20.000 "83,400 " 106.0% 22-Jan-93 20.125 18.625 18.875 "62,800 " 100.0% 29-Jan-93 20.125 18.250 19.875 "109,300" 105.3% 05-Feb-93 20.750 19.625 20.250 "43,900 " 107.3% 12-Feb-93 20.250 19.250 19.250 "1,517,200 "102.0% 19-Feb-93 19.375 17.375 17.875 "444,500 "94.7% 26-Feb-93 18.000 16.750 18.000 "160,900 "95.4% 05-Mar-93 18.750 18.125 18.250 "279,500 "96.7% 12-Mar-93 18.500 17.750 18.000 "119,500 "95.4% 19-Mar-93 18.250 17.500 17.625 "79,000 " 93.4% 26-Mar-93 17.625 14.500 15.500 "467,900 "82.1% 02-Apr-93 17.250 15.375 16.250 "274,400 "86.1% 09-Apr-93 16.625 15.625 16.125 "220,400 "85.4% 16-Apr-93 17.375 16.000 17.000 "123,300 "90.1% 23-Apr-93 17.000 14.875 14.875 "322,300 "78.8% 30-Apr-93 15.250 14.000 14.125 "199,600 "74.8% 07-May-93 14.875 13.375 14.750 "386,100 "78.1% 14-May-93 15.375 14.875 15.125 "151,100 "80.1% 21-May-93 15.250 14.000 14.000 "171,200 "74.2% 28-May-93 15.875 13.500 15.250 "270,900 "80.8% 04-Jun-93 15.875 15.000 15.625 "107,800 "82.8% 11-Jun-93 15.500 14.750 14.750 "182,400 "78.1% 18-Jun-93 14.250 12.375 12.625 "441,900 "66.9% 25-Jun-93 12.875 11.625 11.750 "200,700 "62.3% 02-Jul-93 11.875 9.500 10.250 "904,700 "54.3% 09-Jul-93 11.000 10.000 10.875 "202,300 "57.6% 16-Jul-93 11.750 11.000 11.375 "142,600 "60.3% 23-Jul-93 11.500 10.500 11.125 "373,200 "58.9% 30-Jul-93 11.875 10.875 11.000 "86,400 " 58.3% 06-Aug-93 $12.375 $11.000 $12.375 "377,000 "65.6% 13-Aug-93 12.375 11.750 11.875 "168,200 "62.9% 20-Aug-93 12.125 11.750 12.125 "78,000 " 64.2% 27-Aug-93 13.000 12.000 12.750 "160,800 "67.5% 03-Sep-93 13.750 12.750 13.250 "149,500 "70.2% 10-Sep-93 13.625 12.625 12.875 "38,700 " 68.2% 17-Sep-93 12.750 11.875 12.125 "57,500 " 64.2% 24-Sep-93 12.250 11.750 11.750 "71,000 " 62.3% 01-Oct-93 12.750 11.750 12.625 "88,800 " 66.9% 08-Oct-93 12.500 10.250 11.375 "461,700 "60.3% 15-Oct-93 11.625 10.500 10.750 "80,000 " 57.0% 22-Oct-93 10.750 10.125 10.250 "64,300 " 54.3% 29-Oct-93 11.375 10.125 11.125 "161,500 "58.9% 05-Nov-93 11.625 10.625 10.750 "181,100 "57.0% 12-Nov-93 11.125 10.750 10.750 "253,000 "57.0% 19-Nov-93 11.000 10.500 10.500 "127,700 "55.6% 26-Nov-93 10.750 10.000 10.625 "513,100 "56.3% 03-Dec-93 10.750 10.375 10.500 "131,100 "55.6% 10-Dec-93 11.000 10.375 10.500 "180,600 "55.6% 17-Dec-93 10.500 10.125 10.375 "149,200 "55.0% 24-Dec-93 10.375 10.000 10.250 "279,300 "54.3% 31-Dec-93 10.250 9.625 9.875 "250,900 "52.3% 07-Jan-94 10.125 9.625 9.750 "168,700 "51.7% 14-Jan-94 11.125 9.250 11.125 "467,300 "58.9% 21-Jan-94 11.375 10.500 10.750 "236,300 "57.0% 28-Jan-94 11.375 10.625 11.000 "200,900 "58.3% 04-Feb-94 11.125 10.500 10.500 "127,000 "55.6% 11-Feb-94 10.750 9.625 9.750 "259,500 "51.7% 18-Feb-94 11.250 9.500 10.625 "176,500 "56.3% 25-Feb-94 11.000 10.500 10.750 "156,200 "57.0% 04-Mar-94 12.375 11.000 12.375 "825,500 "65.6% 11-Mar-94 12.875 12.375 12.375 "382,100 "65.6% 18-Mar-94 13.625 12.500 13.375 "355,300 "70.9% 25-Mar-94 13.500 12.875 12.875 "185,100 "68.2% 01-Apr-94 13.000 11.750 11.875 "180,900 "62.9% FOOTNOTES (i) EBITDA, EBIT, and Pretax Income exclude Special Items (ii)Income Available to Common excludes Extraordinary Items & Discontinued Operations (iii) Net Interest Expense=Gross Interest Expense-Interest Income-Capitalized Interest (iv) Cash Flow=Income Available to Common + Depreciation, Depletion, & Amortization + Deferred Taxes - Unremitted earnings +/- any other non-cash items (v) Financials have been adjusted for stock splits where applicable O REILLY AUTOMOTIVE INC HISTORICAL FINANCIAL SUMMARY (dollar amounts in millions except share data)
VALUATION DATA Fiscal LTM Fiscal 1993E DEC-1993 1992 ------------------------------- Price Per Share (1-Apr-94) $28.00 Price Earnings Ratio 23.3X 28.0x 28.0x Shares Outstanding (DEC-1993) 8.235 Price/Book Value Ratio 4.0x 4.0x Aggregate Market Value $230.6 Price/Cash Flow Ratio 20.4X 20.4x LTM Ended DEC-1993 Total Value/EBIT 18.5X 18.5X Latest Fiscal Year End 12/31/92 Indicated Annual Dividend $0.00 $0.00 Earnings Forecast as of 03/29/94 Indicated Dividend Yield 0.00%
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OPERATING DATA Operating EBITDA EBIT PreTax PreTax Net Net Deprec& Cash Flow Capital Revenues EBITDA Margin EBIT Margin Income Margin Income Margin Amort. Operations Expenditures --------- ------ ------ ---- ------ ------ ------ ------ ------ ------- ---------- ------------ LTM (Ended DEC-1993) $137.2 $15.3 11.2% $12.5 9.1% $12.8 9.3% $8.2 6.0% $2.8 $11.3 $8.5 1993 137.2 15.3 11.2 12.5 9.1 12.8 9.3 8.2 6.0 2.8 11.3 8.5 1992 110.1 12.2 11.1 10.0 9.1 10.1 9.2 6.4 5.8 2.1 8.4 4.5 1991 94.9 10.8 11.3 8.8 9.3 8.6 9.1 5.5 5.7 2.0 7.5 2.7 1991-1993 Growth Rate 20.2% 19.3% 19.5% 21.8% 22.9% 18.5% 22.6% 78.1% 1991-1993 Average 11.2% 9.2% 9.2% 5.8%
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BALANCE SHEET AND RATIOS BALANCE SHEET DATA SELECTED FINANCIAL STATISTICS Total Working Net Total Capital Net Net Debt/ EBIT/ Current EBIT/Avg Return Avg Assets Capital PP&E (net of cash) Debt Net Cap Interest Ratio Net Cap Com. Equity LTM (Ended DEC-1993) $73.1 $41.2 $17.0 $47.5 ($10.8) NMF NA 3.9x 52.8% 28.5% 1993 73.1 41.2 17.0 47.5 (10.8) NMF NA 3.9 27.3 18.9 1992 58.9 15.5 11.4 44.2 14.4 32.6% NA 1.9 24.8 24.8 1991 49.5 13.4 9.1 36.6 13.4 36.7 50.5x 2.1 48.0 47.6 1991-1993 Growth Rate 21.5% 75.1% 36.7% 13.9% NA% 1991-1993 Average 34.7% 50.5x 2.6x 33.4% 30.4%
O REILLY AUTOMOTIVE INC. HISTORICAL FINANCIAL SUMMARY (dollar amounts in millions except share data)
PER SHARE AND MARKET DATA Earnings Dividends Payout % Book Val. 52 Wk. Price Range P/E Range Yield Range Market/Book Range --------------------------------------------------------------------------------------------------------------- LTM (Ended DEC-1993) $1.00 $0.00 0.0 $7.0 $26.50-35.25 26.5-35.3x 0.00 - 0.00% 3.78 -5.02x 1993 1.00 0.00 0.0 7.0 0.00-0.00 0.0-0.0 NA - NA 0.00 -0.00 1992 0.84 0.00 0.0 4.0 0.00-0.00 0.0-0.0 NA - NA 0.00 -0.00 1991 0.74 0.00 0.0 3.1 0.00-0.005 0.0-0.0 NA - NA 0.00 -0.00 1991-1993 Growth Rate 16.2 NA% 49.9% 1991-1993 Average 0.0%
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CAPITALIZATION % of Total Capitalization -------------------------- Excluding Including DEC-1993 S-T Debt S-T Debt -------------------------------------------- Short Term Debt $0.5 -- 0.8% Total Long-Term Debt 0.7 1.2 1.2 Deferred Taxes 0.2 0.3 0.3 Other L-T Liabilities 0.4 0.6 0.6 Preferred Equity 0.0 0.0 0.0 Common Equity 57.8 97.9 97.1 -------------------------------------------- Total Capitalization $59.6 100.0 100.0% Less: Cash & Equivalents (12.0) -------- Adjusted Total Capitalization $47.5 --------
[GRAPH APPEARS HERE] PaineWebber Incorporated O Reilly Automotive Inc Price/Volume Analysis "Weekly: April 17, 1993 to April 1, 1994" Total Close High Low Closing Trading as a % of Date Price Price Price Volume 04/23/93 23-Apr-93 $19.500 $18.750 $19.250 "2,061,000 " 100.0% 30-Apr-93 19.250 18.250 18.750 "1,038,000 " 97.4% 07-May-93 19.750 18.500 19.250 "360,600 " 100.0% 14-May-93 22.250 19.250 21.875 "380,100 " 113.6% 21-May-93 22.250 20.500 20.750 "235,700 " 107.8% 28-May-93 21.250 20.500 21.250 "82,200 " 110.4% 04-Jun-93 22.500 20.500 22.000 "157,000 " 114.3% 11-Jun-93 23.250 22.000 23.000 "313,800 " 119.5% 18-Jun-93 23.250 22.000 23.000 "170,700 " 119.5% 25-Jun-93 23.500 22.750 23.500 "99,500 " 122.1% 02-Jul-93 25.000 22.750 23.500 "103,500 " 122.1% 09-Jul-93 24.000 23.000 24.000 "16,400 " 124.7% 16-Jul-93 24.000 23.500 23.500 "17,200 " 122.1% 23-Jul-93 24.000 23.250 23.500 "62,900 " 122.1% 30-Jul-93 24.250 23.500 23.750 "54,800 " 123.4% 06-Aug-93 23.750 23.250 23.250 "111,500 " 120.8% 13-Aug-93 24.000 23.000 24.000 "134,500 " 124.7% 20-Aug-93 24.000 23.250 23.250 "61,000 " 120.8% 27-Aug-93 23.750 23.250 23.750 "145,500 " 123.4% 03-Sep-93 23.750 22.500 23.250 "98,000 " 120.8% 10-Sep-93 23.250 22.250 23.250 "63,800 " 120.8% 17-Sep-93 23.500 22.750 23.500 "27,000 " 122.1% 24-Sep-93 25.000 23.000 24.250 "128,800 " 126.0% 01-Oct-93 24.750 23.000 23.750 "249,700 " 123.4% 08-Oct-93 24.750 23.500 24.750 "54,300 " 128.6% 15-Oct-93 28.500 24.000 28.500 "91,300 " 148.1% 22-Oct-93 32.500 28.500 29.500 "158,000 " 153.2% 29-Oct-93 31.500 28.750 30.750 "80,300 " 159.7% 05-Nov-93 31.750 29.250 29.750 "78,100 " 154.5% 12-Nov-93 30.500 29.250 29.500 "49,900 " 153.2% 19-Nov-93 29.500 28.375 28.500 "29,000 " 148.1% 26-Nov-93 28.250 27.500 28.250 "14,700 " 146.8% 03-Dec-93 30.250 27.500 29.750 "70,500 " 154.5% 10-Dec-93 31.000 29.250 30.000 "18,900 " 155.8% 17-Dec-93 30.000 28.750 29.500 "95,900 " 153.2% 24-Dec-93 29.500 28.250 28.250 "19,800 " 146.8% 31-Dec-93 29.000 28.250 29.000 "6,100 " 150.6% 07-Jan-94 $30.500 $28.500 $30.250 "92,900 " 157.1% 14-Jan-94 33.500 30.000 33.000 "186,800 "171.4% 21-Jan-94 33.750 31.750 32.250 "114,700 "167.5% 28-Jan-94 32.250 31.750 32.250 "19,900 " 167.5% 04-Feb-94 33.000 31.750 32.500 "68,700 " 168.8% 11-Feb-94 35.250 32.500 34.500 "55,300 " 179.2% 18-Feb-94 34.250 31.500 31.500 "61,900 " 163.6% 25-Feb-94 32.250 29.000 29.500 "328,000 "153.2% 04-Mar-94 30.000 27.750 28.750 "194,000 "149.4% 11-Mar-94 29.250 28.500 28.500 "34,900 " 148.1% 18-Mar-94 29.250 28.500 29.250 "73,000 " 151.9% 25-Mar-94 29.250 28.500 29.000 "18,000 " 150.6% 01-Apr-94 29.500 27.250 28.000 "39,400 " 145.5% FOOTNOTES (i) EBITDA, EBIT, and Pretax Income exclude Special Items (ii)Income Available to Common excludes Extraordinary Items & Discontinued Operations (iii) Net Interest Expense=Gross Interest Expense-Interest Income-Capitalized Interest (iv) Cash Flow=Income Available to Common + Depreciation, Depletion, & Amortization + Deferred Taxes - Unremitted earnings +/- any other non-cash items (v) Financials have been adjusted for stock splits where applicable PART VI DETERMINATION OF EXERCISE PRICE DETERMINATION OF EXERCISE PRICE
Implied Stock Price Analysis Implied Stock Price Analysis ESTIMATED EPS ASSUMING P/E MULTIPLE RANGE OF: ASSUMING P/E MULTIPLE RANGE OF: ______________________________ _____________________________ FY2004 14 16 18 20 22 FY2004 24 26 28 30 32 ______ ______ $2.55 $2.55
Average of Central Area Average of Central Area Multiple of Exercise Price/Current Market Price Multiple of Exercise Price/Current Market Price Implied Ten Year Return to Shareholders Implied Ten Year Return to Shareholders ESTIMATED EPS ASSUMING P/E MULTIPLE RANGE OF: ASSUMING P/E MULTIPLE RANGE OF: ______________________________ _____________________________ FY2004 14 16 18 20 22 FY2004 24 26 28 30 32 ______ ______ $2.55 $2.55
Average of Central Area Average of Central Area Multiples of Exercise Price/Current Market Price Stock Price Exercise Price $12.50 $13.00 $13.50 $14.00 $14.50 $15.00 $15.50 $16.00 $16.50 PART VII HYPOTHETICAL EFFECT ON CAPITALIZATION HYPOTHETICAL EFFECT ON CAPITITALIZATION Assumed Market Price Triggering Percentage Exercise Price Common Equivalent of New Shares Issued Pro Forma As of Exercise 12/31/93 Adjustments of Rights Total Debt Shareholders' Equity Total Capitalization Shares Outstanding Increase in Shares Outstanding New (%) Owned by Acquiror (%) Dilution to Acquiror PART VIII SELECTED UNSOLICITED TAKEOVER BIDS
DATE TARGET NAME ACQUIROR NAME ANNOUNCED International Standards Group UMI Inc 03/24/94 Mark Controls Corp Tyco International Ltd 03/21/94 Centex Telemanagement Inc MFS Communications Co Inc 03/15/94 Kemper Corp General Electric Capital Corp 03/14/94 Grumman Corp Northrop Corp 03/10/94 Texfi Industries Inc Mentmore Holdings Corp 03/10/94 Sandy Corp Westcott Communications Inc 03/07/94 Crestmont Financial Corp Undisclosed Acquiror 02/02/94 WLR Foods Inc Tyson Foods Inc 01/24/94 Public Storage Properties VIII Storage Equities Inc 01/14/94 Provident Bancorp,Cincinnati Undisclosed Acquiror 01/07/94 CalFed Inc Golden West Financial Corp 01/06/94 R.H. Macy & Co Federated Department Stores 01/02/94 Mark Controls Corp Crane Co 01/03/94 America West Airlines Inc Investor Group 12/27/93 Fibreboard Corp CRP 3000 Inc 12/20/93 Katy Industries Inc Investor Group 11/30/93 Sunshine Jr Stores Inc MFL Holdings Inc 11/29/93 Esquire Radio & Electronics Steel Partners II 11/26/93 Integrated Resources Inc-Cert Penguin Group LP 11/23/93 ARI Holdings Inc LMI Insurance Co 11/19/93 Electromedics Inc Medtronic Inc 11/19/93 Maxum Health Corp DLG Financial Corp 11/18/93 Minor League Heroes LP Skylands Park Management Inc 11/15/93 Green Point Svgs Bk, Flushing Republic New York Corp 11/05/93 Medical Care America Inc Surgical Care Affiliates Inc 10/25/93 Candlewood Bank & Trust Co NewMil Bancorp 10/21/93 First City Industries Inc Alpha Acquisition Corp 10/19/93 Mylan Laboratories Inc Undisclosed Acquiror 10/19/93 King City Federal Savings Bank First Banks Inc 10/18/93 Nostalgia Network Inc International Family Ent Inc 10/08/93 America West Airlines Inc Undisclosed Acquiror 09/29/93 United Capital Leasing Corp Lease Acquisition Corp 09/22/93 Nostalgia Network Inc Concept Communications Inc 09/21/93 AngeLase Inc(Angeion Corp) Cardiac Albation Systems 09/20/93 Digital Communications Assoc DCA Holdings Inc 09/20/93 Paramount Communications QVC Network Inc 09/20/93 Deprenyl Animal Health Inc Safety Corp 09/14/93 Mayflower Group Inc IMR Fund LP 09/13/93 Katy Industries Inc Rosecliff Pensler Partners LP 09/02/93 Nutri/System Inc Physicians Weight Loss Centers 08/18/93 Termiflex Corp Investor 08/17/93 Constellation Bancorp The Bank of New York Co Inc 08/12/93 Rodman & Renshaw Capital Group Undisclosed Acquiror 08/09/93 Phibro Energy USA Inc-St Rose Enjet Inc 08/04/93 Fieldcrest Cannon Inc Bibb Co Inc 07/28/93 Sunbelt Nursery Group Inc General Host Corp 07/27/93 Rodman & Renshaw Capital Group Josephthal Lyon & Ross 07/26/93 Alter Sales Co Group Hammer SA 07/23/93 Dolphin Titan International Offshore Rigs LLC 07/21/93 Evergreen Bancorp KeyCorp,Albany,New York(OLD) 06/22/93 Western Resources Inc-Oklahoma ONEOK Inc 06/22/93 Kemper Securities Inc Undisclosed Acquiror 05/28/93 Amoskeag Co(Dumaines Trust) Springs Industries Inc 05/27/93 Fieldcrest Cannon Inc Springs Industries Inc 05/27/93 Dover Electrical System Delmarva Power & Light 05/26/93 Accuhealth Inc-Infusion Ops Undisclosed Acquiror 05/25/93 Restaurant Enterprises Group Investor Group 05/20/93 Weldotron Corp SFM Corp 05/17/93 Magellan Petroleum Corp Sagusa Inc(Sagasco Holdings) 05/12/93 Pratt & Whitney(United Techs) Stuyvesant Van 05/07/93 Rochester Community Svgs Bk,NY Undisclosed Acquiror 05/05/93 Nutri/System Inc Investor Group 04/29/93 BioEnergy International Undisclosed Acquiror 04/28/93 Tri-National Development Corp Associated Capital & Equities 04/13/93 Allied Research Corp First Allied Corp 04/12/93 Mark Controls Corp Investor Group 04/09/93 West Coast Bancorp Western Bank,Coos Bay,Oregon 04/08/93 Cap First Mtg-Loan Pipeline Continental Savings America 04/07/93 Forum Group Inc Forum/Classic LP 04/05/93 Home-Stake Oil & Gas Co Investor Group 03/24/93 LCP National Plastics Buffton Corp 03/22/93 Lifetime Corp Abbey Healthcare Group Inc 03/22/93 Prudential-Bache En III-P13 GBK Acquisition Corp 03/19/93 First National Bank, Huntsville Undisclosed Acquiror 03/15/93 Forum Group Inc Dalfort(Hyatt Air/Hyatt Corp) 03/15/93 PSI Resources Inc IPALCO Enterprises Inc 03/15/93 Commodity Exchange,New York Coffee Sugar and Cocoa 03/10/93 Shenango Inc (Boggs Corp) Employee Stock Ownership Plan 03/09/93 Pet Inc-Whitman's Chocolates Investor Group 03/08/93 In-Store Advertising Investor Group 03/02/93 Forum Group Inc Multicare Cos Inc 02/25/93 Prudential Securities Inc-West Parker & Parsley Petroleum Co 02/24/93 Alco International Group Inc Scottsdale Group 02/17/93 SCI Television Inc Investor 02/16/93 Home Shopping Network Inc Liberty Media Corp 02/12/93 Nobel Insurance Ltd-US Assets Undisclosed Acquiror 02/01/93 Puroflow-Ultra Dynamics Div Undisclosed Acquiror 01/29/93 Kasler Corp DW Holdings Inc 01/22/93 Peoples Westchester Savings Bk Investor Group 01/19/93 Southern Educators Life Ins Co United Insurance Cos 01/15/93 Schwinn Bicycle Co Giant Manufacturing Co Ltd 01/07/93 Sunshine Jr Stores Inc Investor 12/24/92 Riddell Sports-Certain Assets Sport Supply Group Inc 12/17/92 Roadmaster Corp Undisclosed Acquiror 12/09/92 Home-Stake Oil & Gas Co Home-Stake Royalty Corp 12/08/92 ERC Industries Inc Undisclosed Acquiror 12/02/92 Morse Shoe Inc May Department Stores Co 11/30/92 Schwinn Bicycle Co Dore Enterprises 11/30/92 Austin McDaniel Corp Baurys Corp 11/27/92 Hydro Flame Corp Atwood Industries Inc 11/17/92 MEI Diversified Incorporated IMR Fund LP 11/17/92 Macmillan Inc,Official Investor Group 11/10/92 Home Federal Savings Bank First Banks Inc 10/23/92 Skandia America (Skandia US) John Head & Partners LP 10/22/92 Consolidated Capital Gordon Realty Inc 10/16/92 Forum Group Inc Investor Group 10/16/92 San Francisco Giants Investor Group 10/13/92 The Circle K Corp Commonwealth Oil Refining Co 10/09/92 RehabCare Corp Continental Medical Systems 10/08/92 Nendels Corp Investor 10/06/92 Command Credit Corp Ventura Capital Partners I LP 10/04/92 Victory Markets-Distn Business Investor Group 10/02/92 Ameriwood Industries Intl Corp Willametta K Day Trust 10/01/92 Continental Airlines Hldgs Inc Investor Group 09/30/92 Credit Bureau Reports Inc Ventura Capital Partners I LP 09/24/92 American Learning Corp JW Acquisition Corp 09/21/92 Undisclosed Oil and Gas Pptys HarCor Energy Inc 09/21/92 Continental Airlines Hldgs Inc Investor Group 09/16/92 Regency Cruises Inc Castle Harlan Partners II LP 09/16/92 Braniff International Airlines Investor 08/11/92 Center Banks Inc NBT Bancorp Inc 08/04/92 Fretter Inc Investor Group 07/29/92 National Heritage WelCare International Inc 07/24/92 Durr-Fillauer Medical Inc Bergen Brunswig Corp 07/07/92 Hadson Energy Resources Corp Wiser Oil Co 07/01/92 First City Bancorp of Texas Investor Group 06/23/92 Petrolane Gas Service LP Investor Group 06/16/92 North American National Corp Loyal American Life Insurance 06/01/92 Orion Pictures Corp MGM/UA Communications Co 05/12/92 Orion Pictures Corp Republic Pictures Corp 05/07/92 Script Systems Inc InfoMed Inc 05/04/92 Napa Valley Bancorp Westamerica Bancorp,CA 05/01/92 Alpha Industries Inc M/A-COM Inc 04/22/92 Star Banc Corp Fifth Third Bancorp,Cincinnati 04/16/92 Orion Pictures Corp Savoy Pictures Entertainment 04/09/92 Greene-Shaw Electronics Jaco Electronics Inc 03/30/92 Laser Biotech Inc Laser Medical Technology Inc 03/30/92 Source: Securities Data Company, Inc. PART IX SELECTED REDEEMED SHAREHOLDERS' RIGHTS PLANS SELECTED REDEEMED SHAREHOLDERS' RIGHTS PLANS (Last Twelve Months) COMPANY EFFECTIVE DATE PLAN ESTABLISHED PRICE TJX Cos. Inc. February 17, 1994 November 1986 $0.01 per share BJ Services Co January 14, 1994 July 1990 $0.01 per right Computalog Ltd. May 31, 1993 May 1990 $0.01 per right Eaton Corporation May 10, 1993 September 1985 $0.01 per right Source: Nexis News Service and Dow Jones News Retrieval PART X PRICING AND TRADING INFORMATION ON SELECTED COMPANIES ADOPTING SHAREHOLDERS' RIGHTS PLANS PRICING AND TRADING INFORMATION ON SELECTED COMPANIES ADOPTING SHAREHOLDER'S RIGHTS PLANS - SUMMARY
AVERAGE PERCENTAGE CHANGE AVERAGE PERCENTAGE CHANGE OF STOCK PRICE FROM: OF S&P 400 INDEX FROM: 20 BUS. DATE OF 20 BUS. DATE OF DAYS PRIOR ANNOUNCEMENT DAYS PRIOR ANNOUNCEMENT TO DATE OF TO 20 TO DATE OF TO 20 NUMBER AVERAGE ANNOUNCEMENT BUS. DAYS ANNOUNCEMENT BUS. DAYS OF EXERCISE/ MEDIAN TO DATE OF AFTER DATE TO DATE OF AFTER DATE OF DATE COMPANIES MARKET % CHANGE ANNOUNCEMENT ANNOUNCEMENT ANNOUNCEMENT ANNOUNCEMENT 1-Jan-93 36 5.08 x Absolute 1.72% (2.23%) 0.51% 0.30% 31-Dec-93 Net (a) 1.21% (2.53%) 1-Jan-92 47 4.81 x Absolute 0.93% (0.41%) (0.22%) (0.37%) 31-Dec-92 Net (a) 1.15% (0.04%) 1-Jan-91 99 4.29 x Absolute 0.00% 4.27% 0.60% 0.82% 31-Dec-91 Net (a) 1.82% 5.61% 1-Jan-90 152 4.58 x Absolute (2.44%) (2.02%) 0.09% (0.18%) 31-Dec-90 Net (a) (2.36%) 6.48% 1-Jan-89 329 4.21 x (b) Absolute 1.47% 0.39% 2.38% 1.62% 31-Dec-89 Net (a) (0.37%) 8.76% 1-Jan-88 306 4.44 x (b) Absolute 3.07% 1.49% 1.90% 1.98% 31-Dec-88 Net (a) 1.92% 1.68%
(a) As compared to the S&P 400 Industrial Index. (b) Average Exercise/Market price does not include certain companies which were deemed to be large outlying computations. PRICING AND TRADING INFORMATION ON SELECTED COMPANIES ADOPTING SHAREHOLDERS' RIGHTS PLANS (4/2/86 - 12/31/93)
Closing Price ___________________________________________________________________ A B C American Ecology Corp. 12/8/93 NA $535.39 $5.63 $538.82 $4.50 $544.88 NA 0.64 NA (20.00) 1.12 (21.12) Cephalon Inc. 11/22/93 $15.50 $530.77 17.75 533.12 16.75 537.31 14.52 0.44 14.07 (5.63) 0.79 (6.42) Carolina First Corp. 11/15/93 14.75 534.46 13.50 537.17 13.00 538.47 (8.47) 0.51 (8.98) (3.70) 0.24 (3.95) Acme Electric Corp. 11/15/93 9.38 534.46 8.75 537.17 8.63 538.47 (6.67) 0.51 (7.17) (1.43) 0.24 (1.67) Carson Pirie Scott&Co. 11/8/93 NA 521.82 11.75 530.33 12.88 538.54 NA 1.63 NA 9.57 1.55 8.03 Hamilton Financial Svs 10/28/93 8.00 516.72 7.13 535.87 6.88 535.97(10.94) 3.71 (14.64) (3.51) 0.02 (3.53) American Exploration Co. 10/1/93 1.44 521.83 1.44 519.56 1.50 535.49 0.00 (0.44) 0.44 4.31 3.07 1.25 Span-America Medical Systems 9/22/93 5.75 521.55 5.75 513.43 9.13 531.41 0.00 (1.56) 1.56 58.70 3.50 55.19 Education Alternatives Inc. 9/16/93 34.50 518.81 34.25 516.95 43.50 528.99 (0.72) (0.36) (0.37) 27.01 2.33 24.68 Centex Telemanagement Inc. 9/15/93 8.00 517.86 6.75 519.58 7.25 522.43(15.63) 0.33 (15.96) 7.41 0.55 6.86 Qualmed Inc. 9/9/93 11.38 506.38 14.38 515.17 14.13 518.77 26.37 1.74 24.64 (1.74) 0.70 (2.44) Intergraph Corp. 9/9/93 8.75 506.38 11.13 515.17 10.00 516.72 27.14 1.74 25.41 (10.11) 0.30 (10.41) Dr. Pepper/Seven-Up 9/2/93 17.88 506.57 19.25 522.17 20.13 516.72 7.69 3.08 4.61 4.55 (1.04) 5.59 Rodman & Renshaw Capital 8/23/93 7.13 509.36 7.88 517.39 9.13 511.38 10.53 1.58 8.95 15.87 (1.16) 17.03 Mercer International Inc. 8/18/93 10.38 507.61 11.00 517.86 10.25 519.58 6.02 2.02 4.00 (6.82) 0.33 (7.15) HPSC Inc. 8/11/93 2.88 504.36 3.00 508.63 3.19 524.47 4.35 0.85 3.50 6.27 3.11 3.15 BMC West Corp. 8/3/93 15.25 513.31 18.75 508.55 18.25 517.39 22.95 (0.93) 23.88 (2.67) 1.74 (4.40) BWIP Holding Inc. 7/30/93 25.00 508.09 24.25 506.95 26.00 521.86 (3.00) (0.22) (2.78) 7.22 2.94 4.28 Vencor Inc. 7/21/93 27.75 511.67 27.25 507.61 23.00 507.22 (1.80) (0.79) (1.01) (15.60)(0.08) (15.52) Costco Wholesale Corp. 7/14/93 16.88 511.03 16.50 513.31 16.00 508.55 (2.22) 0.45 (2.67) (3.03)(0.93) (2.10) Healthtrust Inc. 7/13/93 17.75 507.41 20.00 510.29 20.25 509.45 12.68 0.57 12.11 1.25 (0.16) 1.41 Levitz Furniture Inc. 6/30/93 NA 514.61 NA 514.26 11.50 507.91 NA (0.07) NA NA (1.23) NA Davstar Industries Ltd. 6/29/93 6.63 514.99 6.75 515.11 5.75 505.86 1.89 0.02 1.86 (14.81)(1.80) (13.02) Eagle Bancshares Inc. 5/17/93 17.25 507.47 16.75 509.64 15.75 516.71 (2.90) 0.43 (3.33) (5.97) 1.39 (7.36) Bank of New York Company Inc. 5/3/93 57.38 501.85 53.75 504.70 54.75 521.75 (6.32) 0.57 (6.89) 1.86 3.38 (1.52) America Online Inc. 5/3/93 26.75 504.36 24.25 498.96 30.13 505.94 (9.35) (1.07) (8.28) 24.23 1.40 22.83 Leslie Fay Cos Inc. 4/29/93 5.75 518.94 3.00 505.05 3.88 496.48(47.83) (2.68)(45.15) 29.17 (1.70) 30.86 Cascade Natural Gas 4/23/93 24.25 509.24 24.63 517.62 25.38 501.85 1.55 1.65 (0.10) 3.05 (3.05) 6.09 Milestone Pptys Inc. 3/31/93 4.63 521.77 4.75 517.69 4.50 505.99 2.70 (0.78) 3.48 (5.26)(2.26) (3.00) Research Frontiers Inc. 2/12/93 8.63 504.42 9.38 513.10 9.88 513.84 8.70 1.72 6.97 5.33 0.14 5.19 Tyler Corp. Del. 1/29/93 4.50 499.48 5.25 508.56 5.00 497.54 16.67 1.82 14.85 (4.76)(2.17) (2.60) Westmoreland Coal Co 1/28/93 10.00 499.48 12.88 508.30 12.00 499.21 28.75 1.77 26.98 (6.80)(1.79) (5.01) Offshore Pipelines Inc. 1/28/93 10.38 499.48 10.00 508.30 9.25 499.21 (3.61) 1.77 (5.38) (7.50)(1.79) (5.71) Advo Inc. 1/27/93 17.28 500.95 17.84 507.58 17.52 500.08 3.24 1.32 1.92 (1.79)(1.48) (0.32) Rexene Corp. 1/26/93 3.88 505.60 3.75 510.26 3.38 513.10 (3.23) 0.92 (4.15) (10.00) 0.56 (10.56) Bally Gaming Intl Inc. 1/22/93 13.25 507.46 14.38 504.42 12.88 517.12 8.49 (0.60) 9.09 (10.43) 2.52 (12.95) Eskimo Pie Corp. 1/21/93 16.75 507.46 22.00 503.59 19.63 515.16 31.34 (0.76) 32.11 (10.80) 2.30 (13.09) Diagnostek Inc. 12/31/92 7.38 508.18 8.25 507.46 7.38 501.19 11.86 (0.14) 12.01 (10.61)(1.24) (9.37) Hologic Inc. 12/22/92 5.88 504.59 5.13 513.05 6.25 501.40(12.77) 1.68 (14.44) 21.95 (2.27) 24.22 PSI Resources Inc. 12/11/92 18.88 500.68 18.50 508.18 20.00 507.46 (1.99) 1.50 (3.48) 8.11 (0.14) 8.25 Esterline Technologies Corp. 12/9/92 10.63 496.75 11.13 511.22 12.00 510.48 4.71 2.91 1.79 7.87 (0.14) 8.01 Cimco Inc. 12/5/92 8.25 491.80 N/A N/A 8.25 512.34 N/A N/A N/A N/A N/A N/A Purolator Products Co. 12/1/92 N/A 496.13 15.00 505.45 15.25 514.60 N/A 1.88 N/A 1.67 1.81 (0.14) Terminal Data Corp. 11/23/92 3.75 492.68 4.00 498.50 3.13 506.71 6.67 1.18 5.49 (21.88) 1.65 (23.52) Oceaneering Intl Inc. 11/20/92 17.25 490.76 14.25 500.68 12.88 509.51(17.39) 2.02 (19.41) (9.65) 1.76 (11.41) Amre Inc 11/13/92 4.88 485.96 4.75 495.91 5.75 504.39 (2.56) 2.05 (4.61) 21.05 1.71 19.34 St Paul Bancorp Inc 10/26/92 20.38 477.00 20.13 490.56 21.38 493.59 (1.23) 2.84 (4.07) 6.21 0.62 5.59 Centigram Comm. Corp 10/20/92 7.25 490.49 8.50 486.44 10.25 491.28 17.24 (0.83) 18.07 20.59 0.99 19.59 North American Mtg Co 10/19/92 13.50 489.96 14.38 485.94 15.75 491.28 6.48 (0.82) 7.30 9.57 1.10 8.47 Minerals Technologies Inc 10/16/92 N/A 487.23 N/A 481.74 17.00 490.84 N/A (1.13) N/A N/A 1.89 N/A Lifetime Corp 9/30/92 14.25 495.86 12.50 490.49 12.13 486.44(12.28) (1.08)(11.20) (3.00)(0.83) (2.17) Rehabcare Corp 9/21/92 7.75 489.61 8.50 498.91 9.00 476.68 9.68 1.90 7.78 5.88 (4.46) 10.34 Recognition Equip Inc 9/18/92 9.38 487.72 11.25 499.94 9.50 478.06 20.00 2.51 17.49 (15.56)(4.38) (11.18) Tecumseh Prods Co 8/30/92 59.00 491.97 60.50 487.72 60.00 498.91 2.54 (0.86) 3.41 (0.83) 2.29 (3.12) American Funeral Svcs Corp 8/12/92 11.25 483.31 12.25 490.33 14.25 489.61 8.89 1.45 7.44 16.33 (0.15) 16.47 Liberty Bancorp Inc. DE 8/9/92 16.00 485.61 16.00 491.63 15.75 487.27 0.00 1.24 (1.24) (1.56)(0.89) (0.68) Dycom Inds Inc 8/1/92 4.00 490.19 4.75 498.11 4.25 482.29 18.75 1.62 17.13 (10.53)(3.18) (7.35) Concurrent Computer Corp. 7/31/92 2.00 485.94 2.13 498.11 2.75 491.26 6.25 2.50 3.75 29.41 (1.38) 30.79 Rio Algom Ltd 7/22/92 13.13 483.64 14.19 481.91 14.50 491.97 8.10 (0.36) 8.46 2.20 2.09 0.11 James River Corp Va 6/28/92 21.00 484.64 20.25 474.86 20.00 485.26 (3.57) (2.02) (1.55) (1.23) 2.19 (3.42) BankWorcester Corp 6/23/92 13.75 490.90 11.25 476.14 13.75 486.62(18.18) (3.01)(15.18) 22.22 2.20 20.02 Republic Automotive PTS Inc 6/18/92 7.75 492.47 7.50 472.33 6.88 481.07 (3.23) (4.09) 0.86 (8.33) 1.85 (10.18) Hook-Superx Inc 6/4/92 NA 484.06 13.00 489.57 10.88 475.92 NA 1.14 NA (16.35) (2.79) (13.56) Cooker Restaurant Corp 5/27/92 17.50 492.68 15.50 487.45 14.50 481.44(11.43) (1.06)(10.37) (6.45) (1.23) (5.22) Equitable Iowa Cos 4/30/92 26.63 482.02 28.25 492.36 NA 490.24 6.10 2.15 3.96 NA (0.43) N/A PHP Healthcare Corp 4/10/92 19.13 489.15 17.25 482.02 17.50 492.36 (9.80) (1.46)(8.35) 1.45 2.15 (0.70) Clothestime 3/27/92 11.50 481.54 9.63 480.33 10.50 495.44(16.30) (0.25)(16.05) 9.09 3.15 5.95 Picturetel Corp 3/25/92 44.88 484.10 44.75 485.28 35.88 491.73 (0.28) 0.24 (0.52) (19.83) 1.33 (21.16) Quadralogic Technologies 3/17/92 7.88 494.42 7.13 487.93 7.38 484.34 (9.52) (1.31) (8.21) 3.51 (0.74) 4.24 Polymedica Inds Inc 3/13/92 NA 489.86 12.25 483.15 10.25 477.10 NA (1.37) NA (16.33) (1.25) (15.07) Unum Corp 3/13/92 36.94 489.86 37.25 483.15 34.75 477.10 0.84 (1.37) 2.21 (6.71) (1.25) (5.46) Dayton Hudson Corp 3/11/92 70.00 492.45 66.88 480.63 62.25 480.15 (4.46) (2.40) (2.06) (6.92) (0.10) (6.82) Immune Response Corp 2/26/92 35.75 492.61 28.63 494.42 27.00 487.93(19.93) 0.37 (20.30) (5.68) (1.31) (4.36) Indiana Federal Corp 2/26/92 16.00 492.61 17.00 494.42 16.75 487.93 6.25 0.37 5.88 (1.47) (1.31) (0.16) Iowa Ill Gas & Elec Co 2/25/92 24.50 492.88 24.75 488.17 24.88 483.80 1.02 (0.96) 1.98 0.51 (0.90) 1.40 Rowan Cos Inc 2/25/92 5.75 492.88 6.25 488.17 5.75 483.80 8.70 (0.96) 9.65 (8.00) (0.90) (7.10) Integrated Device Tech Inc 2/18/92 5.63 486.47 7.25 483.91 6.25 481.82 28.89 (0.53) 29.42 (13.79) (0.43) (13.36) Firstier Finl Inc 2/17/92 30.13 492.48 30.00 491.00 30.94 481.82 (0.41) (0.30) (0.11) 3.13 (1.87) 5.00 Mattel Inc 2/7/92 31.25 498.15 33.00 489.59 33.25 492.45 5.60 (1.72) 7.32 0.76 0.58 0.17 Berlitz Intl Inc 2/5/92 19.63 496.70 19.50 492.88 19.50 488.17 (0.64) (0.77) 0.13 0.00 (0.96) 0.96 Ikos Sys Inc 1/27/92 1.50 493.46 2.31 492.51 3.06 491.00 54.20 (0.19) 54.39 32.43 (0.31) 32.73 Trans Finl Bancorp Inc 1/20/92 16.00 492.72 15.50 495.14 14.75 492.51 (3.13) 0.49 (3.62) (4.84) (0.53) (4.31) Van Dorn Co 1/15/92 11.88 476.81 17.63 499.27 18.00 492.64 48.42 4.71 43.71 2.13 (1.33) 3.46 ICF Intl Inc (CLASS A) 1/13/92 7.00 470.59 8.50 491.69 10.50 486.98 21.43 4.48 16.94 23.53 (0.96) 24.49 Ku Energy Corp 12/27/91 26.63 446.75 27.50 479.39 24.75 496.70 3.29 7.31 (4.02) (10.00) 3.61 (13.61) Hanna M A Co 12/24/91 22.25 463.91 21.00 470.59 20.50 491.69 (5.62) 1.44 (7.06) (2.38) 4.48 (6.86) Borland Intl Inc 12/20/91 73.50 442.42 73.50 455.98 80.75 494.52 0.00 3.06 (3.06) 9.86 8.45 1.41 Guaranty Natl Corp New 12/20/91 13.63 442.42 13.63 455.98 15.50 494.52 0.00 3.06 (3.06) 13.76 8.45 5.31 Sanifill Inc 12/13/91 22.88 443.89 14.00 452.77 15.50 493.26(38.80) 2.00(40.80) 10.71 8.94 1.77 MBIA Inc 12/12/91 42.25 443.89 45.00 448.80 48.25 492.72 6.51 1.11 5.40 7.22 9.79 (2.56) DPL Inc 12/3/91 23.88 468.35 25.38 449.02 25.13 467.45 6.28 (4.13)10.41 (0.99) 4.10 (5.09) Topps Company Inc 12/2/91 14.50 467.37 14.00 449.84 16.75 467.45 (3.45) (3.75) 0.30 19.64 3.91 15.73 Florida Progress Corp 11/21/91 43.75 461.48 45.25 448.21 45.13 444.53 3.43 (2.88) 6.30 (0.28) (0.82) 0.54 Cleveland Cliffs Inc 11/19/91 34.88 463.60 35.63 447.66 34.25 445.36 2.15 (3.44) 5.59 (3.86) (0.51) (3.35) Arctic Alaska Fisheries Corp 11/15/91 7.00 454.37 8.38 450.59 8.50 444.90 19.64 (0.83)20.47 1.49 (1.26) 2.76 CMS/Data Corp 11/8/91 2.75 464.80 1.63 462.76 2.75 444.04(40.91) (0.44)(40.47) 69.23 (4.05) 73.28 IES Inds Inc 11/6/91 28.00 464.17 27.88 459.71 27.13 445.83 (0.45) (0.96) 0.51 (2.69) (3.02) 0.33 Bolar Pharmaceutical Inc 11/1/91 7.38 450.58 6.38 461.48 5.63 448.21 (13.56) 2.42 (15.98) (11.76) (2.88) (8.89) Laserscope 10/31/91 7.25 450.58 7.13 462.95 7.75 446.51 (1.72) 2.75 (4.47) 8.77 (3.55) 12.32 Banta Corp. 10/29/91 26.63 445.37 25.75 462.61 26.75 454.27 (3.29) 3.87 (7.16) 3.88 (1.80) 5.69 Digital Microwave Corp 10/24/91 9.00 450.59 9.50 455.73 11.50 468.35 5.56 1.14 4.41 21.05 2.77 18.28 Synergen Inc 10/24/91 42.50 450.59 46.33 455.73 59.88 468.35 9.02 1.14 7.88 29.23 2.77 26.46 American President Cos Ltd 10/22/91 35.38 458.49 41.88 459.08 43.00 462.85 18.37 0.13 18.25 2.69 0.82 1.87 Ketema Inc 10/15/91 10.75 458.50 10.63 462.40 10.25 460.49 (1.16) 0.85 (2.01) (3.53) (0.41) (3.12) Xilinx Inc 10/4/91 27.13 454.66 28.25 450.59 26.00 455.73 4.15 (0.90) 5.04 (7.96) 1.14 (9.11) K Tron Intl Inc 10/3/91 8.00 454.66 8.13 454.03 8.25 459.21 1.56 (0.14) 1.70 1.54 1.14 0.40 Medical Imaging Ctrs Amer 10/2/91 9.63 459.40 5.13 458.49 3.88 459.08 (46.75) (0.20)(46.56)(24.39) 0.13 (24.52) Wicat Sys Inc 9/27/91 3.38 462.08 3.38 456.45 3.31 464.17 0.00 (1.22) 1.22 (1.84) 1.69 (3.53) Foundation Health Corp 9/27/91 25.13 456.45 22.00 462.08 23.00 464.17 (12.44) 1.23 (13.67) 4.55 0.45 4.09 Wicat Sys Inc 9/27/91 3.38 456.45 3.38 462.08 3.31 464.17 0.00 1.23 (1.23) (1.84) 0.45 (2.29) Greenwich Pharmaceuticals 9/25/91 8.00 462.31 7.50 458.50 8.50 462.40 (6.25) (0.82) (5.43) 13.33 0.85 12.48 Merry Go Round Enterprises 9/20/91 14.63 459.47 14.25 470.56 12.87 449.60 (2.56) 2.41 (4.98) (9.68) (4.45) (5.23) Carrington Labs Inc 9/19/91 11.50 470.56 11.75 459.41 13.38 445.37 2.17 (2.37) 4.54 13.83 (3.06) 16.89 Carrington Labs Inc 9/19/91 11.75 459.41 11.50 470.56 13.37 445.37 (2.13) 2.43 (4.55) 16.26 (5.35) 21.61 Informix Corp 9/17/91 6.19 471.86 6.50 457.08 9.38 448.54 5.04 (3.13) 8.17 44.23 (1.87) 46.10 Informix Corp 9/17/91 6.50 457.08 6.19 471.86 9.37 448.54 (4.80) 3.23 (8.03) 51.42 (4.94) 56.36 Eastern Co 9/16/91 11.25 457.35 11.00 467.59 11.25 448.54 (2.22) 2.24 (4.46) 2.27 (4.07) 6.35 General Re Corp 9/11/91 89.50 456.65 87.00 465.10 88.50 459.86 (2.79) 1.85 (4.64) 1.72 (1.13) 2.85 Lattice Semiconductor 9/11/91 10.38 465.10 11.25 456.65 10.50 459.86 8.43 (1.82) 10.25 (6.67) 0.70 (7.37) Arctco Inc 9/5/91 9.38 457.93 9.25 462.31 9.38 458.50 (1.33) 0.96 (2.29) 1.35 (0.82) 2.18 California Amplifier Inc 9/5/91 2.25 457.93 2.75 462.31 3.00 458.50 22.22 0.96 21.27 9.09 (0.82) 9.92 Arctco Inc 9/5/91 9.25 462.31 9.38 457.93 9.37 458.50 1.35 (0.95) 2.30 (0.05) 0.12 (0.18) California Amplifier Inc 9/5/91 2.75 462.31 2.25 457.93 3.00 458.50 (18.18) (0.95)(17.23) 33.33 0.12 33.21 Hancock Fabrics Inc 8/30/91 21.88 470.56 22.63 461.09 20.87 459.41 3.43 (2.01) 5.44 (7.76) (0.36) (7.39) Smithfield Cos Inc 8/29/91 8.25 472.01 8.00 461.09 8.75 458.84 (3.03) (2.31) (0.72) 9.38 (0.49) 9.86 Gentex Corp 8/19/91 9.13 447.28 9.50 461.20 9.50 461.21 4.11 3.11 1.00 0.00 0.00 (0.00) Marquest Med Prods Inc 8/8/91 12.00 463.92 14.00 458.36 10.00 471.86 16.67 (1.20) 17.87 (28.57) 2.95 (31.52) Oakwood Homes Corp 8/8/91 13.75 463.92 13.50 458.36 13.75 471.86 (1.82) (1.20) (0.62) 1.85 2.95 (1.09) Wellman Inc 8/6/91 24.13 465.60 26.50 454.70 24.13 468.45 9.84 (2.34) 12.19 (8.96) 3.02 (11.99) Medical Care Intl Inc 7/25/91 58.75 454.01 57.50 446.19 64.50 463.00 (2.13) (1.72) (0.41) 12.17 3.77 8.41 Southwestern Pub Svc Co 7/23/91 29.38 452.05 28.75 445.30 29.75 461.22 (2.13) (1.49) (0.63) 3.48 3.58 (0.10) Pinkertons Inc New 7/12/91 28.75 453.65 27.00 450.67 27.75 461.82 (6.09) (0.66) (5.43) 2.78 2.47 0.30 First Interstate Iowa Inc 7/11/91 5.63 449.55 5.63 450.67 5.63 462.47 0.00 0.25 (0.25) 0.00 2.62 (2.62) Valley Res Inc 6/18/91 11.63 451.18 10.88 456.60 11.87 451.20 (6.45) 1.20 (7.65) 9.15 (1.18) 10.33 Nellcor Inc 6/11/91 19.75 453.91 18.88 448.31 20.00 450.37 (4.43) (1.23) (3.20) 5.96 0.46 5.50 Allied Resh Corp 6/8/91 12.38 451.79 11.00 447.28 15.00 450.37 (11.11) (1.00)(10.11) 36.36 0.69 35.67 Solitron Devices Inc 5/29/91 1.38 456.60 2.25 456.60 1.50 451.18 63.64 0.00 63.64 (33.33) (1.19) (32.15) Datascope Corp 5/22/91 63.50 448.31 61.25 451.51 65.25 453.91 (3.54) 0.71 (4.26) 6.53 0.53 6.00 Franklin First Finl Corp 5/16/91 9.88 443.23 10.00 449.86 11.25 458.92 1.27 1.50 (0.23) 12.50 2.01 10.49 Boston Technology Inc 5/9/91 4.44 456.60 4.19 456.19 3.50 456.60 (5.63) (0.09) (5.54) (16.43) 0.09 (16.52) Smithfield Foods Inc 5/8/91 20.50 450.00 19.50 461.13 22.50 455.68 (4.88) 2.47 (7.35) 15.38 (1.18) 16.57 Investors Svgs Corp Minn 5/7/91 10.88 448.13 9.00 463.12 10.75 449.92 (17.24) 3.35 (20.59) 19.44 (2.85) 22.29 Reynolds & Reynolds Co 5/6/91 20.88 451.41 21.38 459.87 20.87 449.92 2.40 1.87 0.52 (2.36) (2.16) (0.20) Shared Med Sys Corp 5/1/91 20.25 451.07 18.50 447.40 20.75 447.28 (8.64) (0.81) (7.83) 12.16 (0.03) 12.19 Bancorp Miss Inc 4/23/91 22.00 452.99 22.00 448.74 22.50 449.45 0.00 (0.94) 0.94 2.27 0.16 2.11 Intervoice Inc 4/23/91 14.25 452.99 14.75 448.74 14.50 449.45 3.51 (0.94) 4.45 (1.69) 0.16 (1.85) Software Pubg Corp 4/23/91 20.75 452.99 21.25 448.74 22.25 449.45 2.41 (0.94) 3.35 4.71 0.16 4.55 Telecom Corp 4/23/91 1.25 452.99 1.13 448.74 1.25 449.45 (10.00) (0.94)(9.06) 11.11 0.16 10.95 Caere Corp 4/17/91 23.13 463.12 15.75 444.21 20.75 448.13 (31.89) (4.08)(27.81) 31.75 0.88 30.86 Continental Bk Corp 4/17/91 13.75 463.12 11.63 444.21 13.87 448.13 (15.45) (4.08)(11.37) 19.31 0.88 18.43 Lubys Cafeterias Inc 4/16/91 19.00 444.63 20.38 459.87 19.38 451.41 7.24 3.43 3.81 (4.91) (1.84) (3.07) Lubys Cafeterias Inc 4/16/91 20.38 459.87 19.00 444.63 19.37 451.41 (6.75) (3.31) (3.43) 1.95 1.52 0.42 Bytex Corp 4/12/91 12.50 451.12 10.75 435.75 14.50 451.51 (14.00) (3.41)(10.59) 34.88 3.62 31.27 City Hldgs Co 4/4/91 15.00 449.84 14.50 444.11 15.00 454.30 (3.33) 1.27) (2.06) 3.45 2.29 1.15 Instron Corporation 4/3/91 10.88 448.74 9.88 444.35 11.12 452.99 (9.20) (0.98) (8.22) 12.61 1.94 10.66 Xytronyx Inc. 4/2/91 15.38 447.21 19.63 449.82 18.81 445.19 27.64 0.58 27.06 (4.13) (1.03) (3.10) Bt Financial Corp 3/27/91 14.25 444.63 14.25 447.30 14.38 459.87 0.00 0.60 (0.60) 0.88 2.81 (1.93) CPC Intl Inc. 3/19/91 83.25 436.58 78.63 434.88 88.25 459.87 (5.56) (0.39) (5.17) 12.24 5.75 6.50 Continental Med Sys Inc. 3/11/91 11.00 385.67 11.00 390.35 11.50 395.65 0.00 1.21 (1.21) 4.55 1.36 3.19 Southdown Inc. 3/4/91 15.63 410.71 15.50 437.60 17.88 439.64 (0.80) 6.55 (7.35) 15.32 0.47 14.86 Ameron Inc. 3/1/91 45.63 438.58 41.25 423.79 44.00 434.77 (9.59) (3.37) (6.22) 6.67 2.59 4.08 Cumberland Federal Bancorp 2/26/91 9.50 429.98 9.75 422.64 9.75 441.60 2.63 (1.71) 4.34 0.00 4.49 (4.49) Public Svc Co Colo 2/26/91 21.75 396.59 22.75 429.98 22.63 434.88 4.60 8.42 (3.82) (0.55) 1.14 (1.69) HBO & Co. 2/22/91 5.38 396.58 6.88 432.57 7.13 435.75 27.91 9.08 18.83 3.64 0.74 2.90 Ambase Corp. 2/19/91 0.31 386.11 0.69 436.58 1.13 434.88 119.81 13.07 106.74 63.52 (0.39) 63.91 Constellation Bancorp 2/19/91 7.75 386.11 8.50 436.58 7.50 434.88 9.68 13.07 (3.39)(11.76) (0.39) (11.38) Marsh & McLennan Cos Inc. 2/19/91 73.25 386.11 76.63 436.58 79.25 434.88 4.61 13.07 (8.46) 3.43 (0.39) 3.82 Stoneridge Res Inc. 2/15/91 3.88 390.48 5.00 435.43 4.00 444.11 29.03 11.51 17.52 (20.00) 1.99 (21.99) TSI Inc. Minn 2/12/91 12.25 368.53 15.50 430.76 17.00 439.68 26.53 16.89 9.64 9.68 2.07 7.61 Franklin Elec Inc. 2/11/91 9.25 366.64 11.25 434.57 11.19 443.48 21.62 18.53 3.09 (0.55) 2.05 (2.60) Silicon Graphics Inc. 2/1/91 26.75 375.97 33.00 405.10 40.00 438.58 23.36 7.75 15.62 21.21 8.26 12.95 Immunex Corp. 1/31/91 35.88 377.18 33.75 406.53 48.00 435.00 (5.92) 7.78 (13.70) 42.22 7.00 35.22 E Town Corp. 1/24/91 24.33 384.37 24.50 395.22 23.50 431.51 0.70 2.82 (2.12) (4.08) 9.18 (13.26) Exabyte Corp. 1/24/91 13.00 384.37 17.13 395.22 20.75 431.51 31.73 2.82 28.91 21.17 9.18 11.99 Tecumseh Products Co. 1/23/91 80.00 387.09 80.00 389.67 86.00 432.01 0.00 0.67 (0.67) 7.50 10.87 (3.37) Collins Food International 1/22/91 7.50 386.11 8.06 383.02 9.37 434.57 7.51 (0.80) 8.31 16.21 13.46 2.75 Cabot Corp. 1/21/91 28.38 385.94 28.00 388.74 32.75 435.43 (1.32) 0.73 (2.05) 16.96 12.01 4.95 Fabricland Inc. 1/21/91 12.50 385.94 13.63 388.74 14.25 435.43 9.00 0.73 8.27 4.59 12.01 (7.42) Manufacturers Natl Corp. 1/18/91 45.25 387.95 45.13 390.48 54.50 435.43 (0.28) 0.65 (0.93) 20.78 11.51 9.26 National Data Corp. 1/18/91 11.25 387.93 11.00 390.48 9.50 435.43 (2.22) 0.66 (2.88)(13.64) 11.51 (25.15) Puget Sound Pwr & Lt Co. 1/15/91 20.63 386.06 20.50 368.53 21.38 430.76 (0.61) (4.54) 3.93 4.27 16.89 (12.62) First Coml Corp. 1/8/91 16.25 381.98 15.00 369.16 16.00 414.26 (7.69) (3.36) (4.34) 6.67 12.22 (5.55) Jacor Comm Inc. 12/31/90 1.88 380.05 2.25 387.42 2.38 396.73 20.00 1.94 18.06 5.56 2.40 3.15 First Intst Bancorp 12/20/90 19.88 370.68 26.00 386.00 22.63 385.97 30.82 4.13 26.68 (12.98) (0.01) (12.97) Jacobs Engr Group Inc. 12/20/90 22.38 370.68 26.00 386.00 24.25 385.97 16.20 4.13 12.07 (6.73) (0.01) (6.72) National Cmnty Banks Inc. 12/19/90 12.75 370.68 16.25 385.99 15.75 372.30 27.45 4.13 23.32 (3.08) (3.55) 0.47 First Un Corp. 12/18/90 14.25 396.66 17.00 386.06 13.75 368.53 19.30 (2.67) 21.97 (19.12) (4.54) (14.58) Oklahoma Gas & Elec Co. 12/11/90 38.50 371.69 39.38 381.98 37.50 369.16 2.27 2.77 (0.50) (4.76) (3.36) (1.41) Cellular Inc. 12/10/90 8.25 373.35 8.50 384.88 9.25 369.64 3.03 3.09 (0.06) 8.82 (3.96) 12.78 LG&E Energy Corp. 12/5/90 39.63 358.15 41.50 385.33 40.00 383.02 4.73 7.59 (2.86) (3.61) (0.60) (3.01) Comstock Resources Inc. 12/4/90 3.25 364.97 3.75 381.93 3.63 387.42 15.38 4.65 10.74 (3.33) 1.44 (4.77) Stratus Computer 12/4/90 19.63 364.97 23.50 381.93 23.13 387.42 19.75 4.65 15.10 (1.60) 1.44 (3.03) Oracle Sys Corp. 12/3/90 5.88 368.44 8.50 380.05 7.88 387.42 44.68 3.15 41.53 (7.35) 1.94 (9.29) Hallwood Rlty Partners LP 11/30/90 6.50 364.85 5.75 377.92 5.00 385.26 (11.54) 3.58 (15.12)(13.04) 1.94 (14.99) Pioneer Finl Svcs Inc. 11/30/90 11.00 364.85 5.50 377.92 6.25 385.26 (50.00) 3.58 (53.58) 13.64 1.94 11.69 Allied Prods Corp. Del 11/21/90 3.38 367.61 4.25 370.68 3.38 385.99 25.93 0.84 25.09 (20.59) 4.13 (24.72) Fleet Norstar Finl Group 11/21/90 10.25 367.61 10.13 370.68 11.63 385.99 (1.22) 0.84 (2.05) 14.81 4.13 10.68 Homeowners Group Inc. 11/21/90 5.50 367.61 5.13 370.68 5.00 385.99 (6.82) 0.84 (7.65) (2.44) 4.13 (6.57) Ruddick Corp. 11/15/90 21.44 358.86 21.00 371.23 21.63 385.42 (2.04) 3.45 (5.49) 2.98 3.82 (0.85) Hecla Mng Co. 11/9/90 7.88 351.52 7.13 367.11 7.38 383.70 (9.52) 4.44 (13.96) 3.51 4.52 (1.01) Melamine Chems Inc. 11/5/90 8.38 351.52 6.50 367.11 6.50 383.70 (22.39) 4.44 (26.82) 0.00 4.52 (4.52) Excel Bancorp Inc. Quincy MA 10/25/90 3.38 355.10 3.00 364.84 2.88 370.68 (11.11) 2.74 (13.85) (4.17) 1.60 (5.77) Team Inc. 10/24/90 11.25 359.99 10.00 367.61 9.13 370.68 (11.11) 2.12 (13.23) (8.75) 0.84 (9.59) Kennametal Inc. 10/23/90 28.13 363.73 26.75 367.19 27.38 369.66 (4.89) 0.95 (5.84) 2.34 0.67 1.66 Fabri Ctrs Amer Inc. 10/22/90 11.92 359.29 10.83 369.89 13.08 374.31 (9.10) 2.95 (12.05) 20.77 1.19 19.57 Landmark Bancshares Corp. 10/22/90 8.25 359.29 5.75 369.89 5.38 374.31 (30.30) 2.95 (33.25) (6.52) 1.19 (7.72) Apogee Enterprises Inc. 10/19/90 15.25 367.10 16.00 367.42 16.50 371.05 4.92 0.09 4.83 3.13 0.99 2.14 Nevada Pwr Co. 10/19/90 21.75 367.10 21.88 367.42 22.00 371.05 0.57 0.09 0.49 0.57 0.99 (0.42) INB Finl Corp. 10/16/90 17.25 376.71 16.50 350.09 17.50 371.69 (4.35) (7.07) 2.72 6.06 6.17 (0.11) Ohio Edison Co. 10/16/90 16.75 376.71 16.63 350.09 17.25 371.69 (0.75) (7.07) 6.32 3.76 6.17 (2.41) First Mich Bank Corp. 10/11/90 13.63 376.88 11.75 346.86 14.00 359.72 (13.76) (7.97) (5.80) 19.15 3.71 15.44 Global Nat Res Inc. 10/5/90 7.38 382.65 6.50 367.02 6.75 364.85 (11.86) (4.08) (7.78) 3.85 (0.59) 4.44 International Multifoods Corp. 10/4/90 28.88 379.48 31.50 368.42 32.38 359.80 9.09 (2.91) 12.01 2.78 (2.34) 5.12 Koger Pptys Inc. 9/30/90 19.00 382.03 11.13 360.47 7.13 358.50 (41.45) (5.64) (35.80)(35.96) (0.55) (35.41) Property Cap Tr 9/28/90 7.63 382.03 7.63 360.47 7.38 358.50 0.00 (5.64) 5.64 (3.28) (0.55) (2.73) La Qunita Mtr Inns 9/26/90 15.38 384.45 12.25 359.99 12.63 367.61 (20.33) (6.36) (13.96) 3.06 2.12 0.94 Med-Chem Prods Inc. 9/24/90 5.13 380.70 4.63 359.29 3.25 369.89 (9.76) (5.62) (4.13)(29.73) 2.95 (32.68) Ogden Corp. 9/20/90 18.00 362.23 18.63 367.62 15.50 358.86 3.47 1.49 1.98 (16.78) (2.38) (14.40) Regency Cruises Inc. 9/18/90 1.84 379.81 1.59 376.71 1.25 350.09 (13.56) (0.82) (12.74)(21.58) (7.07) (14.51) Oryx Energy Co. 9/14/90 52.75 386.73 52.75 374.60 41.88 351.52 0.00 (3.14) 3.14 (20.62) (6.16) (14.45) Santa Fe Energy Res Inc. 9/13/90 21.00 392.42 21.38 376.88 19.63 346.86 1.79 (3.96) 5.75 (8.19) (7.97) (0.22) Information Intl Inc. 9/11/90 11.75 400.84 10.50 380.23 9.25 358.67 (10.64) (5.14) (5.50)(11.90) (5.67) (6.23) El Paso Elec Co. 9/5/90 6.38 398.96 5.88 384.35 5.63 367.37 (7.84) (3.66) (4.18) (4.19) (4.42) 0.23 Gamma Biologicals Inc. 9/5/90 3.00 395.82 2.88 382.65 2.75 367.02 (4.17) (3.33) (0.84) (4.35) (4.08) (0.26) Enex Res Corp. Colo 9/4/90 3.50 395.10 4.00 382.85 40.63 371.05 14.29 (3.10) 17.39 915.75 (3.08) 918.83 Newmont Mng Corp. 8/30/90 51.63 415.29 44.50 377.69 41.50 355.10 (13.80) (9.05) (4.75) (6.74) (5.98) (0.76) Northeast Bancorp Inc. 8/29/90 15.50 419.84 12.13 384.45 8.50 359.99 (21.77) (8.43) (13.34)(29.90) (6.36) (23.53) FST City Bancorp Tex Inc. 8/24/90 31.25 413.25 18.00 421.70 17.00 379.81 (42.40) 2.04 (44.44) (5.56) (9.93) 4.38 Guilford Mls Inc. 8/23/90 18.88 421.30 16.88 362.23 15.88 367.62 (10.60)(14.02) 3.42 (5.93) 1.49 (7.41) Datron Sys Inc. CA 8/21/90 7.75 421.70 6.25 379.81 6.75 376.71 (19.35) (9.93) (9.42) 8.00 (0.82) 8.82 Regency Cruises Inc. 8/18/90 2.03 419.84 1.88 386.73 1.69 374.60 (7.68) (7.89) 0.21 (9.97) (3.14) (6.84) Dresser Inds Inc. 8/16/90 26.25 433.20 25.56 392.42 25.50 376.88 (2.62) (9.41) 6.80 (0.25) (3.96) 3.71 Tektronix Inc. 8/16/90 16.13 433.20 12.88 392.42 14.38 376.88 (20.16) (9.41) (10.74) 11.65 (3.96) 15.61 Waste Mgmt Inc. 8/15/90 42.75 431.53 39.63 401.38 35.50 381.96 (7.31) (6.99) (0.32)(10.41) (4.84) (5.57) ASK Computer Sys Inc. 8/14/90 9.38 435.58 9.25 400.84 8.00 380.23 (1.33) (7.98) 6.64 (13.51) (5.14) (8.37) Boatmans Bancshares Inc. 8/14/90 32.00 435.58 28.25 400.84 27.50 380.23 (11.72) (7.98) (3.74) (2.65) (5.14) 2.49 On Line Software Intl Inc. 8/13/90 7.88 428.69 6.63 400.06 5.88 380.57 (15.87) (6.68) (9.19)(11.32) (4.87) (6.45) Genesco Inc. 8/8/90 5.38 427.54 4.63 398.96 3.75 384.35 (13.95) (6.68) (7.27)(18.92) (3.66) (15.26) Storage Technology Corp. 8/8/90 32.63 427.54 21.50 398.96 19.88 384.35 (34.10) (6.68) (27.41) (7.56) (3.66) (3.90) Liberty Corp. 8/7/90 47.25 420.97 47.00 395.10 48.38 382.85 (0.53) (6.15) 5.62 2.93 (3.10) 6.03 Harley Davidson Inc. 8/6/90 30.63 424.10 23.50 394.74 22.88 382.03 (23.27) (6.92) (16.34) (2.66) (3.22) 0.56 Hunt Mfg Co. 8/6/90 12.75 424.10 11.75 394.74 12.75 382.03 (7.84) (6.92) (0.92) 8.51 (3.22) 11.73 McDonnell Corp. 8/2/90 40.88 418.89 44.00 415.29 41.38 377.69 7.65 (0.86) 8.50 (5.97) (9.05) 3.09 N S Group Inc. 7/30/90 12.63 422.49 10.13 420.23 10.50 380.70 (19.80) (0.53) (19.27) 3.70 (9.41) 13.11 Bay View Cap Corp. 7/26/90 17.75 420.24 17.38 421.30 14.50 362.23 (2.11) 0.25 (2.36)(16.55)(14.02) (2.53) Empire Dist Elec Co. 7/26/90 29.00 420.24 29.38 421.30 29.25 362.23 1.29 0.25 1.04 (0.43)(14.02) 13.60 Gerber Prods Co. 7/25/90 52.75 416.78 57.13 423.11 50.63 373.64 8.29 1.52 6.78 (11.38)(11.69) 0.31 Octel Communications Corp. 7/25/90 24.13 416.78 19.63 423.11 17.63 373.64 (18.65) 1.52 (20.17)(10.19)(11.69) 1.50 United Banks Colo Inc. 7/25/90 18.63 416.78 19.75 423.11 19.50 373.64 6.04 1.52 4.52 (1.27)(11.69) 10.43 Woodhead Inds Inc. 7/25/90 15.63 416.78 15.75 423.11 14.38 373.64 0.80 1.52 (0.72) (8.73)(11.69) 2.96 Neutrogena Corp. 7/23/90 20.50 413.63 20.75 420.79 17.75 387.73 1.22 1.73 (0.51)(14.46) (7.86) (6.60) Robert Half Intl Inc. 7/23/90 15.88 413.63 15.00 420.79 12.63 387.73 (5.51) 1.73 (7.24)(15.83) (7.86) (7.98) Stone Container Corp. 7/23/90 17.38 413.63 15.38 420.79 13.63 387.73 (11.51) 1.73 (13.24)(11.38) (7.86) (3.53) Citizens Banking Corp. 7/20/90 22.50 417.10 21.25 428.69 21.75 386.73 (5.56) 2.78 (8.33) 2.35 (9.79) 12.14 Live Entertainment Inc. 7/19/90 23.88 421.12 22.50 431.53 17.50 392.42 (5.76) 2.47 (8.23)(22.22) (9.06) (13.16) First American Bank Corp. 7/18/90 24.88 421.12 23.75 431.53 21.31 401.38 (4.52) 2.47 (6.99)(10.26) (6.99) (3.27) Kemper Corp. 7/18/90 41.75 421.12 42.13 431.53 36.63 401.38 0.90 2.47 (1.57)(13.06) (6.99) (6.07) Triangle Corp. 7/15/90 5.00 424.91 4.88 435.38 4.13 395.82 (2.50) 2.46 (4.96)(15.38) (9.09) (6.30) Adobe Res Corp. 7/11/90 12.25 426.16 11.38 427.54 12.88 398.96 (7.14) 0.32 (7.47) 13.19 (6.68) 19.87 Houston Inds Inc. 7/11/90 33.38 426.16 33.00 427.54 33.88 398.96 (1.12) 0.32 (1.45) 2.65 (6.68) 9.34 Health Care Ppty Invs Inc. 7/5/90 30.63 422.73 31.50 418.89 32.25 415.29 2.86 (0.91) 3.77 2.38 (0.86) 3.24 Bank Boston Corp. 6/28/90 13.38 422.03 12.38 420.24 10.88 421.30 (7.48) (0.42) (7.05)(12.12) 0.25 (12.37) Copley Pptys Inc. 6/28/90 12.00 422.03 12.00 420.24 12.75 421.30 0.00 (0.42) 0.42 6.25 0.25 6.00 IPALCO Enterprises Inc. 6/26/90 25.38 421.31 24.50 413.25 24.13 421.70 (3.45) (1.91) (1.54) (1.53) 2.04 (3.58) Keystone Intl Inc. 6/20/90 27.13 419.32 26.63 421.12 28.50 431.53 (1.84) 0.43 (2.27) 7.04 2.47 4.57 Smith Intl Inc. 6/19/90 13.63 418.20 14.50 420.01 16.13 435.58 6.42 0.43 5.99 11.21 3.71 7.50 Carolco Pictures Inc. 6/18/90 12.75 412.75 12.50 424.91 12.00 420.91 (1.96) 2.95 (4.91) (4.00) (0.94) (3.06) Reebok International Ltd 6/14/90 18.50 412.44 18.00 424.51 18.13 433.37 (2.70) 2.93 (5.63) 0.69 2.09 (1.39) Triton Energy Corp. 6/14/90 11.25 412.44 11.75 424.51 12.38 433.37 4.44 2.93 1.52 5.32 2.09 3.23 Flow International Corp 6/7/90 4.25 400.21 4.13 422.73 4.13 418.89 (2.94) 5.63 (8.57) 0.00 (0.91) 0.91 Energynorth Inc. 6/6/90 17.96 398.88 17.48 424.61 17.00 423.71 (2.70) 6.45 (9.15) (2.72) (0.21) (2.51) FHP International Corp. 6/6/90 14.14 409.45 16.36 417.43 17.05 422.32 15.74 1.95 13.80 4.16 1.17 2.99 Starrett L S Co. 6/6/90 21.63 398.88 25.25 424.61 24.38 423.71 16.76 6.45 10.31 (3.47) (0.21) (3.25) Daniel Industries Inc 5/31/90 14.50 385.44 15.75 421.62 16.38 420.51 8.62 9.39 (0.77) 3.97 (0.26) 4.23 Summit Technology Inc. 5/29/90 6.31 382.02 8.25 396.81 9.66 386.51 30.68 3.87 26.81 17.04 (2.60) 19.64 Dennison Manufacturing Co. 5/24/90 21.63 386.51 19.25 419.32 25.63 417.10 (10.98) 8.49 (19.47) 33.12 (0.53) 33.65 Gannett Inc 5/21/90 36.00 385.21 37.38 412.75 40.25 417.90 3.82 7.15 (3.33) 7.69 1.25 6.44 Horizon Industries Inc. 5/21/90 4.75 385.21 7.75 412.75 6.88 417.90 63.16 7.15 56.01 (11.29) 1.25 (12.54) Digital Comm. Ass. Inc. 5/18/90 19.75 395.81 23.13 412.44 24.13 424.51 17.09 4.20 12.89 4.32 2.93 1.40 Kent Electronics Corp. 5/11/90 8.38 400.42 8.75 400.21 11.50 421.22 4.48 (0.05) 4.53 31.43 5.25 26.18 FAB Industries Inc. 5/10/90 33.94 399.85 34.50 400.21 35.00 422.73 1.66 0.09 1.57 1.45 5.63 (4.18) Detrex Corp. 5/4/90 19.50 396.95 19.50 391.12 21.50 422.03 0.00 (1.47) 1.47 10.26 7.90 2.35 Unitrode Corp. 5/2/90 4.50 392.84 3.88 387.08 5.00 422.03 (13.89)(1.47) (12.42) 29.03 9.03 20.00 Genus Inc. 4/27/90 6.13 394.18 4.50 387.89 4.63 413.63 (26.53)(1.60) (24.93) 2.78 6.64 (3.86) American Travellers Corp. 4/25/90 9.50 396.48 12.13 384.45 17.25 418.20 27.63 (3.03) 30.67 42.27 8.78 33.49 Progress Financial Corp. 4/25/90 8.88 391.94 7.25 384.45 14.00 418.45 (18.31)(1.91) (16.40) 93.10 8.84 84.26 Republic Capital Group Inc. 4/25/90 16.13 391.94 15.44 384.45 15.00 418.45 (4.26)(1.91) (2.35) (2.84) 8.84 (11.68) Tony Lama Co. Inc. 4/23/90 8.13 398.94 6.75 389.90 6.00 419.32 (16.92)(2.27) (14.66)(11.11) 7.55 (18.66) American Rlty Tr. 4/11/90 5.25 388.20 4.25 397.16 3.88 398.02 (19.05) 2.31 (21.36) (8.82) 0.22 (9.04) American Health Pptys Inc. 4/10/90 20.88 391.25 20.25 397.13 21.75 396.54 (2.99) 1.50 (4.50) 7.41 (0.15) 7.56 Logicon Inc. 4/6/90 18.38 389.54 17.88 396.95 16.25 391.12 (2.72) 1.90 (4.62) (9.09) (1.47) (7.62) First Un Real Estate Equity 3/30/90 15.75 382.02 17.38 396.81 15.25 385.44 10.32 3.87 6.45 (12.23) (2.87) (9.36) Trustcompany Bacorporation 3/29/90 18.00 382.02 18.50 396.81 17.50 387.89 2.78 3.87 (1.09) (5.41) (2.25) (3.16) Teradyne Inc. 3/14/90 9.13 383.13 9.38 388.20 9.38 399.85 2.74 1.32 1.42 0.00 3.00 (3.00) Wallace Computer Svcs Inc. 3/14/90 27.00 383.13 25.50 388.20 25.50 399.85 (5.56) 1.32 (6.88) 0.00 3.00 (3.00) Graco Inc. 3/9/90 17.75 385.67 21.50 393.02 20.63 395.65 21.13 1.91 19.22 (4.07) 0.67 (4.74) Synoptics Communications Inc. 3/5/90 14.38 380.09 15.75 386.25 17.81 392.84 9.57 1.62 7.94 13.10 1.71 11.39 Western Co. North American 3/5/90 15.00 381.14 17.63 386.25 16.75 392.84 17.50 1.34 16.16 (4.96) 1.71 (6.67) Arix Corp 2/27/90 2.13 374.31 2.13 378.51 2.00 391.34 0.00 1.12 (1.12) (5.88) 3.39 (9.27) NIPSCO Industries Inc. 2/27/90 17.38 374.31 17.63 378.51 17.88 391.94 1.44 1.12 0.32 1.42 3.55 (2.13) CCB Financial Corp. 2/26/90 39.50 374.58 36.75 381.26 36.50 391.34 (6.96) 1.78 (8.75) (0.68) 2.64 (3.32) CFW Communications Co. 2/26/90 19.00 374.31 19.00 373.15 19.00 391.34 0.00 (0.31) 0.31 0.00 4.87 (4.87) Graham Corp 2/23/90 21.50 379.92 27.25 375.35 23.63 389.56 26.74 (1.20) 27.95 (13.30) 3.79 (17.09) Midlantic Corp 2/23/90 24.00 379.68 21.25 375.35 18.63 389.56 (11.46)(1.14) (10.32)(12.35) 3.79 (16.14) Eastern Enterprises 2/22/90 30.38 379.92 30.38 378.13 30.63 394.23 0.00 (0.47) 0.47 0.82 4.26 (3.43) Tultex Corp. 2/22/90 7.50 373.15 8.63 394.23 8.00 389.90 15.00 5.65 9.35 (7.25) (1.10) (6.15) Barnett Banks Inc. 2/21/90 31.75 381.26 32.75 378.66 29.38 396.45 3.15 (0.68) 3.83 (10.31) 4.70 (15.00) Huntington Bancshares Inc. 2/21/90 17.05 379.68 16.82 378.66 16.71 396.45 (1.33)(0.27) (1.06) (0.67) 4.70 (5.37) Chemdesign Corp. 2/20/90 14.00 381.26 14.25 383.81 12.25 398.80 1.79 0.67 1.12 (14.04) 3.91 (17.94) Washington Wtr Pwr Co. 2/16/90 30.63 391.83 29.75 386.51 28.75 388.20 (2.86)(1.36) (1.50) (3.36) 0.44 (3.80) VMX Inc. 2/15/90 2.38 379.68 1.94 383.13 2.38 391.33 (18.40) 0.91 (19.31) 22.55 2.14 20.41 Intl. Flavors & Fragrances 2/13/90 64.13 390.72 58.00 381.28 59.25 391.25 (9.55)(2.42) (7.14) 2.16 2.61 (0.46) General Employment Enterpris. 2/12/90 2.50 390.72 3.00 380.09 3.00 389.02 20.00 (2.72) 22.72 0.00 2.35 (2.35) MDT Corp. 2/10/90 7.13 390.72 6.50 385.67 5.88 393.02 (8.77)(1.29) (7.48) (9.62) 1.91 (11.52) Advanced Micro Devices Inc. 2/7/90 7.75 401.54 7.00 380.09 9.00 389.02 (9.68)(5.34) (4.34) 28.57 2.35 26.22 Giddings & Lewis Inc. 2/7/90 17.15 399.15 16.38 380.09 18.00 389.02 (4.52)(4.78) 0.26 9.92 2.35 7.57 Quaker Chemical Corp. 2/7/90 14.00 406.09 13.67 380.09 13.83 389.54 (2.38)(6.40) 4.02 1.21 2.49 (1.27) Anacomp Inc 2/4/90 4.38 404.05 3.88 381.16 3.50 386.25 (11.43)(5.67) (5.76) (9.68) 1.34 (11.01) United Coin Mines Ltd. 2/2/90 2.09 411.20 2.59 378.36 2.50 383.02 23.88 (7.99) 31.86 (3.62) 1.23 (4.86) J.C. Penney 1/31/90 74.88 410.40 66.88 371.92 65.88 382.02 (10.68)(9.38) (1.31) (1.50) 2.72 (4.21) Keystone Financial 1/30/90 24.75 411.20 22.25 374.31 22.50 380.38 (10.10)(8.97) (1.13) 1.12 1.62 (0.50) Monsanto 1/26/90 115.38 403.49 106.00 374.86 108.75 373.15 (8.13)(7.10) (1.03) 2.59 (0.46) 3.05 Wolohan Lumber 1/26/90 16.50 403.49 16.25 374.86 15.00 373.15 (1.52)(7.10) 5.58 (7.69)(0.46) (7.24) Telecom USA 1/25/90 22.75 400.50 20.38 379.92 16.50 375.35 (10.44)(5.14) (5.30) (19.02)(1.20) (17.82) Hooper Holmes Inc. 1/23/90 9.00 395.65 8.75 379.68 8.75 373.15 (2.78)(4.04) 1.26 0.00 (1.72) 1.72 Coachmen Industires Inc. 1/19/90 6.63 403.39 6.75 389.97 6.75 383.81 1.89 (3.33) 5.21 0.00 (1.58) 1.58 Lewis Galoob Toys 1/19/90 11.88 396.35 11.88 388.82 9.63 383.81 0.00 (1.90) 1.90 (18.95)(1.29) (17.66) Regional Bancorp 1/18/90 14.25 393.81 15.00 387.99 13.25 386.51 5.26 (1.48) 6.74 (11.67)(0.38) (11.29) Summit Bancorporation 1/16/90 16.25 393.60 16.88 388.82 17.25 386.51 3.85 (1.21) 5.06 2.22 (0.59) 2.82 West Co. 1/16/90 17.63 392.46 18.50 387.45 18.00 382.31 4.96 (1.28) 6.24 (2.70) (1.33) (1.38) Westbank 1/12/90 5.94 399.91 5.45 400.57 5.50 385.67 (8.33) 0.17 (8.50) 0.99 (3.72) 4.71 Idaho Power 1/11/90 29.75 400.56 28.00 399.15 27.63 384.99 (5.88)(0.35) (5.53) (1.34) (3.55) 2.21 Par Pharmaceutical 1/8/90 7.00 398.91 6.25 404.20 7.00 382.29 (10.71) 1.33 (12.04) 12.00 (5.42) 17.42 National Savings Bank Albany 1/2/90 25.00 399.71 28.00 403.49 28.50 371.92 12.00 0.95 11.05 1.79 (7.82) 9.61 Mission Resource Partners LP 12/31/89 15.38 395.51 12.75 403.49 12.38 374.31 (17.07) 2.02 (19.09) (2.94) (7.23) 4.29 Davis Water & Waste 12/21/89 14.75 390.58 12.63 391.86 13.00 388.82 (14.41) 0.33 (14.73) 2.97 (0.78) 3.75 Kinark Corp 12/21/89 4.75 390.58 4.75 391.86 4.88 388.82 0.00 0.33 (0.33) 2.63 (0.78) 3.41 PACCAR Inc. 12/21/89 42.50 390.58 42.00 391.86 41.25 388.82 (1.18) 0.33 (1.50) (1.79) (0.78) (1.01) Boston Five Bancorp 12/20/89 6.25 390.58 4.88 392.46 6.38 387.99 (22.00) 0.48 (22.48) 30.77 (1.14) 31.91 Briggs & Stratton 12/20/89 26.25 390.58 24.63 392.46 28.88 387.99 (6.19) 0.48 (6.67) 17.26 (1.14) 18.40 CUCOS Inc. 12/20/89 1.88 387.27 1.88 392.46 1.88 389.97 0.00 1.34 (1.34) 0.00 (0.63) 0.63 MCN Corp 12/20/89 21.75 390.58 23.38 392.46 22.75 387.99 7.47 0.48 6.99 (2.67) (1.14) (1.53) Bank of Chester County 12/19/89 11.50 387.65 9.13 393.60 9.63 391.83 (20.65) 1.53 (22.19) 5.48 (0.45) 5.93 Lincoln Financial Corp. 12/19/89 26.25 387.27 24.50 393.60 24.00 388.82 (6.67) 1.63 (8.30) (2.04) (1.21) (0.83) TCI International 12/18/89 7.88 387.27 6.50 399.91 6.88 387.45 (17.46) 3.26 (20.72) 5.77 (3.12) 8.88 Capital Cities/ABC 12/15/89 544.00 389.92 547.00 400.56 536.00 390.72 0.55 2.73 (2.18) (2.01) (2.46) 0.45 Ohio Casualty 12/15/89 50.75 389.92 49.75 400.56 47.13 390.72 (1.97) 2.73 (4.70) (5.28) (2.46) (2.82) Alcan Aluminium 12/14/89 21.38 388.05 22.75 403.07 23.50 400.57 6.43 3.87 2.56 3.30 (0.62) 3.92 Biomet 12/14/89 27.00 388.05 27.00 403.07 28.00 400.57 0.00 3.87 (3.87) 3.70 (0.62) 4.32 Foremost Corp 12/14/89 35.25 388.05 33.75 403.07 34.75 400.57 (4.26) 3.87 (8.13) 2.96 (0.62) 3.58 International Technology 12/14/89 4.88 388.05 6.75 403.07 6.75 400.57 38.46 3.87 34.59 0.00 (0.62) 0.62 Vitalink Communications 12/14/89 18.63 388.05 15.50 403.07 15.75 400.57 (16.78) 3.87 (20.65) 1.61 (0.62) 2.23 Heekin Can 12/13/89 39.25 388.16 39.75 402.71 38.50 399.15 1.27 3.75 (2.47) (3.14) (0.88) (2.26) Oneida 12/13/89 15.13 388.16 14.63 402.71 14.50 399.15 (3.31) 3.75 (7.05) (0.85) (0.88) 0.03 CareerCom Corp 12/12/89 5.88 385.09 5.25 398.91 4.75 401.54 (10.64) 3.59 (14.23) (9.52) 0.66 (10.18) Berry Petroleum 12/11/89 13.50 387.03 13.69 399.22 14.25 406.09 1.39 3.15 (1.76) 4.11 1.72 2.38 Digital Equipment 12/11/89 83.63 387.03 85.00 399.22 87.75 406.09 1.64 3.15 (1.51) 3.24 1.72 1.51 GTE Corp 12/7/89 65.38 383.22 68.50 398.71 69.25 407.59 4.78 4.04 0.74 1.09 2.23 (1.13) Murphy Oil 12/7/89 38.50 383.22 40.88 398.71 41.25 407.59 6.17 4.04 2.13 0.92 2.23 (1.31) Bradley Real Estate Trust 12/6/89 10.88 385.14 10.50 399.71 9.75 410.40 (3.45) 3.78 (7.23) (7.14) 2.67 (9.82) St. Paul Companies 12/4/89 60.50 378.85 63.00 400.67 60.00 411.20 4.13 5.76 (1.63) (4.76) 2.63 (7.39) North-West Telecommunications 12/1/89 43.25 384.77 40.88 395.51 42.00 403.49 (5.49) 2.79 (8.28) 2.75 2.02 0.73 Western Digital 12/1/89 6.88 384.77 8.25 395.51 8.38 403.49 20.00 2.79 17.21 1.52 2.02 (0.50) Maxxam Inc. 11/30/89 44.38 385.96 45.50 392.67 46.50 400.50 2.54 1.74 0.80 2.20 1.99 0.20 Commercial Intertech 11/29/89 20.25 389.42 21.75 395.27 22.25 398.07 7.41 1.50 5.91 2.30 0.71 1.59 Bell South Corp. 11/28/89 52.50 388.54 52.75 394.88 56.75 395.65 0.48 1.63 (1.16) 7.58 0.19 7.39 Security Bancorp 11/28/89 21.50 388.54 21.25 394.88 20.38 395.65 (1.16) 1.63 (2.79) (4.12) 0.19 (4.31) Dofasco Inc. 11/27/89 25.38 382.10 25.00 392.98 24.38 395.65 (1.48) 2.85 (4.33) (2.50) 0.68 (3.18) Sherritt-Gordon 11/27/89 NA 382.10 NA 392.98 NA 395.65 NA 2.85 NA NA 0.68 N/A Hershey Oil 11/24/89 6.00 382.16 6.00 390.58 6.88 396.35 0.00 2.20 (2.20) 14.58 1.48 13.11 Norwich Financial Corp. 11/21/89 9.13 392.83 9.00 387.27 8.13 392.46 (1.37) (1.42) 0.05 (9.72) 1.34 (11.06) Charter One Financial 11/20/89 21.00 393.58 18.75 389.92 15.50 393.60 (10.71) (0.93) (9.78) (17.33) 0.94 (18.28) Apple Bancorp 11/17/89 36.25 396.30 36.38 388.05 33.00 399.91 0.34 (2.08) 2.43 (9.28) 3.06 (12.33) NBB Bancorp 11/14/89 15.13 389.34 15.75 387.03 15.13 402.71 4.13 (0.59) 4.73 (3.97) 4.05 (8.02) Broadway Financial Corp. 11/13/89 13.50 391.33 13.13 386.45 12.00 398.91 (2.78) (1.25) (1.53) (8.57) 3.22 (11.80) Gleason Corp. 11/13/89 15.38 391.33 16.13 386.45 15.88 398.91 4.88 (1.25) 6.13 (1.55) 3.22 (4.77) USBancorp 11/10/89 15.25 379.68 14.88 383.22 14.50 399.22 (2.46) 0.93 (3.39) (2.52) 4.18 (6.70) CCNB Corp. 11/9/89 22.38 405.40 21.75 385.14 21.50 397.89 (2.79) (5.00) 2.20 (1.15) 3.31 (4.46) Diversified Energies 11/8/89 32.50 407.40 33.38 381.39 36.38 398.71 2.69 (6.38) 9.08 8.99 4.54 4.45 Wetterau Inc. 11/8/89 30.13 407.40 29.38 381.39 29.38 398.71 (2.49) (6.38) 3.89 0.00 4.54 (4.54) Syncor International 11/7/89 7.00 409.73 7.00 378.85 7.38 399.71 0.00 (7.54) 7.54 5.36 5.51 (0.15) Goody Products 11/1/89 15.75 407.40 13.00 388.54 10.75 392.67 (17.46) (4.63) (12.83) (17.31) 1.06 (18.37) Volunteer Bancshares 10/31/89 13.75 404.44 13.75 382.10 13.00 395.27 0.00 (5.52) 5.52 (5.45) 3.45 (8.90) Aetna Life & Causualty Co. 10/27/89 56.88 397.81 60.50 385.19 61.00 392.98 6.37 (3.17) 9.55 0.83 2.02 (1.20) Tellabs Inc. 10/27/89 11.00 397.95 9.25 385.19 9.50 392.98 (15.91) (3.21) (12.70) 2.70 2.02 0.68 American Business Products 10/26/89 24.63 397.81 21.00 390.92 20.00 392.98 (14.72) (1.73) (12.99) (4.76) 0.53 (5.29) Flagship Financial Corp. 10/26/89 17.63 397.81 15.88 390.92 14.75 392.98 (9.93) (1.73) (8.20) (7.09) 0.53 (7.61) Philip Morris Co.'s 10/26/89 41.25 397.81 43.50 390.92 41.50 392.98 5.45 (1.73) 7.19 (4.60) 0.53 (5.12) First New York Business Bank 10/25/89 12.00 393.88 11.25 392.83 9.00 390.58 (6.25) (0.27) (5.98) (20.00) (0.57) (19.43) Bankeast Corp. 10/24/89 3.13 393.01 3.00 393.58 2.38 387.65 (4.00) 0.15 (4.15) (20.83) (1.51) (19.33) Tambrands Inc. 10/24/89 71.00 393.01 65.75 393.58 63.50 387.65 (7.39) 0.15 (7.54) (3.42) (1.51) (1.92) Amoskeag Bank Shares 10/23/89 7.25 392.89 5.25 396.30 4.63 385.95 (27.59) 0.87 (28.45) (11.90) (2.61) (9.29) McGill Manufacturing Co. 10/23/89 56.50 392.89 73.13 396.30 83.50 387.27 29.42 0.87 28.56 14.19 (2.28) 16.47 Southeast Banking 10/20/89 26.13 395.84 26.13 396.57 24.88 389.92 0.00 0.18 (0.18) (4.78) (1.68) (3.11) NYNEX Corp. 10/19/89 80.75 394.64 79.50 390.22 80.25 388.05 (1.55) (1.12) (0.43) 0.94 (0.56) 1.50 West One Bancorp 10/19/89 26.50 394.64 26.17 390.22 24.83 388.05 (1.26) (1.12) (0.14) (5.10) (0.56) (4.54) Community Bankshares 10/18/89 9.13 395.60 8.50 389.34 5.75 388.16 (6.85) (1.58) (5.27) (32.35) (0.30) (32.05) Northern Trust Corp. 10/17/89 64.50 395.98 64.75 391.33 63.75 385.09 0.39 (1.17) 1.56 (1.54) (1.59) 0.05 CFS Financial Corp. 10/16/89 18.75 396.18 17.25 379.68 14.00 387.03 (8.00) (4.16) (3.84) (18.84) 1.94 (20.78) Quest Medical 10/13/89 2.50 394.35 2.38 405.40 2.06 386.45 (5.00) 2.80 (7.80) (13.14) (4.67) (8.46) First Essex Bancorp 10/12/89 7.25 392.64 7.88 407.40 7.63 383.22 8.62 3.76 4.86 (3.17) (5.94) 2.76 Heritage Bancorp 10/12/89 8.45 392.64 7.88 407.40 7.13 383.22 (6.83) 3.76 (10.59) (9.52) (5.94) (3.59) Star Banc Corp. 10/10/89 26.00 399.24 25.50 410.49 22.00 381.39 (1.92) 2.82 (4.74) (13.73) (7.09) (6.64) USX Corp. 10/10/89 34.50 399.24 38.63 410.49 34.13 381.39 11.96 2.82 9.14 (11.65) (7.09) (4.56) Eastchester Financial 10/4/89 14.50 400.16 14.13 404.44 13.13 389.42 (2.59) 1.07 (3.66) (7.08) (3.71) (3.37) Security Investments Group 10/3/89 6.13 404.10 6.25 400.02 5.25 388.54 2.04 (1.01) 3.05 (16.00) (2.87) (13.13) AVX Corp. 9/28/89 19.63 401.92 21.63 397.81 28.88 392.84 10.19 (1.02) 11.21 33.53 (1.25) 34.78 "ConAgra, Inc." 9/28/89 37.50 401.92 37.63 397.81 38.38 392.84 0.33 (1.02) 1.36 1.99 (1.25) 3.24 Wyle Labs 9/28/89 8.63 401.92 8.50 397.81 9.25 392.84 (1.45) (1.02) (0.43) 8.82 (1.25) 10.07 "MAPCO, Inc." 9/27/89 37.38 401.06 37.25 393.88 34.88 390.92 (0.33) (1.79) 1.46 (6.38) (0.75) (5.62) ONBANcorp. 9/25/89 13.00 403.53 12.38 395.84 13.25 393.58 (4.81) (1.91) (2.90) 7.07 (0.57) 7.64 "InterTAN, Inc." 9/22/89 49.13 402.71 47.38 395.84 61.00 396.57 (3.56) (1.71) (1.86) 28.76 0.18 28.58 Pacific Telesis Group 9/22/89 44.75 402.71 45.63 395.84 45.50 396.57 1.96 (1.71) 3.66 (0.27) 0.18 (0.46) Standard Federal Bank 9/22/89 12.50 402.71 12.00 395.84 12.00 396.57 (4.00) (1.71) (2.29) 0.00 0.18 (0.18) "Gamma Biologicals, Inc." 9/21/89 2.75 394.64 2.75 394.64 3.13 390.22 0.00 0.00 0.00 13.64 (1.12) 14.76 "DFSoutheastern, Inc." 9/19/89 20.25 390.50 19.13 395.98 17.38 391.33 (5.56) 1.40 (6.96) (9.15) (1.17) (7.98) Nelson Holdings Ltd. 9/19/89 0.88 390.50 0.94 395.98 1.06 391.33 7.20 1.40 5.80 13.33 (1.17) 14.50 "Sovereign Bancorp, Inc." 9/19/89 19.50 390.50 18.75 395.98 18.25 391.33 (3.85) 1.40 (5.25) (2.67) (1.17) (1.49) Sovran Financial Corp.9/19/89 37.75 367.37 40.13 384.22 42.50 395.73 6.29 4.59 1.70 5.92 3.00 2.92 "Imperial Holly, Corp." 9/14/89 25.50 394.27 26.25 391.64 28.25 407.40 2.94 (0.67) 3.61 7.62 4.02 3.59 Marietta Corporation 9/12/89 23.50 392.77 22.00 397.99 22.00 410.49 (6.38) 1.33 (7.71) 0.00 3.14 (3.14) Velobind Inc. 9/8/89 6.625 396.86 5.75 399.21 5.63 407.04 (13.21) 0.59 (13.80) (2.17) 1.96 (4.14) Great Lakes Chemical Corp. 9/7/89 20.25 398.56 23.38 399.21 23.13 407.04 15.43 0.16 15.27 (1.07) 1.96 (3.03) Multimedia Inc. 9/6/89 105.25 396.86 105.00 400.16 100.00 404.44 (0.24) 0.83 (1.07) (4.76) 1.07 (5.83) "The Genlyte Group, Inc." 8/29/89 12.50 395.68 12.75 401.06 12.25 392.89 2.00 1.36 0.64 (3.92) (2.04) (1.88) "WICOR, Inc." 8/29/89 23.50 395.68 23.38 401.06 24.13 392.89 (0.53) 1.36 (1.89) 3.21 (2.04) 5.25 Society Corp. 8/25/89 36.00 391.87 37.75 401.79 36.88 394.64 4.86 2.53 2.33 (2.32) (1.78) (0.54) HomeFed Corp. 8/24/89 35.88 387.31 41.88 402.71 44.63 395.60 16.72 3.98 12.75 6.57 (1.77) 8.33 National Penn Bancshares Inc. 8/23/89 43.33 382.20 42.88 390.50 44.50 395.98 (1.06) 2.17 (3.23) 3.79 1.40 2.39 "Fleming Companies, Inc." 8/22/89 36.50 382.38 34.75 390.50 34.50 396.18 (4.79) 2.12 (6.92) (0.72) 1.45 (2.17) Anchor Glass Corp. 8/21/89 10.88 385.31 20.00 389.55 19.25 394.35 83.91 1.10 82.81 (3.75) 1.23 (4.98) "QED Exploration, Inc." 8/21/89 1.69 385.31 2.16 389.55 2.00 394.35 27.73 1.10 26.62 (7.24) 1.23 (8.47) "Sage Software, Inc." 8/18/89 8.38 381.96 7.25 395.84 7.88 392.64 (13.43) 3.63 (17.07) 8.62 (0.81) 9.43 First Fidelity Bancorp 8/17/89 32.88 384.22 33.50 394.27 31.25 395.38 1.90 2.62 (0.71) (6.72) 0.28 (7.00) UJB Financial Corp. 8/17/89 23.00 384.22 26.25 394.27 25.75 395.38 14.13 2.62 11.51 (1.90) 0.28 (2.19) New Hampshire Savings Bank 8/16/89 5.00 378.73 5.75 395.73 6.50 399.24 15.00 4.49 10.51 13.04 0.89 12.16 Mellon Bank Corp. 8/15/89 37.13 379.67 35.75 394.71 34.75 397.99 (3.70) 3.96 (7.67) (2.80) 0.83 (3.63) "BRE Properties, Inc."8/14/89 30.00 378.70 31.38 392.77 30.00 399.47 4.58 3.72 0.87 (4.38) 1.71 (6.09) AMR Corp. 8/11/89 61.88 376.50 77.50 394.38 81.00 399.21 25.25 4.75 20.50 4.52 1.22 3.29 "Anthony Industries, Inc." 8/10/89 15.88 376.24 17.13 398.56 17.00 400.16 7.87 5.93 1.94 (0.73) 0.40 (1.13) Storage Technology Corp. 8/8/89 13.75 373.12 12.38 399.67 10.25 405.27 (10.00) 7.12 (17.12) (17.17) 1.40 (18.57) "Bemis Company, Inc." 8/3/89 29.50 366.17 33.88 393.62 33.88 401.92 14.83 7.50 7.33 0.00 2.11 (2.11) "Juno Lighting, Inc." 8/2/89 17.75 364.82 17.75 393.02 17.75 401.06 0.00 7.73 (7.73) 0.00 2.05 (2.05) "Marsh Supermarkets, Inc." 8/1/89 19.25 364.82 19.13 392.20 18.50 403.53 (0.65) 7.51 (8.15) (3.27) 2.89 (6.16) Georgia Pacific Corp. 7/31/89 43.88 363.48 54.88 395.68 59.13 403.53 25.07 8.86 16.21 7.74 1.98 5.76 IOMEGA Corp. 7/28/89 2.63 365.70 2.75 391.31 2.75 401.79 4.76 7.00 (2.24) 0.00 2.68 (2.68) Numac Oil and Gas Ltd. 7/28/89 8.25 365.70 8.50 391.31 8.50 401.79 3.03 7.00 (3.97) 0.00 2.68 (2.68) "Ryder System, Inc. " 7/28/89 26.00 365.70 28.88 391.31 28.38 401.79 11.06 7.00 4.05 (1.73) 2.68 (4.41) American General Corporation 7/27/89 36.75 372.92 37.63 391.87 38.00 402.71 2.38 5.08 (2.70) 1.00 2.77 (1.77) California Microwave 7/27/89 8.00 372.92 9.13 391.87 9.13 402.71 14.06 5.08 8.98 0.00 2.77 (2.77) Cobe Labs Inc. 7/27/89 19.50 372.92 21.00 391.87 22.00 402.71 7.69 5.08 2.61 4.76 2.77 2.00 Pneumatic Scale Corp. 7/27/89 20.25 372.92 30.25 391.87 22.63 402.71 49.38 5.08 44.30 (25.21) 2.77 (27.97) Adaptec Inc. 7/26/89 5.63 336.92 7.38 353.98 10.00 366.05 31.08 5.06 26.02 35.50 3.41 32.09 Ametek Inc. 7/26/89 15.75 375.71 13.88 387.31 14.38 394.64 (11.90) 3.09 (14.99) 3.60 1.89 1.71 Asarco Incorporated 7/26/89 28.63 375.71 29.63 387.31 34.75 394.64 3.49 3.09 0.41 17.30 1.89 15.41 MTEL 7/26/89 8.00 375.71 11.00 387.31 10.63 394.64 37.50 3.09 34.41 (3.41) 1.89 (5.30) Union Carbide Corp. 7/26/89 27.13 375.71 27.50 387.31 28.50 394.64 1.38 3.09 (1.70) 3.64 1.89 1.74 Concurrent Computer 7/25/89 4.63 373.30 4.63 382.20 4.88 390.50 0.00 2.38 (2.38) 5.41 2.17 3.23 "Cullen/Frost Bankers, Inc." 7/25/89 15.88 373.30 16.75 382.20 17.75 390.50 5.51 2.38 3.13 5.97 2.17 3.80 Meridian Bancorp 7/25/89 23.63 373.30 23.88 382.20 25.50 390.50 1.06 2.38 (1.33) 6.81 2.17 4.63 St. Jude Medical 7/24/89 36.50 373.30 37.50 385.31 40.00 389.55 2.74 3.22 (0.48) 6.67 1.10 5.57 Burr Brown Corp 7/21/89 11.00 373.30 9.75 381.96 9.50 389.55 (11.36) 2.32 (13.68) (2.56) 1.99 (4.55) Global Natural Res. Inc. 7/20/89 5.25 366.56 5.75 381.96 5.63 394.27 9.52 4.20 5.32 (2.17) 3.22 (5.40) ICM Property Invs. Inc. 7/18/89 10.00 368.12 9.00 378.73 8.00 394.71 (10.00) 2.88 (12.88) (11.11) 4.22 (15.33) Interpublic Group 7/18/89 31.75 368.12 31.88 378.73 35.00 394.71 0.39 2.88 (2.49) 9.80 4.22 5.58 Kerr-McGee Corp. 7/11/89 46.25 373.21 46.63 374.77 48.75 399.67 0.81 0.42 0.39 4.56 6.64 (2.09) Phillips Petroleum Co.7/10/89 22.88 373.53 23.13 373.12 22.75 399.26 1.09 (0.11) 1.20 (1.62) 7.01 (8.63) Georgia Gulf Corp. 7/7/89 36.63 373.52 39.38 370.87 44.00 393.14 7.51 (0.71) 8.22 11.75 6.00 5.74 Computer Horizons Corp.7/6/89 7.63 371.10 8.00 367.19 7.25 393.62 4.92 (1.05) 5.97 (9.38) 7.20 (16.57) United Water Resources Inc. 7/6/89 16.88 371.10 16.63 367.19 16.63 393.62 (1.48) (1.05) (0.43) 0.00 7.20 (7.20) Flow General Inc. 6/30/89 5.63 372.99 5.88 363.48 6.13 395.68 4.44 (2.55) 6.99 4.26 8.86 (4.60) United Savers Bancorp 6/29/89 14.50 369.46 12.00 365.70 9.38 391.31 (17.24) (1.02) (16.22) (21.88) 7.00 (28.88) "US Air Group, Inc. " 6/29/89 45.75 369.46 45.38 365.70 50.00 391.31 (0.82) (1.02) 0.20 10.19 7.00 3.19 Dionex Corp. 6/27/89 20.00 366.30 18.75 373.30 19.25 382.20 (6.25) 1.91 (8.16) 2.67 2.38 0.28 Crestar Financial Corp. 6/23/89 27.75 366.50 29.50 375.06 29.38 382.38 6.31 2.34 3.97 (0.42) 1.95 (2.38) Baltimore Bancorp 6/21/89 14.00 364.72 14.13 366.56 15.00 381.96 0.89 0.50 0.39 6.19 4.20 1.99 Echlin Inc. 6/21/89 17.75 364.72 16.88 366.56 16.88 381.96 (4.93) 0.50 (5.43) 0.00 4.20 (4.20) "IMC Fertilizer Group, Inc." 6/21/89 40.13 364.72 36.25 366.56 34.63 381.96 (9.66) 0.50 (10.16) (4.48) 4.20 (8.68) "Maxwell Laboratories, Inc." 6/21/89 14.00 369.09 17.00 367.37 14.50 384.22 21.43 (0.47) 21.89 (14.71) 4.59 (19.29) MGI Properties 6/21/89 14.50 364.72 15.00 366.56 16.00 381.96 3.45 0.50 2.94 6.67 4.20 2.47 The Walt Disney Company 6/21/89 94.13 364.72 93.00 366.56 101.25 381.96 (1.20) 0.50 (1.70) 8.87 4.20 4.67 Valley National 6/21/89 27.75 364.72 25.88 366.56 26.25 381.96 (6.76) 0.50 (7.26) 1.45 4.20 (2.75) Tolland Bank 6/20/89 10.75 369.09 10.38 367.37 10.25 384.22 (3.49) (0.47) (3.02) (1.20) 4.59 (5.79) Analysts International Corp. 6/16/89 14.60 365.47 15.60 367.74 15.60 379.67 6.85 0.62 6.23 0.00 3.24 (3.24) "P&F Industries, Inc."6/16/89 3.13 365.47 3.19 367.74 3.25 379.67 2.02 0.62 1.39 1.94 3.24 (1.30) AmSouth Bancorporation6/15/89 26.63 365.47 28.75 367.74 28.75 379.67 7.98 0.62 7.36 0.00 3.24 (3.24) Hathaway Corp. 6/15/89 3.88 365.47 4.38 367.74 4.38 379.67 12.90 0.62 12.28 0.00 3.24 (3.24) Santa Anita Realty 6/15/89 29.75 365.47 29.88 367.74 30.75 379.67 0.42 0.62 (0.20) 2.93 3.24 (0.32) "Applied Materials, Inc." 6/14/89 31.00 362.52 28.50 370.40 27.75 376.50 (8.06) 2.17 (10.24) (2.63) 1.65 (4.28) "Casey's General Stores, Inc."6/14/89 12.00 362.52 10.75 370.40 8.00 376.50 (10.42) 2.17 (12.59) (25.58) 1.65 (27.23) "Matlack Systems, Inc." 6/14/89 8.38 362.52 8.50 370.40 8.38 376.50 1.49 2.17 (0.68) (1.47) 1.65 (3.12) RLC Corp. 6/14/89 8.63 362.52 8.88 370.40 8.50 376.50 2.90 2.17 0.72 (4.23) 1.65 (5.87) "Rollins Envir. Services, Inc." 6/14/89 10.75 362.52 11.63 370.40 9.88 376.50 8.14 2.17 5.97 (15.05) 1.65 (16.70) John H. Harland Co. 6/9/89 21.50 353.48 23.00 373.53 23.50 373.12 6.98 5.67 1.30 2.17 (0.11) 2.28 Duplex Products Inc. 6/8/89 19.88 352.15 20.50 373.52 20.25 370.87 3.14 6.07 (2.92) (1.22) (0.71) (0.51) Gleason Corp. 6/6/89 14.63 351.35 14.63 368.52 18.13 366.17 0.00 4.89 (4.89) 23.93 (0.64) 24.57 Hasbro Inc. 6/5/89 17.63 354.16 21.25 368.52 21.00 364.82 20.57 4.05 16.51 (1.18) (1.00) (0.17) Agnico-Eagle 6/3/89 8.25 354.16 7.13 372.99 7.50 363.48 (13.64) 5.32 (18.95) 5.26 2.55) 7.81 The Chubb Corporation 6/2/89 64.63 354.69 70.88 372.99 68.38 363.48 9.67 5.16 4.51 (3.53) (2.55) (0.98) Barry Wright Corp. 5/30/89 5.38 355.77 8.13 366.30 12.25 375.71 51.16 2.96 48.20 50.77 2.57 48.20 "National Realty, L.P." 5/26/89 8.88 356.58 8.00 369.19 8.75 373.30 (9.86) 3.54 (13.40) 9.38 1.11 8.26 Coeur D'Alene Mines Corp. 5/24/89 18.00 353.98 16.38 366.05 17.25 368.43 (9.03) 3.41 (12.44) 5.34 0.65 4.69 Johnson Controls Inc. 5/24/89 36.25 353.98 41.63 366.05 38.63 368.43 14.83 3.41 11.42 (7.21) 0.65 (7.86) Signet Banking Corp. 5/23/89 35.88 353.91 35.75 364.72 36.25 366.56 (0.35) 3.05 (3.40) 1.40 0.50 0.89 TCF Financial Corp. 5/23/89 12.25 353.91 13.00 364.72 13.38 366.56 6.12 3.05 3.07 2.88 0.50 2.38 "Donaldson Company, Inc." 5/19/89 17.75 357.49 17.63 368.76 17.25 368.12 (0.70) 3.15 (3.86) (2.13) (0.17) (1.95) Allergan Inc. 5/18/89 NA 353.38 NA 365.47 NA 367.74 NA 3.42 NA NA 0.62 N/A Compaq Computer Corp. 5/18/89 79.38 353.38 83.00 365.47 91.75 367.74 4.57 3.42 1.15 10.54 0.62 9.92 Micropolis Corp. 5/18/89 6.75 353.38 6.13 365.47 5.38 367.74 (9.26) 3.42 (12.68) (12.24) 0.62 (12.87) Sensormatic Electronics Corp. 5/18/89 11.63 353.38 12.63 365.47 11.75 367.74 8.65 3.42 5.22 (6.97) 0.62 (7.59) First Eastern Corp. 5/17/89 34.00 354.30 33.00 364.89 35.00 366.20 (2.94) 2.99 (5.93) 6.06 0.36 5.70 Ltx Corp. 5/17/89 6.25 354.30 4.63 364.89 3.25 366.20 (26.00) 2.99 (28.99) (29.73) 0.36 (30.09) Cray Research Inc. 5/15/89 54.88 348.01 55.75 363.67 53.00 370.72 1.59 4.50 (2.91) (4.93) 1.94 (6.87) Electro Scientific Ind. Inc. 5/15/89 11.75 348.01 12.63 363.67 13.88 370.72 7.45 4.50 2.95 9.90 1.94 7.96 Biogen Inc. 5/12/89 12.75 347.46 12.63 360.88 13.88 373.21 (0.94) 3.86 (4.80) 9.86 3.42 6.44 Corporate Software Inc. 5/12/89 10.00 347.46 14.00 360.88 14.25 373.21 40.00 3.86 36.14 1.79 3.42 (1.63) Universal Voltronics Corp. 5/12/89 1.25 347.46 1.63 360.88 1.59 373.21 30.00 3.86 26.14 (1.91) 3.42 (5.32) "Amwest Insurance Group, Inc." 5/11/89 10.88 341.90 10.75 353.48 11.75 373.53 (1.19) 3.39 (4.58) 9.30 5.67 3.63 Carpenter Technology Corp. 5/11/89 46.88 341.90 46.50 353.48 51.13 373.53 (0.81) 3.39 (4.20) 9.96 5.67 4.28 Cycare Systems Inc. 5/11/89 7.00 341.90 7.00 353.48 7.00 373.53 0.00 3.39 (3.39) 0.00 5.67 (5.67) Health Images Inc. 5/11/89 6.63 341.90 6.50 353.48 6.38 373.53 (1.89) 3.39 (5.27) (1.92) 5.67 (7.60) Hein-Werner 5/9/89 15.00 344.24 17.25 352.24 17.88 371.10 15.00 2.32 12.68 3.62 5.35 (1.73) International Broadcasting 5/6/89 9.63 342.30 11.00 354.16 10.13 368.52 14.29 3.46 10.82 (7.95) 4.05 (12.01) Service Merchandise Co.5/5/89 15.00 342.30 19.63 354.16 19.50 368.52 30.83 3.46 27.37 (0.64) 4.05 (4.69) Southwestern Energy Co.5/5/89 21.00 342.30 23.50 354.16 26.38 368.52 11.90 3.46 8.44 12.23 4.05 8.18 Sun Microsystem Inc. 5/5/89 17.13 342.30 17.00 354.16 18.63 368.52 (0.73) 3.46 (4.19) 9.56 4.05 5.50 "Central Fidelity Banks, Inc." 5/3/89 29.00 340.97 30.00 354.99 30.50 369.46 3.45 4.11 (0.66) 1.67 4.08 (2.41) Perkin Elmer Corp. 5/3/89 21.88 340.97 24.75 354.99 25.25 369.46 13.14 4.11 9.03 2.02 4.08 (2.06) Pioneer Hi Bred Intl Inc. 5/3/89 38.00 340.97 37.50 354.99 40.50 369.46 (1.32) 4.11 (5.43) 8.00 4.08 3.92 Puritan Bennett Corp. 5/3/89 19.25 340.97 22.00 354.99 24.75 369.46 14.29 4.11 10.17 12.50 4.08 8.42 Sizeler Property Invest. Inc. 5/3/89 16.00 340.97 16.13 354.99 15.13 369.46 0.78 4.11 (3.33) (6.20) 4.08 (10.28) CPI Corp. 5/1/89 24.63 341.29 24.50 355.77 25.38 366.30 (0.51) 4.24 (4.75) 3.57 2.96 0.61 Milton Roy 4/28/89 13.50 339.42 13.25 356.58 16.50 369.19 (1.85) 5.06 (6.91) 24.53 3.54 20.99 Teco Energy Inc. 4/28/89 22.75 339.42 24.00 356.58 24.50 369.19 5.49 5.06 0.44 2.08 3.54 (1.45) Charming Shoppes Inc. 4/27/89 15.63 336.86 14.38 356.82 17.63 366.50 (8.00) 5.93 (13.93) 22.61 2.71 19.90 NWA Inc. 4/27/89 68.25 336.86 100.00 356.82 104.88 366.50 46.52 5.93 40.59 4.88 2.71 2.16 Church & Dwight 4/26/89 11.25 336.92 13.50 353.98 13.13 366.05 20.00 5.06 14.94 (2.78) 3.41 (6.19) W.W. Grainger Inc. 4/26/89 52.50 336.92 57.75 353.98 63.38 366.05 10.00 5.06 4.94 9.74 3.41 6.33 Pioneer Standard Electr. Inc. 4/25/89 9.25 336.02 9.25 353.91 9.00 364.72 0.00 5.32 (5.32) (2.70) 3.05 (5.76) Sanderson Farms Inc. 4/25/89 14.25 336.02 16.25 353.91 18.25 364.72 14.04 5.32 8.71 12.31 3.05 9.25 Ameribanc Inc. 4/21/89 20.94 332.79 20.75 357.49 19.50 368.76 (0.91) 7.42 (8.33) (6.02) 3.15 (9.18) "CB&T Bancshares, Inc." 4/20/89 11.75 336.86 14.00 353.38 14.75 365.47 19.15 4.90 14.24 5.36 3.42 1.94 Dunkin Donuts Inc. 4/20/89 32.00 336.86 37.88 353.38 38.13 365.47 18.36 4.90 13.46 0.66 3.42 (2.76) Apple Computer Inc. 4/19/89 34.88 335.85 40.88 354.30 45.25 364.89 17.20 5.49 11.71 10.69 2.99 7.70 Consolidated Stores 4/18/89 7.63 335.85 7.63 348.01 7.38 362.52 0.00 3.62 (3.62) (3.21) 4.17 (7.38) Income Opportunity Rlty Trust 4/14/89 4.38 346.01 7.25 347.76 8.63 360.88 65.71 0.51 65.21 18.97 3.77 15.19 Chemical Banking Corp.4/13/89 31.50 342.97 34.63 341.90 33.63 353.48 9.92 (0.31) 10.23 (2.89) 3.39 (6.28) Credo Petroleum Inc. 4/13/89 1.88 342.97 1.94 341.90 2.13 353.48 3.19 (0.31) 3.50 9.79 3.39 6.41 Federal Rlty Invt Trust 4/13/89 23.13 342.97 23.00 341.90 23.63 353.48 (0.54) (0.31) (0.23) 2.72 3.39 (0.67) Super Valu Stores Inc.4/12/89 24.38 340.95 24.13 344.95 27.00 352.15 (1.03) 1.17 (2.20) 11.92 2.09 9.83 Trinity Inds. Inc. 4/11/89 33.75 341.21 36.25 344.24 34.88 339.43 7.41 0.89 6.52 (3.79) 1.40) (2.40) Immucor Inc. 4/10/89 5.38 338.17 6.13 342.48 5.75 352.24 13.95 1.27 12.68 (6.12) 2.85 (8.97) US West Inc. 4/7/89 62.00 339.43 62.50 342.30 65.38 354.16 0.81 0.85 (0.04) 4.60 3.46 1.14 Trimedyne 4/4/89 14.50 339.55 13.38 341.29 12.75 354.61 (7.76) 0.51 (8.27) (4.67) 3.90 (8.58) Brunswick Corp. 4/3/89 17.63 336.35 19.25 341.29 19.25 355.77 9.19 1.47 7.72 0.00 4.24 (4.24) Farr Co. 4/3/89 10.00 336.35 10.75 341.29 10.25 355.77 7.50 1.47 6.03 (4.65) 4.24 (8.89) Ferro Corp. 4/3/89 34.00 336.35 43.88 341.29 47.63 355.77 29.04 1.47 27.58 8.55 4.24 4.30 "J.P. Industries, Inc." 3/30/89 13.00 331.48 17.25 336.86 16.38 353.98 32.69 1.62 31.07 (5.07) 5.08 (10.15) "The Home Group, Inc."3/30/89 13.63 331.48 14.00 336.86 12.75 353.98 2.75 1.62 1.13 (8.93) 5.08 (14.01) "Shaw Industries, Inc." 3/29/89 24.75 333.48 24.13 336.92 29.00 353.98 (2.53) 1.03 (3.56) 20.21 5.06 15.14 Beckman Instruments 3/28/89 19.00 332.24 19.25 336.02 19.50 353.91 1.32 1.14 0.18 1.30 5.32 (4.03) Bell Atlantic Corp. 3/28/89 72.88 332.24 76.00 336.02 80.25 353.91 4.29 1.14 3.15 5.59 5.32 0.27 "Electromagnetic Sciences, Inc." 3/27/89 7.13 331.33 6.88 334.73 7.50 356.15 (3.51) 1.03 (4.53) 9.09 6.40 2.69 "NWA, Inc." 3/27/89 69.38 331.33 70.38 334.73 100.25 356.15 1.44 1.03 0.42 42.45 6.40 36.05 Pinnacle West Capital Corp. 3/27/89 15.25 331.33 13.75 334.73 14.00 356.15 (9.84) 1.03 (10.86) 1.82 6.40 (4.58) Synalloy Corp. 3/27/89 7.63 331.33 7.75 334.73 8.63 356.15 1.64 1.03 0.61 11.29 6.40 4.89 PLM International 3/23/89 8.13 337.10 9.38 332.79 9.25 357.49 15.38 1.28) 16.66 (1.33) 7.42 (8.76) Upjohn Co. 3/23/89 30.75 337.10 27.75 332.79 29.75 357.49 (9.76) (1.28) (8.48) 7.21 7.42 (0.21) Porta Systems Corp. 3/22/89 10.13 335.96 12.00 334.54 11.63 353.38 18.52 (0.42) 18.94 (3.13) 5.63 (8.76) Cambridge Bioscience Corp. 3/21/89 14.50 342.07 14.13 335.85 13.75 352.87 (2.59) (1.82) (0.77) (2.65) 5.07 (7.72) Fluorocarbon Co. 3/21/89 13.63 342.07 13.00 335.85 13.25 352.87 (4.59) (1.82) (2.77) 1.92 5.07 (3.14) "Baxter International, Inc." 3/20/89 19.75 342.66 19.38 334.17 19.50 352.87 (1.90) (2.48) 0.58 0.65 5.60 (4.95) Archive Corp. 3/17/89 10.50 340.45 10.13 337.78 10.88 348.01 (3.57) (0.78) (2.79) 7.41 3.03 4.38 "Flowers Industries, Inc." 3/17/89 16.50 340.45 16.88 337.78 18.63 348.01 2.27 (0.78) 3.06 10.37 3.03 7.34 Raven Industries 3/16/89 8.75 339.84 10.50 346.01 10.75 347.76 20.00 1.82 18.18 2.38 0.51 1.88 "Texaco, Inc." 3/16/89 50.00 339.84 53.63 346.01 53.88 347.76 7.25 1.82 5.43 0.47 0.51 (0.04) Genzyme Corp. 3/15/89 8.75 336.74 9.50 342.97 10.38 341.90 8.57 1.85 6.72 9.21 (0.31) 9.52 Morgan Products Ltd. 3/15/89 15.63 336.74 15.00 342.97 15.50 341.90 (4.00) 1.85 (5.85) 3.33 (0.31) 3.65 Orion Capital Corp. 3/15/89 20.00 336.74 20.88 342.97 20.50 341.90 4.38 1.85 2.52 (1.80) (0.31) (1.48) Texas Eastern Corp. 3/15/89 49.38 336.74 50.13 342.97 51.13 341.90 1.52 1.85 (0.33) 2.00 (0.31) 2.31 Grubb & Ellis Co. 3/13/89 4.00 337.26 3.75 341.21 4.00 344.24 (6.25) 1.17 (7.42) 6.67 0.89 5.78 Johnstown Cons. Rlty Trust 3/13/89 5.88 337.39 6.50 341.21 7.25 344.24 10.64 1.13 9.51 11.54 0.89 10.65 International Minerals & Chemical 3/10/89 39.88 342.16 40.00 338.17 41.25 342.48 0.31 (1.17) 1.48 3.13 1.27 1.85 Moore Medical Corp. 3/9/89 11.50 345.31 12.88 339.43 13.00 342.30 11.96 (1.70) 13.66 0.97 0.85 0.13 General Instrument Corp. 3/8/89 33.00 346.41 31.13 339.81 29.13 339.89 (5.68) (1.91) (3.78) (6.43) 0.02 (6.45) Pacific Enterprises 3/7/89 40.25 342.59 41.50 339.55 39.13 340.97 3.11 (0.89) 3.99 (5.72) 0.42 (6.14) "Premark International, Inc." 3/7/89 31.75 342.59 32.63 339.55 33.63 340.97 2.76 (0.89) 3.64 3.07 0.42 2.65 Outboard Marine Corp. 3/6/89 32.38 343.84 32.50 340.39 34.38 340.14 0.39 (1.00) 1.39 5.77 (0.07) 5.84 Wynn's International 3/3/89 25.00 343.62 26.38 336.35 26.88 341.29 5.50 (2.12) 7.62 1.90 1.47 0.43 "American Water Works, Inc." 3/2/89 18.25 343.87 19.63 334.82 19.50 339.42 7.53 (2.63) 10.17 (0.64) 1.37 (2.01) "Information Resources, Inc." 3/2/89 11.50 343.87 12.88 334.82 13.88 339.42 11.96 (2.63) 14.59 7.77 1.37 6.39 Finnigan Corp. 3/1/89 16.25 344.20 16.75 331.48 15.00 336.86 3.08 (3.70) 6.77 (10.45) 1.62 (12.07) Longview Fibre 3/1/89 66.88 344.20 63.88 331.48 65.00 336.86 (4.49) (3.70) (0.79) 1.76 1.62 0.14 Seagull Energy 3/1/89 15.75 344.20 17.25 331.48 16.38 336.86 9.52 (3.70) 13.22 (5.07) 1.62 (6.70) Shawmut National Corp. 3/1/89 24.88 344.20 24.25 331.48 25.00 336.86 (2.51) (3.70) 1.18 3.09 1.62 1.47 "Bohemia, Inc." 2/28/89 18.00 340.96 19.00 333.48 17.75 336.02 5.56 (2.19) 7.75 (6.58) 0.76 (7.34) Health-Chem Corp. 2/28/89 2.88 340.96 2.75 333.48 2.63 336.92 (4.35) (2.19) (2.15) (4.55) 1.03 (5.58) IFR Systems 2/28/89 11.75 340.96 10.25 333.48 11.50 336.92 (12.77) (2.19) (10.57) 12.20 1.03 11.16 North Fork Bancorp 2/28/89 18.25 340.96 18.25 333.48 18.88 336.92 0.00 (2.19) 2.19 3.42 1.03 2.39 "Burlington Resources, Inc." 2/23/89 39.75 333.99 49.63 337.10 43.13 332.79 24.84 0.93 23.91 (13.10) (1.28) (11.82) Cyprus Minerals Co. 2/23/89 36.25 333.99 39.88 337.10 38.38 332.79 10.00 0.93 9.07 (3.76) (1.28) (2.48) Microage Industries 2/23/89 6.88 333.99 6.75 337.10 7.00 332.79 (1.82) 0.93 (2.75) 3.70 (1.28) 4.98 "Skipper's, Inc." 2/23/89 7.75 333.99 9.13 337.10 7.13 332.79 17.74 0.93 16.81 (21.92) (1.28) (20.64) "Independence Bancorp, Inc." 2/22/89 19.50 333.99 22.38 335.96 20.13 334.54 14.74 0.59 14.15 (10.06) (0.42) (9.63) Liqui Box Corp. 2/22/89 49.00 333.99 48.00 335.96 52.00 334.54 (2.04) 0.59 (2.63) 8.33 (0.42) 8.76 Southtrust 2/22/89 20.43 333.99 21.50 335.96 21.25 334.54 5.22 0.59 4.63 (1.16) (0.42) (0.74) "Silicon Systems, Inc." 2/21/89 11.00 328.83 10.63 342.07 10.63 335.85 (3.41) 4.03 (7.44) 0.00 (1.82) 1.82 "DeSoto, Inc." 2/20/89 38.75 328.83 48.25 342.66 50.13 334.17 24.52 4.21 20.31 3.89 (2.48) 6.36 General Development Corp. 2/17/89 15.50 331.41 17.50 342.66 14.75 334.17 12.90 3.39 9.51 (15.71) (2.48) (13.24) General Housewares Corp. 2/17/89 7.25 331.41 8.00 342.66 12.63 334.17 10.34 3.39 6.95 57.81 (2.48) 60.29 LSB Industries 2/17/89 2.25 331.41 2.88 342.66 2.63 334.17 27.78 3.39 24.38 (8.70) (2.48) (6.22) "Andover Bancorp, Inc." 2/16/89 14.88 331.87 15.63 340.45 14.63 337.78 5.04 2.59 2.46 (6.40) (0.78) (5.62) Dynatech 2/16/89 18.50 331.87 18.75 340.45 18.25 337.78 1.35 2.59 (1.23) (2.67) (0.78) (1.88) Sterling Bancorp 2/16/89 10.75 331.87 9.50 340.45 9.88 337.78 (11.63) 2.59 (14.21) 3.95 (0.78) 4.73 Western Microwave 2/16/89 2.00 331.87 2.25 340.45 1.63 337.78 12.50 2.59 9.91 (27.78) (0.78) (26.99) Chase Manhattan Corp. 2/15/89 31.63 331.56 32.25 339.84 34.38 346.01 1.98 2.50 (0.52) 6.59 1.82 4.77 First Midwest Bancorp 2/15/89 16.83 331.56 16.50 339.84 17.83 346.01 (1.98) 2.50 (4.48) 8.08 1.82 6.26 Legget & Platt 2/15/89 24.00 331.56 24.88 339.84 25.63 346.01 3.65 2.50 1.15 3.02 1.82 1.20 Ashton-Tate Corp. 2/13/89 21.88 328.89 22.75 337.39 19.75 340.95 4.00 2.58 1.42 (13.19) 1.06 (14.24) "Diebold, Inc." 2/10/89 39.25 328.81 43.25 337.26 46.25 341.21 10.19 2.57 7.62 6.94 1.17 5.77 James River Corp. 2/9/89 28.13 327.99 29.63 342.16 29.25 339.43 5.33 4.32 1.01 (1.27) (0.80) (0.47) Norton Co. 2/9/89 50.00 327.99 49.75 342.16 48.25 339.43 (0.50) 4.32 (4.82) (3.02) (0.80) (2.22) Preston Corp. 2/9/89 17.50 327.99 16.00 342.16 15.25 338.17 (8.57) 4.32 (12.89) (4.69) (1.17) (3.52) Carlisle Companies 2/8/89 34.13 326.29 33.88 345.31 36.50 339.43 (0.73) 5.83 (6.56) 7.75 (1.70) 9.45 Harnischfeger Industries 2/6/89 16.75 325.04 18.25 343.84 17.50 340.39 8.96 5.78 3.17 (4.11) (1.00) (3.11) Dresher Inc. 2/3/89 5.75 324.93 5.63 343.84 5.38 340.39 (2.17) 5.82 (7.99) (4.44) (1.00) (3.44) Hemotec Inc. 2/3/89 4.19 324.93 5.63 343.84 4.63 340.39 34.31 5.82 28.49 (17.78) (1.00) (16.77) Marriott Corp. 2/3/89 32.75 324.93 33.00 343.84 31.13 340.39 0.76 5.82 (5.06) (5.68) (1.00) (4.68) Raychem Corp. 2/3/89 35.00 324.93 36.75 343.84 34.25 340.39 5.00 5.82 (0.82) (6.80) (1.00) (5.80) "Temple-Inland, Inc. 2/3/89 48.75 324.93 56.25 343.84 53.38 340.39 15.38 5.82 9.56 (5.11) (1.00) (4.11) Park Electrochemical Corp.2/2/89 16.38 324.41 15.38 343.62 16.63 336.35 (6.11) 5.92 (12.03) 8.13 (2.12) 10.25 Universal Corp. 2/2/89 33.38 324.41 34.13 343.62 35.25 336.35 2.25 5.92 (3.67) 3.30 (2.12) 5.41 Cadmus Communications Corp. 2/1/89 12.75 323.44 12.75 343.87 13.00 334.82 0.00 6.32 (6.32) 1.96 (2.63) 4.59 General Dynamics Corp.2/1/89 50.88 323.44 50.00 343.87 50.88 334.82 (1.73) 6.32 (8.05) 1.76 (2.63) 4.39 "Pratt & Lambert, Inc." 2/1/89 16.13 323.44 15.13 343.87 14.00 334.82 (6.20) 6.32 (12.52) (7.44) (2.63) (4.81) United Companies Financial 2/1/89 18.86 323.44 17.50 343.87 21.36 334.82 (7.23) 6.32 (13.55) 22.08 (2.63) 24.71 Super Food Services 1/27/89 17.75 337.24 17.00 321.26 17.75 331.33 (4.23) (4.74) 0.51 4.41 3.13 1.28 Handy & Harman 1/26/89 17.50 320.49 17.13 337.24 18.50 331.33 (2.14) 5.23 (7.37) 8.03 (1.75) 9.78 Interlake Corp. 1/26/89 41.13 320.49 44.38 337.24 43.00 331.33 7.90 5.23 2.68 (3.10) (1.75) (1.35) "Morton Thiokol, Inc."1/26/89 38.13 320.49 39.75 337.24 40.00 331.33 4.26 5.23 (0.96) 0.63 (1.75) 2.38 Trinova Corp. 1/26/89 27.25 320.49 28.13 337.24 29.25 331.33 3.21 5.23 (2.02) 4.00 (1.75) 5.75 USLIFE Corp. 1/26/89 33.63 320.49 37.88 337.24 36.38 331.33 12.64 5.23 7.41 (3.96) (1.75) (2.21) Sherwin-Williams Co. 1/25/89 25.50 320.18 25.88 333.99 26.50 337.10 1.47 4.31 (2.84) 2.42 0.93 1.48 Standex International Corp. 1/25/89 20.38 320.18 22.00 333.99 22.88 337.10 7.98 4.31 3.66 3.98 0.93 3.05 "Amgen, Inc." 1/24/89 33.38 321.28 36.75 333.26 37.50 335.96 10.11 3.73 6.38 2.04 0.81 1.23 Waltham Corp. 1/23/89 10.00 319.89 10.25 328.83 10.25 342.07 2.50 2.79 (0.29) 0.00 4.03 (4.03) "Fairchild Industries, Inc." 1/21/89 15.75 320.54 16.13 331.41 12.38 342.66 2.38 3.39 (1.01) (23.26) 3.39 (26.65) Southmark Corp. 1/20/89 1.75 320.54 2.00 331.41 1.63 342.66 14.29 3.39 10.89 (18.75) 3.39 (22.14) Whitman Corp. 1/20/89 35.75 320.54 36.88 331.41 34.38 342.66 3.15 3.39 (0.24) (6.78) 3.39 (10.17) Emulex Corp. 1/19/89 10.63 320.51 11.00 331.87 11.38 340.45 3.53 3.54 (0.01) 3.41 2.59 0.82 Intel Corp. 1/19/89 23.25 320.51 24.25 331.87 26.25 340.45 4.30 3.54 0.76 8.25 2.59 5.66 "NBI, Inc." 1/19/89 2.00 320.51 1.63 331.87 1.88 340.45 (18.75) 3.54 (22.29) 15.38 2.59 12.80 "Ogilvy & Mather Group, Inc." 1/19/89 25.75 317.41 30.75 327.99 30.75 342.16 19.42 3.33 16.08 0.00 4.32 (4.32) "Premier Bancorp, Inc." 1/19/89 4.13 320.51 4.75 331.87 4.88 340.45 15.15 3.54 11.61 2.63 2.59 0.05 "Time, Inc." 1/19/89 99.25 320.51 110.38 331.87 108.50 340.45 11.21 3.54 7.66 (1.70) 2.59 (4.28) Union Planters Corp. 1/19/89 12.50 320.51 12.63 331.87 14.13 340.45 1.00 3.54 (2.54) 11.88 2.59 9.30 PHH Corporation 1/17/89 33.75 316.24 33.88 327.98 32.75 336.74 0.37 3.71 (3.34) (3.32) 2.67 (5.99) Southwestern Bell Corp. 1/17/89 40.75 323.38 43.50 339.55 43.75 332.24 6.75 5.00 1.75 0.57 (2.15) 2.73 "Computer Task Group, Inc." 1/16/89 14.63 316.24 12.88 328.89 13.13 337.39 (11.97) 4.00 (15.97) 1.94 2.58 (0.64) Ekco Group 1/11/89 3.13 318.43 3.25 326.29 3.38 345.31 4.00 2.47 1.53 3.85 5.83 (1.98) "Caesars World, Inc." 1/10/89 24.50 319.06 32.00 324.33 32.13 346.41 30.61 1.65 28.96 0.39 6.81 (6.42) Willcox & Gibbs Inc. 1/10/89 15.75 319.06 16.75 324.33 17.63 346.41 6.35 1.65 4.70 5.22 6.81 (1.58) Associated Communications 1/3/89 21.67 319.85 24.00 321.26 32.00 344.20 10.77 0.44 10.33 33.33 7.14 26.19 Houghton Mifflin Co. 12/31/88 34.75 313.78 34.38 321.26 36.38 340.96 (1.08) 2.38 (3.46) 5.82 6.13 (0.31) A.G. Edwards 12/30/88 13.79 313.16 14.96 323.38 17.29 339.55 8.45 3.26 5.18 15.58 5.00 10.58 "Athlone Industries, Inc." 12/29/88 12.13 315.12 16.19 323.38 14.94 339.55 33.51 2.62 30.89 (7.72) 5.00 (12.72) Numerica Financial Corp. 12/29/88 8.88 315.12 9.13 323.38 8.75 339.55 2.82 2.62 0.20 (4.11) 5.00 (9.11) "Champion Products, Inc." 12/28/88 48.25 311.96 55.75 320.49 59.63 337.24 15.54 2.73 12.81 6.95 5.23 1.72 Lockheed Corp. 12/23/88 39.25 307.64 42.75 321.28 43.63 333.99 8.92 4.43 4.48 2.05 3.96 (1.91) "Big Bear, Inc." 12/22/88 26.25 309.45 34.88 319.89 37.25 328.83 32.86 3.37 29.48 6.81 2.79 4.02 "First Bank System, Inc." 12/22/88 20.13 309.45 19.75 319.89 19.88 328.83 (1.86) 3.37 (5.24) 0.63 2.79 (2.16) Ameritech 12/21/88 46.44 309.45 48.38 320.51 47.94 331.56 4.17 3.57 0.60 (0.90) 3.45 (4.35) Commercial Federal Corp. 12/20/88 8.63 306.14 7.38 320.51 8.13 331.87 (14.49) 4.69 (19.19) 10.17 3.54 6.63 Old Kent Financial Corp. 12/20/88 22.00 306.14 23.63 320.51 22.63 331.87 7.39 4.69 2.69 (4.23) 3.54 (7.78) Puget Sound Bancorp 12/20/88 18.88 306.14 19.25 320.51 19.25 331.87 1.99 4.69 (2.71) 0.00 3.54 (3.54) "Combustion Engineering, Inc." 12/19/88 26.38 306.36 27.38 321.97 29.75 331.56 3.79 5.10 (1.30) 8.68 2.98 5.70 SEI Corp. 12/19/88 17.50 306.36 17.50 321.97 16.50 331.56 0.00 5.10 (5.10) (5.71) 2.98 (8.69) Coherent Inc. 12/16/88 9.00 306.36 9.75 316.24 10.88 328.81 8.33 3.22 5.11 11.54 3.97 7.56 AIFS Inc. 12/15/88 5.44 302.84 5.00 316.24 5.31 328.89 (8.05) 4.42 (12.48) 6.26 4.00 2.26 "BayBanks, Inc. " 12/15/88 44.75 302.84 44.25 316.24 41.50 328.89 (1.12) 4.42 (5.54) (6.21) 4.00 (10.21) Checkpoint Systems 12/15/88 9.00 302.84 9.00 316.24 9.25 328.89 0.00 4.42 (4.42) 2.78 4.00 (1.22) McDonald's Corp. 12/14/88 46.50 308.44 47.38 317.41 47.63 328.81 1.88 2.91 (1.03) 0.53 3.59 (3.06) Boise Cascade Corp. 12/13/88 40.38 307.73 40.38 318.42 40.00 326.29 0.00 3.47 (3.47) (0.93) 2.47 (3.40) "Hubbell, Inc." 12/13/88 31.91 307.73 32.50 318.42 35.75 327.99 1.86 3.47 (1.61) 10.00 3.01 6.99 Versa Technologies 12/13/88 14.17 307.73 13.33 318.42 14.17 327.99 (5.91) 3.47 (9.38) 6.28 3.01 3.27 "Prospect Group, Inc." 12/12/88 9.38 308.11 9.75 318.43 9.63 326.29 4.00 3.35 0.65 (1.28) 2.47 (3.75) Citizens Bancorp 12/11/88 25.25 308.11 23.88 319.06 22.75 324.93 (5.45) 3.55 (9.00) (4.71) 1.84 (6.55) "Liz Claiborne, Inc." 12/8/88 17.00 314.61 16.25 318.46 18.50 325.04 (4.41) 1.22 (5.64) 13.85 2.07 11.78 Ingersoll-Rand Co. 12/7/88 33.88 316.75 33.63 320.54 36.00 324.93 (0.74) 1.20 (1.93) 7.06 1.37 5.69 Novell Inc. 12/7/88 30.50 316.75 31.50 320.54 32.00 324.93 3.28 1.20 2.08 1.59 1.37 0.22 Westinghouse Electric Corp. 12/7/88 52.25 316.75 53.38 320.54 54.00 324.93 2.15 1.20 0.96 1.17 1.37 (0.20) Walbro Corporation 12/6/88 19.13 315.36 16.75 319.85 17.00 324.41 (12.42) 1.42 (13.84) 1.49 1.43 0.07 "Pegasus Gold, Inc." 12/2/88 13.25 321.51 13.50 313.16 11.50 318.66 1.89 (2.60) 4.48 (14.81) 1.76 (16.57) American Presidents' Cos. Ltd.11/29/88 32.38 321.26 31.63 311.96 33.63 320.49 (2.32) (2.89) 0.58 6.32 2.73 3.59 "Borden, Inc." 11/29/88 57.00 321.26 56.00 311.96 58.75 320.49 (1.75) (2.89) 1.14 4.91 2.73 2.18 "Borden, Inc." 11/29/88 57.00 321.26 56.00 311.96 58.75 320.49 (1.75) (2.89) 1.14 4.91 2.73 2.18 "CRS Sirrine, Inc." 11/29/88 23.13 321.26 24.25 311.96 25.75 320.49 4.86 (2.89) 7.76 6.19 2.73 3.45 Affiliated Banc Corp. 11/28/88 9.38 320.67 8.75 309.42 8.75 320.18 (6.67) (3.51) (3.16) 0.00 3.48 (3.48) Chevron Corp. 11/22/88 47.00 325.66 44.50 307.55 46.88 320.54 (5.32) (5.56) 0.24 5.34 4.22 1.11 Louisiana Gen Svcs Inc. 11/22/88 12.875 319.18 12.50 306.14 12.75 320.54 (2.91) (4.09) 1.17 2.00 4.70 (2.70) First Interstate Bancorp 11/21/88 49.50 325.48 46.75 306.14 44.75 320.51 (5.56) (5.94) 0.39 (4.28) 4.69 (8.97) Whittaker Corp. 11/21/88 35.00 325.48 42.00 306.14 43.88 320.51 20.00 (5.94) 25.94 4.46 4.69 (0.23) Tiffany & Co. 11/18/88 44.25 326.84 43.50 306.36 39.63 321.97 (1.69) (6.27) 4.57 (8.91) 5.10 (14.00) Battle Mountain Gold Co. 11/11/88 15.00 316.70 16.00 308.11 14.63 319.06 6.67 (2.71) 9.38 (8.59) 3.55 (12.15) "California Energy, Inc." 11/11/88 8.09 316.70 8.33 308.11 10.08 318.43 2.97 (2.71) 5.68 21.00 3.35 17.65 "SPS Technologies, Inc." 11/11/88 44.50 316.70 42.88 308.11 43.00 319.06 (3.65) (2.71) (0.94) 0.29 3.55 (3.26) "RJR Nabisco, Inc." 11/10/88 56.00 316.32 89.38 315.00 89.88 318.46 59.60 (0.42) 60.02 0.56 1.10 (0.54) "Computer Products, Inc." 11/9/88 2.00 314.92 2.00 314.61 2.00 320.54 0.00 (0.10) 0.10 0.00 1.88 (1.88) "Motorola, Inc." 11/9/88 39.75 314.92 39.25 314.61 40.25 320.54 (1.26) (0.10) (1.16) 2.55 1.88 0.66 "Businessland, Inc." 11/8/88 13.13 319.62 12.75 316.75 13.63 319.85 (2.86) (0.90) (1.96) 6.86 0.98 5.88 Lotus Development Corp.11/8/88 15.63 319.62 17.00 316.75 18.25 319.85 8.80 (0.90) 9.70 7.35 0.98 6.37 Pacific Scientific Co. 11/8/88 12.75 319.62 11.25 316.75 10.75 319.85 (11.76) (0.90) (10.87) (4.44) 0.98 (5.42) Shaklee Corp. 11/8/88 20.00 319.62 22.13 316.75 26.13 319.85 10.63 (0.90) 11.52 18.08 0.98 17.10 "Church's Fried Chicken, Inc." 11/7/88 6.88 319.72 7.75 315.36 8.38 313.92 12.73 (1.36) 14.09 8.06 (0.46) 8.52 Contel Corp. 11/3/88 37.13 312.66 38.75 321.51 39.00 313.78 4.38 2.83 1.55 0.65 (2.40) 3.05 Ampco-Pittsburg Corp. 11/1/88 12.88 310.42 13.00 321.24 12.50 311.96 0.97 3.49 (2.51) (3.85) (2.89) (0.96) Emerson Electric Co. 11/1/88 29.88 310.42 30.50 321.24 29.50 311.96 2.09 3.49 (1.39) (3.28) (2.89) (0.39) Precision Castparts Corp. 11/1/88 35.25 310.42 33.50 321.24 33.75 311.96 (4.96) 3.49 (8.45) 0.75 (2.89) 3.64 CNW Corp. 10/31/88 28.00 311.14 27.38 321.26 26.00 309.42 (2.23) 3.25 (5.48) (5.02) (3.69) (1.34) Lubrizol Corp. 10/31/88 34.13 311.14 37.00 321.26 34.88 309.42 8.42 3.25 5.17 (5.74) (3.69) (2.06) "Automated Systems, Inc." 10/28/88 3.50 311.67 4.81 320.67 4.00 307.64 37.51 2.89 34.63 (16.89) (4.06) (12.83) Dexter Corp. 10/28/88 22.75 311.67 24.63 320.67 22.75 307.64 8.24 2.89 5.35 (7.61) (4.06) (3.55) HRE Properties 10/28/88 24.38 311.67 25.75 320.67 25.50 307.64 5.64 2.89 2.75 (0.97) (4.06) 3.09 Triad Systems Corp. 10/28/88 14.75 342.16 16.00 338.17 18.00 342.48 8.47 (1.17) 9.64 12.50 1.27 11.23 "TNP Enterprises, Inc."10/24/88 19.75 308.40 19.50 325.48 19.38 306.14 (1.27) 5.54 (6.80) (0.64) (5.94) 5.30 UTL Corp. 10/21/88 5.25 309.40 4.63 326.84 4.00 306.36 (11.90) 5.64 (17.54) (13.51) (6.27) (7.25) SPX Corp. 10/19/88 34.50 310.11 36.88 318.81 33.75 302.84 6.88 2.81 4.08 (8.47) (5.01) (3.47) "Washington Bancorp, Inc." 10/19/88 17.00 310.11 16.00 318.81 14.25 302.84 (5.88) 2.81 (8.69) (10.94) (5.01) (5.93) Manufacturers Hanover Corp. 10/18/88 30.00 309.47 27.88 321.44 28.25 308.44 (7.08) 3.87 (10.95) 1.35 (4.04) 5.39 "Delchamps, Inc." 10/17/88 20.63 308.45 26.75 317.75 20.25 307.73 29.70 3.02 26.68 (24.30) (3.15) (21.15) Proler International Corp. 10/14/88 67.25 310.81 62.50 316.70 61.38 308.11 (7.06) 1.90 (8.96) (1.80) (2.71) 0.91 Perpetual Financial Corp. 10/13/88 8.13 307.94 8.63 316.32 9.25 315.00 6.15 2.72 3.43 7.25 (0.42) 7.66 "Endevco, Inc." 10/6/88 5.00 304.67 6.13 312.66 6.75 321.51 22.50 2.62 19.88 10.20 2.83 7.37 "Global Natural Resources, Inc." 10/5/88 5.63 304.72 5.63 311.90 5.25 321.35 0.00 2.36 (2.36) (6.67) 3.03 (9.70) Great Northern Nekoosa Corp. 10/5/88 40.88 304.72 40.13 311.90 39.00 321.35 (1.83) 2.36 (4.19) (2.80) 3.03 (5.83) Anadarko Petroleum Corp. 10/4/88 26.38 304.62 24.63 310.42 25.75 321.24 (6.64) 1.90 (8.54) 4.57 3.49 1.08 "Jacobson Stores, Inc."10/4/88 19.00 304.62 21.25 310.42 21.50 321.24 11.84 1.90 9.94 1.18 3.49 (2.31) TGX Corp. 10/4/88 1.75 304.62 1.63 310.42 1.50 321.24 (7.14) 1.90 (9.05) (7.69) 3.49 (11.18) Butler Manufacturing Co. 10/3/88 33.25 303.35 33.50 311.14 35.50 321.26 0.75 2.57 (1.82) 5.97 3.25 2.72 Computer Entry Systems Corp. 10/3/88 4.63 303.35 5.00 311.14 7.25 321.26 8.11 2.57 5.54 45.00 3.25 41.75 Inco Ltd. 10/3/88 29.00 303.35 29.00 311.14 28.63 321.26 0.00 2.57 (2.57) (1.29) 3.25 (4.55) "Prime Computer, Inc." 10/3/88 12.88 303.35 14.88 311.14 13.50 321.26 15.53 2.57 12.97 (9.24) 3.25 (12.50) Universal Foods Corp. 10/3/88 24.00 303.35 23.75 311.14 24.25 321.26 (1.04) 2.57 (3.61) 2.11 3.25 (1.15) Fidata Corp. 9/29/88 6.88 296.35 7.88 312.68 8.00 319.18 14.55 5.51 9.04 1.59 2.08 (0.49) Bethlehem Steel Corp. 9/28/88 21.25 300.05 20.25 308.46 21.88 324.22 (4.71) 2.80 (7.51) 8.02 5.11 2.92 "Centocor, Inc." 9/26/88 24.50 301.20 21.50 308.40 21.25 325.48 (12.24) 2.39 (14.64) (1.16) 5.54 (6.70) Andrew Corp. 9/22/88 16.75 297.36 16.25 308.82 16.00 326.07 (2.99) 3.85 (6.84) (1.54) 5.59 (7.12) Northrop Corp. 9/21/88 29.75 299.50 30.25 310.11 33.25 318.81 1.68 3.54 (1.86) 9.92 2.81 7.11 "TW Services, Inc." 9/19/88 17.63 294.49 23.75 308.45 26.75 317.75 34.75 4.74 30.01 12.63 3.02 9.62 State Street Boston Corp. 9/15/88 24.88 299.90 24.88 307.94 26.63 316.32 0.00 2.68 (2.68) 7.04 2.72 4.31 The MacNeal-Schwendler Corp. 9/14/88 10.75 299.47 10.50 309.39 11.88 314.92 (2.33) 3.31 (5.64) 13.10 1.79 11.31 Durham Corp. 9/13/88 32.88 299.31 32.00 306.95 35.25 319.62 (2.66) 2.55 (5.21) 10.16 4.13 6.03 "Wickes Companies, Inc." 9/13/88 9.00 299.31 13.63 306.95 11.13 319.62 51.39 2.55 48.84 (18.35) 4.13 (22.48) "Lowe's Companies, Inc." 9/9/88 20.38 301.94 21.25 305.97 22.00 319.17 4.29 1.33 2.96 3.53 4.31 (0.78) "System Industries, Inc." 9/9/88 4.75 301.94 6.25 305.97 5.75 319.17 31.58 1.33 30.24 (8.00) 4.31 (12.31) American Hoist & Derrick Co. 9/8/88 10.63 302.26 10.75 304.67 11.88 312.66 1.18 0.80 0.38 10.47 2.62 7.84 "Betz Laboratories, Inc." 9/8/88 48.75 302.26 45.75 304.67 46.75 312.66 (6.15) 0.80 (6.95) 2.19 2.62 (0.44) Gulf+Western Inc. 9/7/88 41.75 301.19 41.88 304.72 40.00 311.90 0.30 1.17 (0.87) (4.48) 2.36 (6.83) Stanhome Inc. 9/7/88 20.38 301.19 20.25 304.72 19.13 311.90 (0.61) 1.17 (1.79) (5.56) 2.36 (7.91) "Nantucket Industries, Inc." 9/6/88 6.50 306.86 8.50 304.62 8.88 310.42 30.77 (0.73) 31.50 4.41 1.90 2.51 "Engraph, Inc." 9/1/88 11.40 313.21 11.40 296.35 12.25 312.68 0.00 (5.38) 5.38 7.46 5.51 1.95 "Kraft, Inc." 9/1/88 55.75 313.21 54.78 296.35 58.88 312.68 (1.74) (5.38) 3.64 7.48 5.51 1.96 "Realist, Inc." 8/29/88 10.25 313.95 11.63 301.20 12.13 308.40 13.41 (4.06) 17.48 4.30 2.39 1.91 Nordson Corp. 8/26/88 45.75 313.98 40.88 298.01 42.88 309.40 (10.66) (5.09) (5.57) 4.89 3.82 1.07 Fibreboard Corp. 8/25/88 9.88 307.30 10.63 297.36 14.00 308.82 7.59 (3.23) 10.83 31.76 3.85 27.91 Square D Company 8/24/88 50.38 303.15 47.25 299.50 50.00 310.11 (6.20) (1.20) (5.00) 5.82 3.54 2.28 "Commerce Bancshares, Inc." 8/23/88 38.50 306.45 39.75 294.59 40.75 309.47 3.25 (3.87) 7.12 2.52 5.05 (2.54) The Lamson & Sessions Co. 8/22/88 11.38 305.94 14.00 294.49 17.13 308.45 23.08 (3.74) 26.82 22.32 4.74 17.58 "ARX, Inc." 8/19/88 8.63 304.36 7.88 298.44 7.00 310.81 (8.70) (1.95) (6.75) (11.11) 4.14 (15.26) Ameritrust Corp. 8/17/88 22.13 312.03 20.38 299.47 20.75 309.39 (7.91) (4.03) (3.88) 1.84 3.31 (1.47) "Management Science, Inc." 8/17/88 8.13 312.03 8.88 299.47 8.25 309.39 9.23 (4.03) 13.26 (7.04) 3.31 (10.35) "Duramed Pharmaceuticals, Inc."8/16/88 4.13 310.18 4.00 299.31 5.50 306.95 (3.03) (3.50) 0.47 37.50 2.55 34.95 Banponce Corp. 8/11/88 26.00 312.17 23.00 302.26 23.75 304.67 (11.54) (3.17) (8.36) 3.26 0.80 2.46 Gordon Jewelry Corp. 8/10/88 16.88 311.12 16.50 301.19 16.75 304.72 (2.22) (3.19) 0.97 1.52 1.17 0.34 "Jostens, Inc." 8/9/88 17.38 309.50 17.63 306.86 16.88 304.62 1.44 (0.85) 2.29 (4.26) (0.73) (3.53) Publicker Industries Inc. 8/9/88 1.88 309.50 2.00 306.86 2.13 304.62 6.67 (0.85) 7.52 6.25 (0.73) 6.98 AmVestors Financial Corp. 8/4/88 6.40 314.25 6.88 313.21 7.63 296.35 7.42 (0.33) 7.75 10.91 (5.38) 16.29 "Marion Laboratories, Inc." 8/4/88 20.00 314.25 19.88 313.21 17.75 296.35 (0.63) (0.33) (0.29) (10.69) (5.38) (5.31) "Wendy's International, Inc." 8/4/88 5.88 314.25 6.00 313.21 6.75 296.35 2.13 (0.33) 2.46 12.50 (5.38) 17.88 Paradyne Corp. 8/3/88 5.38 314.38 5.75 314.58 5.00 300.05 6.98 0.06 6.91 (13.04) (4.62) (8.42) Augat Inc. 8/2/88 14.00 318.52 13.88 313.61 11.25 301.32 (0.89) (1.54) 0.65 (18.92) (3.92) (15.00) "Airgas, Inc." 8/1/88 NA 313.75 NA 313.95 NA 301.20 NA 0.06 NA NA (4.06) N/A Cetus Corp. 8/1/88 12.75 313.75 11.38 313.95 10.00 301.20 (10.78) 0.06 (10.85) (12.09) (4.06) (8.03) Phelps Dodge Corp. 7/29/88 41.38 313.75 40.38 313.98 40.50 298.01 (2.42) 0.07 (2.49) 0.31 (5.09) 5.40 Dean Foods 7/28/88 26.25 315.73 25.88 303.15 25.63 297.36 (1.43) (3.98) 2.56 (0.97) (1.91) 0.94 Energen Corporation 7/27/88 22.13 313.20 22.38 303.15 23.88 299.50 1.13 (3.21) 4.34 6.70 (1.20) 7.91 "First Virginia Banks, Inc." 7/27/88 26.50 313.20 25.88 303.15 25.63 299.50 (2.36) (3.21) 0.85 (0.97) (1.20) 0.24 H.F. Ahmanson & Company 7/26/88 16.38 314.57 15.13 306.45 14.63 294.59 (7.63) (2.58) (5.05) (3.31) (3.87) 0.56 Rorer Group Inc. 7/26/88 36.38 314.57 34.88 306.45 34.38 294.59 (4.12) (2.58) (1.54) (1.43) (3.87) 2.44 Stone Container Corporation 7/25/88 34.50 310.44 34.63 305.94 31.50 294.49 0.36 (1.45) 1.81 (9.03) (3.74) (5.28) "Warwick Insurance Mgrs., Inc." 7/25/88 8.75 310.44 8.75 305.94 7.75 294.49 0.00 (1.45) 1.45 (11.43) (3.74) (7.69) "Texfi Industries, Inc." 7/22/88 6.50 316.18 6.75 304.36 5.63 298.44 3.85 (3.74) 7.58 (16.67) (1.95) (14.72) "RJR Nabisco, Inc." 7/21/88 47.50 317.58 49.63 308.00 50.88 299.90 4.47 (3.02) 7.49 2.52 (2.63) 5.15 Chicago Dock & Canal Trust 7/20/88 25.00 318.50 24.00 312.03 24.13 299.47 (4.00) (2.03) (1.97) 0.52 (4.03) 4.55 Crompton & Knowles Corp. 7/20/88 34.00 318.50 33.50 312.03 29.00 299.47 (1.47) (2.03) 0.56 (13.43) (4.03) (9.41) Acme Steel Company 7/19/88 19.25 313.87 24.00 310.18 24.50 299.31 24.68 (1.18) 25.85 2.08 (3.50) 5.59 Del Webb Corporation 7/19/88 13.75 313.87 14.75 310.18 13.00 299.31 7.27 (1.18) 8.45 (11.86) (3.50) (8.36) Eli Lilly and Company 7/18/88 81.38 310.76 84.50 312.70 81.00 297.28 3.84 0.62 3.22 (4.14) (4.93) 0.79 Service Corporation Intl. 7/18/88 19.13 310.76 20.00 312.70 19.38 297.28 4.58 0.62 3.95 (3.13) (4.93) 1.81 "Interleaf, Inc." 7/15/88 12.63 312.80 13.25 314.38 11.00 301.94 4.95 0.51 4.45 (16.98) (3.96) (13.02) Quixote Corporation 7/15/88 7.50 312.80 7.50 314.38 8.19 301.94 0.00 0.51 (0.51) 9.17 (3.96) 13.13 Dynamics Research Corp.7/14/88 7.50 311.96 7.75 312.17 7.13 302.26 3.33 0.07 3.27 (8.06) (3.17) (4.89) "H&R Block, Inc." 7/14/88 25.75 311.96 26.88 312.17 25.25 302.26 4.37 0.07 4.30 (6.05) (3.17) (2.87) Hilton Hotels Corporation 7/14/88 47.75 311.96 48.13 312.17 44.88 302.26 0.79 0.07 0.72 (6.75) (3.17) (3.58) INTERCO Incorporated 7/11/88 43.50 313.92 45.25 312.81 72.50 310.93 4.02 (0.35) 4.38 60.22 (0.60) 60.82 Hadson Corporation 7/5/88 4.25 313.61 4.00 318.52 5.38 306.54 7.00 1.57 5.43 34.38 (3.76) 38.14 Avery International Inc. 6/30/88 22.50 306.36 24.50 315.73 24.13 307.30 8.89 3.06 5.83 (1.53) (2.67) 1.14 "Floating Point Systems, Inc." 6/30/88 2.63 306.36 3.00 315.73 3.00 307.30 14.29 3.06 11.23 0.00 (2.67) 2.67 "CML Group, Inc." 6/28/88 18.88 302.67 22.13 314.57 19.63 306.45 17.22 3.93 13.29 (11.30) (2.58) (8.72) Elcor Corporation 6/28/88 6.50 302.67 7.00 314.57 7.25 306.45 7.69 3.93 3.76 3.57 (2.58) 6.15 Warner-Lambert Company 6/28/88 65.25 302.67 66.75 314.57 66.50 306.45 2.30 3.93 (1.63) (0.37) (2.58) 2.21 Colorado Natn'l Bankshares 6/27/88 12.25 292.55 15.63 310.44 14.63 305.94 27.55 6.12 21.44 (6.40) (1.45) (4.95) Crane Co. 6/27/88 29.25 292.55 31.00 310.44 30.25 305.94 5.98 6.12 (0.13) (2.42) (1.45) (0.97) Federal Signal Corporation 6/24/88 20.75 292.55 22.13 316.18 21.25 304.36 6.63 8.08 (1.45) (3.95) (3.74) (0.22) Bolt Beranek and Newman Inc. 6/23/88 16.13 294.31 17.38 317.58 18.13 308.00 7.75 7.91 (0.15) 4.32 (3.02) 7.33 Buffton Corporation 6/23/88 6.75 294.31 7.63 317.58 8.25 308.00 12.96 7.91 5.06 8.20 (3.02) 11.21 Farmers Group 6/23/88 59.38 294.31 56.88 317.58 53.50 308.00 (4.21) 7.91 (12.12) (5.93) (3.02) (2.92) "American Savings Bank, FSB" 6/22/88 14.50 293.57 14.25 318.50 14.63 312.03 (1.72) 8.49 (10.22) 2.63 (2.03) 4.66 Owens & Minor 6/22/88 11.63 293.57 13.50 318.50 13.63 312.03 16.13 8.49 7.64 0.93 (2.03) 2.96 "Amfac, Inc." 6/21/88 48.50 293.46 47.00 313.87 45.75 310.18 (3.09) 6.95 (10.05) (2.66) (1.18) (1.48) Data Switch Corporation 6/21/88 6.75 293.46 8.13 313.87 8.00 310.18 20.37 6.95 13.42 (1.54) (1.18) (0.36) Kimberly-Clark Corporation 6/21/88 53.50 293.46 61.00 313.87 58.63 310.18 14.02 6.95 7.06 (3.89) (1.18) (2.72) Merchants National Corp. 6/21/88 23.00 293.46 24.88 313.87 25.13 310.18 8.15 6.95 1.20 1.01 (1.18) 2.18 Wavetek Corporation 6/21/88 6.75 293.46 7.13 313.87 6.88 310.18 5.56 6.95 (1.40) (3.51) (1.18) (2.33) Micro Semi Corporation 6/17/88 6.00 293.42 6.50 312.80 6.13 314.38 8.33 6.60 1.73 (5.77) 0.51 (6.27) Texas Instruments Inc. 6/17/88 43.25 293.42 47.63 312.80 44.88 314.38 10.12 6.60 3.51 (5.77) 0.51 (6.28) "Twin Disc, Incorporated" 6/17/88 26.63 293.42 27.00 312.80 29.38 314.38 1.41 6.60 (5.20) 8.80 0.51 8.29 "Baush & Lomb, Inc." 6/16/88 42.25 292.97 44.38 311.96 45.50 312.17 5.03 6.48 (1.45) 2.54 0.07 2.47 "Chelsea Industries, Inc." 6/10/88 17.88 298.23 16.25 313.62 15.88 312.28 (9.09) 5.16 (14.25) (2.31) (0.43) (1.88) Isomedix Inc. 6/10/88 5.63 298.23 6.25 313.62 9.13 312.28 11.11 5.16 5.95 46.00 (0.43) 46.43 NAC Re Corp. 6/9/88 22.00 294.71 24.25 312.47 26.25 314.25 10.23 6.03 4.20 8.25 0.57 7.68 Texas Air Corporation 6/9/88 10.50 294.71 12.00 312.47 14.88 314.25 14.29 6.03 8.26 23.96 0.57 23.39 CSX Corporation 6/8/88 26.75 294.32 28.13 313.91 28.38 314.38 5.14 6.66 (1.52) 0.89 0.15 0.74 "GenRad, Inc." 6/7/88 10.00 299.66 10.75 306.54 11.88 318.52 7.50 2.30 5.20 10.47 3.91 6.56 Dallas Corporation 6/6/88 12.13 298.58 12.75 308.57 12.13 318.52 5.15 3.35 1.81 (4.90) 3.22 (8.13) "AMAX, Inc." 6/2/88 20.13 301.66 21.25 306.36 23.38 315.73 5.59 1.56 4.03 10.00 3.06 6.94 "Lone Star Industries, Inc." 6/2/88 30.00 301.66 31.88 306.36 32.88 315.73 6.25 1.56 4.69 3.14 3.06 0.08 Browning-Ferris Inds. Inc. 6/1/88 23.88 303.53 23.38 308.04 24.50 313.20 (2.09) 1.49 (3.58) 4.81 1.68 3.14 Digilog Inc. 6/1/88 4.63 303.53 4.75 308.04 6.00 313.20 2.70 1.49 1.22 26.32 1.68 24.64 Tech-Sym Corporation 6/1/88 12.25 303.53 16.75 308.04 17.00 313.20 36.73 1.49 35.25 1.49 1.68 (0.18) Vista Chemical Co. 5/31/88 51.50 306.70 48.38 302.67 57.00 314.57 (6.07) (1.31) (4.75) 17.83 3.93 13.90 Bio-Medicus Inc. 5/25/88 7.63 307.54 6.88 293.57 6.88 318.50 (9.84) (4.54) (5.29) 0.00 8.49 (8.49) Ducommun Incorporated 5/25/88 3.75 307.54 3.38 293.57 3.50 318.50 (10.00) (4.54) (5.46) 3.70 8.49 (4.79) SmithKline Beckman 5/25/88 54.75 307.54 49.75 293.57 46.25 318.50 (9.13) (4.54) (4.59) (7.04) 8.49 (15.53) Tenneco Inc. 5/25/88 44.00 307.54 45.75 293.57 47.38 318.50 3.98 (4.54) 8.52 3.55 8.49 (4.94) "BancTec, Inc." 5/24/88 8.50 307.51 8.00 293.46 7.75 313.87 (5.88) (4.57) (1.31) (3.13) 6.95 (10.08) Mercantile Bancorp 5/23/88 21.50 305.83 25.38 290.74 27.88 310.76 18.02 (4.93) 22.96 9.85 6.89 2.97 Veeco Instruments Inc. 5/23/88 14.75 305.83 14.13 290.74 17.13 310.76 (4.24) (4.93) 0.70 21.24 6.89 14.35 VWR Corporation 5/20/88 20.88 302.92 20.00 293.42 20.25 312.80 (4.19) (3.14) (1.06) 1.25 6.60 (5.35) Arkansas Best Corp. 5/19/88 14.13 298.66 23.88 292.97 24.75 311.96 69.03 (1.91) 70.93 3.66 6.48 (2.82) "Lumex, Inc." 5/19/88 10.75 298.66 9.75 292.97 11.00 311.96 (9.30) (1.91) (7.40) 12.82 6.48 6.34 Norstan Inc. 5/18/88 6.75 298.33 6.75 291.76 7.63 317.36 0.00 (2.20) 2.20 12.96 8.77 4.19 K mart Corporation 5/17/88 33.88 300.50 31.75 296.72 34.63 317.11 (6.27) (1.26) (5.02) 9.06 6.87 2.18 Security Pacific Corp. 5/17/88 31.25 300.50 34.38 296.72 37.88 317.11 10.00 (1.26) 11.26 10.18 6.87 3.31 The One Bancorp 5/16/88 13.25 302.05 13.63 300.56 13.50 313.92 2.83 (0.49) 3.32 (0.92) 4.45 (5.36) Payless Cashways Inc. 5/13/88 17.63 302.68 19.25 298.23 25.63 313.62 9.22 (1.47) 10.69 33.12 5.16 27.96 Jefferies Group Inc. 5/12/88 10.25 302.32 11.75 294.71 12.25 312.47 14.63 (2.52) 17.15 4.26 6.03 (1.77) Plains Petroleum Company 5/12/88 26.50 302.32 24.75 294.71 25.38 312.47 (6.60) (2.52) (4.09) 2.53 6.03 (3.50) Whirpool Corp. 5/12/88 25.50 302.32 26.38 294.71 27.38 312.47 3.43 (2.52) 5.95 3.79 6.03 (2.23) Baldor Electric Co. 5/10/88 26.88 316.16 25.88 299.66 25.75 306.54 (3.72) (5.22) 1.50 (0.48) 2.30 (2.78) "Harley-Davidson, Inc."5/10/88 24.50 316.16 22.88 299.66 24.88 306.54 (6.63) (5.22) (1.41) 8.74 2.30 6.45 Sea Containers 5/9/88 24.63 314.71 22.00 300.01 22.75 308.57 (10.66) (4.67) (5.99) 3.41 2.85 0.56 Acuson Corp. 5/6/88 24.25 313.60 26.50 300.01 26.25 307.58 9.28 (4.33) 13.61 (0.94) 2.52 (3.47) Collins Foods International 5/6/88 15.50 313.60 13.88 300.01 14.25 307.58 (10.48) (4.33) (6.15) 2.70 2.52 0.18 Bassett Furniture Industries 5/4/88 37.25 308.71 34.25 303.53 34.50 308.04 (8.05) (1.68) (6.38) 0.73 1.49 (0.76) Gould Inc. 5/3/88 11.75 300.17 13.38 306.70 14.00 302.67 13.83 2.18 11.65 4.67 (1.31) 5.99 Maytag Corp. 5/3/88 24.75 300.17 23.50 306.70 21.50 302.67 (5.05) 2.18 (7.23) (8.51) (1.31) (7.20) Circuit City Stores Inc.5/2/88 27.63 297.15 28.00 304.94 27.25 302.67 1.36 2.62 (1.26) (2.68) (0.74) (1.93) Dataproducts 5/2/88 9.00 297.15 9.88 304.94 9.38 302.67 9.72 2.62 7.10 (5.06) (0.74) (4.32) LIN Broadcasting Corp. 5/2/88 52.00 297.15 60.50 304.94 60.13 302.67 16.35 2.62 13.72 (0.62) (0.74) 0.12 Poughkeepsie Savings Bank 5/2/88 21.63 297.15 21.13 304.94 19.25 302.67 (2.31) 2.62 (4.93) (8.88) (0.74) (8.13) Oakite Products Inc. 4/29/88 29.88 300.39 37.88 304.48 37.13 292.55 26.78 1.36 25.42 (1.98) (3.92) 1.94 Energas Co. 4/28/88 15.63 300.39 15.75 306.09 15.00 294.31 0.80 1.90 (1.10) (4.76) (3.85) (0.91) Sara Lee Corp. 4/28/88 40.25 300.39 39.75 306.09 36.38 294.31 (1.24) 1.90 (3.14) (8.49) (3.85) (4.64) Zayre Corp. 4/26/88 22.00 301.70 23.38 307.51 20.50 293.46 6.25 1.93 4.32 (12.30) (4.57) (7.73) Zenith Electronics Corp.4/26/88 18.50 301.70 20.13 307.51 22.38 293.46 8.78 1.93 6.86 11.18 (4.57) 15.75 Ransburg Corp. 4/25/88 11.88 299.08 11.50 305.83 10.25 290.74 (3.16) 2.26 (5.41) (10.87) (4.93) (5.94) Damon Corp. 4/22/88 19.00 299.53 25.75 302.92 22.13 293.42 35.53 1.13 34.39 (14.08) (3.14) (10.94) Genentech Inc. 4/21/88 41.63 305.31 32.50 298.66 28.63 292.97 (21.92) (2.18) (19.74) (11.92) (1.91) (10.02) "Intermedics, Inc." 4/21/88 22.25 305.31 28.88 298.66 27.75 292.97 29.78 (2.18) 31.95 (3.90) (1.91) (1.99) Michigan National Corp. 4/19/88 46.00 312.02 46.00 300.50 43.25 296.72 0.00 (3.69) 3.69 (5.98) (1.26) (4.72) Wilson Foods Corp. 4/19/88 12.63 312.02 13.00 300.50 11.88 296.72 2.97 (3.69) 6.66 (8.65) (1.26) (7.40) Pansophic Systems Inc. 4/18/88 17.88 312.04 17.63 302.05 14.50 300.56 (1.40) (3.20) 1.80 (17.73) (0.49) (17.24) Knight-Ridder Inc. 4/15/88 44.25 314.64 40.75 302.68 41.88 298.23 (7.91) (3.80) (4.11) 2.76 (1.47) 4.23 Millipore Corp. 4/15/88 39.88 314.64 38.00 302.68 37.88 298.23 (4.70) (3.80) (0.90) (0.33) (1.47) 1.14 Pope & Talbot Inc. 4/14/88 20.75 314.78 21.25 302.32 19.50 294.71 2.41 (3.96) 6.37 (8.24) (2.52) (5.72) American Building Maintenance 4/12/88 21.75 308.55 23.25 316.16 24.25 299.66 6.90 2.47 4.43 4.30 (5.22) 9.52 BankAmerica Corp. 4/11/88 9.63 309.21 11.00 314.71 9.75 298.58 14.29 1.78 12.51 (11.36) (5.13) (6.24) "H.M.S.S., Inc." 4/8/88 17.00 307.39 16.50 313.60 18.00 300.01 (2.94) 2.02 (4.96) 9.09 (4.33) 13.42 Orion Research Inc. 4/7/88 6.75 306.25 7.25 309.73 7.13 301.66 7.41 1.14 6.27 (1.72) (2.61) 0.88 Pennzoil Co. 4/7/88 74.50 306.25 76.25 309.73 74.00 301.66 2.35 1.14 1.21 (2.95) (2.61) (0.35) Foxboro Co. 4/5/88 27.63 312.42 30.13 300.17 29.50 306.70 9.05 (3.92) 12.97 (2.07) 2.18 (4.25) Data I/O Corp. 4/4/88 6.50 309.52 6.13 297.15 5.75 304.94 (5.77) (4.00) (1.77) (6.12) 2.62 (8.74) F.W. Woolworth Co. 4/4/88 45.13 309.52 54.13 297.15 57.25 304.94 19.94 (4.00) 23.94 5.77 2.62 3.15 U.S. Shoe Corp. 4/4/88 17.88 309.52 20.38 297.15 18.75 304.94 13.99 (4.00) 17.98 (7.98) 2.62 (10.60) William Carter 4/1/88 43.00 308.98 45.00 297.15 55.00 304.48 4.65 (3.83) 8.48 22.22 2.47 19.76 Avon Products Inc. 3/30/88 24.00 309.60 24.25 299.37 23.25 306.09 1.04 (3.30) 4.35 (4.12) 2.24 (6.37) J.P. Stevens & Co. 3/28/88 48.25 309.43 63.50 299.08 67.75 307.51 31.61 (3.34) 34.95 6.69 2.82 3.87 "Kaneb Services, Inc." 3/28/88 2.00 309.43 2.38 299.08 2.25 307.51 18.75 (3.34) 22.09 (5.26) 2.82 (8.08) Baker Hughes Inc. 3/23/88 16.75 305.06 17.63 312.03 17.13 298.66 5.22 2.28 2.94 (2.84) (4.28) 1.45 "Air Wis Services, Inc."3/22/88 10.88 305.77 13.38 312.02 14.00 298.33 22.99 2.04 20.94 4.67 (4.39) 9.06 Facet Enterprises 3/21/88 18.88 306.34 28.63 312.04 31.50 300.50 51.66 1.86 49.79 10.04 (3.70) 13.74 Air Products and Chemicals 3/17/88 45.00 296.98 47.88 314.78 46.38 302.68 6.39 5.99 0.40 (3.13) (3.84) 0.71 Bank South Corporation 3/17/88 12.75 296.98 13.25 314.78 12.63 302.68 3.92 5.99 (2.07) 4.72) (3.84) (0.87) Horn & Hardart Company 3/17/88 9.25 296.98 9.13 314.78 7.75 302.68 (1.35) 5.99 (7.35) (15.07) (3.84) (11.22) "ONEOK, Inc." 3/17/88 19.00 296.98 10.13 314.78 11.00 302.68 (46.71) 5.99 (52.70) 8.64 (3.84) 12.49 CalFed Inc. 3/16/88 24.75 298.59 26.00 311.39 25.50 302.32 5.05 4.29 0.76 (1.92) (2.91) 0.99 Pic 'N' Save Corporation 3/16/88 17.00 298.59 15.63 311.39 15.50 302.32 (8.09) 4.29 (12.38) (0.80) (2.91) 2.11 Centerre Bancorp. 3/15/88 35.00 299.09 34.25 308.55 37.50 316.49 (2.14) 3.16 (5.31) 9.49 2.57 6.92 Chesapeake Corp. 3/15/88 18.75 299.09 20.00 308.55 20.38 316.49 6.67 3.16 3.50 1.88 2.57 (0.70) Irving Bank Corporation 3/15/88 48.38 299.09 53.38 308.55 65.00 316.49 10.34 3.16 7.17 21.78 2.57 19.21 UNUM Corp. 3/11/88 20.75 296.07 21.75 307.39 21.50 314.71 4.82 3.82 1.00 (1.15) 2.38 (3.53) "Varo, Inc." 3/11/88 10.75 296.07 19.38 307.39 19.63 314.71 80.23 3.82 76.41 1.29 2.38 (1.09) Browne & Sharpe Manufacturing 3/9/88 16.25 287.96 21.25 312.46 23.88 309.73 30.77 8.51 22.26 12.35 (0.87) 13.23 Novo Corp. 3/9/88 1.44 287.96 1.25 312.46 1.38 309.73 (13.07) 8.51 (21.58) 10.00 (0.87) 10.87 Shoney's Inc. 3/7/88 22.50 286.47 23.63 309.52 24.50 300.17 5.00 8.05 (3.05) 3.70 (3.02) 6.72 Patrick Petroleum Co. 3/4/88 4.00 288.23 4.13 308.98 4.38 297.15 3.13 7.20 (4.07) 6.06 (3.83) 9.89 GAINSCO Inc. 3/3/88 3.50 288.06 5.13 309.34 4.63 300.39 46.43 7.39 39.04 (9.76) (2.89) (6.86) GardenAmerica Corp. 3/3/88 11.88 288.06 15.00 309.34 13.75 300.39 26.32 7.39 18.93 (8.33) (2.89) (5.44) Pennwalt Corp. 3/1/88 45.63 291.10 53.00 308.81 53.50 301.70 16.16 6.08 10.08 0.94 (2.30) 3.25 R.G. Barry Corp. 2/29/88 6.63 293.70 5.38 309.43 5.50 299.08 (18.87) 5.36 (24.22) 2.33 (3.34) 5.67 Arrow Electronics Inc. 2/26/88 7.25 289.75 7.13 302.63 7.50 299.53 (1.72) 4.45 (6.17) 5.26 (1.02) 6.29 USLICO Corp. 2/26/88 24.25 289.75 23.25 302.63 20.13 299.53 (4.12) 4.45 (8.57) (13.44) (1.02) (12.42) Minnetonka Corp. 2/25/88 12.50 285.36 12.38 301.61 13.88 305.31 (1.00) 5.69 (6.69) 12.12 1.23 10.89 Valley National Corp. 2/25/88 26.25 285.36 29.13 301.61 29.50 305.31 10.95 5.69 5.26 1.29 1.23 0.06 Amcast Industrial 2/24/88 9.25 285.92 10.25 305.06 10.75 312.03 10.81 6.69 4.12 4.88 2.28 2.59 American Bankers Insurance 2/24/88 8.88 285.92 8.88 305.06 9.50 312.03 0.00 6.69 (6.69) 7.04 2.28 4.76 Pace Membership Warehouse 2/23/88 5.38 285.92 5.75 306.34 7.63 312.02 6.98 7.14 (0.17) 32.61 1.85 30.75 Philadelphia Suburban 2/19/88 13.63 279.02 16.63 301.48 15.63 314.64 22.02 8.05 13.97 (6.02) 4.37 (10.38) Westmark International 2/19/88 15.75 279.02 17.50 301.48 19.00 314.64 11.11 8.05 3.06 8.57 4.37 4.21 Forest Laboratories 2/18/88 19.00 278.41 17.00 296.98 19.63 314.78 (10.53) 6.67 (17.20) 15.44 5.99 9.45 Grumman Corp. 2/18/88 19.00 278.41 18.63 296.98 23.13 314.78 (1.97) 6.67 (8.64) 24.16 5.99 18.17 Postal Instant Press 2/18/88 14.00 278.41 16.13 296.98 16.25 314.78 15.18 6.67 8.51 0.78 5.99 (5.22) Wyse Technology 2/18/88 19.88 278.41 17.75 296.98 21.75 314.78 (10.69) 6.67 (17.36) 22.54 5.99 16.54 Heilig-Myers Co. 2/17/88 15.25 286.80 16.13 298.59 18.38 311.39 5.74 4.11 1.63 13.95 4.29 9.67 Infotron Systems Corp. 2/17/88 6.50 286.80 7.25 298.59 8.81 311.39 11.54 4.11 7.43 21.56 4.29 17.27 Union Corp. 2/17/88 5.38 286.80 7.25 298.59 7.38 311.39 34.88 4.11 30.77 1.72 4.29 (2.56) Vermont American 2/17/88 16.02 286.80 17.05 298.59 18.18 311.39 6.38 4.11 2.27 6.67 4.29 2.38 Bankers Trust NY Corp. 2/16/88 31.50 290.26 35.25 299.09 33.88 308.55 11.90 3.04 8.86 (3.90) 3.16 (7.06) Firestone Tire & Rubber2/16/88 31.88 290.26 45.00 299.09 63.13 308.55 41.18 3.04 38.13 40.28 3.16 37.11 Southern Union Co. 2/12/88 9.38 290.58 9.13 296.07 9.38 309.21 (2.67) 1.89 (4.56) 2.74 4.44 (1.70) Grow Group 2/11/88 7.00 283.29 7.75 293.85 7.88 307.39 10.71 3.73 6.99 1.61 4.61 (2.99) Alco Standard 2/10/88 21.63 283.15 20.88 294.11 25.00 306.25 (3.47) 3.87 (7.34) 19.76 4.13 15.63 Countrywide Credit Industries 2/10/88 5.64 283.15 9.07 294.11 8.58 306.25 60.88 3.87 57.01 (5.41) 4.13 (9.54) Electronic Associates 2/10/88 3.50 283.15 3.75 294.11 4.00 306.25 7.14 3.87 3.27 6.67 4.13 2.54 Joslyn Corp. 2/10/88 25.25 283.15 26.75 294.11 29.00 306.25 5.94 3.87 2.07 8.41 4.13 4.28 American Standard 2/9/88 36.75 283.23 67.00 287.96 73.75 312.46 82.31 1.67 80.64 10.07 8.51 1.57 Leisure Technology 2/9/88 3.88 283.23 3.88 287.96 4.75 312.46 0.00 1.67 (1.67) 22.58 8.51 14.07 Chrysler Corp. 2/4/88 26.75 302.74 26.00 288.23 24.75 308.98 (2.80) (4.79) 1.99 (4.81) 7.20 (12.01) Hannaford Bros. 2/4/88 37.25 302.74 36.13 288.23 38.13 308.98 (3.02) (4.79) 1.77 5.54 7.20 (1.66) Analog Devices 1/28/88 11.63 287.06 11.38 289.75 12.50 302.63 (2.15) 0.94 (3.09) 9.89 4.45 5.44 Maxtor Corp. 1/27/88 9.13 283.15 11.88 285.36 13.00 301.61 30.14 0.78 29.36 9.47 5.69 3.78 Brush Wellman 1/26/88 25.38 284.37 24.13 285.92 27.13 305.06 (4.93) 0.55 (5.47) 12.44 6.69 5.74 Comerica Inc. 1/26/88 38.33 284.37 43.83 285.92 44.67 305.06 14.36 0.55 13.81 1.90 6.69 (4.79) Edison Brothers 1/26/88 24.88 284.37 25.63 285.92 27.50 305.06 3.02 0.55 2.47 7.32 6.69 0.62 Richton International 1/26/88 3.50 284.37 3.50 285.92 3.50 305.06 0.00 0.55 (0.55) 0.00 6.69 (6.69) U.S. Trust 1/26/88 37.25 284.37 41.50 285.92 41.25 305.06 11.41 0.55 10.86 (0.60) 6.69 (7.30) Cronus Industries 1/22/88 10.38 293.18 13.63 282.44 12.75 306.34 31.33 (3.66) 34.99 (6.42) 8.46 (14.88) Elco Industries 1/19/88 22.00 287.56 24.75 286.80 25.25 298.59 12.50 (0.26) 12.76 2.02 4.11 (2.09) Molecular Genetics 1/19/88 3.50 287.56 4.00 286.80 4.06 298.59 14.29 (0.26) 14.55 1.57 4.11 (2.54) Lincoln Telecommunications 1/15/88 26.75 286.52 26.25 290.58 28.50 296.07 (1.87) 1.42 (3.29) 8.57 1.89 6.68 New England Critical Care 1/15/88 19.25 286.52 17.50 290.58 20.75 296.07 (9.09) 1.42 (10.51) 18.57 1.89 16.68 Northwestern National Life 1/14/88 21.88 280.20 26.88 283.29 27.50 293.85 22.86 1.10 21.75 2.33 3.73 (1.40) TransNet Corp. 1/14/88 2.06 280.20 2.06 283.29 2.00 293.85 0.00 1.10 (1.10) (3.05) 3.73 (6.78) V.F. Corp. 1/13/88 23.50 279.45 28.88 283.15 29.00 294.11 22.87 1.32 21.55 0.43 3.87 (3.44) Primark Corp. 1/12/88 17.50 271.27 18.75 283.15 21.63 287.96 7.14 4.38 2.76 15.33 1.70 13.63 Van Dorn Co. 1/8/88 30.63 275.16 34.25 280.91 34.13 286.47 11.84 2.09 9.75 (0.36) 1.98 (2.34) Allen Group Inc. 1/7/88 6.25 269.87 9.00 302.74 8.75 288.23 44.00 12.18 31.82 (2.78) (4.79) 2.02 Cooper LaserSonics 1/7/88 0.63 269.87 0.88 302.74 1.47 288.23 40.00 12.18 27.82 67.89 (4.79) 72.68 Standard Microsystems 1/6/88 5.38 261.96 7.13 300.30 7.63 288.06 32.56 14.64 17.92 7.02 (4.08) 11.09
PART XI SUMMARY OF SELECTED SHAREHOLDERS' RIGHTS PLANS SUMMARY DESCRIPTION OF SELECTED FLIP-OVER/FLIP-IN PLANS
STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER- UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/ EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKET TION A.G. Edwards 12/30/88 DE 1 share of Common Stock 14.96 75 5.01 10 AGCO Corp. 01/26/94 DE 1/100th of Preferred 5.00 200 5.13 10 AIFS Inc. 12/15/88 DE 1/100th share of Series A Cumulative Participating Preferred Stock 5.00 22 4.40 10 AMAX, Inc. 06/02/88 NY 1/2 share of Common Stock 21.25 35 1.65 10 AMR 08/11/89 DE 1/100th share of Series A Junior Participating Preferred Stock 77.50 200 2.58 10 ARX, Inc. 09/19/88 DE 1/100th share of Series A Junior Participating Preferred Stock 8.00 25 3.13 10 AVX 09/28/89 DE 1/100th share of Series A Participating Cumulative Preferred Stock 21.63 100 4.62 10 Abigail Adams National Bank 04/12/94 DE 1 Share of Common Stock 12.25 60.33 4.92 10 Acme Electric Corp. 11/15/93 NY 1 share of Common Stock 8.75 50.00 5.71 10 Acme Steel Company 07/19/88 DE 1/100th share of Series B Junior Participating Preferred Stock 24.00 70 2.92 10 Acuson Corporation 05/06/88 DE 1 share of Common Stock 26.50 120 4.53 10 Adaptec Inc. 04/26/89 CA 1 share of Common Stock 7.50 35 4.67 10 Adobe Systems Inc. 7/11/90 CA 1 share of Common Stock 33.00 230 6.97 10 Advanced Micro Devices Inc. 02/07/90 DE 1/1000th share of Series A Junior Participating Preferred Stock 7.00 65 9.29 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS A.G. Edwards Following 20% acquisition without consent of Company, or 10 days following 20% tender offer; rights will not be issued if Acquiror reduces ownership below 20% in five days. $0.01 prior to Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to less than 10%. Standard Standard; triggered by 20% beneficial ownership. AGCO Corp. 10 days following 20% acquisition $0.01 prior to 10% acquisition Standard Standard; also triggered by 20% beneficial ownership AIFS Inc. 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.001 prior to 20% acquisition in or in case of fair offer. Standard Standard; also triggered by 20% beneficial ownership. AMAX, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.05 prior to the 10th day following the Stock Acquisition Date. Standard None AMR 10 days following 20% acquisition or tender offer of 30%. $0.05 prior to 20% acquisition. Standard Standard; also triggered by beneficial ownership of 10%. ARX, Inc. 10 days following 20% acquisition or 10 days following tender offer for 20%. $0.01 prior to 5 p.m. NY City time on the tenth day following the Shares Acquisi- tion Date. Standard Standard; also triggered by 25% beneficial ownership or 1% event. Acquiror's Rights become void. AVX 10 days following 10% acquisition or tender offer for 30%. $0.01 prior to 10% acquisition. Standard Standard; also triggered by 15% beneficial ownership. Abigail Adams National Bank 10 days following 25% acquisition $0.01 prior to acquisition Standard Standard; also triggered by 25% beneficial ownership Acme Electric Corp. 10 business days following 20% acquisition $0.01 prior to 10% acquisition Standard Standard; triggered by 20% beneficial ownership Acme Steel Company 10 days following 20% acquisition or tender offer for 30%. $0.02 prior to 20% acquisition. Standard Standard; also triggered by beneficial ownership of 25%; Acquiror's Rights become void. Acuson Corporation 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 10 days following date there is an Acquiring Person. Standard Standard; Acquiror's Rights become void. Adaptec Inc. 10 days following 20% acquisition offer or tender offer of 30%. $0.01 prior to tenth day following acquisition or prior to Final Expiration Date. Standard Standard; also triggered by 30% beneficial ownership. Adobe Systems Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date. Standard Standard Advanced Micro Devices Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to tenth day following Stock Acquisition Date. Standard Standard; also triggered by declaration of an "Adverse Person" with 10% ownership. STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER- UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/ EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKET TION Advo Inc. 01/27/93 DE 1/100th Share of Preferred Stock 17.84 75 4.2 10 Aetna Life & Casualty Co. 10/27/89 Ct 1/100th share of Class B voting Preferred Stock 60.50 200 3.31 10 Affiliated Banc Corporation 11/28/88 Ma 1/100th share of Series A Junior Participating Cumulative Preferred Stock 8.75 35 4.00 10 Air Products and Chemicals, Inc. 03/17/88 DE 1/100th share of Series A Junior Participating Preferred Stock 46.50 200 4.30 10 Air Wis Services, Inc. 03/22/88 Wi 1/100th share of Series A Preferred Stock 12.88 45 3.49 10 Airgas, Inc. 08/01/88 DE 1/100th share of Series A Junior Participating Preferred Stock, or a combination of securities and assets of equivalent value NA 65 NA 10 Alcan Aluminum 12/14/89 CAN 1 share of Common Stock 22.75 100 4.40 10 Alco Standard Corporation 02/10/88 OH 1/100th share of Series 12 Preferred Stock 20.50 75 3.66 10 Allen Group, Inc., The 01/07/88 DE 1/100th share of Series B Junior Participating Preferred Stock 8.63 35 4.06 10 Allergan, Inc. 05/18/89 DE 1/100th share of Series A Participating Preferred Stock NA 115 NA 10 Allied Products Corp. 11/21/90 DE 1 share of Common Stock 4.25 50 11.76 20 Allied Research Corp. 06/08/91 DE 1/100th share of Preferred Stock 12.375 45 3.64 10 Alpha 1 Biomedicals 04/29/94 DE 1/1,000th of Preferred Stock 2.00 16.00 8.00 10 Ambase Corp. 02/19/91 DE NA 0.69 NA NA NA Amcast Industrial Corporation 02/24/88 OH 1/100th share of Series A Preferred Stock 10.50 40 3.81 10 Ameribanc Investors, Inc. 04/21/89 MD 1/100th Share of Series A Junior Participating Preferred Stock 21.50 75 3.49 10 America Online Inc. 04/23/93 DE 1/100th Share of Preferred Stock 24.25 150 6.2 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS Advo Inc. 10 days following 20% acquisition. $0.01 prior to acquisition. Standard Standard; also triggered by beneficial ownership of 20%. Acquiror's Rights become void. Aetna Life & Casualty Co. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to close of business on the later of Distribution Date or first date of Acquiring Person public announcement. Standard Standard; also triggered by 20% beneficial ownership or declaration of an "Adverse Person" with 10% ownership. Affiliated Banc Corporation 10 days following 20% acquisition or tender offer for 25%. $0.01 prior to 10 days following Stock Acquisition Date. Standard Standard; also triggered by 25% beneficial ownership; Acquiror's Rights become void. Air Products and Chemicals, Inc. 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to 10 days following the Stock Acquisi- tion Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 25% beneficial ownership. Air Wis Services, Inc. 20 business days following 20% acquisition or tender offer for 30%. $0.05 prior to 20 business days following the Share Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 35% beneficial ownership. Airgas, Inc. 10 days following 20% acquisition (30% for Peter McCausland) or the close of business 65 days following tender offer for 30%. $0.02 prior to 10 days following the Stock Acquisition Date. Standard; Acquiror's Rights become void. Standard; also triggered by 35% beneficial ownership or 1% event. Acquiror's Rights become void. Alcan Aluminum 10 days following 20% acquisition or tender offer. $0.01 prior to Flip-in event. Contains share-holder referendum provision. Standard Standard; also triggered by 20% beneficial ownership. Alco Standard Corporation 10 days following 20% acquisition or tender offer for 30%. $0.05 prior to 10 days following Stock Acquisi- tion Date or 20 Days following the Stock Acquisition Date if it occurred before 2/22/88. Standard Standard; also triggered by 30% beneficial ownership, reduction in dividends, or 2% increase in ownership of any class of securities. Allen Group, Inc., The 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to 10 days following the Stock Acquisi- tion Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by more than 20% beneficial ownership. Allergan, Inc. Following 20% acquisition or 10 days following tender offer for 20%. $0.01 prior to Stock Acquisition Date. May also be redeemed in merger unrelated to Acquiror or following expiration of Subscrip- tion Right if Acquiror owns less than 20%. Standard Standard; also triggered by 20% beneficial ownership except in case of Permitted Offer. Allied Products Corp. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date or 20% Acquisition. Standard Standard Allied Research Corp. 10 days following 25% acquisition or tender offer for 30% $0.01 prior to the Stock Acquisition Date. Standard Standard Alpha 1 Biomedicals 10 days following 25% acquisition $0.01 prior to acquisition Standard Standard; also triggered by 25% beneficial ownership Ambase Corp. NA NA NA NA Amcast Industrial Corporation 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 10 days following the Share Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to less than 10%. Standard Standard; also triggered by 30% beneficial ownership. Ameribanc Investors, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to acquisition. Standard Standard America Online Inc. 10 days following 25% acquisition. $0.01 prior to acquisition. Standard Standard; also triggered by beneficial ownership of 25%; Acquiror's Rights become void. STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER- UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/ EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKET TION American Bankers Insurance Group, Inc. 02/24/88 FL 1/100th share of Series A Participating Preferred Stock 9.13 31 3.40 10 American Building Maintenance Industries 04/12/88 DE 1/100th share of Series A Junior Participating Preferred Stock 23.25 80 3.44 10 American Business Products 10/26/89 GA 1 share of Common Stock 21.00 20% of Market Price 5.00 10 American Ecology Corp. 12/08/93 DE 1/1000th share of Preferred Stock 5.63 55.00 9.77 10 American Exploration Co. 10/01/93 DE 1/10000th share of Preferred Stock 1.44 7.50 5.21 10 American Funeral Services Corp. 08/12/92 DE 1/100th share of Preferred Stock 12.25 50.00 4.08 10 American General Corp. 07/27/89 TX 1/100th share of Series A Junior Participating Preferred Stock 36.75 120 3.26 10 American Health Properties Inc. 04/10/90 DE 1/100th share of Series A Preferred Stock 20.25 45 2.22 10 American Hoist & Derrick Company 09/08/88 DE 1/100th share of Series E Participating Preferred Stock 10.63 35 3.29 10 American President Companies, Ltd. 11/29/88 DE 1/100th share of Series A Junior Participating Preferred Stock 31.63 130 4.11 10 American President Companies Ltd. 10/22/91 DE 1/100th share of Preferred Stock 41.88 130.00 3.10 10 American Realty Trust, Inc. 04/11/90 GA 1/100th share of Series A Cumulative Participating Preferred stock. 4.25 25 5.88 10 American Savings Bank, FSB 06/22/88 NA 1/100th share of Series A Junior Participating Preferred Stock 14.25 56 3.93 10 American Standard, Inc. 02/09/88 DE 5 shares of Common or equivalent Preferred Stock. 66.88 32.50 0.49 06/30/88 American Travellers Corp. 04/25/90 PA 1/100th share of Series A Preferred Stock 12.13 50 4.12 10 American Water Works Company, Inc. 03/02/89 DE One-half share of Common Stock 19.63 40 2.04 10 Ameritech 12/21/88 DE 1/100th share of Junior Participating Preferred Stock 48.38 125 2.58 10 Ameritrust Corporation 08/17/88 DE 1/100th share Cumulative Redeemable Series A Preferred Stock 20.25 75 3.70 10 Ameron Inc. 03/01/91 DE 1/100th share of Preferred Stock 45.63 55 1.21 10 Ametek, Inc 07/26/89 DE 1/100th share of Series A Junior Participating Preferred Stock 13.75 60 4.36 10 Amfac, Inc. 06/21/88 HI 1/100th share of Series C Junior Participating Preferred Stock 47.00 100 2.13 10 Amgen Inc. 01/24/89 DE 1 share of Common Stock 36.75 180 4.90 10 Amoskeag Bank Shares 10/23/89 NH 1/100th Share Junior Participating Preferred Stock 5.25 32 6.10 10 Ampco-Pittsburgh Corporation 11/01/88 PA 1/100th share of Series A Preferred Stock 13.00 36 2.77 10 Amre Inc. 11/13/92 DE 1/100th Share of Preferred Stock 4.75 25 5.3 10 AmSouth Bancorpora- tion 06/15/89 DE 1/100th share Series A Preferred Stock 28.75 115 4.00 10 AmVestors Financial Corporation 08/04/88 KS 1/100th share of Series A Junior Participating Preferred Stock 6.40 28.80 4.5 5 Amwest Insurance Group, Inc. 05/11/89 DE 1 share of Common Stock 10.50 50 4.76 10 AnaComp Inc. 02/04/90 IN 1/10th share of Common Stock 3.88 32 8.25 10 Anadarko Petroleum Corporation 10/04/88 DE 1/200th share of Series A Junior Participating Preferred Stock 24.63 80 3.25 10 Analog Devices, Inc. 01/28/88 MA 1 share of Common Stock 11.63 60 5.16 10 Analysts International Corporation 06/16/89 MN 1 share Common Stock 15.6 100 6.41 10 Anchor Glass 08/21/89 DE 1/100th share of Series A Junior Participating Preferred Stock 20.00 55 2.75 10 Andover Bancorp, Inc. 02/16/89 DE 1/100th share of Series A Junior Participating Cumulative Preferred Stock 15.63 90 5.76 10 Andrew Corporation 09/22/88 IL 1 share of Common Stock 16.25 50 3.08 10 Angico- Eagle Mines 06/03/89 ON 1 share of Common Stock NA $80 (Cdn.) NA 10 Anthony Industries 08/10/89 DE 1/100th share of Series A Preferred Stock 17.13 66 3.85 10 Apogee Enterprises Inc. 10/19/90 MN 1/100th share of Preferred Stock 16.00 70 4.38 10 Apple Bancorp Inc. 11/17/89 DE 1/100th Share Junior Participating Preferred Stock 36.38 135 3.71 10 Apple Computer, Inc. 04/19/89 CA 1 share of Common Stock 40.125 200 4.98 10 Applied Materials, Inc. 06/14/89 DE 1/4 share Common Stock 28.50 45 1.58 10 Archive Corp. 03/17/89 DE 1/100th share of Junior Participating Preferred Stock 10.13 55 5.43 10 Arctco Inc. 09/05/91 MN 1/100th share of Preferred Stock 9.25 38 4.11 10 Arctco Inc. 09/05/91 MN 1/100th share of Preferred Stock 8.38 38.00 4.54 10 Arctic Alaska Fisheries Corp. 11/19/91 WA 1 share of Common Stock 9.25 38.00 4.11 10 Arix Corp. 02/27/90 DE 1 share of Common Stock 2.13 14 6.57 10 Arkansas Best Corporation 05/19/88 DE 1/1000th of Series A Junior Participating Preferred Stock 23.875 60 2.51 5 Arrow Electronics, Inc. 02/26/88 NY 1/100th share of Participating Preferred Stock 7.00 50 7.14 10 Asarco Incorporated 07/26/89 NJ 1/100th share of Junior Participating Preferred Stock 29.25 90 3.08 10 Ashton-Tate Corporation 02/13/89 DE 1 share of Common Stock 22.75 105 4.62 10 Ask Computer Systems Inc. 08/14/90 DE 1 share of Common Stock 9.25 45 4.86 10 Associated Communica- tions 01/03/89 DE 1/100th share of Series A Junior Participating Preferred Stock 24 90 3.75 10 Athlone Industries, Inc. 12/26/88 DE 1 share of Common Stock 16.19 90 5.56 10 Augat Inc. 08/22/88 MA 1/5th share of Common Stock and one note in principal amount equal to 4/5th of the current market price of the Common Stock 13.63 60 4.40 10 Automated Systems, Inc. 10/28/88 WI 1 share of Common Stock 4.81 40 8.32 10 Avery International Corpora- tion 06/30/88 DE 1/100th share of Series A Junior Participating Preferred Stock 24.50 95 3.88 10 Avon Products, Inc. 03/30/88 NY 1/100th share of Series A Junior Participating Preferred Stock 24.75 100 4.04 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS American Bankers Insurance Group, Inc. 10 days following 20% acquisition or 10 business days following a 30% tender offer. $0.01 prior to 20 days following 20% acquisition; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 20% beneficial ownership. American Building Maintenance Industries 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 10 days following the Stock Acquisition Date. Standard Standard; Acquiror's rights become void. American Business Products 20 days following 20% acquisition or 20 business days following 20% tender offer or 20 business days following Adverse Person declaration. $0.01 prior to 20 days following Stock Acquisition. Redemption may be reinstated if ownership is reduced below 10%. Standard Standard; also triggered by 20% beneficial ownership or Adverse Person. American Ecology Corp. 10 business days following 15% acquisition $0.01 prior to 10% acquisition. Standard Standard; triggered by 15% beneficial ownership American Exploration Co. 10 days following 15% acquisition or tender offer of 30% $0.01 prior to acquisition. Standard Standard; triggered by 15% beneficial ownership American Funeral Services Corp. 10 days following 35% acquisition or tender offer for 35% $0.01 prior to 35% acquisition in or in case of fair offer. Standard Standard American General Corp. 10 days following 15% acquisition or tender ownership offer for 25%. $0.01 prior to 10th day after acquisition. Standard Standard; also triggered by 15% beneficial ownership. American Health Properties Inc. 10 days following 10% acquisition or tender offer of 10%. $0.01 prior to close of business on later of Distribution date or Acquiring Person public announcement. Standard Standard; also triggered by 15% beneficial ownership. American Hoist & Derrick C ompany 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to 20% acquisition; 1 Common Share any time after 20% acquisition and to prior 50% acquisition. Standard; Acquiror's Rights become void. Standard; also triggered by 20% beneficial ownership. Acquiror's Rights become void. American President Companies, Ltd. 10 days following 20% acquisition or 10 business days following tender offer for 30%. $0.05 prior to 20 business days following Stock Acquisition Date; may be reinstated if Acquiror reduces benefi- cial ownership to 10% or less. Standard Standard; also triggered by 30% beneficial ownership or 1% event; Acquiror's Rights become void. American President Companies Ltd. 10 days following 20% acquisition or tender offer for 20% $0.05 prior to 20% acquisition in or in case of fair offer. Standard Standard American Realty Trust, Inc. 10 days following 25% acquisition or 10 days following tender offer for 25%. $0.01 only after receiving recommendation from "Independent Directors." Standard Standard; also triggered by above 25% beneficial ownership or "Adverse Person" ownership of 10%. American Savings Bank, FSB 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership; Acquiror's Rights become void. American Standard, Inc. 15% acquisition. NA NA NA American Travellers Corp. 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to 10 days following Stock Acquisition date. Standard Standard; also triggered by above 20% beneficial ownership or "Adverse Person" 10% ownership. American Water Works Company, Inc. 10 days following 25% acquisition or tender offer for 25%. $0.0005 prior to the 10th day following 25% acquisition. Standard Standard; also triggered by 35% beneficial ownership. Acquiror's Rights become void. Ameritech 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to the 10th day following Stock Acquisition Date; may be reinstated if Acquiror reduces ownership to 10%. Standard Standard; also triggered by 20% beneficial ownership except in case of fair offer. Ameritrust Corporation 20 days following 15% acquisition or 20 days following tender offer for 15%. $0.01 (i) prior to the close of business on the earlier of (a) August 17, 1998 or (b) the first date of public announce- ment that a Person has become an Acquiring Person, and (ii) in certain circum- stances after an Acquiring Person becomes the Beneficial Owner of less than 10% of the outstanding Common Shares. Standard Standard; also triggered by 15% beneficial ownership or 1% event. Acquiror's Rights become void. Ameron Inc. 10 days following 15% acquisition or 10 days following tender offer for 15%. $0.10 prior to 10 days following 15% acquisition. Standard Standard Ametek, Inc 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 10 days following 20%. Standard Standard; also triggered by 20% beneficial ownership. Amfac, Inc. 10 days following 15% acquisition or 10 business days following tender offer for 20%. $0.01 prior to 15% acquisition. Standard Standard; also triggered by 15% beneficial ownership; Acquiror's Rights become void. Amgen Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to the 20th day following 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Amoskeag Bank Shares 10 days following 20% acquisition or 10 business days following 20% tender offer. $0.01 prior to 20% acquisition. Standard Triggered by 20% beneficial ownership or by 1% event except in case of Permitted Offer. Ampco- Pittsburgh Corporation 20 business days following 20% acquisi- tion or 30% tender offer. $0.05 prior to 20 business days following 20% acquisition or 30% tender offer. Standard Standard; also triggered by 30% beneficial ownership or 1% event. Amre Inc. 10 days following 35% acquisition. $0.01 prior to acquisition. Standard Standard; also triggered by beneficial ownership of 35%; Acquiror's Rights become void. AmSouth Bancorporation 10 days following 15% acquisition or tender offer. $0.01 prior to Flip-in Date. Standard Standard; also triggered by 15% beneficial ownership. Acquiror's Right's become void. AmVestors Financial Corporation 20th business day following 20% acquisi- tion; 20th business day following tender offer for 20%; or 20th business day after a person is declared to be an "Adverse Person". $0.01 prior to the 20th business day following the Stock Acquisition Date and may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard; Acquiror's Rights become void. Standard; also triggered by 20% beneficial ownership, 1% event, or declaration of an "Adverse Person". Acquiror's Rights become void. Amwest Insurance Group, Inc. 10 business days following 20% acquisition. $0.01 prior to first date exercisable to purchase shares. Standard Standard AnaComp Inc. 10 business days following 15% acquisition or 10 business days following 30% tender offer. $0.01 prior to close of business on 10th day following Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership. Anadarko Petroleum Corporation 10 days following 20% acquisition or tender for 25% or a person is declared to be an "Adverse Person". $0.01 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 25% beneficial ownership or declaration of an "Adverse Person". Acquiror's Rights become void. Analog Devices, Inc. 10 business days following 20% acquisition or 30% tender offer. $0.02 prior to 10 days following the Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 30% beneficial ownership. Analysts International Corporation 10 days following 20% acquisition or tender offer for 20%. $0.01 within 10 days after 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Anchor Glass 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Andover Bancorp, Inc. 10 days following 20% acquisition, tender offer for 20%, or after a person is declared an "Adverse Person". $0.02 prior to the 10th day following 20% acquisition. Standard Standard; Acquiror's Rights become void. Andrew Corporation 10 days following 27% acquisition or 10 business days following tender offer for 30%. $0.01 prior to the 20th day following the Stock Acquisition Date and may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 27% beneficial ownership, or 1% event. Acquiror's Rights become void. Angico- Eagle Mines Following 20% Acquisition except in case of Permitted Bid or 10 days following 20% tender offer. $0.01 prior to Flip-in event. Standard Standard; triggered by 20% beneficial ownership except in case of Permitted Bid. Anthony Industries 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard Apogee Enterprises Inc. 10 days following 10% acquisition or tender offer for 10%. $0.01 prior to Stock Acquisition Date. Standard Standard Apple Bancorp Inc. 10 business days following 20% acquisition or tender offer or 1% increase in holdings for 20% beneficial owners. $0.01 prior to stock Acquisition Dates; allows for permitted offer. Standard Standard; also triggered by 20% beneficial ownership. Apple Computer, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 10th day following acquisition. Standard Standard; also triggered by 30% beneficial ownership. Applied Materials, Inc. 10 days following 20% acquisition or tender offer. $0.01 within 10 days following Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership. Archive Corp. 10 days following 15% acquisition or 10 business days following 30% tender offer. $0.01 prior to 10th day following Stock Acquisition Date (deadline may be extended no longer than an additional 20 days); may be reinstated if Acquiror reduces ownership to 10%. Standard Standard; triggered by 20% beneficial ownership or by 1% event. Arctco Inc. 10 days following 10% acquisition or tender offer 10%. $0.01 prior to 10% Stock Acquisition Date. Standard Standard Arctco Inc. 10 days following 10% acquisition or tender offer for 10% $0.01 prior to 10% acquisition in or in case of fair offer. Standard Standard Arctic Alaska Fisheries Corp. 10 days following 15% acquisition or tender offer for 15% $0.001 prior to 20% acquisition in or in case of fair offer. Standard Standard Arix Corp. 10 days following 15% acquisition or 10 business days following 20% tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard Arkansas Best Corporation 10 days following 25% acquisition or 19 business days following a tender offer for 25%. $0.02 prior to 10 days following the Stock Acquisition Date. Standard Standard; also triggered by 25% beneficial ownership; Acquiror's rights become void. Arrow Electronics, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 10 days following the Stock Acquisition Date; will be reinstated if Acquiror reduces bene- ficial ownership to 10% or less. Standard Standard; also triggered by reduction in dividends or beneficial ownership of 20%. Asarco Incorporated 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to the 10th day following 15% Acquisition. Standard Standard; also triggered by 15% beneficial ownership. Ashton-Tate Corporation 10 days following 15% acquisition or tender offer for 15%. $0.01 within 10 days following 15% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Acquiror's Rights become void. Ask Computer Systems Inc. 10 days following 25% acquisition or tender offer for 25%. $0.01 prior to Stock Acquisition Date. Standard Standard Associated Communications 10 business days following 20% acquisition or tender offer or 10 days following "Adverse Person" declaration. $0.01 prior to 10 business days following Stock Acquisition Date or prior to "Adverse Person" declaration. Standard Standard; also triggered by 20% acquisition or "Adverse Person" Declaration. Athlone Industries, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 25% beneficial ownership or 1% event. Acquiror's Rights become void. Augat Inc. 10 days following 20% acquisition or 10 business days following tender offer for 30%. $0.02 prior to 10 days following the Stock Acquisition Date and may be reinstated if The Acquiror reduces beneficial ownership to 10% or less or the Board approves of a merger with or acquisition by a Person unrelated to the Acquiring Person. Standard; Acquiror's Rights Become void. Standard; also triggered by 25% beneficial ownership or 1% event. Acquiror's Rights become void. Automated Systems, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.05 prior to the 20th day following 20% acquisition. Standard Standard; also triggered by 30% beneficial ownership or 1% event. Acquiror's Rights become void. Avery International Corporation 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by beneficial ownership of 30%; Acquiror's Rights become void. Avon Products, Inc. 10 days following 20% acquisition or 10 business days following a tender offer for 20%. $0.01 prior to 20% acquisition and under certain circumstances thereafter. Board may exchange Rights at a ratio of one Common Share of 1/100th Preferred Share per Right between the points of 20% and 50% acquisition. Standard Standard STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER- UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/ EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKET TION B.F. Goodrich Co. 07/20/87 NY 1/100th share of Series E Cumulative Participating Preferred Stock 54.25 200 3.69 10 BRE Properties, Inc. 08/14/89 DE 1 share of Common Stock 31.38 90 2.87 10 BT Financial Corp. 03/27/91 Pa 1/100th share of Preferred Stock 14.25 50 3.51 10 Baker Hughes Incorporated 03/23/88 DE 1/100th share of Series One Junior Participating preferred Stock 18.00 55 3.05 10 Baldor Electric Company 05/10/88 MO 1 share of Common Stock 25.875 75 2.90 10 Bally Gaming International Inc. 01/22/93 DE 1/100th Share of Preferred Stock 14.38 55 3.8 10 Baltimore Bancorp 06/21/89 MD 1/100th share of Series A Junior Participating Stock 14.0 48 3.43 10 Bancorp of Mississippi Inc. 04/23/91 MS 1 share of Common Stock 22.00 100 4.55 10 Bancorp New Jersey Inc. 12/26/90 DE 1 share of Preferred Stock NA 35 NA 10 BancTec, Inc. 05/24/88 DE 1 share of Common Stock 8.00 33.5 4.19 10 Bank of Boston Corp. 06/28/90 MA 1/1000th share of Preferred Stock 12.38 50 4.04 10 Bank of Chester County (formerly Dime Financial Corp.) 12/19/89 PA 1/100th share of Series A Junior A Participating Preferred Stock 9.13 70 7.67 10 Bank of New York Company, Inc. 05/03/93 NY 1/1000 share of Preferred Stock 53.75 200 3.72 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS B.F. Goodrich Co. 10 days following 20% acquisition or tender offer for 20%. $0.05 prior to 20% acquisition or upon a merger or consolida- tion with a corporation which is not an Acquiror; may be reinstated if Acquiror reduces beneficial ownership to less than 5%. Standard Standard; also triggered by 25% beneficial ownership or reduction in dividends. Acquiror's Rights become void. BRE Properties, Inc. 10 days following 32% acquisition, tender offer for 40% or declaration of an "Adverse Person." $0.01 prior to the 10th day following 32% acquisition. Standard Standard; also triggered by 40% beneficial ownership or 1% event. BT Financial Corp. 10 days following 10% acquisition or tender for 10%. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard Baker Hughes Incorporated 30 days following 20% acquisition or tender offer for 30%. $0.03 prior to 20% acquisition. Standard Standard; also triggered by 30% beneficial ownership. Baldor Electric Company Acquisition of 20% or 10 days following tender offer of 20%. $0.05 prior to Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership. Bally Gaming International Inc. 10 days following 10% acquisition. $0.01 prior to acquisition. Standard Standard; also triggered by beneficial ownership of 10%; Acquiror's Rights become void. Baltimore Bancorp 20 days following 20% acquisition or tender offer for 20%. $0.01 prior to 20 days following 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Bancorp of Mississippi Inc. 10 days following 20% acquisition or 10 business days following tender offer for 10%. $0.01 prior to Stock Acquisition date or 20% acquisition. Standard Standard Bancorp New Jersey Inc. 10 days following 15% acquisition or tender offer for 15%. NA Standard Standard BancTec, Inc. 10 days following 20% acquisition or 10 business days following tender offer for 30%. $0.05 prior to 15th day following 20% acquisition; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard; Acquiror's Rights become void. Standard; also triggered by beneficial ownership of 35%; Acquiror's rights become void. Bank of Boston Corp. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date. Standard Standard Bank of Chester County (formerly Dime Financial Corp.) 10 business days following 19.9% acquisition or tender offer or 4.9% "Adverse Person" declaration. $0.001 prior to 10th business day following Stock Acquisition Date. May be reinstated if Acquiror reduces ownership to 10%. Standard Standard; also triggered by 19.9% acquisition or by 1% event. Bank of New York Company, Inc. 10 days following 20% acquisition or tender $0.05 prior to acquisition Standard Standard STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER- UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/ EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKET TION Bank South Corporation 03/17/88 GA 1/100th share of Series A Participating Preferred Stock 13.00 50 3.85 10 BankAmerica Corporation 04/11/88 DE 1/100th share of Series E Cumulative Participating Preferred Stock 11.00 50 4.55 10 Bankeast Corp. 10/24/89 NH 1/1000th share of Junior Participating Preferred Stock 3.00 18 6.00 10 Bankers Trust New York Corporation 02/16/88 NY 1/100th share of Series C Junior Participating Preferred Stock 35.00 140 4.00 10 Banknorth Group Inc. 11/27/90 DE 1 share of Common Stock NA 35 NA 10 BankWorcester Corp. 06/23/92 DE 1/100th share of Preferred Stock 11.25 50.00 4.44 10 Banponce Corporation 08/11/88 PR 1/100th share of Series A Participating Cumulative Preferred Stock 23 90 3.91 10 Banta Corporation 10/29/92 WI 1/2 Share of Common Stock 25.75 90.00 3.50 10 Barnett Banks Inc. 02/21/90 FL 1/100th share of Junior Participating Preferred Stock 32.75 125 3.82 10 Barry Wright Corporation 05/30/89 MA 1/100th share Series A Junior Participating Preferred Stock 7.125 70 9.82 7 Bassett Furniture Industries, Inc. 05/04/88 VA 1 share of Common Stock 34.25 50 1.46 10 Battle Mountain Gold Company 11/11/88 NV 1/100th share of Series A Junior Participating Preferred Stock 16.00 60 3.75 10 Baush & Lamb, Inc. 06/16/88 NY 1/100th share of Series A Preferred Stock 44.38 200 4.51 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS Bank South Corporation 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 10 days following the Stock Acquisition Date. Standard except triggered by sale of 30% of assets or earning power. Standard; also triggered by 20% beneficial ownership. BankAmerica Corporation 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.001 prior to 20% acquisition rounded upward for each holder to nearest $0.01. Standard Standard; also triggered by 20% beneficial ownership; Acquiror's rights become void. Bankeast Corp. 10 business days following 20% acquisition, 25% tender offer or "Adverse Person" declaration. $0.01 prior to 10th business day following Stock Acquisition Date; may be reinstated if Acquiror reduces ownership below 10%. Standard Standard; triggered by 25% beneficial ownership or "Adverse Person" declaration. Bankers Trust New York Corporation 10 days following 20% acquisition or tender offer. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Banknorth Group Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date or 20% Acquisition. Standard Standard BankWorcester Corp. 10 days following 15% acquisition or tender offer for 15% $0.01 prior to 15% acquisition in or in case of fair offer. Standard Standard Banponce Corporation 10 days following 20% acquisition or 10 business days following tender offer for 25%. $0.05 prior to the 10th day after the Stock Acquisition Date and may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 25% beneficial ownership. Acquiror's Rights become void. Banta Corporation 10 days following 20% acquisition or tender offer for 20% $.01 prior to 20% acquisition in or in case of fair offer. Standard Barnett Banks Inc. 10 days following 20% acquisition or 10 business days following 20% tender offer. $0.01 prior to 10th day after Stock Acquisition Date. Standard Standard; also triggered by 10% beneficial ownership. Barry Wright Corporation 10 days following 20% acquisition tender offer, or declaration of an "Adverse Person." $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial Bassett Furniture Industries, Inc. 10 days following 20% acquisition or 10 business days following tender offer for 30%. $0.01 prior to 10 business days following the Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership; Acquiror's Rights become Battle Mountain Gold Company 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 30% beneficial ownership or 1% event. Acquiror's Rights become void. Baush & Lamb, Inc. 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Acquiror's Rights become void. STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER- UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/ EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKET TION Baxter International, Inc. 03/20/89 DE 1/100th share of Series A Junior Participating Preferred Stock 19.38 70 3.61 10 Bay View Capital Corp. 07/26/90 DE 1 share of Common Stock 17.38 55 3.16 NA BayBanks, Inc. 12/15/88 MA 1/100th share of Series A Junior Participating Preferred Stock 44.25 200 4.52 10 Beckman Instruments, Inc. 03/28/89 DE 1/100th share of Series A Participating Cumulative Preferred Stock 19.25 75 3.90 10 Bell Atlantic Corporation 03/28/89 DE 1/100th share of Series A Junior Participating Preference Stock 76.00 250 3.29 10 Bell South Corp. 11/28/89 GA 1/100th share of Preferred Stock 52.75 175 3.32 10 Bemis Company, Inc. 08/03/89 MO 1/100th share of Series A Junior Preferred Stock 33.88 120 3.54 10 Berlitz International Inc. 02/05/92 NY 1 share of Common Stock 19.50 108.00 5.54 10 Berry Petroleum 12/11/89 DE 1/100th share of Series A Junior Participating Preferred Stock 13.69 38 2.78 10 Bethlehem Steel Corporation 09/28/88 DE 1/100th share of Series A Junior Participating Preferred Stock 21.00 80 3.81 10 Betz Laboratories, Inc. 09/08/88 PA 1 share of Common Stock or a combination of securities and assets of equivalent value 46.25 150 3.24 10 Big Bear, Inc. 12/22/88 DE 1/3rd share of Common Stock 34.88 NA NA NA Biogen Inc. 05/12/89 MA 1/100th share of Series A Junior Participating Stock 12.25 68 5.55 10 Bio- Medicus Inc. 05/25/88 MN 1/2 share of Common Stock 6.88 25 3.64 10 Biomet 12/14/89 IN 1 share of Common Stock 27.00 150 5.56 10 BMC West Corporation 08/03/93 DE 1/100 P 18.75 50 2.67 10 Boatman's Bancshares Inc. 08/14/90 MO 1/100th share of Preferred Stock 28.25 110 3.89 20 Bohemia 02/28/89 OR 1/100th share of Series A Participating Preferred Stock 19.00 60 3.16 10 Boise Cascade Corporation 12/13/88 DE 1 share of Common Stock 40.38 175 4.33 10 Bolar Pharmaceutical Company Inc. 11/01/91 NY 1 share of Common Stock 6.38 35.00 5.49 10 Bolt Beranek and Newman Inc. 06/23/88 MA 1 share of Common Stock 17.38 90 5.18 10 Borden, Inc. 11/29/88 NJ 1/100th share of Series C Junior Participating Preferred Stock 56.00 175 3.12 10 Borland International Inc. 12/20/91 DE 1/1000th share of Preferred Stock 73.50 500.00 6.80 10 Boston Digital Corp. 09/04/90 MA 1 share of Common Stock NA 14.00 NA 10 The Boston Five Bancorp 12/20/89 DE 1/100th share of Series A Preferred Stock 4.88 32 6.56 10 Boston Technology Group 05/09/91 DE 0.4 share of Common Stock 4.44 12.4 2.80 10 Bradley Real Estate Trust 12/06/89 MA 1 share of Common Stock 10.50 38 3.62 10 Briggs & Stratton 12/20/89 DE 1/2 share of Common Stock 24.63 85 3.45 10 Broadway Financial Corp. 11/13/89 NJ 1/100th share of Junior Participating Preferred Stock 13.13 50 3.81 10 Browne & Sharpe Manufacturing Company 03/09/88 DE 1/100th share of Series A Participating Preferred Stock 21.13 55 2.60 10 Browning-Ferris Industries, Inc. (yyy) 06/01/88 DE 1/100th share of Series A Participating Preferred Stock 23.38 110 4.70 10 Brunswick Corporation 04/03/89 DE 1/100th share of Series B Junior participating Preferred Stock 19.75 100 5.06 10 Brush Wellman Inc. 01/26/88 OH 1/100th share of Serial Series A Preferred Stock 23.75 100 4.21 10 Buffton Corporation 06/23/88 DE 1/100th share of Series A Junior Participating Preferred Stock 7.63 28.5 3.74 10 Burlington Resources, Inc. 02/23/89 DE 1/100th share of Series A Preferred Stock 49.63 95 1.91 10 Burr-Brown Corporation 07/21/89 DE 1/100th share of Common Stock 9.75 47.5 4.87 10 Businessland, Inc. 11/08/88 CA 1/1000th share of Series A Junior Participating Preferred Stock 12.75 55 4.31 10 Butler Manufacturing Company 10/03/88 DE 1/100th share of Series A, Class 1 Preferred Stock 33.50 100 2.99 10 BWIP Holding Inc. 07/30/93 DE 1/100th share of Preferred Stock 24.25 85.00 3.51 10 Bytex Corp. 04/12/91 DE 1 share Common Stock 12.50 60 4.80 10 CACI International Inc. 6/27/90 DE 1 share Class A Common Stock NA 11 NA 10 CAE Industries Ltd. 03/07/90 TOR 1 share Common Stock NA 30[cdn] NA 5 CB&T Bancshares, Inc. 04/20/89 GA 1 Share Common Stock 13.75 65 4.73 10 CCB Financial Corp. 02/26/90 NC 1/100th share of Preferred Stock 36.75 100 2.72 10 CCNB Corporation 11/09/89 PA 1/100th share of Series B Preferred Stock 21.75 90 4.14 10 CFS Financial Corp. 10/16/89 VA 1/100th share of Series A Junior Participating Preferred Stock 17.25 60 3.48 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS Baxter International, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Acquiror's rights become Bay View Capital Corp. 10 days following 10% acquisition or tender offer for 10%. NA Standard BayBanks, Inc. 10 days following 20% acquisition tender offer for 25%, or after a person is declared an "Adverse Person". $0.01 prior to the 10th day following 20% acquisition. Standard Standard: also triggered by 25% beneficial ownership. Beckman Instruments, Inc. 10 days following 20% acquisition or 10 business days following tender offer for 25%. $0.01 prior to 10th day following Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10%. Standard Standard; triggered by 25% beneficial ownership. Bell Atlantic Corporation 10 days following 15% acquisition or tender offer for 20%. $0.01 prior to the 10th day following 15% acquisition. Standard Standard; also triggered by 15% beneficial ownership. Acquiror's Rights become void. Bell South Corp. Following 10% acquisition without Board approval or 10 days following 25% tender offer. $0.01 prior to Stock Acquisition Date. Standard Standard; also triggered by 10% beneficial ownership. Bemis Company, Inc. 15 days following 20% acquisition on 20% tender offer. $0.01 prior to 30 days following 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership, 1% event, or declaration of an "Adverse Person" with 10% ownership. Berlitz International Inc. 10 days following 20% acquisition or tender offer for 20% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard Berry Petroleum 10 days following 20% acquisition or 1% acquisition by 20% holder or 10 business days following 20% tender offer. $0.01 prior to Distribution Rate; may be reinstated if Acquiror declares ownership below 10%. Standard Standard; also triggered by 20% beneficial ownership. Bethlehem Steel Corporation 10 days following 20% acquisition or 10 days following tender offer for 20%. $0.01 prior to the 10th day following the Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership, or a 1% event. Acquiror's Rights become void. Betz Laboratories, Inc. 10 days following a 20% acquisition or 65 days following tender offer for 20%. $0.01 prior to the 10 days following the Stock Acquisition Date. Standard; Acquiror's Rights become void. Standard; also triggered by 20% beneficial ownership. Acquiror's Rights become void. Big Bear, Inc. 30% acquisition or tender offer for 30%. NA Standard Standard Biogen Inc. 10 business days following 20% acquisition, tender offer for 20%, or after a person is declared an "Adverse Person." $0.01 prior to 10th day following 20% acquisition. Standard Standard; Acquiror's Rights become void. Bio-Medicus Inc. 10 days following 20% acquisitions. $0.01 prior to 20 days following 20% acquisition. Standard Standard Biomet 10 business days following 15% acquisition or 30% tender offer. $0.01 prior to 10th day following stock Acquisition Date or in connection with unrelated merger or following expiration of subscription period if no person owns 15%. Standard Standard; also triggered by 15% beneficial ownership. BMC West Corporation 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to acquisition. Standard Standard Boatman's Bancshares Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date or 20% Acquisition. Standard Standard Bohemia 10 days following 25% acquisition or tender offer for 30%. $0.01 prior to the 10th day following 25% acquisition. Standard Standard; also triggered by 30% beneficial ownership. Boise Cascade Corporation 10 days following 20% acquisition, tender offer for 30%, or after a person is declared to be an "Adverse Person." $0.01 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 25% beneficial ownership. Acquiror's Rights become void. Bolar Pharmaceutical Company Inc. 10 days following 20% acquisition or tender offer for 20% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard Bolt Beranek and Newman Inc. 10 business days following 20% acquisition or tender offer for 30%. $0.01 prior to the Expiration Date by 2/3 majority vote of Continuing Directors. Standard; Acquiror's Rights become void. Standard; also triggered by reduction in dividends; Acquiror's Rights become void. Borden, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.033 prior to the 10th day following 20% acquisition. Standard Standard; Acquiror's Rights become void. Borland International Inc. 10 days following 15% acquisition or tender offer for 15% $0.01 prior to 15% acquisition in or in case of fair offer. Standard Standard Boston Digital Corp. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date Standard Standard The Boston Five Bancorp 10 business days following 15% acquisition or 30% tender offer. $0.01 prior to 10th business day following Stock Acquisition Date. Standard; also triggered by 30% sale of assets or earning power. Standard; also triggered by 15% beneficial ownership or by 1% event. Boston Technology Group 10 business days following 20% acquisition or 30% tender offer. $0.02 prior to 10% Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard Bradley Real Estate Trust 10 days following 15% acquisition or 10 business days following 15% tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 15% beneficial ownership. Briggs & Stratton 10 days following 20% acquisition or 10 business days following 20% tender offer. $0.01 prior to 20% beneficial ownership. Standard Standard; also triggered by 20% beneficial ownership. Broadway Financial Corp. 10 days following 15% acquisition or 10 business days following 15% tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 15% beneficial ownership. Browne & Sharpe Manufacturing Company 10 business days following 10% acquisition or tender offer for 15%. $0.03 by 2/3 vote of Continuing Directors prior to 15 days following the Stock Acquisition Date. Standard; except triggered by sale of 30% of assets or earning power. Standard Browning- Ferris Industries, Inc. (yyy) 10 business days following 20% acquisition or tender offer for 30%. $0.05 prior to the 10th business day following Stock Acquisition Date. Standard; Acquiror's Rights become void. Standard; also triggered by beneficial ownership of 30%; Acquiror's Rights become void. Brunswick Corporation 10 days following 20% acquisition or beneficial ownership of 30%. $0.05 prior to acquisition or beneficial ownership. Standard Standard; also triggered by 15% beneficial ownership. Brush Wellman Inc. 10 days following 20% acquisition or tender offer for 30%. $0.03 prior to 10 days following 20% acquisition; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 50% beneficial ownership. Buffton Corporation 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to the 10th day following the Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard; Acquiror's Rights become void. Standard; also triggered by 30% beneficial ownership; Acquiror's Rights become void. Burlington Resources, Inc. 20% acquisition or 10 days following tender offer for 20%. $0.05 prior to 20% acquisition. Standard Standard; also triggered by 25% beneficial ownership. Burr-Brown Corporation 10 days following 20% acquisition or 10 days following 20% tender offer. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Businessland, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 30% beneficial ownership or 1% event. Acquiror's Rights become void. Butler Manufacturing Company 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 30% beneficial ownership BWIP Holding Inc. 10 business days following 15% acquisition $0.01 prior to acquisition. Standard Standard; triggered by 15% beneficial ownership Bytex Corp. 10 business days following 20% acquisition or 20% tender offer. $0.01 prior to 10% stock acquisition date. Can be reinstated if beneficial ownership falls below 10%. Standard Standard CACI International Inc. 10 days following 20% acquisition, or no later than 19 days following 20% tender offer. $0.01 prior to Distribution Date. Standard Standard; also triggered by 1% event. CAE Industries Ltd. Announcement of 20% acquisition or 20% tender offer. $0.001 any time prior to Flip-in Event. None Standard; also triggered by 20% beneficial ownership. CB&T Bancshares, Inc. 10 days following 10% acquisition or tender offer for 15%. $0.01 prior to triggering event. Standard Standard; also triggered by 15% beneficial ownership. CCB Financial Corp. 20 business days following 15% acquisition or tender offer. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 15% beneficial ownership or 1% event. CCNB Corporation 10 business days following 20% acquisition or tender offer. $0.01 prior to 10th business day following Stock Acquisition Date; if redemption is requested after Stock Acquisition Date or after change in majority of directors resulting from a proxy solicitation and if solicitor wishes to be Acquiring Person, request must be accepted by majority of Continuing Directors. Standard Standard; also triggered by 20% acquisition except in case of fair offer. CFS Financial Corp. 10 business days following 20% acquisition or tender offer for 25%. $0.01 prior to 10th day following Stock Acquisition Date; may be reinstated if Acquiror reduces ownership below 10%. Standard Standard; triggered by 25% beneficial ownership. STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER- UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/ EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKET TION CFW Communications Co. 02/26/90 VA 1/1000th share of Series A Junior Participating Preferred Stock 19.00 130 6.84 10 CML Group Inc. 06/28/88 DE 1/100th share Series A Junior Participating Preference Stock 22.13 92 4.16 10 CMS/Data Corp. 11/08/91 FL 1 share of Common Stock 1.63 12.00 7.38 10 CNW Corporation 10/31/88 DE 1 share of Common Stock 27.38 90 3.29 10 CPC International Inc. 3/19/91 DE 1/200th share of Preferred Stock 78.63 325 4.13 10 CPI Corp. 05/01/89 DE 1/100th share of Series A Participating Preferred Stock 24.5 85 3.47 10 CRS Sirrine Inc. 11/29/88 DE 1/5th share of Common Stock 24.25 72 2.97 10 Cabot Oil & Gas Corp. 1/21/91 DE 1/100th share of Preferred Stock 28.00 55 1.96 10 Cadmus Communications 02/01/89 VA 1/1000th share of Junior Participating Preferred Stock 12.75 45 3.53 10 Caere Corp. 04/17/91 DE 1/100th share of Preferred Stock 23.13 90 3.89 10 Caesars World, Inc. 01/10/89 FL 1/200th share of Series A Junior participating Preferred Stock 32.00 125 3.91 10 CalFed Inc. 03/16/88 DE 1/100th share of Series A Junior Participating Cumulative Preferred Stock 26.00 100 3.85 10 California Amplifier 09/05/91 DE 1/100th share of Preferred Stock 2.75 11 4.00 10 California Amplifier Inc. 09/05/91 DE 1/100th share of Preferred Stock 2.75 11.00 4.00 10 California Energy Company, Inc. 11/11/88 DE 1/100 share of Series A Junior Preferred Stock 8.83 52 5.89 10 California Microwave Inc. 07/27/89 DE One share of Common Stock 9.13 35 3.83 10 Cambridge BioScience Corporation 03/21/89 DE 1 Share of Common Stock 14.13 60 4.25 10 Canadian Pacific 12/05/89 CAN 1 Share of Common Stock or a fraction of right for Convertible Rights. NA $85 (Cdn) NA 10 Capital Cities/ABC 12/15/89 NY 1/100th share of Series A Preferred Stock. 547.00 2,000 3.66 10 CareerCom Corp. 12/12/89 PA 1/100th share of Series C Participating Preferred Stock. 5.25 40 7.62 10 Carlisle Companies Incorporated 02/08/89 DE 1/1000th share of Series A Preferred Stock 33.88 160 4.72 10 Carolco Pictures Inc. 06/18/90 DE 1/100th share of Series R Junior Participating Preferred Stock. 12.375 50 4.04 10 Carolina First Corp. 11/15/93 SC 1/2 share of Common Stock 13.5 18.00 1.33 10 Carpenter Technology Corporation 05/11/89 DE 1 share Common Stock 46.875 90 1.92 10 Carrington Laboratories 10/16/91 MN 1/100th share of Preferred Stock 11.75 80 6.81 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS CFW Communications Co. 10 business days following 10% acquisition or 10 business days following 10% tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; triggered by 20% beneficial ownership. CML Group Inc. 10 days following 20% acquisition or 10 business days following tender offer for 30%. $0.02 prior to 10 days following the Stock Acquisition Date. May be reinstated if (i) Acquiror reduces beneficial ownership to 10% or less, or (ii) the Board approves the merger of the Company by a Person unrelated to the Acquiring Person. Standard Standard; also triggered by 30% beneficial ownership, or 1% event. Acquiror's Rights become void. CMS/Data Corp. 10 days following 15% acquisition or tender offer for 15% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard CNW Corporation 10 days following 20% acquisition or 10 business days following 20% tender offer. $0.01 prior to 20% acquisition redemption rights may be reinstated if acquisition percentage drops below 10%. Standard Standard; also triggered by 1% event. CPC International Inc. 10 days following 10% acquisition of tender offer for 30%. $0.01 prior to Stock Acquisition Date. Standard Standard CPI Corp. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to acquisition. Standard Standard CRS Sirrine Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 10 days following Stock Acquisition Date. Standard Standard; also triggered by 30% beneficial ownership or 1% event; Acquiror's Rights become null and void. Cabot Oil & Gas Corp. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date. Can be reinstated if Beneficial Ownership falls below 10%. Standard Standard Cadmus Communications 10 days following 20% acquisition or 10 business days following 20% tender offer. $0.01 prior to 10th day following stock acquisition; may be reinstated if Acquiror reduces ownership to less than 10%. Standard Standard; also triggered by 20% beneficial ownership. Caere Corp. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date. Standard Standard Caesars World, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. CalFed Inc. Primary Rights: 10 business days following 15% acquisition. Secondary Rights: 25% acquisition or tender offer. $0.01 prior to 10 business days following 15% acquisition for Primary Rights and 25% acquisition for Secondary Rights. Standard Standard; secondary rights also triggered by 25% beneficial ownership. California Amplifier 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date. Standard Standard California Amplifier Inc. 10 days following 20% acquisition or tender offer for 20% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard California Energy Company, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.02 prior to 10th day following 20% acquisition. Standard Standard; triggered by 20% beneficial ownership. Acquiror's Rights become void. California Microwave Inc. 20 business days following 20% acquisition or tender offer for 30%. $0.01 prior to 20th day following Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10%. Standard Standard; triggered by 30% beneficial ownership except in case of fair offer. Cambridge BioScience Corporation 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to the 10th day following 20% acquisition. Standard Standard; Acquiror's Rights become void. Canadian Pacific 10 days following 15% acquisition or tender offer except in case of Permitted Bid. $0.01 ($0.001/Convertible Right) prior to Flip-in or Flip-over event; can be redeemed pursuant to Permitted Bid. Standard Standard; also triggered by 15% beneficial ownership. Capital Cities/ABC 10 days following 20% acquisition or 10 business days following 20% tender offer. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. CareerCom Corp. 10 business days following 15% acquisition or 10% "Adverse Person" declaration or 15 business days following 20% tender offer. $0.01 prior to 10th day following Stock Acquisition Date; may be reinstated if Acquiror reduces ownership to 10%, or in unrelated merger. Standard Standard; triggered by 20% beneficial ownership, 1% event, or "Adverse Person" declaration. Carlisle Companies Incorporated 20 days following 20% acquisition, tender offer for 25%, or after a person is declared an "Adverse Person." $0.01 prior to the 20th day following 20% acquisition. Standard Standard; also triggered by 25% beneficial ownership. Acquiror's Rights become void. Carolco Pictures Inc. 10th business day following 20% acquisition or 20% tender offer. $0.01 prior to 10th business day following 20% Ownership Date. Standard Standard; also triggered by 20% beneficial ownership or 1% event. Carolina First Corp. 10 business days following 10% acquisition or tender offer of 15%. $0.001 prior to 15% acquisition Standard Standard; triggered by 10% beneficial ownership Carpenter Technology Corporation 10 days following 20% acquisition or declaration or an "Adverse Person." $0.05 prior to 10 days following acquisition. Standard Standard; also triggered by 20% beneficial ownership. Carrington Laboratories 10 days following 20% acquisition or 20% tender offer. $0.01 prior to 20% Stock Acquisition Date. Standard Standard STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER- UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/ EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKET TION Carrington Laboratories Inc. 09/19/91 MN 1/100th share of Preferred Stock 11.75 80.00 6.81 10 Carson Pirie Scott & Co. 11/08/93 IL 1 share of Common Stock 11.75 40.00 3.40 10 Cascade Natural Gas 03/19/93 WA 1/100th share of Preferred Stock 24.63 85 3.45 10 Casey General Stores, Inc. 06/14/89 IA 1 share Common Stock 10.625 40 3.76 10 Castle Energy 04/21/94 DE 1/100th of Preferred 10.25 35.00 3.41 10 Cellular Inc. 12/10/90 CO 1/100th share of Preferred Stock 8.50 45.00 5.29 10 Centerre Bancorporation 03/15/88 MO 1/100th share of Series A Junior Participating Preferred Stock 34.75 120 3.45 10 Centex Corporation 05/16/88 NV 1/100th share of Series D Junior Participating Preferred Stock 26.88 120 4.47 10 Centex Telemanagement Inc. 09/15/93 DE 1/1000th share of Preferred Stock 6.75 30.00 4.44 10 Centigram Communications Corp. 10/20/92 DE 1/1000th share of Preferred Stock 8.50 45.00 5.29 10 Centocor, Inc. 09/26/88 PA 1/100th share of Series A Preferred Stock 21.75 170 7.82 10 Central Fidelity Banks, Inc. 05/03/89 VA 100th share of Preferred Shares 30 110 3.67 10 Cephalon Inc. 11/22/93 PA 1/100th share of Preferred Stock 17.75 90.00 5.07 10 Cetus Corporation 08/01/88 DE 1 share of Common Stock 11.50 60 5.22 10 Champion Products 12/27/88 NY 1 share of Common Stock 55.75 150 2.69 10 Charming Shoppes, Inc. 4/27/89 PA 1/300th share of Series A Junior Participating Preferred Stock 13.88 70 5.05 10 Charter One Financial, Inc. 11/20/89 DE 1/100th share of Series A Participating Preferred Stock 18.25 90 4.93 10 The Chase Manhattan Corporation 02/15/89 DE 1/100th share of Junior Participating Preferred Stock 32.25 125 3.88 10 Checkpoint Systems 12/15/88 PA 1 share of Common Stock 9.00 40 4.44 10 Chelsea Industries, Inc. 06/10/88 Ma 1/100th share of Series A Preferred Stock 16.25 65 4.00 10 Chemdesign Corp. 02/20/90 Ma 1/100th share of Series A Junior Participating Cumulative Preferred Stock 14.25 56 3.93 10 Chemical Banking Corporation 04/13/89 De 100th share of Junior Participating Preferred Stock 34.875 150 4.30 10 Chesapeake Corporation 03/15/88 VA 1/1000th share of Series A Junior Participating Preferred Stock 20.00 70 3.50 10 Chevron Corporation 11/22/88 DE 1/100th share of Series A Participating Preferred Stock 44.50 130 2.92 10 Chi Chi's, Inc. 11/10/87 DE 1/1000th share of Series A Junior Preferred Stock 8.00 30 3.75 10 The Chicago Dock and Canal Trust 07/20/88 IL 1 share of Common Stock 24.00 75 3.13 10 Chrysler Corporation 02/04/88 DE 1/100th share of Junior Cumulative Participating Preferred Stock 27.00 120 4.44 10 The Chubb Corporation 06/02/89 NJ 1/100th share of Series A Cumulative Participating Preferred Stock 70.0 225 3.21 10 Church & Dwight 04/26/89 DE 1/100th share of Junior Participating Cumulative Preferred Stock. 13.50 50 3.70 10 Church's Fried Chicken, Inc. 11/07/88 TX 1 share of Common Stock 7.75 20 2.58 10 Cimco Inc. 12/05/92 DE 1/100th Share of Preferred Stock NA 25 NA 10 Circuit City Stores, Inc. 05/02/88 VA 1/100th share of Series E Cumulative Participating Preferred Stock 28.00 140 5.00 10 Circus Circus Enterprises 07/14/94 NV 1 Share of Common 27.38 125.00 4.57 10 Citizens Bancorp 12/11/88 MD 10 shares of Common Stock NA 2.50 NA 10 Citizens Banking Corp. 07/20/90 MI 1/100th share of Preferred Stock 21.25 75.00 3.53 10 City Holding Company 04/04/91 WV 1/100th share of Preferred Stock 15.00 53 3.53 10 Cleveland Cliffs Inc. 11/19/91 OH 1 share of Common Stock 35.63 85.00 2.39 10 The Clothestime, Inc. 3/27/92 DE 1 Share of Common Stock 9.625 60.00 6.23 10 Coachmen Industries, Inc. 01/19/90 IN 1 share of common stock 6.75 30 4.44 10 Cobe Laboratories, Inc. 07/27/89 CO 1 share of Common Stock 21.00 90 4.29 10 Coeur d'Alene Mines 05/24/89 ID 1/100th share of Preferred Stock 16.25 100 6.15 10 Coherent, Inc. 12/16/88 CA 1 share of Common Stock 9.75 80 8.21 10 Collins Foods Inc. 01/22/91 DE 1/100th share of Series A Junior Participating Preferred Stock 7.50 40 5.33 10 Colorado National Bankshares, Inc. 06/27/88 CO 1/100th share of Series A Junior Participating Preferred Stock 15.63 70 4.48 10 Combustion Engineering 12/19/88 DE 1/100th share of Series A Junior Participating Preferred Stock 27.38 100 3.65 10 Comerica Incorporated 01/26/88 DE 1/100th share of Series C Participating Preferred Stock 44.17 175 3.96 10 Commerce Bancshares, Inc. 08/23/88 MO 1/100th share of Series A Preferred Stock 39.50 150 3.80 10 Commercial Federal Corporation 12/20/88 NE 1/100th share of Series A Junior Participating Cumulative Preferred Stock 7.38 42 5.69 10 Commercial Intertech Corp. 11/29/89 OH 1/100th share of Series A Junior Participating Preferred Stock 21.75 75 3.45 10 Commonwealth Bancshares Corp 07/11/90 PA 1/100th share of Preferred Stock NA 60.00 NA 10 Community Banks Inc. 12/01/90 PA 1 share of Common Stock NA 20.00 NA 10 Community Bank Shares 10/18/89 NH 1/100th share of Series A Preferred Stock 8.50 40 4.71 10 Comp USA 04/29/94 DE 1/10,000th of Preferred 18.13 120.00 6.62 10 Compaq Computer Corporation 5/18/89 DE 1/100th share of new series of participating Preferred Stock. 81 380 4.69 10 Computer Horizons, Corp. 07/06/89 DE 1/100th share of Series A Preferred Stock 7.875 30 3.81 10 Computer Products, Inc. 11/09/88 FL 1 share of Common Stock 2.00 10 5.00 10 Computer Task Group, Inc. 01/16/89 NY 1/1000th share of Series A Participating Cumulative Preferred Stock 12.88 50 3.88 10 Comstock Resources Inc. 12/04/90 NV 1/100th share of Preferred Stock 3.75 20.00 5.33 10 ConAgra, Inc. 09/28/89 DE 1 share of Common Stock 37.63 200 5.31 10 Concurrent Computer 07/25/89 DE 1/100th share of Series A Participating Cumulative Preferred Stock. 4.63 27.50 5.94 10 Concurrent Computer Corp. 07/31/92 DE 1/100th share of Preferred Stock 2.125 30.00 14.12 10 Consolidated Capital Income Trust 03/13/89 CA 1 share Common Stock NA 14 NA 10 Consolidated Capital Realty Investors 03/13/89 CA 1/100th share of preference stock NA 2.50 NA 10 Consolidated Capital Special Trust 03/13/89 CA 1 share of Common Stock NA 12 NA 10 Consolidated Rail Corp. 07/19/89 PA 1 share Common Stock NA 105 NA 10 Consolidated Stores Corp. 04/18/89 DE 1/100th share of Series A Junior Participating Preferred Stock. 7.63 35 4.59 10 Constellation Bancorp. 02/19/91 NJ 1/100th share of Preferred Stock. 8.50 55 6.47 10 Contel Corporation 11/3/88 DE 1/100th share of Series K Junior Participating Preferred Stock 38.75 120 3.10 10 Continental Bank Corp. 07/22/91 DE 1/100th share of Preferred Stock 13.75 55 4.00 10 Continental Medical Systems Inc. 03/11/91 DE 1/1000th share of Preferred Stock 11.00 85.00 7.73 10 Cooker Restaurant Corp. 05/27/92 OH 1/100th share of Preferred Stock 15.5 15.00 .97 8 Cooper LaserSonics, Inc. 01/07/88 DE 1/100th share of Series A Junior Participating Preferred Stock 0.88 5.50 6.25 10 Copley Properties Inc. 06/28/90 DE 1 share of Common Stock 12.00 36.00 3.00 10 Corporate Software Incorporated 05/12/ 89 DE 1/100th share of Series A Junior Participating Preferred Stock 13.50 70 5.19 10 Costco Wholesale Corporation 07/14/93 WA 1/1000 share of Preferred Stock 16.50 80 4.85 10 Countrywide Credit Corporation 02/10/88 DE 1/100th share of Series A Junior Participating Preferred Stock 9.19 35 3.81 10 Crane Co. 06/27/88 DE 1/100th share of Series A Junior Participating Preferred Stock 31.00 105 3.39 10 Cray Research Inc. 05/15/89 DE 1 share Common Stock 53.125 250 4.71 10 Credo Petroleum Corporation 04/13/89 CO 1 share of new series of Preferred Stock 1.938 NA NA 10 Crestar Financial Corporation 06/23/ 89 VA 1/1000th share of Series C Participating Cumulative Preferred Stock. 29.5 115 3.90 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS Carrington Laboratories Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard Carson Pirie Scott & Co. 10 business days following 15% acquisition. $0.01 prior to acquisition. Standard Standard; triggered by 25% beneficial ownership. Cascade Natural Gas 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 20% acquisition. Standard Standard; triggered by 20% beneficial ownership. Acquiror's Rights become void. Casey General Stores, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to acquisition. Standard Standard; also triggered by 20% beneficial ownership. Castle Energy 10 days following 15% acquisition $0.01 prior to acquisition Standard Standard; also triggered by 15% beneficial ownership Cellular Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to Stock Acquisition Date or 10% Acquisition. Standard Standard Centerre Bancorporation 10 days followings 20% acquisition or tender offer. $0.01 prior to 20% acquisition Standard Standard Centex Corporation 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.05 prior to 15th day following 20% acquisition; may be reinstated if Acquiror reduces ownership to 10% or less. Standard Standard; also triggered by beneficial ownership of 20% Acquiror's Rights become void. Centex Telemanagement Inc. 10 business days following 20% acquisition. $0.01 prior to acquisition. Standard Standard; triggered by 20% beneficial ownership Centigram Communications Corp. 10 days following 15% acquisition or tender offer for 15% $0.01 prior to 15% acquisition in or in case of fair offer. Standard Standard Centocor, Inc. 10 days following 20% acquisition or 10 business days following tender offer for 30%. $0.02 prior to the 10th day following the Stock Acquisition Date and may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 30% beneficial ownership. Acquiror's Rights become void. Central Fidelity Banks, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 20% acquisition Standard Standard; Acquiror's Rights become void. Cephalon Inc. 10 business days following 20% acquisition. $0.01 prior to acquisition Standard Standard; triggered by 20% beneficial ownership Cetus Corporation Primary Rights: 10th business day following 15% acquisition. Secondary Rights: 10th business day following 25% acquisition or the earlier of the Flip-Over Provisions. Primary Rights: $0.01 prior to the 10th business day following the 15% Acquisition Date. Secondary Rights: $0.01 prior to the 10th business day following the 25% Acquisition Date or the earlier of the Flip-over Provisions. Standard Acquiror's Rights become void. Standard; also triggered by 15% beneficial ownership. Acquiror's Rights become void. Champion Products 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 40% beneficial ownership. Charming Shoppes, Inc. 10 days following 20% acquisition or 65 days following tender offer of 20% $0.01 prior to ten days following Stock Acquisition Date Standard Standard Charter One Financial, Inc. 10% acquisition or 10 days following 10% tender offer $0.01 prior to Stock Acquisition Date Standard Standard; also triggered by 10% beneficial ownership except in case of permitted offer. The Chase Manhattan Corporation 10 days following 20% acquisition or tender offer for 25% $0.01 prior to the 10th day following 20% acquisition Standard Standard; also triggered by 20% beneficial ownership. Acquiror's Rights become void. Checkpoint Systems 10 days following 15% acquisition, 15 business days following 20% tender offer, or 10 business days following Adverse Person declaration. $0.01 prior to 10th day following Stock Acquisition Date or Adverse Person declara- tion; may be reinstated if Acquiror reduces beneficial ownership below 10% or if Board approves merger with unrelated party. Standard Standard; triggered by 20% beneficial ownership or Adverse Person declaration or by 1% event. Chelsea Industries, Inc. 20 business days following 20% acquisition or tender offer for 30%. $0.05 prior to the 20th business day following the Shares Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard; Acquiror's Rights become void. Standard; also triggered by 35% beneficial ownership; Acquiror's Rights become void. Chemdesign Corp. 10 days following 20% acquisition or 10 business days following 20% tender offer or 15% "Adverse Person". $0.01 prior to person declared "Adverse Person" or 10th day after Stock Acquisition Date. Standard Standard; also triggered by 15% "Adverse Person" ownership. Chemical Banking Corporation 10 days following 20% acquisition, tender offer of 25%, or "Adverse Person" determined at 10% level $0.01 prior to 10 days following acquisition Standard Standard; Acquiror's Rights becomes void. Chesapeake Corporation 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to 10 days following the Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to less than 10%. Standard Standard; also triggered 30% beneficial ownership. Chevron Corporation 10 days following 10% acquisition or tender offer for 10%. $0.01 prior to the 10th day following 10% acquisition. Standard Standard; also triggered by 10% beneficial ownership. Chi Chi's, Inc. 10 days following 20% acquisition or 10 business days following tender offer for 30%. $0.01 prior to 10 days following the Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 30% beneficial ownership. The Chicago Dock and Canal Trust 10 days following 25% acquisition or tender offer for 30%. $0.01 prior to the 100th day following 25% acquisition. Standard Standard; also triggered by beneficial ownership of 25%; Acquiror's Rights become void. Chrysler Corporation 10 days following 20% acquisition or 10 business days following 20% tender offer. $0.05 prior to 10 business days following 20% acquisition; may be reinstated if Acquiror reduces beneficial ownership to less than 5%. Standard; also triggered by transfer of more than 50% of the cash flow of the company and its sub- sidiaries taken as a whole. Standard; also triggered by 20% beneficial ownership or declaration of an "Adverse Person" with 10% ownership. The Chubb Corporation 10 days following 25% acquisition or tender offer for 25%. $0.01 prior to 10th day following 25% acquisition. Standard Standard; Acquiror's Rights becomes void. Church & Dwight 10 business days following 20% acquisition or tender offer or Adverse Person declaration. $0.01 prior to the 10th business day following Stock Acquisition Date or Adverse Person declaration. Standard Standard; also triggered by 20% beneficial ownership or Adverse Person Declaration. Church's Fried Chicken, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 30% beneficial ownership. Acquiror's Rights become void. Cimco Inc. 10 days following 20% acquisition. $0.01 prior to acquisition. Standard Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. Circuit City Stores, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 10 days following Share Acquisition Date. Standard Standard Circus Circus Enterprises 10 days following 10% acquisition $0.01 prior to acquisition Standard Standard; also triggered by 10% beneficial ownership Citizens Bancorp 30 days following 30% acquisition or 10 days following 30% tender offer. $0.01 prior to Distribution Date. Standard Standard; also triggered by 30% beneficial ownership. Citizens Banking Corp. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date (or 20% Acquisition); may be reinstated if Beneficial Ownership falls below 5%. Standard Standard City Holding Company 10 days following 10% acquisition or 10 business days following tender offer for 10%. $0.01 prior to the 10th day following 10% Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to less than 10%. Standard Standard Cleveland Cliffs Inc. 10 days following 15% acquisition or tender offer for 15% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard The Clothestime, Inc. 10 days following 20% acquisition or tender offer for 20% .01 prior to 20% acquisition in or incase of fair offer. Standard Standard Coachmen Industries, Inc. 10 days following 20% acquisition or 10 business days following tender or exchange offer. $0.01 prior to person or group becoming Acquiring Person. Standard Standard; Acquiror's Rights become void. Cobe Laboratories, Inc. 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to the 10th day following Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership. Coeur d'Alene Mines 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to the 10th day following Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial 10% or less. Standard Standard; also triggered by 30% beneficial ownership. Coherent, Inc. 10 days following 20% acquisition or 10 business days following 30% tender offer. $0.01 prior to the 10th day following Stock Acquisition Date; or in merger unrelated to Acquiror; may be reinstated if Acquiror reduces ownership to 10% or less. Standard Standard; also triggered by 30% beneficial ownership or by 1% event; Acquiror's Rights become void. Collins Foods Inc. 10 days following 10% acquisition or tender offer of 10%. $0.01 prior to Stock Acquisition Date. Standard Standard. Colorado National Bankshares, Inc. 10 business days following 20% acquisition or tender offer for 25% or 10% acquisition by a person or group the Board deems "Adverse Person" to the Company. $0.05 prior to the 10th business day following 20% acquisition (or 10% Acquisition by the "Adverse Person"); may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard; Acquiror or "Adverse Person's" Rights become void. Standard; also triggered by 25% beneficial ownership; Acquiror's Rights become void. Combustion Engineering 10 days following 20% acquisition, tender offer for 20%, or after a person is declared to be an"Adverse Person" to the Company. $0.01 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership or an "Adverse Person". Acquiror's Rights become void. Comerica Incorporated 10 days following 20% acquisition or 10 business days following tender offer for 25%. $0.05 prior to 10 days following the Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial 10% or less. Standard Standard; also triggered by 25% beneficial ownership. Commerce Bancshares, Inc. 20% acquisition or 10 days following tender offer for 20%. $0.01 prior to 5 p.m. Kansas City time on the first day of a 20% acquisition, and may be reinstated if the Acquiror reduces beneficial ownership to 10% or less. Standard; Acquiror's Rights become void. Standard; also triggered by 20% beneficial ownership. Acquiror's Rights become void. Commercial Federal Corporation 25% acquisition or tender offer for 25%. $0.01 prior to 25% acquisition. Standard Standard Commercial Intertech Corp. Following 20% acquisition without Company's consent or 10 days following tender offer for 20%. $0.01 prior to Stock Acquisition Date or following subscription period expiration if Acquiror owns less than 20%. Standard; except in case of Permitted Offer. Standard; also triggered by 20% beneficial ownership. Commonwealth Bancshares Corp 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date (or 20% Acquisition); may be reinstated if Beneficial Ownership falls below 10%. Standard Standard Community Banks Inc. 10 days following 15% acquisition or tender offer for 15%. $0.001 prior to Stock Acquisition Date. Standard Standard Community Bank Shares 10 days following 15% acquisition, 25% tender offer or following 10% Adverse Person declaration. $0.01 prior to the Distribution Date. Standard Standard; same triggers as for distribution for rights. Comp USA 10 days following 20% acquisition $0.01 prior to acquisition Standard Standard; also triggered by 20% beneficial ownership Compaq Computer Corporation 20% acquisition or tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard Computer Horizons, Corp. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to acquisition date. Standard Standard; Acquiror's Rights become void. Computer Products, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 20% acquisition Standard Standard; also triggered by 30% beneficial ownership or 1% event. Acquiror's Rights become void. Computer Task Group, Inc. The day of a 20% acquisition or 10 days following a tender offer for 20%. $0.01 prior to the Distribution Date. Standard Standard Comstock Resources Inc. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date. Standard Standard ConAgra, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.05 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Concurrent Computer 10 days following 20% acquisition or 10 business days following 30% tender offer. $0.01 prior to 10th day following Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 20% beneficial ownership. Concurrent Computer Corp. 10 days following 30% acquisition or tender offer for 30% $0.0025 prior to 30% acquisition in or in case of fair offer. Standard Standard Consolidated Capital Income Trust 10 days following 20% acquisition, tender offer for 20% or "Adverse Person" declared $0.01 prior to 20% acquisition or "Adverse Person" declared Standard Standard Consolidated Capital Realty Investors 10 days following 20% acquisition, tender offer for 20%, or declaration of an "Adverse Person" $0.01 prior to 20% acquisition or determination of an "Adverse Person" Standard Standard Consolidated Capital Special Trust 10 days following 20% acquisition, tender offer for 20%, or declaration of an "Adverse Person" $0.01 prior to 20% acquisition or determination of an "Adverse Person" Standard Standard Consolidated Rail Corp. 10 days following 10% acquisition or tender offer of 10%. $0.01 prior to acquisition. Standard Standard; also triggered by 1% event. Consolidated Stores Corp. 10 business days following 20% acquisition or tender offer. $0.01 prior to the 10th business day following Stock Acquisition Date. Standard Standard; also triggered by 20% acquisition. Constellation Bancorp. 10 days following 10% acquisition or tender offer for 30%. $0.01 prior to Stock Acquisition Date. Standard Standard Contel Corporation 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership or 1% event. Acquiror's Rights become void. Continental Bank Corp. 10 days following 20% acquisition or tender offer for 20% $0.01 prior to the 15% Stock Acquisition Date; may be reinstated if Beneficial Ownership fall below 15%. Continental Medical Systems Inc. 10 days following 20% acquisition or tender offer for 20%. $0.001 prior to Stock Acquisition Date. Standard Standard Cooker Restaurant Corp. 10 days following 20% acquisition or tender offer for 20% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard Cooper LaserSonics, Inc. 10 days following 20% acquisition or 10 business days following 30% offer. $0.05 prior to 10 days following the Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 30% beneficial ownership. Copley Properties Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date (or 20% Acquisition); may be reinstated if Beneficial Ownership falls below 10%. Standard Standard Corporate Software Incorporated 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 10 days following the Stock Acquisition Date. Standard Standard; also triggered by 30% beneficial ownership. Costco Wholesale Corporation 10 days following 10% acquisition or tender offer of 10% $0.01 prior to acquisition Standard Standard Countrywide Credit Corporation 20% acquisition or 10 days following 20% tender offer. $0.01 prior to 20% acquisition and under certain circumstances thereafter. Standard Standard Crane Co. 10 days following 20 % acquisition or 10 business days following tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. Cray Research Inc. 10 days following 20% acquisition of tender offer for 20%. $0.01 prior to 10th day following acquisition or prior to final expiration date. Standard Standard; also triggered by 20% beneficial owner. Credo Petroleum Corporation 20% acquisition or tender offer for 20% $0.01 prior to 20% acquisition Standard Standard Crestar Financial Corporation 10 days following 10% acquisition or tender offer for 10%. $0.01 prior to 10th day following acquisition. Standard Standard; Acquiror's Rights became void. STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER- UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/ EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKET TION Crompton & Knowles Corporation 07/20/88 MA 1/100th share of Series A Junior Participating Preferred Stock 33.50 150 4.48 10 Cronus Industries, Inc. 01/22/88 DE 1/100th share of Series A Junior Participating Preferred Stock 13.50 50 3.70 10 Cucos, Inc. 12/20/89 LA 1 share of Common Stock 1.88 6.00 3.19 10 Cullen/Frost Bankers, Inc. 07/25/89 TX 1/100th share of Junior Participating Preferred Stock. 16.625 60 3.61 10 Cumberland Federal Bancorp Inc. 02/26/91 KY 1/100th share of Preferred Stock. 9.50 31 3.26 10 Cycare Systems, Inc. 05/11/89 DE 1/100th share of Series B Junior Participating Preferred Stock 7.0 200 28.57 10 Cyprus Minerals Company 02/23/89 DE 2/300th share of Series A Junior Participating Preferred Stock 39.88 140 3.51 10 DFSouth- eastern, Inc. 09/19/89 GA 1/100th share of junior Participating Preferred Stock 19.13 70 3.66 10 DPL Inc. 10/03/91 OH 1/100th share of Preferred Stock 25.38 66.00 2.60 10 Dr. Pepper/ Seven-Up Companies Inc. 09/02/93 DE 1/1000th share of Preferred Stock 19.25 90.00 4.68 10 Damon Corporation 04/22/88 DE 1/100th share of Class B Junior Common Stock 25. 75 100 3.88 10 Daniel Industries Inc. 5/31/90 DE 1/100th share of Series A Junior Participating Preferred Stock 15.75 60 3.81 10 Data I/O Corporation 04/04/88 WA 1/100th share of Series A Junior Participating Preferred Stock 6.13 35 5.71 10 Data Switch Corporation 06/21/88 DE One right to each ten Common Shares. Each right entitles holder to purchase one share of Common Stock. 8.13 16 1.97 10 Dataproducts 05/02/88 DE 1/100th share of Series A Junior Preferred Stock 9.88 45 4.56 10 DataScope 05/22/91 DE 1/1000th share of Preferred Stock 63.50 300 4.72 10 Datron Systems Inc. 08/21/90 DE 1/100th share of Common Stock 8.5 0.325 .04 10 Davis Water & Waste Industries 12/21/89 GA One share of Common Stock 12.63 20% of current market price as of date of an- nounce- ment of Acquir- ing Person 5 10 Davstar Industries Ltd. 06/29/93 ON 1/100 share of Preferred Stock 6.75 200 29.63 10 Dayton Hudson Corporation 03/11/92 MN 1/100th share of Preferred Stock 66.875 150.00 2.24 4 Dean Foods 07/28/88 DE 1/100th share of Preferred Stock 25.88 85 3.28 10 Del Webb Corporation 07/19/88 AZ Primary: See Flip-In Provisions Secondary: 1/100th share of Series A Junior Participating Cumulative Preferred Stock 14.75 40 2.71 10 Delchamps, Inc. 10/17/88 AL 1/100th share of Series A Junior Participating Preferred Stock 26.75 70 2.62 10 Dennison Manufacturing Co. 05/24/90 NV 1 share of Common Stock 19.25 80 4.16 10 Desoto, Inc. 02/20/89 DE 1/100th share of Series A Junior Participating Preferred Stock. 48.25 140 2.90 10 Detrex Corp. 05/04/90 MI 1/100th share of Series A Preferred Stock. 19.50 80 4.10 10 Diagnostek Inc. 12/31/92 DE 1/100th Share of Preferred Stock 8.25 40 4.8 10 Diebold, Incorporated 02/10/89 OH 1/100th share of Cumulative Redeemable Serial Preferred Shares. 43.25 130 3.01 10 Digilog Inc. 06/01/88 DE 1 share of Common Stock 4.75 18 3.79 10 Digital Communications Associates Inc. 05/18/90 GA 1 share of Common Stock 23.13 100 4.32 10 Digital Equipment Corp. 12/11/89 MA 1 share of Common Stock 85.00 400 4.71 10 Digital Microwave Corp. 10/24/91 DE 1/100th share of Preferred Stock 9.50 50.00 5.26 10 Dionex Corp. 06/27/89 DE 1 share or Common Stock 18.75 100 5.33 10 Diversified Energies 11/08/89 MN 1/100th share of Junior Participating Preferred Stock 33.38 95 2.85 10 Dofasco, Inc. 11/27/89 ON 1 share of Common Stock 25.00 100 4.00 10 Donaldson Company, Inc. 05/19/89 DE 1/100th share of Series A Junior Participating Preferred Stock. 18.875 85 4.50 10 Dresher, Inc. 02/03/89 DE 1/100th share of Series A Junior Participating Preferred Stock. 5.63 25 4.44 10 Dresser Industries 08/16/90 DE 1/100th share of Preferred Stock 25.81 90.00 3.49 10 Ducommon Incorporated 05/25/88 DE Primary: See Flip-In Provisions Secondary: 1/100th share of Series A Junior Participating Cumulative Preferred Stock 3.38 14.5 4.30 3 Dunkin' Donuts Incorporated 04/20/89 DE 1/100th share of Series A Participating Preferred Stock 37.875 90 2.376 10 Duplex Products Inc. 06/08/89 DE 1/100th share of Series A Preferred Stock 20.75 80 3.86 10 Duramed Pharmaceuticals, Inc. 08/16/88 DE 1/100th share of Series A Preferred Stock 3.88 80 20.62 10 Durham Corporation 09/13/88 NC 1 share of Common Stock 32.50 90 2.77 10 Dycom Industries, Inc. 08/01/92 FL 1/2 share of Common Stock 4.75 18.00 3.79 10 Dynamics Research Corporation 07/14/88 MA 1/10th share of Series A Participating Preferred Stock 7.75 40 5.16 10 Dynatech Corp. 02/16/89 MA 1/2000th share of Junior Participating Cumulative Preferred Stock. 18.75 100 5.33 10 E'Town Corp. 01/24/91 NJ 1/100th share of Common Stock 24.50 80.00 3.27 11 Eagle Bancshares Inc. 05/17/93 GA 1 share of Common Stock 16.75 35.00 2.09 10 Eastchester Financial 10/04/89 DE 1/100th share of Series A Junior Participating Preferred Stock. 14.13 42 2.97 10 Eastern Company 09/16/91 CT 1 share of Common Stock 11.25 35 3.11 10 Eastern Enterprises 02/22/90 MA 1 share of Common Stock 30.38 100 3.29 10 Echlin Inc. 06/21/89 CT 1/100th share Series A Cumulative Participating Preferred Stock. 16.875 65 3.85 10 Edison Brothers Stores, Inc. 01/26/88 DE 1 share of Common Stock 26.00 85 3.27 10 Education Alternatives Inc. 09/16/93 MN 1/100th share of Preferred Stock 34.25 175.00 5.11 10 El Paso Electric Co. 09/05/90 TX 1 share of Common Stock 5.85 25.00 4.27 10 Elco Industries Inc. 01/19/88 DE 1 share of Common Stock 24.75 80 3.23 10 Elcor Corporation 06/28/88 DE 1/100th share of Series A Preferred Stock 7.00 50 7.14 10 Electro Scientific Industries Inc. 05/15/89 OR 1/100th share of Series A No Par Preferred Stock 12.375 55 4.44 10 Electromagnetic Sciences, Inc. 3/27/89 NV 1 share Common Stock 6.88 30 4.36 10 Electronic Associates, Inc. 02/10/88 NJ 1/100th share of Series A Junior Participating Preferred Stock 3.50 11 3.14 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS Crompton & Knowles Corporation 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. Cronus Industries, Inc. 15 days following 20% acquisition or 30% tender offer. $0.01 prior to 15 days following 20% acquisition. Standard Standard Cucos, Inc. 10 days following 30% acquisition or 10 business days following a 30% tender offer. $0.01 prior to 10th day following Stock Acquisition Date: may be reinstated if Acquiror reduces ownership to 10%. Standard Standard Cullen/Frost Bankers, Inc. 10 days following tender offer for 15%. $0.01 prior to acquisition. Standard Standard Cumberland Federal Bancorp Inc. 10 days following 20% acquisition or 10 days following 30% tender offer. $0.01 prior to 10th day following 10% Stock Acquisition Date: may be reinstated if Acquiror reduces ownership to 10% Standard Standard Cycare Systems, Inc. 10 days following 20% acquisitions or tender offer of 35%, or after an "Adverse Person" is determined. $0.01 prior to 10th day following Distribution Date. Standard Standard; Acquiror's Rights become void. Cyprus Minerals Company 10 days following 10% acquisition or tender offer for 10%. $0.0067 prior to 20% acquisition. Standard Standard; also triggered by 10% beneficial ownership or 1% event. Acquiror's Rights become void. DFSouth- eastern, Inc. 15% acquisition or tender offer for 15%. $0.01 prior to 15% acquisition. Standard Standard DPL Inc. 10 days following 15% acquisition or tender offer for 15% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard Dr. Pepper/ Seven-Up Companies Inc. 10 business days following 10% acquisition $0.01 prior to acquisition. Standard Standard; triggered by 10% beneficial ownership. Damon Corporation 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to time there is an Acquiring Person. Standard Standard; Acquiror's rights become void. Daniel Industries Inc. 10 business days following 20% acquisition or 10 business days following 20% tender offer. $0.01 prior to 10th day following date person named Acquiring Person. Standard Standard Data I/O Corporation 20 calendar days following 20% acquisition or tender offer for 30% $0.05 prior to the 20th calendar day following the Stock Acquisition Date. Standard Standard; also triggered by 40% beneficial ownership. Data Switch Corporation 40% acquisition or tender offer for 40%. $0.01 prior to Triggering Event. Right to receive voting securities of Acquiror at a value equal to four times the then market price of the Com- mon shares for the exercise price of the Right. Right to receive Common Shares of the Company at a value equal to four times the then current market price of the shares for the exercise price of the Right. Dataproducts 10 days following 20% acquisition of 30% tender offer. $0.01 prior to Stock Acquisition Date; may be reinstated if Acquiror reduces ownership to 10%. Standard Standard; triggered by 30% beneficial ownership or 1% event. DataScope 10 days following 15% acquisition or 15% tender offer. $0.01 prior to Stock Acquisition Date. Standard Standard Datron Systems Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date. Standard Standard Davis Water & Waste Industries 20 days following 10% acquisition or tender offer. 0.01 prior to 20 days following Stock Acquisition Date; may be reinstated if Acquiror reduces ownership to 10%. Standard; number of shares received upon exercise based on relative prices of Acquiror's and target's market prices. Standard; also triggered by beneficial ownership over 10%; number of shares received upon exercise based on relative shares outstanding to Acquiror's ownership. Davstar Industries Ltd. 10 days following 20% acquisition or tender offer of 35%. $0.01 prior to acquisition Standard Standard Dayton Hudson Corporation 10 days following 20% acquisition or tender offer for 20% $.05 prior to 20% acquisition in or in case of fair offer. Standard Standard Dean Foods 10 days following 15% acquisition or tender offer $0.05 prior to Stock Acquisition Date Standard Standard; also triggered by 15% acquisition or by 1% event. Del Webb Corporation Primary Rights: 10 business days following 15% acquisition. Secondary Rights: announcement of 25% acquisition or tender offer for 25%. $0.05 prior to the 10th business day following 15% acquisition for Primary Rights and prior to 25% acquisition for Secondary Rights. Primary: None Secondary: Standard; Acquiror's Rights become Void. Primary: purchase a number of Common Shares equal to 50% number of Common Shares outstanding divided by number of exercisable Primary Rights outstanding at a price equal to 20% of market value. Secondary: Standard; also triggered by beneficial ownership of 25%; Acquiror's Rights become void. Delchamps, Inc. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to 15% acquisition. Standard Standard; also triggered by 15% beneficial ownership or 1% event. Acquiror's Rights become void. Dennison Manufacturing Co. 10 days following 10% acquisition or 10 business days following 10% tender offer. $0.01 prior to 10% beneficial ownership. Standard Standard; also triggered by 10% beneficial ownership. Desoto, Inc. 10 days following 20% acquisition or 20% tender offer. $0.01 prior to 20% acquisition Standard Standard; also triggered by 20% beneficial ownership or 1% event. Acquiror's Rights become void. Detrex Corp. 10 business days following 15% acquisition or 10 business days following 30% tender offer. $0.01 prior to 10th business day following stock Acquisition Date. Standard Standard; also triggered by 15% beneficial ownership or 1% event. Diagnostek Inc. 10 days following 20% acquisition. $0.01 prior to acquisition. Standard Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. Diebold, Incorporated 20 days following 20% acquisition or tender offer for 20% $0.01 prior to 20% acquisition Standard Standard; also triggered by 20% beneficial ownership or 1% event. Acquiror's Rights become void. Digilog Inc. Rights are exercisable at the earlier of the Initial Exercisability Date or Trigger Date (see footnote (s)). $0.01 prior to Triggering Events. Standard; Acquiror's Rights become void. Standard; also triggered by beneficial ownership of 30%; Acquiror's Rights become void. Digital Communications Associates Inc. 10 days following 20% acquisition or 10 business days following 20% tender offer. $0.01 prior to 10th day following Stock Acquisition Date. May be reinstated if an Acquiring Person reduces beneficial ownership to 10% or less. Standard Standard; also triggered by Acquiring person w/20% ownership unless deemed a "permitted offer". Digital Equipment Corp. 10 days following 20% acquisition or 10 business days following 30% tender offer or following 10% Adverse Person declaration. $0.01 prior to 10th day following Stock Acquisition Date; may be reinstated if Acquiror reduces ownership below 10%. Standard Standard; triggered by Adverse person declaration, 25% beneficial ownership, or 1% event. Digital Microwave Corp. 10 days following 15% acquisition or tender offer for 15% $0.01 prior to 15% acquisition in or in case of fair offer. Standard Standard Dionex Corp. 10 days following 20% acquisition or tender offer. $0.01 prior to 20th day following 20% acquisition; can be redeemed by Qualified Offer. Standard Triggered 10 days following 20% beneficial ownership. Diversified Energies 15 days following 20% acquisition or tender offer. $0.01 prior to 20 days following announcement of Acquiring Person provided control of Board has not changed. Standard Triggered by 20% beneficial ownership unless there is a Qualified Offer. Dofasco, Inc. 10 days following 10% acquisition or tender offer. $0.01 prior to any triggering event. Standard Standard; also triggered by 10% beneficial ownership except in case of permitted bid. Donaldson Company, Inc. 15 days following 20% acquisition or tender offer for 30% $0.10 within 15 days of acquisition Standard Standard; also triggered by 20% beneficial ownership. Dresher, Inc. 10 days following 20% acquisition or 10 business days following 30% tender offer. $0.01 prior to 10th day following Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less, or Board approves a merger unrelated to Acquiror. Standard Standard; triggered by 25% beneficial ownership or by 1% event. Dresser Industries 10 days following 15% acquisition or tender offer for 15%. None. Standard Standard Ducommon Incorporated Primary Rights: 10 business days following 17% acquisition. Secondary Rights: Immediately following 25% acquisition or tender offer for 25%. $0.01 prior to the 10th business day following 17% acquisition for Primary Rights and prior to 25% acquisition for Secondary Rights. Primary: None. Secondary: Standard; Acquiror's Rights become void. Primary: Purchase a number of common shares equal to 50% number of Common Shares outstanding divided by number of exercisable Primary Rights outstanding at a price equal to 20% of market value. Secondary: Standard; also triggered by beneficial ownership of 25%; Acquiror's rights become void. Dunkin' Donuts Incorporated 10 days following 20% acquisition or tender offer for 30% $0.01 prior to 15 days following Stock Acquisition Date Standard Standard; also triggered by 15% beneficial ownership. Duplex Products Inc. 15 days following 25% acquisition or tender offer for 25%. $0.05 prior to 15th day following acquisition. Standard Standard; also triggered by 30% beneficial ownership or 1% event. Duramed Pharmaceuticals, Inc. 20 days following 20% acquisition; 20 business days following tender offer for 30% or 20 business days following Board declaration of an "Adverse Person." $0.001 prior to 20 days following the Stock Acquisition Date, but may not redeem the Rights if the Board has declared an "Adverse Person." May be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard; Acquiror's Rights become void. Standard; also triggered by 30% beneficial ownership. Acquiror's Rights become void. Durham Corporation 10 days following 35% acquisition or 10 days following tender offer for 30%. $0.01 prior to the 10th day following the Share Acquisition Date and may be reinstated if Acquiror reduces beneficial ownership to 25% or less. Standard; Acquiror's Rights become void. Standard; also triggered by 30% beneficial ownership. Acquiror's Rights become void. Dycom Industries, Inc. 10 days following 20% acquisition or tender offer for 20% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard Dynamics Research Corporation 10 business days following 20% acquisition or tender offer for 30%. $0.01 prior to the Expiration Date by 2/3 majority vote of Continuing Directors. Standard; Acquiror's Rights become void. Standard; Acquiror's Rights become void. Dynatech Corp. 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.02 prior to 10th day following Stock Acquisition Date. Standard. Standard; also triggered by 20% beneficial ownership. E'Town Corp. 10 days following 10% acquisition or tender offer for 10%. $0.01 prior to Stock Acquisition Date. Standard Standard Eagle Bancshares Inc. 10 business days following 15% acquisition. $0.01 prior to acquisition. Standard Standard; triggered by 15% beneficial ownership. Eastchester Financial 10 business days following 20% acquisition or tender offer. $0.01 prior to Stock Acquisition Date or in case of fair offer Standard Standard; also triggered by 20% beneficial Ownership. Eastern Company 10 days following 10% acquisition of 10% tender offer. $0.01 prior to 10% Stock Acquisition Date. Standard Standard Eastern Enterprises 20% acquisition or determination by Board of an "Adverse Person" with 10% ownership. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; triggered by 10% ownership of an "Adverse Person". Echlin Inc. 10 days following 20% acquisition or tender offer. $0.01 prior to 10th day following acquisition. Standard Standard; Acquiror's Rights become void. Edison Brothers Stores, Inc. Acquisition of 50% voting power on the 10th day following tender offer. $0.05 prior to the 10th business day following 50% acquisition. Standard Standard; also triggered by 30% beneficial ownership. Education Alternatives Inc. 10 business days following 20% acquisition. $0.01 prior to acquisition. Standard Standard; triggered by 20% beneficial ownership. El Paso Electric Co. 10 days following 15% acquisition or tender offer for 30%. $0.01 prior to Stock Acquisition Date (or 15% Acquisition); may be reinstated if Beneficial Ownership falls below 5%. Standard Standard Elco Industries Inc. 10 days following 20% acquisition or 30% tender offer. $0.05 prior to 15 days following 20% acquisition; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 33% beneficial ownership. Elcor Corporation 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to the 10th day following 20% acquisition; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard; Acquiror's Rights become void. Standard; also triggered by beneficial ownership of 30% Acquiror's Rights become void. Electro Scientific Industries Inc. 10 days following 20% acquisition, tender offer for 20%, or "Adverse Person" declared $0.01 prior to determination of "Adverse Person" or 10 days following Stock Acquisition Date. Standard Standard Electromagnetic Sciences, Inc. 20% acquisition or tender offer for 20%. $0.01 prior to Expiration Date. Standard Standard Electronic Associates, Inc. 10 days following 10% acquisition or tender offer. $0.01 prior to 10% acquisition. After the Acquisition Date, Board may exchange one share of Common Stock for each Right. Standard Standard STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER- UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/ EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKET TION Eli Lily and Company 07/18/88 IN 1/100th share of Series A Participating Preferred Stock. 84.50 325 3.84 10 Emerson Electric Co. 11/1/88 MO 1/100th share of Series A Junior Participating Preferred Stock. 30.50 120 3.93 10 Empire Banc Corp 12/19/90 DE 1/100th share of Preferred Stock NA 50.00 NA 10 Empire District Electric Co. 07/26/90 KS 1/100th share of Preferred Stock 29.38 75.00 2.55 10 Emulex Corp. 01/19/89 CA 1/100th share of Junior Participating Preferred Stock. 11.00 50 4.55 10 Endevco, Inc. 10/6/88 DE 1 share of Common Stock 6.13 30 4.89 10 Energas Company 04/28/88 TX 1 share of Common Stock 15.75 45 2.86 10 Energen Corporation 07/27/88 AL 1/100th share of Series A Junior Participating Preferred Stock. 22.38 80 3.42 10 EnergyNorth Inc. 06/06/90 NH 1 share of Common Stock 17.48 48.00 2.75 10 Enex Resources Corp. 09/04/90 CO 1 share of Common Stock 4.00 12.00 3.00 10 Engraph, Inc. 09/01/88 DE 1/100th share of Series A Participating Preferred Stock 11.40 50 4.39 10 Equitable of Iowa Companies 04/30/ 92 IA 1 share of Common Stock 28.25 125.00 4.42 10 Eskimo Pie Corporation 01/21/93 DE 1/100th Share of Preferred Stock 22.00 75 3.4 10 Esterline Technologies Corp. 12/09/93 DE 1/100th Share of Preferred Stock 11.13 56 5.0 10 Exabyte Corp. 01/24/91 DE 1/100th share of Preferred Stock 17.13 70.00 4.09 11 Excel Bancorp Inc. 10/25/90 DE 1/100th share of Preferred Stock 3.00 26.00 8.66 10 FHP International Corp. 06/08/90 DE 1/4 share of Common Stock. 16.36 20 1.22 10 F.W. Woolworth Co. 04/04/88 NY 1/100th share of Series B Participating Preferred Stock 54.13 200 3.69 10 Fab Industries Inc. 05/10/ 90 DE 1 share of Common Stock 34.50 120.00 3.49 10 Fabricland Inc. 01/21/91 OR 1 share of Common Stock 13.63 60.00 4.40 10 Fabri-Centers of America, Inc. 10/22/90 OH 1 share of Common Stock 10.83 105.75 9.76 10 Facet Enterprises, Inc. 03/21/88 DE 1/100th share of Series A Participating Preferred Stock 29.13 90 3.09 10 Fairchild Industries Inc. 01/21/89 DE 1/100th share of Series B Participating Preferred Stock 16.13 45 2.79 10 Falconbridge, Ltd. 08/01/89 ON 1 share of Common Stock NA 100 (Can.) NA 10 Farmers Group, Inc. 06/23/88 NV 1 share of Common Stock 56.88 160 2.81 10 Farr Company 04/03/89 DE 1/2 share of Common Stock 10.250 40 3.90 10 Federal Industries Ltd. 02/16/90 WIN 1 share of Class A Common Stock NA 45 (cdn) NA 10 Federal Realty Investment Trust 04/13/89 DC 1 share Common Stock 23.00 65 2.83 10 Federal Signal Corporation 06/24/88 DE 1/100th share of Series A Preferred Stock 22.13 90 4.01 10 Ferro Corporation 04/03/89 OH 1 share of Common Stock 44.375 90 2.03 10 Ferrofluidics Corp. 08/03/94 ME 1/1,000th of Preferred 5.25 25.00 4.76 10 Fibreboard Corporation 08/25/88 DE 1/100th share of Series A Junior Participating Preferred Stock 10.63 35 3.29 10 Fidata Corporation 0/9/29/88 DE 1/100th share of Series A Preferred Stock 8.25 23 2.79 10 Finnigan Inc. 03/01/89 VA 1/100th share of Series A Participating Preferred Stock. 16.75 90 5.37 10 The Firestone Tire & Rubber Company 02/16/88 OH 1/100th share of Serial Series A Preferred Stock 35.75 .01 NM 5 First of America Bank Corp. 07/18/90 MI 1/100th share of Preferred Stock 23.75 190 8.00 10 First Bank System, Inc. 12/22/88 DE 1/100th share of Series A Junior Participating Preferred Stock 19.75 80 4.05 10 - 71 - First City Bancorp Inc. 08/24/90 TN 1/100th share of Preferred Stock 18.00 20 1.11 10 First Commercial Corp. 01/08/91 AR NA NA NA NA NA First Eastern Corp. 05/17/89 PA 1/100th of share of series of newly created preferred stock 34.50 120 3.48 10 First Essex Bancorp 10/12/89 DE 1/100th share of Series A Junior Participating Cumulative Preferred Stock 7.88 28 3.55 10 First Fidelity Bancor- poration 08/17/89 NJ 1/100th share of Series E Junior Participating Preferred Stock 33.50 130 3.88 10 First Interstate Bancorp 11/21/88 DE 1 share of Common Stock 46.75 170 3.64 10 First Interstate of Iowa, Inc. 07/11/91 IA 1/100th share of Preferred Stock 5.63 11 1.95 10 First Inter- Bancorp Inc. 12/20/90 DE 1/100th share of Preferred Stock 26.00 25 0.96 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS Eli Lily and Company 10 business days following 20% acquisition or tender offer for 30%. $0.01 prior to the 10th business day following 20% acquisition. Standard; Acquiror's Rights become void. Standard; also triggered by beneficial ownership of 25%; Acquiror's Rights become void. Emerson Electric Co. 10 days following 20% acquisition or 10 days following 20% tender offer $0.01 prior to 20% acquisition Standard Standard; also triggered by 1% event. Empire Banc Corp 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date (or 20% Acquisition); may be reinstated if Beneficial Ownership falls below 10%. Standard Standard Empire District Electric Co. 10 days following 10% acquisition or tender offer for 10%. $0.01 prior to Stock Acquisition Date. Standard Standard Emulex Corp. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 10th day following Stock Acquisition date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 30% beneficial ownership or by 1% event; Acquiror's Rights become void. Endevco, Inc. 20% acquisition or 25% tender offer $0.01 prior to 10 days following 20% acquisition Standard Standard; also triggered by 20% beneficial ownership or 1% event. Energas Company 10 days following 20% acquisition, tender offer for 30%, or upon determina- tion by Board of an "Adverse Person" holding in excess of 10%. $0.05 prior to the 10th day following the Stock Acquisition Date. Standard Standard; also triggered by 30% beneficial ownership; Acquiror's Rights become void. Energen Corporation 10 days following 20% acquisition or 10 business days following tender offer for 30% or promptly after Board determination of an "Adverse Person" with 10% acquisition. $0.02 prior to the 10th day following 20% acquisition; may be reinstated if acquiror reduces beneficial ownership to 10% or less. Standard; Acquiror's Rights become void. Standard; also triggered by beneficial ownership of 30% (10% or more for an "Adverse Person"); Acquiror's Rights become void. EnergyNorth Inc. 10 days following 10% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date (or 10% Acquisition); may be reinstated if Beneficial Ownership falls below 10%. Standard Standard Enex Resources Corp. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date. Standard Standard Engraph, Inc. 20% acquisition or the 10th day after a tender offer or exchange offer which would result in any person or group becoming an Acquiring Person. $0.01 prior to a person becoming an Acquiring Person or expiration of the Rights. Standard; Acquiror's Rights become void. Standard; also triggered by a 20% beneficial ownership. Acquiror's Rights become void. Equitable of Iowa Companies 10 days following 25% acquisition or tender offer for 25% $0.01 prior to 25% acquisition in or in case of fair offer. Standard Standard Eskimo Pie Corporation 10 days following 20% acquisition. $0.01 prior to 10% acquisition. Standard Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. Esterline Technologies Corp. 10 days following 10% acquisition. $0.01 prior to 10% acquisition. Standard Standard; also triggered by beneficial ownership of 10%; Acquiror's Rights become void. Exabyte Corp. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date. Standard Standard Excel Bancorp Inc. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date. Standard Standard FHP International Corp. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date. Standard Standard F.W. Woolworth Co. 10 business days following 20% acquisition, tender offer for 30% or based on Board determination of a 15% acquisition. $0.05 prior to 10 business days following Stock Acquisition Date. Standard Standard; also triggered by 30% beneficial ownership; Acquiror's rights become void. Fab Industries Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to Stock Acquisition Date or 20% Acquisition. Standard Standard Fabricland Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date. Standard Standard Fabri-Centers of America, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date or 20% Acquisition. Standard Standard Facet Enterprises, Inc. The earliest to occur of 20% acquisition or tender offer, or 04/04/88 if PRS Acquisition, Inc. tender offer has not been terminated. $0.01 prior to 20% acquisition and thereafter under certain circumstances, but Right holder may exercise Rights until 10 business days after notice of redemption if Triggering Event has occurred. Standard Standard; also triggered by 20% beneficial ownership. Fairchild Industries Inc. The day of a 20% acquisition or ten days following a tender for 20% $0.01 prior to a 20% acquisition Standard Standard; Acquiror's Rights become void. Falconbridge, Ltd. 8 business days following 15% acquisition or tender offer for 15% $0.01 prior to acquisition Standard Standard Farmers Group, Inc. 10 business days following 20% acquisition. $0.05 prior to the time there is an Acquiring Person. Standard Standard; also triggered by 20% beneficial ownership. Farr Company 10 days following 20% acquisition of tender offer for 30%. $0.01 prior to 10 business days after acquisition announcement Standard Standard Federal Industries Ltd. 20% acquisition or 20% tender offer. $0.001 anytime prior to Flip-in event. Standard Standard; also triggered by 20% beneficial ownership. Federal Realty Investment Trust 20% acquisition announce- ment or 10 days following tender offer. $0.01 prior to acquisition or expiration of the Rights Standard Standard Federal Signal Corporation 10 days following 20% acquisition or tender offer of 30%. $0.10 prior to 20 days following the 20% acquisition. Standard Standard; Acquiror's Rights become void. Ferro Corporation 10 days following 20% acquisition, tender offer for 20%, or "Adverse Person" declared $0.05 prior to fifteen days following Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership. Ferrofluidics Corp. 10 days following 15% acquisition $0.01 prior to acquisition Standard Standard; also triggered by 15% beneficial ownership Fibreboard Corporation 10 days following a 20% acquisition or 10 days business days following tender offer for 20%. $0.01 prior to a 20% acquisition. Board may exchange Rights at a ratio of 1 Common Share or 1/100th Preferred Share per Right between the points of 25% and 50% acquisition. Standard Standard; also triggered by 25% beneficial ownership. Acquiror's Rights become void. Fidata Corporation 10 days following 20% acquisition or 10 days following tender offer for 30%. $0.01 prior to the 10th day following the Stock Acquisition Date and may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard; Acquiror's Rights become void. Standard; also triggered by 30% beneficial ownership or a 1% event. Acquiror's Rights become void. Finnigan Inc. 10 days following 30% acquisition or 10 business days following 30% tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; triggered by 35% beneficial ownership or by 1% event. The Firestone Tire & Rubber Company 10 days following 20% acquisition or tender offer. $0.05 prior to the 11th day following the Stock Acquisition Date. None None First of America Bank Corp. 10 days following 10% acquisition or tender offer for 10%. $0.01 prior to Stock Acquisition Date; can be reinstated if Beneficial Ownership falls below 5%. Standard Standard First Bank System, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Acquiror's Rights become void. First City Bancorp Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date. Standard Standard First Commercial Corp. NA NA NA NA First Eastern Corp. 10 days following 15% acquisition of tender offer for 20%. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership. First Essex Bancorp 10 days following 20% acquisition, 10 business days following 20% tender offer, or "Adverse Person" declaration. $0.02 prior to Adverse Person declaration, or 10th day following Stock Acquisition Date, or Merger Right event. Standard Standard; also triggered by "Adverse Person" declaration. First Fidelity Bancorporation 10 days following 10% acquisition or tender offer for 10%. $0.01 prior to 10% acquisition. Standard Standard First Interstate Bancorp 10 days following 20% acquisition or tender offer for 20%. $0.001 prior to 10th day following 20% acquisition. Standard Standard, Acquiror's Rights become void. First Interstate of Iowa, Inc. 10 days following 10% acquisition or tender offer for 10%. $0.01 prior to Stock Acquisition Date. Standard Standard First Inter- Bancorp Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date. Standard Standard STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER- UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/ EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKET TION First Michigan Bank Corp. 10/11/90 MI 1/100th share of Preferred Stock 11.75 50 4.26 10 First Midwest Bancorp 02/15/89 DE 1/100th share of Series A Preferred Stock 16.50 75 4.55 10 First New York Business Bank 10/25/89 DE 1 share of Common Stock 11.25 60 5.33 10 First Union Corp. 12/18/90 NC 1 share of Common Stock 17.00 80 4.71 10 First Union Real Estate Equity 03/30/90 OH 1 share of Common Stock 17.38 50 2.88 10 First Virginia Banks, Inc. 07/27/88 VA 1/100th share of Series E Participating Preferred Stock 25.88 90 3.48 10 Firstier Financial Inc. 02/17/92 DE 1/1000th share of Preferred Stock 30.00 190.00 6.33 10 Flagship Financial Corp. 10/26/89 PA 1/100th share of Series A Junior Participating Preferred Stock 15.88 60 3.78 10 Fleet/Norstar Financial Group, Inc. 11/21/90 RI 1/100th share of Preferred Stock 10.13 50 4.94 10 Fleming Companies, Inc. 08/22/89 OK 1 share of Common Stock 34.75 150 4.32 10 Floating Point Systems, Inc. 06/30/88 OR 1 share of Common Stock 3.00 15 5.00 10 Florida Progress Corp. 11/21/91 FL 1/100th share of Preferred Stock 45.25 130.00 2.60 10 Flow General Inc. 06/30/89 DE 1 share of Common Stock 5.75 30 5.22 6 Flow International Corp. 06/07/90 DE 1/100th share of Preferred Stock 4.13 15 3.63 10 Flowers Industries, Inc. 03/17/89 GA 1/100th share of Series A Junior Participating Preferred Stock 16.88 75 4.44 10 Fluorocarbon Company 03/21/89 CA 1/4th share of Common Stock 13.00 55 4.23 10 Foremost Corporation of America 12/14/89 DE 1/100th share of Common Stock 33.75 110 3.26 10 Forest Laboratories, Inc. 02/18/88 DE 1/100th share of Series A Junior Participating Preferred Stock 17.00 60 3.53 10 Foundation Health Corp. 09/27/91 DE 1/1000th share Preferred Stock 25.13 105 4.18 10 The Foxboro Company 04/05/88 MA 1/100th share of Series A Junior Participating Cumulative Preferred Stock 30.13 125 4.15 10 Franklin Electric Co., Inc. 02/11/90 IN 1/100th share of Preferred Stock 11.25 50 4.44 10 Franklin First Financial Corp. 05/16/91 PA 1/100th share of Preferred Stock 9.88 50 5.06 10 GAINSCO, Inc. 03/03/88 TX 1 share of Common Stock 5.13 20 3.90 10 GTE Corporation 12/07/89 NY 1/1000th share of Series A Junior Participating Preferred Stock 68.50 200 2.92 10 Gamma Biologicals, Inc. 09/05/90 TX 1 share of Common Stock 2.875 15 5.22 10 Gamma Biologicals, Inc. 09/21/90 TX 1 share of Common Stock 2.75 15 5.45 10 Gannett Inc. 05/21/90 DE 1/200th share of Preferred Stock 37.38 150 4.01 10 GardenAmerica Corp. 03/03/88 DE 1/100th share of Preference Stock 14.25 45 3.16 5 Genentech, Inc. 04/21/88 DE 1/100th share of Series A Junior Participating Preferred Stock 32.50 150 4.62 10 General Development Corporation 02/17/89 DE 1/100th share Series B Participating Cumulative Preferred Stock 17.50 50 2.86 10 General Dynamics Corporation 02/1/89 DE 1/100th share of Series A Junior Participating Preferred Stock 50.00 180 3.60 10 General Employment Enterprises Inc. 02/12/90 IL 1/100th share of Series A Junior Participating Preferred Stock 3.00 12 4.00 10 General Housewares Corporation 02/17/89 DE 1/100th share of Series A Junior Participating Preferred Stock 8.00 25 3.13 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS First Michigan Bank Corp. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date. Standard Standard First Midwest Bancorp 10 days following 15% acquisition or tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 15% beneficial ownership. First New York Business Bank 10 days following 20% acquisition or 30% tender offer. $0.01 prior to 10th day following 20% acquisition. Standard None First Union Corp. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date. Standard Standard First Union Real Estate Equity 20 days following 15% acquisition or 15% tender offer. "Adverse Person" $0.01 anytime prior to triggering events. Standard Standard; also triggered by "Adverse Person", who must own at least 9.8%, or 1% event. First Virginia Banks, Inc. 20% acquisition or 10 days following a tender offer for 20%. $0.01 prior to 20% acquisition. Standard; Acquiror's Rights become void. Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. Firstier Financial Inc. 10 days following 20% acquisition or tender offer for 20% $.01 prior to 10% acquisition in or in case of fair offer. Standard Standard Flagship Financial Corp. 10 business days following 20% acquisition or tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership. Fleet/Norstar Financial Group, Inc. 10 days following 10% acquisition or tender offer for 10%. $0.01 prior to Stock Acquisition Date. Standard Standard Fleming Companies, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.05 prior to 10 days following 20% acquisition. Standard Standard; also triggered by beneficial ownership of 20%. Floating Point Systems, Inc. Immediately following 20% acquisition or 10 business days following tender offer for 30%. $0.01 prior to 20% acquisi- tion; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard; Acquiror's Rights become void. Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. Florida Progress Corp. 10 days following 15% acquisition or tender offer for 15% $0.01 prior to 10% acquisition in or in case of fair offer. Standard Standard Flow General Inc. 10 days following 20% acquisition or tender offer for 20%. $0.05 prior to 10th day following acquisition. Standard Standard; also triggered by 20% beneficial ownership. Flow International Corp. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date; or 20% Acquisition. Standard Standard Flowers Industries, Inc. 10 days following 10% acquisition or tender offer for 30%. $0.001 prior to 10th day following 10% acquisition. Standard Standard; Acquiror's Rights become void. Fluorocarbon Company 10 business days following 20% acquisition or 30% tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership except in case of Qualified Offer. Foremost Corporation of America 10 days following 20% acquisition on 10 business days following 20% tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership or by 1% event. Forest Laboratories, Inc. 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.001 prior to 10 days following the Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Right to receive 2 1/2 times the exercise price of the Right in Common Stock of the Acquiror. Right to receive 2 1/2 times exercise price of the Right in Preferred Stock. Also triggered by 20% beneficial ownership. Foundation Health Corp. 10 days following 15% acquisition or 15% tender offer. $0.01 prior to following 15% Stock Acquisition Date Standard Standard The Foxboro Company 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to the 10th day following the Stock Acquisition Date. Standard Standard; also triggered by 30% beneficial ownership. Franklin Electric Co., Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to Stock Acquisition Date. Standard Standard Franklin First Financial Corp. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date. Standard Standard GAINSCO, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 10 days following 20% acquisition; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Exercise price reduced to 25% of then current Common Stock market price. Also triggered by 20% beneficial ownership. GTE Corporation Following 20% acquisition or 10 days following 20% tender offer or following 10% acquisition and Permitted Offer. Flip-over event. $0.01 prior to 10% acquisi- tion or following expiration of Flip-in Right if no person owns 10%. Standard Standard; also triggered by 20% acquisition. Gamma Biologicals, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date. Standard Standard Gamma Biologicals, Inc. Standard $0.01 following acquisition. Standard Standard; also triggered by 20% beneficial ownership. Gannett Inc. 10 days following 15% acquisition or 10 business days following 15% tender offer. $0.01 prior to 15% acquisition. Standard Standard; also triggered by 15% beneficial ownership. GardenAmerica Corp. NA $0.01 under certain circumstances. Standard, with condi- tions. Standard, with conditions. Genentech, Inc. 10 days following 20% acquisition or tender offer. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership; Acquiror's Rights become void. General Development Corporation 10 days following 15% acquisition or tender offer for 20%. $0.01 prior to the 10th day following 15% acquisition. Standard Standard; Acquiror's Rights become void. General Dynamics Corporation 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership or 1% event. Acquiror's Rights become void. General Employment Enterprises Inc. 10 business days following 1 0% acquisition of "Voting Power" or 20% tender offer of "Voting Power". $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 10% beneficial ownership. General Housewares Corporation 10 days following 21% acquisition or tender offer for 30%. $0.01 prior to 10th day following 21% acquisition. Standard Standard; also triggered by 21% beneficial ownership or 1% event. Acquiror's Rights become void. STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER- UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/ EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKET TION General Instrument Corporation 03/08/89 DE 1/100th share of Series A Cumulative Participating Preferred Stock 31.13 125 4.02 10 General RE Corporation 09/11/91 DE 1/100th share of Preferred Stock 89.50 350 3.91 10 Genesco Inc. 08/08/90 TN 1/100th share of Preferred Stock 4.63 20 4.32 10 The Genlyte Group, Inc. 08/29/89 DE 1/100th share of Junior Participating Cumulative Preferred Stock 12.75 75 5.88 10 GenRad, Inc. 06/07/88 MA 1 share of Common Stock 10.75 50 4.65 10 Gentex Corp. 08/19/91 MI 1/100th share Preferred Stock 9.13 45 4.93 10 Genus Inc. 04/27/90 CA 1 share of Common Stock 4.50 28 6.22 10 Genzyme Corporation 03/15/89 DE 1/100th share of Series A Junior Participating Preferred Stock 9.50 52 5.47 10 GA Gulf Corporation 07/07/89 DE 1 share of Junior Participating Preferred Stock 6.37 45 7.06 7 GA Pacific Corporation 07/31/89 GA 1/100th share of Series A Junior Preferred Stock 52.0 175 3.37 10 Gerber Products Co. 07/25/90 MI 1/100th share of Preferred Stock 57.13 180 3.15 10 Giddings & Lewis Inc. 02/07/90 WI 1/100th share of Series A Preferred Stock 16.38 45 2.75 10 Gleason Corp. 06/06/89 DE 1/100th share of Junior Participating Preferred Stock NA 45 NA 10 Global Natural Resources Inc. 10/05/88 NJ 1/100th share of Series B Junior Preferred Stock 5.63 20 3.55 10 Goody Products 11/01/89 DE 1 share of Common Stock 13.00 65 5.00 10 Gordon Jewelry Corporation 08/10/88 DE 1/100th share of Participating Preferred Stock 16.50 60 3.64 10 Gould Inc. 05/03/88 DE 1/100th share of Series A Junior Participating Preferred Stock 13.38 40 2.99 10 Graco Inc. 05/09/90 MN 1/100th share of Series A Junior Participating Preferred Stock 21.50 80 3.72 10 Graham Corp. 02/23/90 DE 1 share of Common Stock 27.25 70 2.57 10 Great Lakes Chemical Corp. 09/07/89 DE 1/10th share of Common Stock and one Note equal to 9/10ths of current market price on day of exercise 23.68 370 15.83 10 Great Northern Nekoosa Corporation 10/05/88 ME 1/100th share of Series A Junior Participating Preferred Stock 40.13 150 3.74 10 Greenwich Pharmaceuticals Inc. 09/25/91 DE 1/100th share of Preferred Stock 7.50 60.00 8.00 10 Grow Group, Inc. 02/11/88 NY 1 share of Common Stock 7.75 30 3.87 10 Grubb & Ellis Company 03/13/89 DE 1/100th share of Series A Junior Participating Preferred Stock 3.75 20 5.33 10 Grumman Corporation 02/18/88 NY 1/100th share of Series A Junior Participating Preferred Stock 18.88 80 4.24 10 Guaranty National Corp. 12/20/91 CO 1/100th share of Preferred Stock 13.63 60.00 4.40 10 Gulf+ Western Inc. 09/07/88 DE 1 share of Common Stock 41.25 200 4.85 10 Gullford Mills Inc. 08/23/90 DE 1/100th share of Preferred Stock 16.88 60 3.55 10 HBO & Company 02/22/91 DE 1/1000th share of Preferred Stock 6.88 35 5.09 10 H.F. Ahmanson & Company 07/26/88 DE Primary: see Flip-in Provisions Secondary: 1/100th share of Series A Junior Participating Cumulative Preferred Stock 15.13 60 3.97 10 H.M.S.S., Inc. 04/08/88 DE 1 share of Common Stock 16.50 60 3.64 10 H&R Block, Inc. 07/14/88 MO 1/100th share of Participating Preferred Stock 26.88 120 4.47 10 HRE Properties 10/28/88 MA 1/100th share of Series A Participating Preferred Stock 25.75 65 2.52 10 Hadson Corporation 07/05/88 DE 1/100th share of Series A Preferred Stock 4.00 26 6.50 10 Hallwood Realty Partners L.P. 11/30/90 DE 1 share of Common Stock 16.88 50 3.55 10 Hamilton Financial Services Corp. 10/28/93 DE 1/1000th share of Preferred Stock 7.13 33.75 4.73 10 Hancock Fabricks Inc. 08/30/91 DE 1 share of Common Stock 21.88 90 4.11 10 Handy & Harman 01/26/89 NY 1 share of Common Stock 17.13 58 3.39 10 Hannaford Bros. Co. 02/04/88 ME 1/100th share of Series A Junior Participating Preferred Stock 35.75 125 3.50 10 Harley- Davidson, Inc. 05/10/88 DE 1/100th share of Series A Junior Participating Preferred Stock 22.88 60 2.62 10 Harnischfeger Industries 02/06/89 DE 1/100th share of Series D Preferred Stock 18.25 75 4.11 10 Hasbro, Inc. 06/06/89 RI 1/1000th share of Series B Junior Participating Preferred Stock 21.625 75 3.47 10 Hathaway Corp. 06/15/89 CO 1/100th share of Junior Participating Preferred Stock 4.38 17.50 4.00 10 Health Care Property Inv. Inc. 07/05/90 MD 1 share of Common Stock 31.50 95 3.02 10 Health Images, Inc. 05/11/89 FL 1/100th share of Series B Participating Preferred Stock 6.5 56 8.615 10 Health- Chem Corp. 02/28/89 DE 1 share of Common Stock 2.75 10.50 3.82 10 Healthtrust Inc. 07/13/93 DE 1/100 share of Preferred Stock 20.00 75 3.75 10 Heck's, Inc. 11/06/89 WV 1 share of Common Stock NA 20 NA 10 Hecla Mining Co. 11/09/90 DE NA 7.13 95 13.32 NA Heekin Can 12/13/89 DE 1/100th share of Series A Junior Participating Preferred Stock 39.75 200 5.03 10 Heilig- Meyers Company 02/17/88 VA 1/100th share of Cumulative Participating Preferred Stock 16.13 75 4.65 10 Hein- Werner Corp. 05/09/89 WI One share of Common Stock 17.25 65 3.77 10 HemoTec Inc. 02/03/89 CO One share of Common Stock 5.63 22 3.91 10 Heritage Bancorp 10/12/89 DE 1/100th share of Junior Participating Cumulative Preferred Stock 7.88 35 4.44 10 Hershey Oil Corp. 11/24/89 CA 1 share of Common Stock 6.00 20 3.33 10 Hilton Hotels Corporation 07/14/88 DE 1/100th share of Series A Junior Participation Preferred Stock 48.13 150 3.12 10 Hologic Inc. 12/22/92 DE 1 share of Common Stock 5.125 30 5.9 10 Homedco Group 04/25/94 DE 1/100th of Preferred 33.25 155.00 4.66 10 HomeFed Corp. 08/24/89 DE 1/100th share of Series A Junior Participating Cumulative Preferred Stock 41.88 110 2.63 10 Homeowners Group, Inc. 11/21/90 DE 1 share of Common Stock 5.13 30 5.85 10 Hometown Bancorporation Inc. 09/20/90 DE 1 share of Common Stock NA 20 NA 10 Hook- Superx Inc. 06/03/92 DE 1/100th share of Preferred Stock 13.00 64.00 4.92 10 Hooper Holmes Inc. 01/23/90 NY 1 share of Common Stock 8.75 NA NA 10 Horizon Industrial Inc. 05/21/90 GA 1 share of Common Stock 7.75 35 4.52 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS General Instrument Corporation 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to 15% acquisition. Standard Standard; Acquiror's Rights become void. General RE Corporation 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date. Standard Standard Genesco Inc. 10 days following 10% acquisition or tender offer for 10%. $0.01 prior to Stock Acquisition Date. Standard Standard The Genlyte Group, Inc. 10 days following 20% acquisition, tender offer for 20%, or declara- tion of an "Adverse Person." $0.01 prior to 10th day following 20% acquisition or declaration of an "Adverse Person." Standard Standard GenRad, Inc. 10 days following 20% acquisition or 10 business days following tender offer for 30%. $0.02 prior to the 10th day following the Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 20% beneficial ownership; Acquiror's Rights become void. Gentex Corp. 10 day following 15% or 15% tender offer. $0.005 prior to the 10th day following the Stock Acquisition Date. Standard Standard Genus Inc. 10 days following 20% acquisition or 10 business days following 30% tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 30% beneficial ownership or 1% event. Genzyme Corporation 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 10 days following 20% acquisition. Standard Standard; also triggered by 30% beneficial ownership or 1% event. Acquiror's Rights become void. GA Gulf Corporation 10 days following 15% acquisition or tender offer for 15%. $0.01 within 10 days following acquisition. Standard Standard; also triggered by 15% beneficial ownership. GA Pacific Corporation 10 days following 15% acquisition or tender offer for 30%. $0.01 prior to 10th day following acquisition. Standard Standard; also triggered by 15% beneficial ownership or 1% event. Gerber Products Co. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date. Standard Standard Giddings & Lewis Inc. 10 days following 20% acquisition, or 10 business days following 20% tender offer. $0.01 prior to Stock Acquisition Date. Standard Standard; also triggered by 1% event. Gleason Corp. 10 days following 15% acquisition or tender offer except in case of permitted offer. $0.01 prior to Stock Acquisition Date; may be redeemed after Subscrip- tion Period expiration if no beneficial ownership greater than or equal to 10%. Standard Standard; also triggered by 15% beneficial ownership except in case of permitted offer. Global Natural Resources Inc. 10 days following 10% acquisition. $0.01 prior to 10% acquisition. Standard Standard; also triggered by 10% beneficial ownership or 1% event. Goody Products 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to 15% acquisition. Standard Standard; also triggered by 15% beneficial ownership. Gordon Jewelry Corporation 10 days following 20% acquisition or 10 days following tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership; Acquiror's Rights become void. Gould Inc. 10 days following 20% acquisition or tender offer for 25%. $0.01 prior to 15 days following the Stock Acquisition Date. Standard Standard; also triggered by 25% beneficial ownership. Graco Inc. 15 days following 20% acquisition or 15 business days following 20% tender offer. $0.01 prior to 20 days following the Stock Acquisition Date. Standard Standard; also triggered by 1% event. Graham Corp. 10 days following 20% acquisition or 30% tender offer. $0.01 prior to close of business on the Distribution Date. Standard Standard; also triggered by 30% beneficial ownership. Great Lakes Chemical Corp. 15% acquisition or tender offer for 15%. $0.01 prior to 10th day following acquisition. Standard Standard; also triggered by 15% beneficial ownership. Great Northern Nekoosa Corporation 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership or 1% event. Acquiror's Rights become Greenwich Pharmaceuticals Inc. 10 days following 15% acquisition or tender offer for 15% $0.01 prior to 10% acquisition in or in case of fair offer. Standard Standard Grow Group, Inc. 10 business days following 20% acquisition or tender offer for 30%. $0.01 prior to the 10th business day following 20% acquisition; will be reinstated if Acquiror reduces beneficial ownership to less than 5%. Standard Standard; also triggered by 30% beneficial ownership. Grubb & Ellis Company 10 days following 25% acquisition or tender offer. $0.01 prior to 10 business days following 25% acquisition. Standard Standard; also triggered by 25% beneficial ownership. Grumman Corporation 10 days following 20% acquisition or tender offer. $0.01 prior to the 10 days following the Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 30% beneficial ownership. Guaranty National Corp. 10 days following 20% acquisition or tender offer for 20% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard Gulf+ Western Inc. 10 days following a 15% acquisition or a date fixed by the Board which is no later than the 19th business day following a tender offer for 30%. $0.01 prior to 10 days following the Stock Acquisition Date. Standard Standard; also triggered by 15% beneficial ownership or a 1% event. Acquiror's Rights become void. Gullford Mills Inc. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date. Standard Standard HBO & Company 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date. Standard Standard H.F. Ahmanson & Company Primary rights: 10 business days following 15% acquisition. Secondary Rights: announcement of 25% acquisition or tender offer for 25%. $0.01 prior to the 10th business day following 15% acquisition for Primary Rights and prior to 25% acquisition for Secondary Rights. Primary: None Secondary: Standard; Acquiror's Rights become void. Primary: purchase a number of Common Shares equal to 50% of the number of Common Shares outstanding divided by number of exercisable Primary Rights outstanding at a price equal to 20% of market value. Secondary: Standard; also triggered by 25% acquisition; Acquiror's Rights become void. H.M.S.S., Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to the 10th business day following the Stock Acquisition Date and may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 20% beneficial ownership; Acquiror's Rights become void. H&R Block, Inc. Immediately following 20% acquisition or 10 days following tender offer for 20%. $0.01 prior to the 20% acquisition. Standard; Acquiror's Rights become void. Standard; also triggered by 20% beneficial ownership; Acquiror's Rights become void. HRE Properties 10 business days following 20% acquisition or 30% tender offer. $0.01 prior to 11/13/98 Standard Standard; also triggered by 1% event. Hadson Corporation 10 days following 20% acquisition or 10 business days following tender offer for 30%. $0.01 prior to the 10th day following 20% acquisition. Standard; Acquiror's Rights become void. Standard; also triggered by beneficial ownership of 25%; Acquiror's Rights become void. Hallwood Realty Partners L.P. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date; or 15% Acquisition Standard Standard Hamilton Financial Services Corp. 10 business days following 20% acquisition. $0.01 prior to acquisition Standard Standard; triggered by 20% beneficial ownership. Hancock Fabricks Inc. 10 days following 20% acquisition or 30% tender offer. NA Standard Standard Handy & Harman 10 days following 20% acquisition or tender offer for 20%. $0.02 prior to the 10th day following 20% acquisition. Standard Standard; Acquiror's Rights become void. Hannaford Bros. Co. 10 days following 20% acquisition or tender offer for 30%. (m) $0.03 prior to 10 days following 20% acquisition. Standard Standard; also triggered by 30% beneficial ownership. Harley- Davidson, Inc. 10 days following 20% acquisition or tender offer for 25%. $0.01 prior to the 10th day following the Stock Acquisition Date. Standard Standard; also triggered by beneficial ownership of 25%. Harnischfeger Industries 10 days following 20% acquisition or tender offer. $0.02 prior to Distribution Date. Standard Standard; also triggered by 20% beneficial ownership. Hasbro, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 10th day following acquisition. Standard Standard; also triggered by 20% beneficial ownership. Hathaway Corp. 10 days following 20% acquisition or 10 business days following 20% tender offer. $0.01 prior to the 10th business day following Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 20% beneficial ownership. Health Care Property Inv. Inc. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date. Standard Standard Health Images, Inc. 10 days following 20% acquisition of tender offer. $0.01 prior to acquisition or expiration of the rights. Standard Standard Health- Chem Corp. 10 days following 30% acquisition or tender offer. $0.01 prior to the 10th day following Stock Acquisition Date. Standard Standard; also triggered by 30% beneficial ownership, except in case of Permissible Offer. Healthtrust Inc. 10 days following 15% acquisition or tender offer for 15% $0.01 prior to acquisition Standard Heck's, Inc. 10 days following 15% acquisition or 20% tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 15% beneficial ownership. Hecla Mining Co. 10 days following 15% acquisition or tender offer for 15%. NA Standard Standard Heekin Can 10 days following 15% acquisition or 20% tender offer. $0.01 prior to 10th day following the Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership or by 1% event. Heilig- Meyers Company 10 days following 20% acquisition or 10 business days following 30% tender offer. $0.01 prior to 10 days following Share Acquisition Date; may be reinstated if Acquiror reduces benefi- cial ownership to 5% or less. Standard Standard; also triggered by 10% beneficial ownership. Hein- Werner Corp. 10 days following 20% acquisition or 10 business days following 20% tender offer. $0.03 prior to Stock Acquisition Date; may be redeemed in case of Fair Offer. Standard Standard; also triggered by 20% beneficial ownership or by 1% event. HemoTec Inc. 10 days following 20% acquisition of tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; triggered by 25% beneficial ownership. Heritage Bancorp 10 days following 20% acquisition or 10 business days following 20% tender offer or immediately after Adverse Person declaration. $0.02 prior to Adverse Person declaration, 10th day following Stock Acquisition Date or following event giving rise to the Merger Right. Standard Standard; triggered by 20% beneficial ownership or Adverse Person declaration. Hershey Oil Corp. 10 days following 20% acquisition or 10 business days following 30% tender offer. $0.02 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership except in case of qualified offer. Hilton Hotels Corporation 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by beneficial ownership of 30% Acquiror's Rights become void. Hologic Inc. 10 days following 15% acquisition. $0.01 prior to 10% acquisition. Standard Standard; also triggered by beneficial ownership of 15%; Acquiror's Rights become void. Homedco Group 10 days following 20% acquisition $0.01 prior to acquisition Standard Standard; also triggered by 20% beneficial ownership HomeFed Corp. 10 days following 20% acquisition or tender offer for 25%. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard Homeowners Group, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to Stock Acquisition Date. Standard Standard Hometown Bancorporation Inc. 10 days following 14.5% acquisition or tender offer for 14.5%. $0.01 prior to Stock Acquisition Date or 14.5% Acquisition. Standard Standard Hook- Superx Inc. 10 days following 20% acquisition or tender offer for 20% .01 prior to 20% acquisition in or in case of fair offer. Standard Standard Hooper Holmes Inc. 20% acquisition or 30% tender offer. $0.05 prior to 10th day following Standard Standard; also triggered by 20% - 50% acquisition. Horizon Industrial Inc. 10 days following 20% acquisition or 10 business days following 20% tender offer. $0.01 prior to 10th day following the stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership or 1% event. STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER- UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/ EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKET TION The Horn & Hardart Company 03/17/88 NV 1/100th share of Series A Preferred Stock 9.13 40 4.38 10 Houghton Mifflin Company 12/31/88 MA 1/1000th share of Series A Junior Participating Preferred Stock. 34.38 125 3.64 10 Houston Industries Inc. 07/11/90 TX 1/100th share of Preferred Stock 33.00 85 2.58 10 HPSC Inc. 08/11/93 DE 1/100 P 3.00 20 6.67 10 Hubbell Incorporated 12/13/88 CT 1 share of Common Stock (Class A and B) 32.50 120 3.69 10 Hunt Manufacturing Co. 08/08/90 PA 1/1000th share of Preferred Stock 12.88 60 4.66 10 Huntington BancShares Inc. 02/21/90 MD 1/100th share of Series A Junior Participating Preferred Stock 16.82 90 5.35 10 ICF International Inc. 01/13/92 DE 1/100th share of Preferred Stock 8.50 50.00 5.88 10 ICM Property Investors Incorporated 07/18/89 DE 1/100th share of Series A Preferred Stock. 10.25 30 2.93 10 IES Industries Inc. 11/06/91 OH 1/100th share of Preferred Stock 27.88 70.00 2.51 10 IFR System Inc. 02/28/89 DE 1 share of Common Stock 10.25 50 4.88 10 IKOS Systems Inc. 01/27/92 DE 1/100th share of Preferred Stock 2.31 10.00 4.32 10 IMC Fertilizer Group, Inc. 06/21/89 DE 1/100th share Participating Preferred Stock 35.25 150 4.26 10 INB Financial Corp 10/16/90 IN 1/100th share of Preferred Stock 16.50 80 4.85 10 INTERCO Incorporated 07/11/88 DE 1 share of Common Stock 45.25 160 3.54 10 IOMEGA Corporation 07/28/89 DE 1/100th share Series C Junior Participating Preferred Stock 2.625 15 5.71 10 Idaho Power 01/11/90 ID 1/100th Share of Serial Preferred Stock 28.00 85 3.04 10 Immucor, Inc. 04/10/89 GA 1 share Common Stock 5.875 30 5.11 10 Immune Response Corp. 02/26/92 DE 1/100th share of Preferred Stock 28.625 150.00 5.24 10 Immunex Corp 01/31/91 DE 1/100th share of Preferred Stock 33.75 190 5.63 10 Imperial Holly Corp. 09/14/89 TX 1/100th share of Series A Junior Participating Preferred Stock 26.25 90 3.43 10 Inatron Corp. 04/03/91 MA NA 10.88 NA NA NA Inco Limited 10/03/88 CAN NA 29.00 NA NA NA Income Opportunity Realty Trust 04/14/89 CA 1 share Common Stock 6.25 12 1.92 10 Independence Bancorp, Inc. 02/22/89 PA 1/100th share of Series A Preferred Stock 22.38 80 3.57 10 Independent Bank Corp. 01/24/91 MA 1/1000th share of Preferred Stock NA 15 NA 10 Indiana Federal Corp. 02/26/92 DE 1 share of Common Stock 17.00 60.00 3.53 10 Information International Inc. 09/11/90 DE 1 share of Common Stock 10.50 18 1.71 10 Information Resources, Inc. 03/02/89 DE 1/100th share of Series A Participating Preferred Stock 12.88 60 4.66 10 Informix Corp. 09/17/91 DE 1/1000th share of Preferred Stock 6.50 35 5.38 10 Informix Corp. 09/17/91 DE 1/100th share of Preferred Stock 6.50 35.00 5.38 10 Infotron Systems Corporation 02/17/88 PA 1 share of Common Stock 7.25 27 3.72 10 Ingersoll- Rand Company 12/07/88 NJ 1/100th share of Series A Preference Stock 33.63 130 3.87 10 Instron Corp. 04/03/91 MA NA NA NA NA NA Instrument Systems Corporation 04/02/86 DE 1/2 Share of Common Stock 2.00 6 3.0 10 Integrated Device Technology Inc. 02/18/92 DE 1/100th share of Preferred Stock 7.25 50.00 6.90 6 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS The Horn & Hardart Company 10 days following 20% acquisition or 10 business days following tender offer for 30%. $0.01 prior to 10 days following the Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial owner- ship to 10% or less. Standard Standard; also triggered by 30% beneficial ownership Houghton Mifflin Company 10 days following 20% acquisition of tender offer for 30% or immediately after a person is declared to be an "Adverse Person". $0.05 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 30% beneficial ownership or 1% event. Acquiror's Rights become void. Houston Industries Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date Standard Standard HPSC Inc. 10 days following 15% acquisition or tender offer for 15% $0.01 prior to acquisition Standard Standard Hubbell Incorporated 10 days following 20% acquisition or not later than 19 business days following 30% tender offer. $0.01 prior to 10 days following 20% acquisition of Class A. Standard Standard; also triggered by 25% beneficial ownership of Class A or 1% event. Hunt Manufacturing Co. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date Standard Standard Huntington BancShares Inc. 20% acquisition or 10 business days following a 20% tender offer. $0.01 prior to triggering event. Standard Standard ICF International Inc. 10 days following 20% acquisition or tender offer for 20% $0.01 prior to 10% acquisition in or in case of fair offer. Standard Standard ICM Property Investors Incorporated 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to 10th day following acquisition. Standard Standard; also triggered by 20% beneficial ownership or 1% event. IES Industries Inc. 10 days following 20% acquisition or tender offer for 20% $0.01 prior to 10% acquisition in or in case of fair offer. Standard Standard IFR System Inc. 10 business days following 20% acquisition or tender offer. $0.01 prior to Stock Acquisition Date. Allows for redemption if Qualified Offer is accepted. Standard Standard; also triggered by 20% beneficial ownership or by 1% event. Acquiror's Rights become void. IKOS Systems Inc. 10 days following 20% acquisition or tender offer for 20% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard IMC Fertilizer Group, Inc. 20% acquisition or tender offer for 20%. $0.01 prior to acquisition. Standard Standard; also triggered by 20% beneficial ownership. INB Financial Corp 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date. Standard Standard INTERCO Incorporated 10 days following 20% acquisition or 10 business days following tender offer for 30%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 30% beneficial ownership. Acquiror's Rights become void. IOMEGA Corporation 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 10th day following acquisition. Standard Standard; Acquiror's Rights become void. Idaho Power Following 20% acquisition or 10 days following 20% tender offer. $0.01 prior to Stock Acquisition Date. Standard Standard Immucor, Inc. 20% acquisition, or 2% acquisi- tion without consent of a previously approved 20% acquisition. $0.01 prior to acquisition. Standard Standard Immune Response Corp. 10 days following 15% acquisition or tender offer for 15% $.01 prior to 15% acquisition in or in case of fair offer. Standard Standard Immunex Corp 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date or 15% Acquisition. Standard Imperial Holly Corp. 10 days following 25% acquisition or 10 days following tender offer. $0.01 prior to 25% acquisition. Standard Standard Inatron Corp. NA NA NA NA Inco Limited NA NA NA NA Income Opportunity Realty Trust 10 days following 20% acquisition, tender offer for 20%, or after a person is declared an "Adverse Person". $0.01 prior to 20% acquisition or any holder of 10% or more is determined to be an "Adversed Person". Standard Standard; also triggered by 27.5% beneficial ownership. Independence Bancorp, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to the earlier of 10 days following 20% acquisition and 02/21/99. Standard Standard; also triggered by 20% beneficial ownership. Independent BankCorp. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Acquisition. Standard Standard Indiana Federal Corp. 10 days following 10% acquisition or tender offer for 10% $0.01 prior to 10% acquisition in or in case of fair offer. Standard Standard Information International Inc. 10 days following 15% acquisition or tender offer for 30%. $0.01 prior to Stock Acquisition Date or 15% Acquisition. Standard Standard Information Resources, Inc. 10 days following 20% acquisition or tender offer for 25%. $0.01 prior to 03/15/99 or 10 business days following 20% acquisition. Standard Standard; also triggered by 25% beneficial ownership or board determined adverse person. Informix Corp. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date. Standard Standard Informix Corp. 10 days following 20% acquisition or tender offer for 20% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard Infotron Systems Corporation 10 days following 15% acquisition or 10 business days following tender offer for 30%. $0.01 prior to 10 days after the Stock Acquisition Date; may be reinstated if Acquiror reduces ownership to 10% or less. Standard Standard; also triggered by 25% beneficial ownership. Ingersoll- Rand Company 10 days following 20% acquisition or tender offer for 20% $0.01 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership or 1% event. Acquiror's Rights become void. Instron Corp. NA NA NA NA Instrument Systems Corporation 10 days following 20% acquisition. $0.01 prior to 20% acquisition. Standard Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. Integrated Device Technology Inc. 10 days following 15% acquisition or tender offer for 15% $0.01 prior to 15% acquisition in or in case of fair offer. Standard Standard STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER- UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/ EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKET TION Intel Corporation 01/19/89 CA 1 share of Common Stock 24.25 120 4.95 10 Intergraph Corp. 09/09/93 DE 1 share of Common Stock 11.13 50.00 4.49 10 Interim Services 02/17/94 DE 1/100th of Preferred 24.38 98.00 4.02 10 Interlake Corporation 01/26/89 DE 1 share of Common Stock 44.38 150 3.38 10 Interleaf, Inc. 07/15/88 MA 1/100th share of Series A Junior Participating Preferred Stock 13.25 65 4.91 10 Intermedics, Inc. 04/21/88 TX 1 share of Common Stock 28.88 100 3.46 10(q) International Broadcasting Corp. 05/05/89 MN 1 share of Common Stock 11.00 50 4.55 10 International Corona Corp. 08/16/91 ON 1 share of Common Stock NA 50 NA 10 International Flavors and Fragrances 02/13/90 NY 1 share of Common Stock 58.00 200 3.45 10 International Minerals and Chemical Corporation 03/10/89 NY 1 share of Common Stock 40.00 100 2.50 10 International Multifoods Corp 10/04/90 DE 1/100th share of Preferred Stock 31.5 100 3.17 10 International Technology 12/14/89 DE 1/1000th share of Series A Junior Participating Cumulative Preferred Stock 6.75 35 5.19 10 Interpublic Group 07/18/89 DE 1/100th share of Series A Cumulative Participating Preferred Stock 31.88 100 3.14 10 InterTAN 09/22/89 DE 1/100th share of Series A Junior Participating Preferred Stock 49.13 175 3.56 10 Intervoice Inc. 04/23/91 TX 1/100th share of Preferred Stock 14.25 45 3.18 10 Investors Savings Corp. 05/07/91 DE 1/100 share of Preferred Stock 10.88 40 3.68 10 Iowa- Illinois Gas & Electric Co. 02/25/92 IL 1/2 share of Common Stock 24.75 33.00 1.33 10 Ipalco Enterprises Inc. 06/26/90 IN 1 share of Common Stock 24.50 50 2.04 10 Irving Bank Corporation 03/27/88 NY 1 share of Common Stock 65.38 200 3.06 Earlier of 10 years or 24 mos. after the elimination of certain restrictions on interstate banking. Isomedix Inc. 06/10/88 DE 1/100th share of Series A Preferred Stock 6.25 20 3.20 10 J. C. Penney 01/31/90 DE 1/200th share of Series A Junior Participating Preferred Stock 66.88 280 4.19 10 J. P. Industries, Inc. 03/30/89 MI 1/100th share of Series A Junior Participating Preferred Stock 17.25 65 3.77 10 J.P. Stevens & Co., Inc. 03/28/88 DE 1/100th share of Series A Junior Participating Preferred Stock 63.88 100 1.57 8 Jacobs Engineering Group Inc. 12/20/90 DE 1/100th share of Preferred Stock 26.00 90 3.46 10 Jacobson Stores Inc. 10/04/88 MI 1/100th share of Series A Preferred Stock 21.25 100 4.71 10 Jacor Communications Inc. 12/31/90 OH 1 share of Preferred Stock 2.25 8 3.55 10 James River Corp. 02/09/89 VA 1/100th share of Series M Cumulative Participating Preferred Stock 29.63 150 5.06 10 James River Corporation 06/28/92 VA 1/1000th share of Preferred Stock 20.25 150.00 7.41 7 Jeffries Group, Inc. 05/12/88 DE 1/100th share of Series A Junior Participating Preferred Stock 11.75 40 3.40 10 John H. Harland Company 06/09/89 GA 1 share of Common Stock 23.5 80 3.40 10 Johnson Controls 05/24/89 WI NA 40.125 NA NA 10 Johnstown Consolidated Realty Trust 03/13/89 CA 1 share of Common 6.5 15 2.31 10 Joslyn Corporation 02/10/88 IL 1 share of Common Stock 26.00 90 3.46 10 Jostens, Inc. 08/09/88 MN 1 share of Common Stock 17.63 60 3.40 10 Juno Lighting, Inc. 08/02/89 DE 1 share of Common Stock 17.75 75 4.23 10 K mart Corporation 05/17/88 MI 1/1000th share of Series A Junior Participating Preferred Stock 31.75 110 3.46 10 K-Tron International Inc. 10/03/91 NJ 1/100th share of Preferred Stock 8.13 40.00 4.92 10 KU Energy Corp. 12/27/91 KY 1/100th share of Preferred Stock 27.50 65.00 2.36 10 Kaneb Services, Inc. 03/28/88 DE 1/100th share of Series B Junior Participating Preferred Stock 2.50 10 4.00 10 Kemper Corp 07/18/90 DE 2/100th share of Preferred Stock 42.13 220 5.22 10 Kennametal Inc. 10/23/90 PA 1/100th share of Preferred Stock 26.75 150 5.61 10 Kent Electronics Corp. 05/11/90 TX 1/100th share of Series A Preferred Stock 8.75 40 4.57 10 Ketema Inc. 10/15/91 DE 1/100th share of Preferred Stock 10.63 50.00 4.71 10 Keystone International Inc. 06/20/90 TX 1/1000 share of Preferred Stock 26.63 80 3.00 10 Koger Properties Inc. 09/30/90 FL 1/100th of Preferred Stock 11.13 45 4.04 10 Kraft, Inc. 09/01/88 DE 1 share of Common Stock 55.63 200 3.60 10 L.E. Meyers Co. Group 03/27/90 DE 1/6th share of Series I Preferred Stock NA NA 23 10 LGE&E Energy Corp 12/05/90 KY 1 share of Preferred Stock 41.50 110 2.65 LIN Broadcasting Corporation 05/02/88 DE 1/1000th share of Series A Participating Cumulative Preferred Stock 60.50 250 4.13 10 L.S. Starrett Co. 06/06/90 MA 1 share of Common Stock 25.25 92 3.64 10 LSB Industries 02/17/89 DE 1/100th share of Series 2 Participating Class C Preferred Stock. 2.88 14 4.86 10 LTX Corporation 05/17/89 MA 1 share of Common Stock 4.75 30 6.32 10 La Quinta Motor Inns Inc. 09/26/90 TX 1 share of Common Stock 12.25 50 4.08 10 The Lamson & Sessions Co. 08/22/88 OH 1/100th share of Series II Cumulative Redeemable Serial Preference Stock 14.00 47 3.36 10 Landmark Bancshares Corp 10/22/90 MO 1/100th share of Preferred Stock 5.75 30 5.22 10 Laserscope 10/31/91 CA 1 share of Common Stock 7.13 34.00 4.77 10 Lattice Semiconductor Corp. 09/11/91 DE 1/100th share of Preferred Stock 11.25 60.00 5.33 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS Intel Corporation 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to expiration date. Standard Standard; also triggered by 20% beneficial ownership. Acquiror's Rights become void. Intergraph Corp. 10 business days following 15% acquisition. $0.01 prior to acquisition. Standard Standard; triggered by 15% beneficial ownership. Interim Services 10 days following 15% acquisition $0.01 prior to acquisition Standard Standard; also triggered by 15% beneficial ownership Interlake Corporation 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to the 10th day following 15% acquisition. Standard Standard; also triggered by 20% beneficial ownership or 1% event. Acquiror's Rights become void. Interleaf, Inc. 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to the 10th day following 20% acquisition; may be reinstated if Acquiror reduces beneficial owner- ship to 10% or less. Standard; Acquiror's Rights become void. Standard; also triggered by beneficial ownership of 25%; Acquiror's Rights become void. Intermedics, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.10 prior to the 10th day following the Stock Acquisition Date. Standard Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. International Broadcasting Corp. 10 days following 15% acquisition without Company's consent or tender offer for 20%. $0.01 prior to 30th day following Stock Acquisition Date; may be reinstated if Acquiror reduces ownership to 10%. Standard Standard; triggered by 20% beneficial ownership or by 1% event. International Corona Corp. 10 days following 15% acquisition or 15% tender offer. $0.0001 prior to Stock Acquisition Date. Standard Standard International Flavors and Fragrances 10 days following 20% tender or 10th business day after Stock Acquisition Date. $0.01 anytime prior to Flip-in date. Standard Standard; also triggered by 50% beneficial ownership. International Minerals and Chemical Corporation 10 days following 20% acquisition or 30% tender offer. $0.05 prior to 20% Acquisition. Standard Standard; also triggered by 20% beneficial ownership. International Multifoods Corp 10 days following 10% acquisition or tender offer for 10%. $0.01 prior to Stock Acquisition Date or 10% Acquisition Standard Standard International Technology 10 business days following 20% acquisition or tender offer. $0.01 prior to Flip-in or Flip- over event. Standard Standard; also triggered on tenth business day following 20% beneficial ownership. Interpublic Group 10 days after 15% acquisition or 2% acquisition by 15% shareholder or 10 days following tender offer for 15% or ten days following filing of registration statement for any such exchange offer. $0.01 prior to Stock Acquisition Date or merger of company in which company does not survive. Standard Standard; also triggered by 15% beneficial ownership or 2% increase in holdings over 15%. InterTAN 10 days following 20% acquisition or tender offer for 30%. $0.03 prior to 20% acquisition. Standard Standard Intervoice Inc. 10 days following 20% acquisition or 10 days following 20% tender offer. $0.01 prior to Stock Acquisition Date or 20% acquisition. Standard Standard Investors Savings Corp. 10 days following 15% acquisition $0.01 prior to Stock Acquisition Date. Standard Standard Iowa-Illinois Gas & Electric Co. 10 days following 15% acquisition or tender offer for 15% $.01 prior to 10% acquisition in or in case of fair offer. Standard Standard Ipalco Enterprises Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to Stock Acquisition Date or 20% Acquisition. May be reinstated if Beneficial Ownership falls below 10%. Standard Standard Irving Bank Corporation 10 days following 20% acquisition. $0.01 prior to 20% acquisition. Standard Standard (o) Isomedix Inc. 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. J. C. Penney 10 days following 15% acquisition or nineteen business days following 30% tender offer. $0.01 prior to tenth day following Stock Acquisition Date. Standard Standard; also triggered by 15% beneficial ownership. J. P. Industries, Inc. 20 business days following 20% acquisition or tender offer or contemplated offer by registration statement. $0.01 prior to 20 business days following 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. J.P. Stevens & Co., Inc. 10 days following 20% acquisition or, at the discretion of the board, not more than 30 business days following tender offer for 30%. $0.05 prior to the 10th day following 20% acquisition; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 40% beneficial ownership. Acquiror's Rights become void. Jacobs Engineering Group Inc. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date or 15% Acquisition. Standard Jacobson Stores Inc. 10 days following 25% acquisition or tender offer for 30%. $0.01 prior to 30th day following 25% acquisition. Standard Standard; also triggered by 40% beneficial ownership. Acquiror's Rights become void. Jacor Communications Inc. 10 days following 15% acquisition or tender offer for 15%. $0.001 prior to Stock Acquisition Date. Standard Standard James River Corp. 10 days following 10% acquisition or 10 business days following 10% tender offer. $0.01 prior to 10th day following Stock Acquisition Date; may be reinstated if no triggering event occurs and Acquiring Person reduces ownership to 5% or less. Standard Standard; also triggered by 25% beneficial ownership unless in case of Qualified Offer, or by 1% event. James River Corporation 10 days following 15% acquisition or tender offer for 15% $0.01 prior to 15% acquisition in or in case of fair offer. Standard Standard Jeffries Group, Inc. 10 business days following 20.1% acquisition or tender offer for 20.1%. $0.01 prior to time there is an Acquiring Person. Standard Standard; triggered by 20.1% beneficial ownership. John H. Harland Company 10% acquisition or tender offer for 30%. $0.01 prior to acquisition. Standard Standard; also triggered by 10% beneficial ownership. Johnson Controls 10% acquisition or tender offer for 10%. Standard Standard Standard; also triggered by 20% beneficial ownership. Johnstown Consolidated Realty Trust 10 days following 20% acquisition, tender offer for 20%, or after a person is declared an "Adverse Person". $0.01 prior to 20% acquisition or any holder of 10% or more is determined to be an "Adverse Person". Standard Standard; Acquiror's rights become void. Joslyn Corporation 10 days following 20% acquisition (30% acquisition if own 20% on or before 03/04/88) or 10 business days following tender offer for 30%. $0.05 prior to 15 days following the Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Exercise price reduced to 20% of then current Common Stock market price. Also triggered by 30% beneficial ownership. Jostens, Inc. The close of business on the 10th day following (i) 20% acquisition or (ii) tender offer for 25%. $0.01 prior to the close of business on the 13th day following the Stock Acquisition Date and may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 25% beneficial ownership or 1% event. Acquiror's Rights become void. Juno Lighting, Inc. 10 days following 15% acquisition of tender offer for 30%. $0.01 prior to 15% acquisition. Standard Standard; also triggered by 15% beneficial ownership. K mart Corporation 10 business days following 20% acquisition or tender offer. $0.01 prior to 10 business days following the Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership; Acquiror's rights become void. K-Tron International Inc. 10 days following 20% acquisition or tender offer for 20% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard KU Energy Corp. 10 days following 20% acquisition or tender offer for 20% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard Kaneb Services, Inc. 15 days following 20% acquisition or 30% tender offer. $0.05 prior to 15 days following the Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 30% beneficial ownership. Kemper Corp 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to Stock Acquisition Date or 20% Acquisition. May be reinstated if Beneficial Ownership falls below 10%. Standard Standard Kennametal Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date. Standard Standard Kent Electronics Corp. 10 days following 20% acquisition or 10 business days following 30% tender offer. $0.01 prior to 10 days following Stock Acquisition Date; may be reinstated if beneficial ownership reduces to 10%. Standard Standard; also triggered by 20% beneficial ownership. Ketema Inc. 10 days following 30% acquisition or tender offer for 30% $0.01 prior to a 20% acquisition is or in of fair offer. Standard Standard Keystone International Inc. 10 days following 20% acquisition or tender offer for 20%. $0.001 prior to Stock Acquisition Date. Standard Standard Koger Properties Inc. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date. Standard Standard Kraft, Inc. 10 business days following a 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to a 20% acquisition. Standard Standard; also triggered by a 1% event. Acquiror's Rights become void. L.E. Meyers Co. Group 10 days following 30% acquisition or tender, or 15% "Adverse Person" ownership. $0.01 prior to 10th day following the Stock Acquisition Date. Standard Standard; also triggered by 15% "Adverse Person." LGE&E Energy Corp 10 days following 20% acquisition or tender offer for 20%. NA Standard Standard LIN Broadcasting Corporation 10 days following 15% acquisition or tender offer for 30%. $0.01 prior to 10th day following 15% acquisition. Standard Standard; Acquiror's Rights become void. L.S. Starrett Co. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date. Standard Standard LSB Industries 10 days following 30% acquisition or 10 business days following 30% tender offer. $0.01 prior to Stock Acquisition Date. Standard Standard; also triggered by 30% beneficial ownership or by 1% event. LTX Corporation 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to the Stock Acquisition Date. Standard Standard La Quinta Motor Inns Inc. 10 days following 25% acquisition or tender offer for 25%. $0.02 prior to Stock Acquisition Date. Standard Standard The Lamson & Sessions Co. Close of business on the 20th day following a 15% acquisition or close of business on the 20th day following tender offer for 20%. $0.01 prior to the close of business on the 20th day following a 20% acquisition and may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 15% beneficial ownership or Board declaration of an "Adverse Person". Acquiror's Rights become void. Landmark Bancshares Corp 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date. Standard Standard Laserscope 10 days following 20% acquisition or tender offer for 20% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard Lattice Semiconductor Corp. 10 days following 20% acquisition or tender offer for 20% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER- UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/ EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKET TION Learning Company 03/16/94 DE 1/100th of Preferred 18.75 75.00 4.00 10 Leggett & Platt, Inc. 02/15/89 MO 1/100th share of Series A Junior Participating Preferred Stock 24.88 125 5.02 10 Leisure Technology, Inc. 02/09/88 DE 1/4th share of Common Stock 4.00 7.50 1.88 10 Lesco Inc 05/18/94 OH 1/100th of Preferred 16.50 75.00 4.55 10 Leslie Fay Companies Inc. 04/05/93 DE 1 1/2 Share of Common Stock 3.00 18 6.0 10 Levitz Furniture Inc. 06/30/93 DE 1/100 Share of Preferred Stock NA 50 NA 10 Lewis Galoob Toys 01/19/90 DE 1/1000th share of Series A Preferred Stock 11.88 43 3.62 10 Liberty Corp 08/07/90 SC 1/100th share of Preferred Stock 47.00 150 3.19 10 Liberty National Bancorp Inc. 08/09/92 KY 1/100th share of Preferred Stock 30.0 85.00 2.8 10 Lifetime Corporation 09/30/92 DE 1/100th share of Preferred Stock 12.5 60.00 4.80 10 Lincoln Financial Corp. 12/19/89 IN 1 share of Common Stock 24.50 90 3.67 10 Lincoln Telecommunications Company 01/15/88 NE 1 share of Common Stock 26.75 175 6.54 10 Liqui-Box Corp. 02/22/89 OH 1/10th share of Series A Preferred Stock 48.00 175 3.65 10 Live Entertainment Inc. 07/19/90 DE 1/100th share of Series R Junior Participating Preferred Stock. 22.75 90 3.96 10 Liz Clairborne, Inc. 12/08/88 DE 1/100th share of Series A Junior Participating Preferred Stock 16.25 85 5.23 10 Logicon Inc. 04/06/90 DE 1 share of Common Stock 17.88 115 6.43 10 Lone Star Industries, Inc. 06/02/88 DE 1/100th share of Series A Junior Participating Preferred Stock 31.88 100 3.14 10 Longview Fibre 03/01/89 DE 1/10th share of Common Stock 63.88 200 3.13 10 Lotus Development Corporation 11/08/88 DE 1/100th share of Series A Junior Participating Preferred Stock 17.00 75 4.41 10 Louisiana General Services, Inc. 11/22/88 DE 1/100th share of Series A Junior Preferred Stock. 12.375 30 2.42 10 Lowe's Companies, Inc.09/09/88 NC 1/1000th share of Series A Participating Cumulative Preferred Stock 20.75 100 4.82 10 Lubrizol Corporation 10/31/88 OH 1/25th share of Serial Preferred Stock, Series A 37.00 0.04 NA 3 Luby's Cafeterias Inc.04/16/91 TX 1/2 share of Common Stock 20.38 27.50 1.35 10 Lumex, Inc. 05/19/88 NY 1/100th share of Series A Preferred Stock 9.75 60 6.15 10 M.A. Hanna Company 12/24/91 DE 1/100th share of Preferred Stock 22.25 95 4.27 10 MAPCO, Inc. 09/27/89 DE 1/200th share of Series A Junior Participating Series Preferred Stock 37.25 175 4.70 10 MAYTAG Corporation 05/03/88 DE 1/100th share of Series A Junior Participating Preferred Stock 23.50 75 3.19 10 MBIA Inc. 12/12/91 CT 1/100th share of Preferred Stock 45.00 160.00 3.56 10 MBIA Inc. 12/31/91 CT 1/100th share of Preferred Stock 48.25 160.00 3.32 10 MCN Corp. 12/20/89 MI 1/100th share of Series A Junior Participating Preferred Stock 23.38 70 2.99 10 MDT Corp 02/10/90 DE 1/4th share of Common Stock 6.50 32 4.92 10 MGI Properties 06/21/89 MA 1/100th share Series A Participating Preferred Stock 14.875 60 4.03 10 MTEL 07/26/89 DE 1/100th share of Series C Junior Participating Preferred Stock 11.00 30 2.73 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS Learning Company 10 days following 15% acquisition $0.01 prior to 10% acquisition Standard Standard; also triggered by 15% beneficial ownership Leggett & Platt, Inc. 10 days following 20% acquisition or 10 business days following 20% tender offer. $0.01 prior to Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership. Leisure Technology, Inc. 10 days following 15% acquisition or tender offer. $0.01 prior to 10 days following the Stock Acquisition Date. Will receive a number of shares of Common Stock that has a market value three times the Purchase Price. Will receive a number of shares of Common Stock that has a market value three times the Purchase Price. Also triggered by 35% beneficial ownership. Lesco Inc 10 days following 20% acquisition $0.01 prior to acquisition Standard Standard; also triggered by 20% beneficial ownership Leslie Fay Companies Inc. 10 days following 15% acquisition. $0.001 prior to 10% acquisition. Standard Standard; also triggered by beneficial ownership of 15%; Acquiror's Rights become void. Levitz Furniture Inc. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to acquisition Standard Standard Lewis Galoob Toys 10 days following 20% acquisition or 10 business days following 20% tender offer. $0.01 prior to 10th day following Stock Acquisition Date; may be reinstated if Acquiror reduces ownership to 10%. Standard Standard; also triggered by 20% beneficial ownership except pursuant to Permitted Offer, or by 1% event. Liberty Corp 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date. Standard Standard Liberty National Bancorp Inc. 10 days following 20% acquisition or tender offer for 30% $.01 prior to 10% acquisition in or in case of fair offer. Standard Standard Lifetime Corporation 10 days following 10% acquisition or tender offer for 10% $0.01 prior to 10% acquisition in or in case of fair offer. Standard Standard Lincoln Financial Corp. 10 days following 20% acquisition; 10 business days following 30% tender offer, or 15% "Adverse Person". $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; triggered by 20% acquisition or "Adverse Person". Lincoln Telecommuni- cations Company 10 days following 10% acquisition or tender offer for 10%. $0.05 prior to the 10th day following 25% acquisition; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 10% beneficial ownership. Liqui-Box Corp. 10 days following 25% acquisition or tender offer for 25%. $0.05 prior to Stock Acquisition Date. Standard Standard; also triggered by 25% acquisition except in case of Permitted Offer. Live Entertainment Inc. 10th business day following 20% acquisition or 20% tender offer. $0.01 prior to 10th business day following 20% Ownership Date. Standard Standard; also triggered by 20% beneficial ownership or 1% event. Liz Clairborne, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership or 1% event. Acquiror's Rights become void. Logicon Inc. 10 business days following 20% acquisition, 20% tender offer, or 15% "Adverse Person". $0.01 prior to the 10th day following Stock Acquisition Date. Standard Standard; also triggered by 15% "Adverse Person". Lone Star Industries, Inc. 10 business days following 20% acquisition or tender offer of 20% or Board determination of an "Adverse Person" with 15% acquisition. $0.05 prior to the 10th business day following the Stock Acquisition Date. Standard; Acquiror's Rights become void. Standard; also triggered by beneficial ownership of 20% or determination of an "Adverse Person"; Acquiror's Rights become void. Longview Fibre 10 business days following 20% acquisition or 30% tender offer. $0.05 prior to 10th business day following Stock Acquisition Date; may be reinstated if Acquiror reduces ownership to 10%. Standard Standard; triggered by 30% beneficial ownership. Lotus Development Corporation 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 10% beneficial ownership. Acquiror's Rights become void. Louisiana General Services, Inc. 10 days following 20% acquisition or 30% tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 40% beneficial ownership or 1% event. Lowe's Companies, Inc. 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to 10 days following the Stock Acquisition Date and may be reinstated if (1) the Acquiror reduces beneficial ownership to less than 10% or (2) there is a merger or business combina- tion involving the Company in which all holders of Common Stock are treated alike and which does not involve the Acquiror. Standard; Acquiror's Rights become void. Standard; also triggered by 30% beneficial ownership. Acquiror's Rights become void. Lubrizol Corporation Standard $0.05 prior to 20% acquisition. Standard Standard; Acquiror's Rights become void. Luby's Cafeterias Inc. 10 days following 15% acquisition or tender offer for 15% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard Lumex, Inc. Standard $0.05 prior to 10th day following 20% acquisition and may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard except 1.6x the Exercise Price. Standard except 1.6x the Exercise Price; Acquiror's Rights become void. M.A. Hanna Company 10 days following 15% acquisition or tender offer for 20% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard MAPCO, Inc. 10 days following 15% acquisition or tender offer for 15%. $0.05 prior to 10th day following acquisition. Standard Standard; also triggered by 15% beneficial ownership. MAYTAG Corporation 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership; Acquiror's rights become void. MBIA Inc. 10 days following 10% acquisition or tender offer for 10% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard MBIA Inc. 10 days following 10% acquisition or tender offer for 10% $.01 prior to 10% acquisition in or in case of fair offer. Standard Standard MCN Corp. 10 days following 20% acquisition or 10 business days following 20% tender offer. $0.01 prior to 20% beneficial ownership. Standard Standard; also triggered by 20% beneficial ownership. MDT Corp 10 business days following 20% acquisition or 20% tender offer. $0.01 prior to 10 days following the Stock Acquisition Date. Standard Standard MGI Properties 10 days following 15% acquisition or tender offer for 30%. $0.03 prior to the 10th day following 15% acquisition and may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 30% beneficial ownership. Acquiror's Rights become void. MTEL 10 days following 20% acquisition or tender offer. $0.01 prior to 20% acquisition. Standard Standard; alto triggered by 20% beneficial ownership or by 1% event. STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER- UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/ EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKET TION The MacNeal- Schwendler Corporation 09/14/88 CA 1/2 share of Common Stock 10.38 50 4.82 10 Management Science America, Inc. 08/17/88 GA 1 share of Common Stock 9.00 30 3.33 5 Manufacturers Hanover Corporation 10/18/88 DE 1/100th share of Series R Preferred Stock 27.88 120 4.30 10 Manufactures National Corp 01/18/91 DE 1/100th share of Preferred Stock 45.13 80 1.77 6 Marietta Corporation 09/12/89 NY 1/100th shares of Series A Participating Preferred Stock 22.00 110 5.00 10 Marion Laboratories, Inc. 08/04/88 DE 1/1000th share of Series A Junior Participating Preferred Stock 19.88 100 5.03 10 Marquest Medical Products Inc. 08/08/91 CO 1/2 share of Common Stock 12.00 25 2.08 10 Marriott Corporation 02/03/89 DE 1/1000th share of Series A Junior Participating Preferred Stock 33.00 150 4.55 10 Marsh & McLennan Companies, Inc.02/19/91 DE NA 76.63 NA NA NA Marsh Supermarkets, Inc. 08/01/89 IN 1/100th share of Series A Junior Participating Preferred Stock 19.13 65 3.40 10 Matlack Systems, Inc. 06/14/89 DE 1 share of Common Stock 8.5 60 7.06 10 Mattel Inc. 02/07/92 DE 1/100th share of Preferred Stock 22.00 150 6.82 10 Mattel Inc. 02/07/92 DE 1/100th share of Preferred Stock 33.00 150 4.55 10 Maxtor Corporation 01/27/88 DE 1 share of Common Stock 11.88 50 4.21 10 Maxwell Laboratories, Inc. 06/20/89 DE 1/2 share Common Stock 16.75 32.50 1.94 10 Maxxam Inc. 11/30/89 DE 1 share of class A Preferred Stock (Series A Right); 1/100th share of Class B Junior Participating Preferred Stock (Series B Right) 45.50 165 3.63 10 McDonald's Corporation 12/14/88 DE 1/100 share of Series A Junior Participating Preferred Stock 47.38 250 5.28 10 McDonnell Douglas Corp. 8/02/90 MD 1/100th share of Preferred Stock 44.00 200 4.55 10 McGill Manufacturing Co. 10/23/89 IN 1 share of Common Stock 73.13 220 3.01 10 MedChem Products Inc. 9/24/90 MA 1/100th share of Preferred Stock 4.63 25 5.40 10 Medical Care International 07/25/91 DE 1/100th share of Preferred Stock 58.75 200 3.40 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS The MacNeal- Schwendler Corporation 15 days following 20% acquisition or tender offer. $0.05 prior to 16 days following 20% acquisition. At 15 days following acquisition, can buy whole share of Series A at $1.00. At 15 days following 20% acquisition, can buy whole share of Series A at $1.00. Management Science America, Inc. 10 business days following 25% acquisition; 10 business days following tender offer for 25%; or in the case of a person beneficially owning 25% or more as of the date of the Rights Agreement, 10 business days following an additional 1% or more purchase by that person. $0.01 on or prior to the 10th day following the Shares Acquisition Date, and may be reinstated in Acquiror reduces beneficial ownership to 10% or less. Standard; Acquiror's Rights become void. Standard; also triggered by 30% beneficial ownership. Acquiror's Rights become void. Manufacturers Hanover Corporation 10 days following 15% acquisition; a date fixed by the Board (not more than 19 days) following a tender offer for 30%. $0.01 prior to the 10th day following 15% acquisition. Standard Standard; also triggered by 15% beneficial ownership. Acquiror's Rights become void. Manufactures National Corp 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date. Standard Standard Marietta Corporation 10 days following 20% acquisition, tender offer for 30% or declaration of an "Adverse Person". $0.01 prior to 10th day following 20% acquisition. Standard Standard; also triggered by 30% beneficial ownership. Marion Laboratories, Inc. 10th business day following 20% acquisition or 10th business day following tender offer for 20%. $0.01 prior to 10 business days following the Stock Acquisition Date and may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard; Acquiror's Rights become void. Standard; also triggered by 30% beneficial ownership or 1% event. Acquiror's rights become void. Marquest Medical Products Inc. 10th day following 15% acquisition or 15% tender offer. $0.01 prior to 10th day following 15% acquisition. Standard Standard Marriott Corporation 10 days following 20% acquisition or 10 business days following 30% tender offer $0.01 prior to 10 days following 20% acquisition. Standard Standard; also triggered by 30% beneficial ownership. Marsh & McLennan Companies, Inc. 10 days following 15% acquisition or tender offer for 15%. NA NA NA Marsh Supermarkets, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to tenth day following 20%. Standard Standard; also triggered by 20% beneficial ownership. Matlack Systems, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 10th day following acquisition. Standard Standard; also triggered by 20% beneficial ownership. Mattel Inc. 10 days following 20% acquisition or tender offer for 20% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard Mattel Inc. 10 days following 20% acquisition or tender offer for 20% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard Maxtor Corporation 10 days following 20% acquisition or tender offer for 25%. $0.01 prior to 10 days following the Stock Acquisition Date. Standard Standard; also triggered by 25% beneficial ownership. Maxwell Laboratories, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 10th day following acquisition. Standard Standard; also triggered by 20% beneficial ownership or 1% event. Maxxam Inc. 10 days following 15% acquisition or 10 business days following 15% tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 15% beneficial ownership except pursuant to Permitted Offer or by 1% event. McDonald's Corporation 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 1% event. Acquiror's Rights become void. McDonnell Douglas Corp. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date Standard Standard McGill Manufacturing Co. 15% acquisition or 10 days following 15% tender offer. $0.01 prior to Stock Acquisition Date. Standard other than in the case of Permitted Offer Standard; also triggered by 15% beneficial ownership. MedChem Products Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to Stock Acquisition Date. Can be reinstated if Beneficial Ownership falls below 10% Standard Standard Medical Care International 10 days following 15% Acquisition or tender offer for 15% $0.01 prior to 10% Stock Acquisition date can be registered if Beneficial ownership falls below 10% Standard Standard STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER- UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/ EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKET TION Medical Imaging Centers of America 10/02/91 CA 1/100th share of Preferred Stock 5.13 35 6.83 10 Melamine Chemicals Inc. 11/05/90 DE 1/100th share of Preferred Stock 6.50 30 4.62 1 Mellon Bank (4) 08/15/89 PA 1/100 share of Participating Preferred Stock 35.75 200 5.59 10 Mercantile Bancorporation Inc. 05/23/88 MO 1/100 share of Series A Junior Participating Preferred Stock 25.38 100 3.94 10 Mercer International Inc. 08/18/93 WA 1/100th share of Preferred Stock 11 75 6.82 10 Merchants National Corporation 06/21/88 IN 1/100th share of Series A Junior Preferred Stock 24.88 90 3.62 10 Meridian Bancorp, Inc. 07/25/89 PA 1/100th share of Series C Junior Participating Preferred Stock 23.875 85 3.56 5 Merry-Go- Round- Enterprises 09/20/91 MD 1/100th Share of Preferred Stock 14.63 56 3.83 10 MI National Corporation 04/19/88 MI 1/100th share of Series B Junior Participating Preferred Stock 46 170 3.70 10 Microage (4) 02/23/89 DE 2/3 share of Common Stock 6.75 30 4.44 10 Micropolis Corporation 05/18/89 DE 1 share of Common Stock 6.375 40 6.27 10 Midlantic Corp. 02/23/90 NJ 1/100th Share of Series B Junior Participating Preferred Stock without par value. 21.25 125 5.88 10 Milestone Properties Inc.03/31/93 DE 1/100th Share of Preferred Stock 4.75 15 3.2 10 Millipore Corporation 04/15/88 MA 1 share of Common Stock 38 160 4.21 10 Milton Roy Company 04/28/89 PA 1/1000th share of Preferred Stock 13.25 55 4.15 10 Minerals Technologies Inc. 10/16/92 DE 1/100th Share of Preferred Stock NA 65 N/A 10 Minnetonka Corporation 02/25/88 DE 1/100th share of Series A Junior Participating Preferred Stock 12.00 40 3.33 10 Mission Resource Partners L.P. 12/31/89 DE 1 unit of limited partner interests 12.75 40 3.14 10 Molecular Genetics, Inc. 01/19/88 MN 1/2 share of Common Stock 4.13 12 2.91 10 Monsanto Company 10/26/90 DE 1/100th share of Series A Junior Participating Preferred Stock. 106.00 450 4.25 10 Moore Corporation Ltd. 01/18/90 ON 1 share of Common Stock NA 120(Cdn.) NA 10 Moore Medical Corp. 03/09/89 DE 1/100th share of Series I Junior Participating Preferred Stock 12.88 75 5.82 10 Morgan Products Group 03/15/89 DE 1 share of Common Stock 15.00 70 4.67 10 Morton International, Inc. 01/26/89 DE 1/100th share of Series A Junior Participating Preferred Stock 39.75 175 4.40 10 Motorola, Inc. 11/09/88 DE 1/1000th share of Series A Junior Participating Preferred Stock. 39.25 100 2.55 10 Multimedia, Inc. 09/06/89 SC 1 share of Common Stock 105.00 400 3.81 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS Medical Imaging Centers of America 10 days following 20% acquisition or tender offer for 30% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard Melamine Chemicals Inc. 10 days following 10% acquisition or tender offer for 10%. $0.01 prior to Stock Acquisition Date Standard Standard Mellon Bank (4) 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date. Standard Standard Mercantile Bancorporation Inc. 10 days following 20% acquisition or tender offer. $0.01 prior to time there is an Acquiring Person. Standard Standard Mercer International Inc. 10 business days following 25% acquisition. $0.01 prior to acquisition. Standard Standard; triggered by 25% beneficial ownership. Merchants National Corporation 10 days following 20% acquisition or 10 business days following tender offer for 30%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership; Acquiror's Rights become void. Meridian Bancorp, Inc. 10 days following 19.9% acquisition, tender offer for 19.9%, or declaration of an "Adverse Person." $0.001 prior to 10th day following acquisition. Standard Standard; also triggered by 1% event. Merry-Go- Round- Enterprises 10 days following 15% acquisition or tender offer for 15% $0.01 prior to Stock Acquisiton Date Standard Standard MI National Corporation 10 days following 20% acquisition or tender offer for 30%. $0.05 prior to 20% acquisition. Standard; except rights flip-over to acquire number of shares equivalent to exercise price for the market price. Standard; except rights flip-in to acquire number of shares equivalent to exercise price for the market price. Microage (4) 10 days following 15% acquisition or tender offer. $0.01 prior to Stock Acquisition Date or following Expiration of Flip-in right if Acquiror owns less than 15%. Standard Standard; also triggered by 15% beneficial ownership except in case of Permitted Offer. Micropolis Corporation 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 10th day following 20% acquisition. Standard Standard; Acquiror's rights become void. Midlantic Corp. 10 business days following 15% acquisition or 15% tender offer. $0.01 prior to 10th day following stock Acquisition Date. Standard Standard; also triggered by 15% beneficial ownership. Milestone Properties Inc. 10 days following 20% acquisition. $0.001 prior to 20% acquisition. Standard Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. Millipore Corporation 10 business days following 20% acquisition or a tender offer for 30%. $0.01 prior to the Expiration Date by a 2/3 vote of the Continuing Directors. Standard Standard; Acquiror's rights become void. Milton Roy Company 10 days following 15% acquisition or 20% tender offer. $0.01 prior to the Flip-in date (Flip- in rights); $0.01 prior to 10th day following Stock Acquisition Date (Flip-over). May be redeemed if Acquiror reduces ownership to 3%. Standard Standard; also triggered by 20% beneficial ownership. Minerals Technologies Inc. 10 days following 15% acquisition or tender offer for 30%. $0.01 prior to acquisition. Standard Standard; also triggered by beneficial ownership of 15%; Acquiror's Rights become void. Minnetonka Corporation 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 25% beneficial ownership. Mission Resource Partners L.P. 10 days following 20% acquisition or tender offer. $0.001 per Right prior to 10th day following Units Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership. Molecular Genetics, Inc. 15 days following 20% acquisition or tender offer for 30%. $0.01 prior to the 10th day following 20% acquisition; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 30% beneficial ownership. Monsanto Company 10 days following 20% acquisition or 10 business days following 20% tender offer. $0.01 prior to stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership. Moore Corporation Ltd. 10 business days following 15% acquisition or tender offer or termination/ rejection of Permitted Bid. $0.01 prior to flip- in or flip-over event or following 90% acquisition by Permitted Bid. Standard Standard; also triggered by 15% beneficial ownership other than by Permitted Bid. Moore Medical Corp. 10 days following 15% acquisition or tender offer that would result in 30% ownership. NA Standard Standard; Acquiror's Rights become void. Morgan Products Group 10 days following the acquisition of 20% or 10 days following tender offer that would result in 25% ownership. $0.01 prior to 10 days following 20% acquisition. Standard Standard; Acquiror's Rights become void. Morton International, Inc. 10 days following 20% acquisition or 10 business days following 20% tender offer. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 30% beneficial ownership or 1% event. Motorola, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.05 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Acquiror's Rights become void. Multimedia, Inc. 10 days following 15% acquisition or tender offer. $0.01 prior to acquisition. Standard Standard. STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER-UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKETTION Murphy Oil Corp. 12/07/89 DE 1/100th Share of Participating Preferred Stock. 40.88 130 3.18 10 NAC Re Corp. 06/09/88 DE 1/100th share of Series A Junior Participating Preferred Stock 24.25 85 3.37 10 NBB Bancorp, Inc. 11/14/89 DE 1/100th share of Series A Junior Participating Cumulative Preferred Stock 15.75 60 3.81 10 NBI, Inc. 01/19/89 DE 1/100th of a share of Junior Participating Preferred Stock 1.63 9 5.52 10 NIPSCO Industries Inc. 02/27/90 IN 1/100th share of Series A Junior Participating Preferred Shares w/out par value. 17.63 60 3.40 10 NS Group Inc. 7/30/90 KY NA 10.13 NA NA NA NWA Inc. 03/27/89 DE 1/100th share of Participating Cumulative Preferred Stock 60.00 225 3.75 10 NYNEX Corp. 10/19/89 DE 1/100th share of Junior Participating Preferred Stock 79.50 250 3.14 10 Nantucket Industries, Inc. 09/06/88 DE 1/100th share of Series A Junior Participating Preferred Stock and a secured note 8.38 25 2.98 10 National Community Banks, Inc. 12/19/90 NJ 1/100th share of Preferred Stock 16.25 100 6.15 10 National Data Corp. 1/18/91 DE 1/100th share of Preferred Stock 11.00 45 4.09 10 National Media 01/03/94 DE 1/100th of Preferred 6.38 40.00 6.27 10 National Penn Bancshares, Inc. 08/23/89 PA 1/100th share of Series A Junior Participating Preferred Stock 42.88 145 3.38 10 National Realty, L.P. 05/26/89 DE 1 share Common Stock 8.125 40 4.92 10 National Savings Bank of Albany 01/02/90 NY 1/100th share of Junior Participating Preferred Stock. 28.00 75 2.68 10 Nellcor Inc. 06/11/91 DE 1/1000th Share of Preferred Stock 19.75 90 4.56 10 Nelson Holdings 09/19/89 VAN 1 share of Common Stock NA 100 (Cdn.) NA 10 Neutrogena Corp. 7/23/90 DE 1/100th share of Preferred Stock 20.75 80 3.86 10 Nevada Power Company 10/19/90 NV 1/100th share of Preferred Stock 21.88 10 0.46 10 New England Critical Care, Inc. 01/15/88 DE 1 share of Common Stock 17.50 85 4.86 10 New Hampshire Savings Bank Corp. 08/15/89 NH 1 share of Common Stock 6.50 35 5.38 10 Newmont Mining Corp. 8/30/90 DE 1/500th share of Preferred Stock 44.50 150 3.37 10 Nordson Corporation 08/26/88 OH 1 share of Common Stock 40.75 200 4.91 09/09/88 Norstan, Inc. 05/18/88 MN 1 share of Common Stock 6.75 25 3.70 10 North American Mortgage Company 10/19/92 DE 1/100th share of Preferred Stock 14.375 70.00 4.87 10 North Fork Bancorpora- tion (4) 02/28/89 DE 1/100th share of Junior Participating Preferred Stock 18.25 70 3.84 10 Northeast Bancorp Inc. 8/29/90 CT 1/2 share of Common Stock 12.13 40 3.30 10 Northern Trust Corp. 10/17/89 DE 1/100th share of Series A Junior Participating Preferred Stock 64.75 250 3.86 10 Northrop Corporation 09/21/88 DE 1 share of Common Stock 30.63 105 3.43 10 North-West Telecommuni- cations 12/01/89 NV 1/100th share of Series B Cumulative Preferred Stock 40.88 80 1.96 10 Northwest Illinois Bancorp Inc. 12/12/90 DE 1/100th share of Preferred Stock NA 50 NA 10 Northwestern National Life Insurance Company 01/14/88 MN 1/10th share of Series A Junior Participating Preferred Stock 25.38 100 3.94 10 Norton Company 02/09/89 MA 1/100th share of Series A Participating Cumulative Preferred Stock 49.75 120 2.41 10 Norwich Financial Corp. 11/21/89 DE 1/100th share of Series A Preferred Stock 9.00 45 5.00 10 Novell Inc. 12/07/88 DE 1/300th share Junior Participating Preferred Stock 31.50 150 4.76 10 Novo Corporation 03/09/88 NY 1/100th share of Series A Junior Participating Preference Shares 1.38 8.50 6.16 10 Nowsco Well Service Ltd. 01/04/90 AB 1 share Common Stock NA 65 (Cdn) NA 10 Nu-kote Holding 05/18/94 DE 1 Share of Common 16.25 75.00 4.62 10 Numac Oil and Gas Ltd. 07/28/89 AB 1 share Common Stock 8.375 25.33 3.02 10 Numerica Financial Corporation 12/29/88 NH 1 share of Common Stock 9.13 40 4.38 10 ONBAN Corp. Inc. 09/25/89 DE 1/100th share of Junior Participating Preferred Stock 12.38 50 4.04 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS Murphy Oil Corp. 10 days following 15% acquisition. $0.01 prior to 10 days following Stock Acquisition Date. Standard Standard; also triggered by 15% beneficial ownership. NAC Re Corp. 10 days following 20% acquisition or tender offer for 30%. $0.05 prior to 10th day following 20% acquisition. Standard Standard; also triggered by beneficial ownership of 30%; Acquiror's Rights become void. NBB Bancorp, Inc. 10 days following 20% acquisition, 10 business days following tender offer for 20%, or following "Adverse Person" declaration and 10% acquisition. $0.02 prior to "Adverse Person" declaration, to 10th day following Stock Acquisition Date, or 10th day following Merger Right event. Standard Standard; also triggered by 20% beneficial ownership or "Adverse Person" declaration. NBI, Inc. 10 business days following 20% acquisition or 10 business days following tender offer of 20%. $0.01 prior to Stock Acquisition Date. Standard Standard; also triggered by 20% ownership. Acquiror's Rights become void. NIPSCO Industries Inc. 10 business days following 20% acquisition or 25% tender offer. $0.01 prior to 10th day following share Acquisition Date. Standard Standard; also triggered by 25% beneficial ownership. NS Group Inc. NA NA NA NA NWA Inc. 10 days following 15% acquisition or 10 business days following 15% tender offer. $0.01 prior to Stock Acquisition Date. Prohibits newly-elected board from redeeming for 180 days after election if in doing would facilitate change in control unless bidder had given incumbent board 45 days notice of proposed insurgent slate. Standard Standard; also triggered by 15% beneficial ownership. NYNEX Corp. 10 days following 15% acquisition or 10 business days following 15% tender offer. $0.01 prior to Stock Acquisition Date. Standard Standard; also triggered by 15% beneficial ownership. Nantucket Industries, Inc. 20 days following a 20% acquisition or 20 business days following a tender offer for 15%. $0.05 prior to 10 business days following the Shares Acquisition Date and may be reinstated if no triggering event has occurred and the Acquiror reduces beneficial ownership to 10% or less. Standard; Acquiror's Rights become void. Standard; also triggered by 15% beneficial ownership or a 1% event. Acquiror's Rights become void. National Community Banks, Inc. 10 days following 10.5% acquisition or tender offer for 10.5%. $0.01 prior to Stock Acquisition Date or 10.5% Acquisition. Standard Standard National Data Corp. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date Standard Standard National Media 10 days following 15% acquisition $0.001 prior to acquisition Standard Standard; also triggered by 15% beneficial ownership National Penn Bancshares, Inc. 10 business days following 19.9% acquisition or tender offer for 19.9%. $0.001 prior to 10th day following acquisition. Standard Standard; also triggered by 15% beneficial ownership. National Realty, L.P. 10 days following 30% acquisition, tender offer for 30%, or declaration of an "Adverse Person." $0.01 prior to acquisition or declaration of an "Adverse Person." Standard Standard National Savings Bank of Albany 20 business days following 20% acquisition or tender offer. $0.01 prior to Stock Acquisition Date. Includes shareholder referendum provision. Standard Standard; also triggered by 20% beneficial ownership. Nellcor Inc. 10 days following 15% acquisiton or tender offer for 15% $0.001 prior to 15% Stock Acquisiton Date Standard Standard Nelson Holdings 10 business days following 20% acquisition or tender offer. $0.01 (Cdn.) up to 10th day following Stock Acquisition Date. Standard, except in case of Qualified Offer Standard; also triggered by 20% beneficial ownership except in case of Qualified Offer. Neutrogena Corp. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date can be reinstated if Beneficial Ownership falls below 15%. Standard Standard Nevada Power Company 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date Standard Standard New England Critical Care, Inc. 10 days following 20% acquisition or tender offer. $0.01 prior to 20% acquisition. Standard Standard New Hamp- shire Savings Bank Corp. 10 days following 20% acquisition or tender offer. $0.01 prior to 10th day following acquisition. Standard Standard Newmont Mining Corp. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date Standard Standard Nordson Corpora- tion 20 days following: (1) 20% acquisition, (2) Board declaration of an "Adverse Person" or (3) Tender offer for 20% $0.01 prior to any "Flip-in" or " Flip-over" event. Standard Standard; also triggered by 25% beneficial ownership, Board declaration of an "Adverse Person," a 1% event, or a person or group making or attempting to make a "Control Share Acquisition" without complying with the Ohio Control Share Acquisition law. Norstan, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 10 days following the Stock Acquisition date. Standard Standard; also triggered by 40% beneficial ownership. North American Mortgage Company 10 days following 10% acquisition or tender offer for 10% $0.01 prior to 10% acquisition in or in case of fair offer. Standard Standard North Fork Bancorpor- ation (4) 10 days following 20% acquisition or "Adverse Person" declaration or 10 business days following 25% tender Offer. $0.01 prior to tenth day following Stock Acquisition Date. Standard Standard; also triggered by 20% acquisition or "Adverse Person" declaration. Northeast Bancorp Inc. 10 days following 10% acquisition or tender offer for 10%. $0.01 prior to Stock Acquisition Date Standard Standard Northern Trust Corp. 20 days following 15% acquisition or 25% tender offer. $0.01 prior to 20th day following Stock Acquisition Date; may be reinstated if Acquiror reduces ownership to 10%. Standard Standard; triggered by 25% beneficial ownership. Northrop Corpor- ation 10 business days following 20% acquisition or 10 business days following tender offer for 30%. $0.02 prior to 10 business days following the Stock Acquisition Date. Standard Standard; also triggered by 25% beneficial ownership or a 1% event. Acquiror's Rights become void. North-West Telecom- munica- tions 10 days following 18% acquisition or tender offer (for Class A or B Stock) $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 18% beneficial ownership or by 1% event. Northwest Illinois Bancorp Inc. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date Standard Standard North- western National Life Insurance Company 15 days following 20% acquisition or tender offer for 30%. $0.01 prior to 30 days following 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Norton Company 10% acquisition or tender offer for 30%. $0.05 prior to the 10th day following 10% acquisition. Standard Standard; also triggered by 10% beneficial ownership. Norwich Financial Corp. 10 days following 20% acquisition, 10% acquisition and "Adverse Person" declaration or 20% tender offer. $0.01 prior to 14th day following Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership; Acquiror's Rights become void. Novell Inc. 10 days following 20% acquisition or up to 65 days following 30% tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; triggered by 25% acquisition or by 1% event. Novo Corpora- tion 10 days following 20% acquisition or tender offer for 30%. $0.02 prior to 10 days following 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Nowsco Well Service Ltd. 10 days following 15% acquisition or 15% tender offer. $0.01 prior to flip-in event. Standard Standard; also triggered by 15% beneficial ownership. Nu-kote Holding 10 days following 15% acquisition $0.01 prior to acquisition Standard Standard; also triggered by 15% beneficial ownership Numac Oil and Gas Ltd. 10 days following 10% acquisition or tender offer. NA Standard Standard; also triggered by 10% beneficial ownership. Numerica Financial Corpora- tion 20 days following 20% acquisition or tender offer for 30%. $0.01 prior to the 20th day following 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership or 1% event. Acquiror's Rights become void. ONBAN Corp. Inc. 10 days following 20% acquisition or 10 business days following tender offer for 25%. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership. STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER-UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKETTION ONEOK, Inc. 03/17/88 DE 1/100th share of Series A Participating Preference Stock 11.63 50 4.30 10 Oakite Products, Inc. 04/29/88 NY 1 share of Common Stock 37.88 90 2.38 10 Oakwood Homes Corp. 08/23/91 NC 1/200th share of Preferred Stock 13.75 60 4.36 10 Oceaneering International Inc. 11/20/92 DE 1/100th Share of Preferred Stock 14.25 60 4.2 10 Octel Communications Corp. 7/25/90 DE 1 share of Common Stock 19.63 80 4.08 10 Offshore Pipelines Inc. 01/28/93 DE 1/200th Share of Preferred Stock 12.875 55 4.3 10 Ogden 9/20/90 DE 1/100th share of Preferred Stock 18.63 80 4.29 10 The Ogilvy Group, Inc. 01/19/89 DE 1 share of Common Stock 30.75 115 3.74 10 Ohio Casualty Corp. 12/15/89 OH 1 share of Common Stock 49.75 150 3.02 10 Ohio Edison Company 10/16/90 OH 1 share of Common Stock 16.63 35 2.10 10 Oklahoma Gas & Electric Co. 12/11/90 OK 1/100th share of Preferred Stock 39.38 95 2.41 10 Old Kent Financial Corporation 12/19/88 MI 1/100th share of Series B Preferred Stock 23.63 80 3.39 10 Old National Bancorp. 01/25/90 IN 1/100th share of Series A Preferred Stock NA 60 NA 10 The One Bancorp 05/16/88 ME 1/100th share of Series A Junior Participating Preferred Stock 13.63 90 6.61 10 Oneida 12/13/89 NY 1/1000th share of Series A Preferred Stock 14.63 45 3.08 10 On-Line Software Int'l Inc. 8/13/90 DE 1/100th share of Preferred Stock 6.63 40 6.03 10 Oracle Systems Corp. 12/03/90 DE 1/1000th share of Preferred Stock 8.50 60 7.06 10 Orion Capital Corporation 03/15/89 DE 1/100th share of Series A Junior Participating Preferred Stock 20.88 80 3.83 10 Orion Research Incorporated 04/06/88 1 share of Common Stock 7.25 33.50 4.62 10 Oryx Energy Co. 9/14/90 DE 1/1000th share of Preferred Stock 52.75 150 2.84 10 Owens & Minor, Inc 06/22/88 VA 1/100th share of Series A Participating Cumulative Preferred Stock 13.50 75 5.56 10 PACCAR, Inc. 12/21/89 DE 1/1000th share of Participating Preferred Stock 42.00 150 3.57 10 P&F Industries, Inc. 06/16/89 DE 1/100th share of Series A Participating Preferred Stock 3.188 50 15.6810 PHH Corporation 01/17/89 MD 1/100th share of Series A Junior Participating Preferred Stock 33.38 120 3.54 10 PHP Healthcare Corp. 04/10/92 DE 1/1000th share of Preferred Stock 17.25 85.00 4.93 10 PLM Inter- national 03/23/89 DE 1 share of Common Stock 9.38 30 3.20 10 PSI Resources Inc. 12/11/92 DE 1/1000th Share of Preferred Stock 18.5 55 3.0 10 Pace Membership Warehouse 02/23/88 CO 1 share of Common Stock 5.75 30 5.22 10 Pacific Enterprises 03/07/89 CA 1 share of Common Stock 41.50 150 3.61 10 Pacific Scientific Company 11/08/88 CA 1/100th share of Series A Junior Participating Preferred Stock 11.25 45 4.00 10 Pacific Telesis Group 09/22/89 NV 1/100th share of Series A Participating Preferred Stock 45.63 150 3.29 10 Pall Corporation 11/17/89 NY 1 share of Common Stock 29.5 80.00 2.71 10 Pansophic Systems, Incorporated 04/18/88 IL 1 share of Common Stock 17.63 85 4.82 10 Par Pharmaceutical 01/08/90 NJ 1 share of Common Stock 6.25 25 4.00 10 Paradyne Corporation 08/03/88 DE 1/100th share of Series A Junior Participating Preferred Stock 5.75 25 4.35 10 Park Electro- chemical Corp. 02/02/89 NY 1/100th of a share of Series A Preferred Stock 15.38 60 3.90 10 Parker & Parsley Petroleum Co. 1/31/91 DE NA NA NA NA NA Patrick Petroleum Company 03/04/88 DE 1/100 share of Series A Preferred Stock 4.25 30 7.06 10 Paul Mueller Company 1/29/91 MI 1 share of Common Stock NA 125 NA 10 Payless Cashways, Inc. 05/13/88 IA 1/100th share of Series A participating Preferred Stock 19.25 70 3.64 10 Pegasus Gold, Inc. 12/02/88 BC 1/100th share of Class A Preferred Stock 13.50 55 4.07 10 Pennwalt Corporation 03/01/88 PA 1/100th share of Fourth Series Participating Preference Stock 53.75 225 4.19 10 Pennzoil Company 04/07/88 DE 1/100th share of Series A Participating Preferred Stock 76.25 225 2.95 5 Perini Corp. 09/23/88 MA 1/100th share of Series A Junior Participating Cumulative Preferred Stock NA 100 NA 10 Perkin-Elmer Corporation 04/21/89 NY 1/100th share of Participating Preferred Stock 24.75 90 3.64 10 Perpetual Financial Corporation 10/13/88 DE 1/100th share of Series B Participating Preferred Stock 8.63 39 4.52 10 Phelps Dodge Corporation 07/29/88 NY 1/100th share of Junior Participating Cumulative Preferred Stock 40.00 145 3.63 10 Philadelphia Suburban Corporation 02/19/88 PA 1/100th share of Series A Junior Participating Preferred Stock 16.50 70 4.24 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS ONEOK, Inc. 20% acquisition or 10 days following 20% tender offer. $0.01 prior to 20% acquisition, and thereafter under certain circumstances. Standard Standard; also triggered by 20% beneficial ownership. Oakite Products, Inc. 10 days following 15% acquisition or tender offer for 30%. $0.01 prior to 10 days following the Shares Acquisition Date. Standard Standard; also triggered by 30% beneficial ownership; Acquiror's Rights become void. Oakwood Homes Corp. 10 days following 20% acquisition or tender offer for 20% $0.01 prior to following the Shares Acquisiton Date Standard Standard Oceaneering International Inc. 10 days following 15% acquisition. $0.01 prior to 10% acquisition. Standard Standard; also triggered by beneficial ownership of 15%; Acquiror's Rights become void. Octel Communications Corp. 10 days following 21% acquisition or tender offer for 21%. $0.01 prior to Stock Acquisition Date Standard Standard Offshore Pipelines Inc. 10 days following 20% acquisition. $0.01 prior to acquisition. Standard Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. Ogden 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date Standard Standard The Ogilvy Group, Inc. 10 days following 20% acquisition or 10 business days following 20% tender offer $0.01 prior to 10 days following 20% acquisition. Standard Standard Ohio Casualty Corp. 10 days following 20% acquisition or tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership. Ohio Edison Company 10 days following 15% acquisition or tender offer for 25%. $0.001 prior to Stock Acquisition Date Standard Standard Oklahoma Gas & Electric Co. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date Standard Standard Old Kent Financial Corporation 10 days following 20% acquisition or 10 business days following tender offer for 25%. $0.01 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 25% beneficial ownership. Old National Bancorp. 10 days following 20% acquisition or 10 business days following 20% tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard The One Bancorp 10 business days following 20% acquisition or tender offer for 30% or Board determination of an "Adverse Person" with 10% acquisition. $0.03 prior to the 10th business day following the Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard; Acquiror's Rights become void. Standard; also triggered by beneficial ownership of 25%; Acquiror's Rights become void. Oneida 10 days following 20% acquisition or 10 business days following 30% tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership or by 1% event. On-Line Software Int'l Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date Standard Standard Oracle Systems Corp. 10 days following 20% acquisition or tender offer for 20%. $0.001 prior to Stock Acquisition Date Standard Standard Orion Capital Corporation 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to the 10th day following 20% acquisition. Standard Standard; Acquiror's Rights become void. Orion Research Incorporated 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to the 10th business day following 20% acquisition or tender offer for 20%. Standard; except triggered by a merger with a 30% beneficial owner. Standard; Acquiror's Rights become void. Oryx Energy Co. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date Standard Standard Owens & Minor, Inc 10 days following 20% acquisition or 10 business days following tender offer for 30%. $0.01 prior to 10 days following the Stock Acquisition Date. Standard Standard; also triggered by 30% beneficial ownership; Acquiror's Rights become void. PACCAR, Inc. 10 days following 10% acquisition or 10 business days following 10% tender offer. $0.01 prior to Stock Acquisition Date. Standard Standard; also triggered by 10% beneficial ownership. P&F Industries, Inc. 10 days following 20% acquisition or tender for 20%. $0.01 prior to 10th day following acquisition. Standard Standard PHH Corpora- tion 20 days following 20% acquisition or tender offer for 20%. $0.05 prior to 20% acquisition. Standard Standard PHP Healthcare Corp. 10 days following 15% acquisition or tender offer for 15% $.01 prior to 15% acquisition in or in case of fair offer. Standard Standard PLM Interna- tional 15 days following 36% acquisition or 20% tender offer or 20% acquisition and "Adverse Person" declaration. $0.01 prior to Stock Acquisition Date. Standard Standard; triggered by existence of Acquiring Person or "Adverse Person" declaration. PSI Resources Inc. 10 days following 20% acquisition. $0.01 prior to acquisition. Standard Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. Pace Membership Warehouse 10 days following 20% acquisition or tender offer. $0.01 prior to Stock Acquisition Date or following Stock Acquisition Date if Acquiror reduces ownership below 20%. Standard Standard; also triggered by 20% beneficial ownership. Pacific Enter- prises 10 business days following 20% acquisition or tender offer. $0.001 prior to 10 business days following Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership. Pacific Scientific Company 20 days following 25% acquisition or tender offer for 35%. $0.01 prior to the 20th day following 25% acquisition. Standard Standard Pacific Telesis Group 20% acquisition, declaration of an "Adverse Person," or 10 days following tender offer. $0.01 prior to acquisition or declaration of an "Adverse Person." Standard Standard; also triggered by 20% beneficial ownership. Pall Corpora- tion 10 days following 20% acquisition or tender offer for 20% $.0044 prior to 20% acquisition in or in case of fair offer. Standard Standard Pansophic Systems, Incorporat- ed 10 days following 20% acquisition or tender offer for 30%. $0.03 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 33 % beneficial ownership; Acquiror's Rights become void. Par Pharma- ceutical 10 days following 15% acquisition or 10 business days following 15% tender offer. $0.01 prior to 10th day following Stock Acquisition Date; may be reinstated if Acquiror reduces ownership to 10%. Standard Standard; triggered by 25% beneficial ownership or by 1% event. Paradyne Corpora- tion 10 business days following 20% acquisition; 10 business days following tender offer for 25%; or 10 business days after a 15% beneficial ownership by an "Adverse Person." $0.01 prior to 10 business days following the Stock Acquisition Date and may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard; Acquiror's Rights become void. Standard; also triggered by 25% beneficial ownership or an "Adverse Person." Acquiror's Rights become void. Park Electro- chemical Corp. 20 days following the earlier of the acquisition of 30% or the tender offer for 20% or more. $0.01 prior to the Distribution Date or $0.03 on or within 10 days subsequent to the Distribution Date. Standard Standard; Acquiror's Rights become void. Parker & Parsley Petroleum Co. NA NA NA NA Patrick Petroleum Company 10 days following 20% acquisition or tender offer for 30%. $0.02 prior to 20% acquisition. Standard Standard Paul Mueller Company 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date can be reinstated if Beneficial Ownership falls below 20% Standard Standard Payless Cashways, Inc. 20% acquisition or 10 days following tender offer for 20%. $0.01 prior to person becoming Acquiring Person. Standard Standard Pegasus Gold, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to the 10th day following 20% acquisition. Standard Standard; Acquiror's Rights become void. Pennwalt Corpora- tion 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 30% beneficial ownership. May, though, only redeem after 20% acquisition if a majority of the Board is Disinterested. None Standard; also triggered by 30% beneficial ownership. Pennzoil Company 10 days following 20% acquisition or 10 business days following a tender offer for 30%. $0.05 prior to 15 days following the Stock Acquisition Date. Standard Standard; also triggered by 30% beneficial ownership; Acquiror's Rights become void. Perini Corp. 10 days following 20% acquisition, 20% tender offer or 10% "Adverse Person." $0.02 prior to declaration of "Adverse Person" or 10 days following "Stock Acquisition Date." Standard Standard; also triggered by 20% beneficial ownership or 10% "Adverse Person." Perkin- Elmer Corpora- tion 10 days following 20% acquisition; the first date of public announcement that an acquiring person has become such. $0.01 prior to acquisition. Standard Standard; Acquiror's Rights become void. Perpetual Financial Corpora- tion 20% acquisition or 10 days following tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership; Acquiror's Rights become void. Phelps Dodge Corpora- tion 10 business days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to 10 business days following the Stock Acquisition Time and may be reinstated if the Acquiror reduces beneficial ownership to 5% or less. Standard Standard; also triggered by 20% beneficial ownership or 1% event. Phila- delphia Suburban Corpora- tion 10 days following 25% acquisition or not later than 65 days following tender offer for 30%. $0.02 prior to 10 days following the Stock Acquisition Date. Standard; also provision to surrender Rights for 1/2 the value otherwise purchasable. Standard; also triggered by 25% beneficial ownership. Provision to surrender Rights for 1/2 the value otherwise purchasable. STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER-UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKETTION Phillips Petroleum Company 07/10/89 DE 1/100th share Series B Junior Participa- ting Preferred Stock 23 75 3.26 10 Pic 'N' Save Corporation 03/16/88 DE 1/100th share of Series A Junior Participating Preferred Stock 15.38 80 5.20 10 Picturetel Corp. 03/25/92 DE 1/100th share of Preferred Stock 44.75 60.00 1.34 6 Piedmont Federal Corp. 7/23/90 DE 1/100th share of Preferred Stock NA 24 NA 10 Pinkerton's Inc. 07/12/91 DE 1/100th Share of Preferred Stock 28.75 90 3.13 10 Pinnacle West Capital (4) 03/27/89 AZ 1/100th share of Series A Participa- ting Preferred Stock 13.75 60 4.36 10 Pioneer Financial Services Inc. 11/30/90 DE 1 share of Preferred Stock 5.50 45 0.91 10 Pioneer Hi-Bred International, Inc. 04/07/89 IA 1 share of Common Stock 37.25 100 2.68 10 Pioneer- Standard Electronics, Inc. 04/25/89 OH 1 share Common Stock 9.375 40 4.27 10 Placer Dome 01/05/90 CAN 1 share of Common Stock NA 90 (Cdn.) NA 10 Plains Petroleum Corporation 05/12/88 DE 1/100th share of Series A Junior Participating Preferred Stock 24.75 100 4.04 10 Platinum Software 03/09/94 DE 1/100th of Preferred 11.50 70.00 6.09 10 Pneumatic Scale 07/27/89 MA 1/2 share Common Stock 29.50 30 1.02 10 PolyMedica Industries Inc. 03/13/92 MA 1/100th share of Preferred Stock 12.25 90.00 7.35 10 Pool Energy Services 06/07/94 TX 1/3 Share of Common 8.88 9.00 1.01 10 Porta Systems 03/22/89 DE 1/100th share of Junior Participating Preferred Stock 12.00 35 2.92 10 Postal Instant Press, Inc. 02/18/88 DE 1 share of Common Stock 15.75 NA NA The earlier Pratt & Lambert, Inc. 02/01/89 NY 1 share of Common Stock 15.13 50 3.30 10 Precision Castparts Corp. 11/01/88 OR 1/100th share of Series A No Par Serial Preferred Stock 33.50 135 4.03 10 Preferred Entertain- ment 05/30/94 DE 1 Share of Common 22.75 120.00 5.27 10 Premark International Inc. 03/07/89 DE 1 share of Common Stock 32.63 125 3.83 10 Premier Bancorp, Inc. 01/19/89 LA 1 share of Common Stock 4.75 20 4.21 10 Preston Corporation 02/09/89 MD 1/100th of a share of Series A Participating Preferred Stock 16.00 50 3.13 10 Primark Corporation 01/12/88 MI 1 share of Common Stock 18.88 66 (1) 3.50 10 Prime Computer, Inc. 10/03/88 DE 1 share of Common Stock 14.88 65 4.37 10 Progress Financial Corp. 04/25/90 DE 1/100th share of Series A Junior Participating Preferred Stock 7.25 40 5.52 10 Proler International Corp., Inc. 10/14/88 DE 1/100th share of Series A Junior Participating Preferred Stock 62.50 200 3.20 10 Property Capital Trust 9/28/90 MA 1 share of Common Stock 7.63 27 3.54 10 The Prospect Group, Inc. 12/12/88 DE 1/100th share of Series A Special Stock 9.75 30 3.08 10 Public Service Co. of CO 2/26/91 CO 1 share of Common Stock 22.75 55 2.42 10 Publicker Industries Inc. 08/09/88 PA 1/100th share of Class A Preferred Stock 2.00 7.50 3.75 10 Puget Sound Bancorp 12/20/88 WA 1/100th share of Series A Junior Participating Preferred Stock 19.25 65 3.38 10 Puget Sound Power & Light Co. 1/15/91 WA 1/1000th share of Preferred Stock 20.50 45 2.20 10 Puritan-Bennett Corporation 05/03/89 DE 1/2 share of Common Stock 22.25 45 2.02 10 Purolator Products Co. 12/01/92 DE 1/100th share of Preferred Stock NA 42 NA 10 QED Exploration, Inc. 08/21/89 CO 1 share of Common Stock 2.00 4 2.00 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS Phillips Petroleum Company 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Pic 'N' Save Corporation 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 20% acquisition, and thereafter under certain circumstances. Standard Standard Picturetel Corp. 10 days following 15% acquisition or tender offer for 15% $0.01 prior to 15% acquisition in or in case of fair offer. Standard Standard Piedmont Federal Corp. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date Standard Standard Pinkerton's Inc. 10 days following 15% acquisition or tender offer for 20% $0.01 prior to Stock Acquisiton Date or in case of fair offer Standard Standard Pinnacle West Capital (4) 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to Stock Acquisition Date or in case of fair offer. Standard Standard; also triggered by 20% beneficial ownership except in case of fair offer, or by 1% event. Pioneer Financial Services Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date can be reinstated if Beneficial Ownership falls below 10%. Standard Standard Pioneer Hi-Bred International, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Pioneer- Standard Electronics, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to acquisition. Standard Standard; Acquiror's Rights become void. Placer Dome 10 days following 15% acquisition or tender offer. $0.001 prior to flip-in event or within four months following Permitted Bid if Acquiror acquires 90%. Standard Standard; also triggered by 15% beneficial ownership except in case of Permitted Bid. Plains Petroleum Corporation 10 business days following 20% acquisition or tender offer for 30%. $0.01 prior to the 10th business day following the Stock Acquisition Date. Standard Standard; also triggered by beneficial ownership of 30%; Acquiror's Rights become void. Platinum Software 10 days following 20% acquisition $0.01 prior to acquisition Standard Standard; also triggered by 20% beneficial ownership Pneumatic Scale 10 days following 20% acquisition or tender offer for 30%. $0.05 prior to 10th day following 20% acquisition. Standard Standard; also triggered by beneficial ownership of 30%. PolyMedica Industries Inc. 10 days following 15% acquisition or tender offer for 15% $.01 prior to 10% acquisition in or in case of fair offer. Standard Standard Pool Energy Services 10 days following 15% acquisition $0.01 prior to acquisition Standard Standard; also triggered by 15% beneficial ownership Porta Systems 10 business days following 30% acquisition or tender offer. $0.01 prior to 10th business day following Stock Acquisition Date. Standard Standard; also triggered by 30% beneficial ownership except in case of Permitted Offer. Postal Instant Press, Inc. 20% acquisition, or, in the case of an existing 20% holder at 2/18/88, acquisition of an additional 1%. $0.02 prior to the earlier of 08/18/88, 60 days after the Exercisability Date, or immediately prior to the consummation of any merger or consolidation. For each Right, may purchase 1 share of common Stock for $1. For each Right, may purchase 1 share of Common Stock for $1. Pratt & Lambert, Inc. 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to 10 days following the Stock Acquisition Date. Standard Standard; also triggered by 25% beneficial ownership. Acquiror's Rights become void. Precision Castparts Corp. 10 days following 20% acquisition, tender offer for 30%, or after a person is declared an "Adverse Person." $0.01 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 30% beneficial ownership. Preferred Entertain- ment 10 days following 25% acquisition $0.01 prior to acquisition Standard Standard; also triggered by 25% beneficial ownership Premark Inter- national Inc. 10 days following 20% acquisition or tender offer for 20%. 0.01 prior to 20% acquisition. Standard Standard; also triggered by 30% beneficial ownership of 1% event. Acquiror's Rights become void. Premier Bancorp, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership or 1% event. Acquiror's Rights become void. Preston Corporation 10 days following 20% acquisition or 10 business days following tender offer which results in 20% ownership. $0.01 prior to Shares Acquisition Date. Standard Standard; Acquiror's Rights become void. Primark Corporation 20% acquisition of voting shares or a tender offer for 30% of voting shares. $0.05 prior to 10th day following 20% acquisition and may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 20% beneficial ownership. Acquiror's Rights become void. Prime Computer, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.05 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 10% beneficial ownership. Acquiror's Rights become void. Progress Financial Corp. 10 business days following 20% or more acquisition or 20% tender offer. $0.01 prior to 10 days following Stock Acquisition Date. Standard Standard Proler International Corp., Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Property Capital Trust 10 days following 9.8% acquisition or tender offer for 9.8%. $0.01 prior to Stock Acquisition Date Standard Standard The Prospect Group, Inc. 10 days following 25% acquisition or tender offer for 30%. $0.05 prior to the 10th day following 25% acquisition. Standard Standard Public Service Co. of CO 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date Standard Standard Publicker Industries Inc. 10th day following 20% acquisition or 10th day following tender offer for 30%. $0.01 on or prior to 10th day following the Stock Acquisition Date and may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard; Acquiror's Rights become void. Standard; also triggered by 30% beneficial ownership or 1% event. Acquiror's rights become void. Puget Sound Bancorp 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 25% beneficial ownership or 1% event. Acquiror's Rights become void. Puget Sound Power & Light Co. 10 days following 10% acquisition or tender offer for 10%. $0.01 prior to Stock Acquisition Date can be reinstated if Beneficial Ownership falls below 10%. Standard Standard Puritan-Bennett Corporation 20% acquisition or 10 days following tender offer. $0.01 prior to acquisition, or expiration of the rights. Standard Standard; also triggered by 20% beneficial ownership. Purolator Products Co. 10 days following 15% acquisition or tender offer for 15%. $0.01 on or prior to 10th day following the Stock Acquisition Date and may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 20% beneficial ownership. QED Exploration, Inc. Following 20% acquisition. $0.01 prior to 20% acquisition. Standard Standard STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER-UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKETTION Quadra Logic Technology Inc. 03/17/92 CAN 1 share of Common Stock 7.125 50.00 7.02 10 Quaker Chemical Corp. 02/07/90 PA 1/100th share of Series A Preferred Stock 13.67 72 5.27 10 Qualmed Inc. 09/09/93 DE 1/1000th share of Preferred Stock 14.38 50.00 3.48 10 Quest Medical 10/13/89 TX 1/2 Share of Common Stock 2.38 10 4.20 10 Quixote Corporation 07/15/88 DE 1/100th share of Series A Junior Participating Preferred Stock 7.5 25 3.33 10 R.G. Barry Corporation 02/29/88 OH 1/10th share of Series I Junior Participating Class B Preferred Stock 5.25 20 3.81 10 RJR Nabisco, Inc. 07/21/88 DE 1/100th share of Series D Participating Cumulative Preferred Stock 49.63 200 4.03 10 RLC Corp. 06/14/89 DE 1 share Common Stock 8.75 60 6.86 10 Ransburg Corporation 04/28/88 IN 1/100th share of Series A Junior Preferred Stock 11.50 40 3.48 10 Raven Industries 03/16/89 SD 1 share of Common Stock 10.50 74 7.05 10 Raychem Corporation 02/03/89 DE 1/100th share of Series A Participa- ting Cumulative Preferred Stock 35.00 150 4.29 10 Realist, Inc. 08/29/88 DE 1 share of Common Stock 11.50 35 3.04 10 Recognition Equipment Inc. 09/18/92 DE 1/100th share of Preferred Stock 11.25 60.00 5.33 10 Reebok International LTD. 6/14/90 MA 1 share of Common Stock 18.00 60 3.33 10 Regency Cruises Inc. 09/18/90 DE 1/5th share of Common Stock 1.59 6.50 4.09 10 Regional Bancorp 01/18/90 DE 1/100th share of Junior Participating Cumulative Preferred Stock. 15.00 56 3.73 10 Rehabcare Corporation 09/21/92 DE 1/100th share of Preferred Stock 8.5 35.00 4.12 10 Republic Automotive Parts Inc. 06/18/92 DE 1/100th share of Preferred Stock 7.5 24.00 3.20 10 Republic Capital Group Inc. 04/25/90 WI 1 share of Common Stock 15.44 60 3.89 10 Research Frontiers Inc. 02/12/93 DE 1 Share of Common Stock 9.38 45 4.8 10 Rexene Corporation 01/26/93 DE 1 Share of Common Stock 3.75 25 6.7 10 Reynolds and Reynolds Co. 05/06/91 OH 1/1000th Share of Preferred Stock 20.88 80 3.83 10 Richton International Corporation 01/26/88 DE 1/100th share of Series A Preferred Stock 3.13 14 4.47 10 Rio Algom Limited 07/22/92 ON 1 share of Common Stock 14.188 75.00 5.29 10 Robert Half Int'l Inc. 7/23/90 DE 1/100th share of Preferred Stock 15.00 65 4.33 10 Rodman & Renshaw Capital Group Inc. 08/23/93 DE 1 share of Common Stock 7.88 30.00 3.81 10 Rollins Environmental Services, Inc. 06/14/89 DE 1 share Common Stock 11.75 200 17.02 10 Rowan Companies Inc. 02/25/92 DE 1/100th share of Preferred Stock 6.25 30.00 4.80 10 Ruddick Corp. 11/15/90 NC 1/100th share Preferred Stock 21.00 105 5.00 10 Ryder System, Inc. 07/28/89 FL 1/100th share Series Cumulative Preferred Stock 29.25 150 5.13 10 SEI Corporation 12/19/88 PA 1/400th share of Junior Participating Preferred Stock 17.50 65 3.71 10 SPS Technologies 11/11/88 PA 1/100th share of Series A Junior Participating Preferred Stock 42.88 125 2.92 10 SPX Corporation 10/19/88 DE 1/100th share of Series A Junior Participating Preferred Stock 36.88 NA NA 10 Sage Software 08/18/89 DE 1/100th share of Series A Junior Participating Preferred Stock 7.25 40 5.52 10 Sanderson Farms, Inc. 04/25/89 MS 1/100th share of Series A Participating Preferred Stock. 16.25 53 3.26 10 Sanifill Inc. 12/13/91 DE 1/300th share of Preferred Stock 15.625 100.00 6.40 10 Santa Anita Realty 06/15/89 DE 1/100th share of Junior Participating Preferred Stock 29.88 100 3.35 10 Santa Fe Energy Resources Inc. 9/13/90 DE 1/100th share of Preferred Stock 21.38 40 1.87 1 Sara Lee Corporation 04/28/88 MD 1/100th share of Series A Junior Participating Preferred Stock 39.75 140 3.52 10 Sea Containers Ltd. 05/09/88 BER 1/100th share Junior Participating Preferred Stock 22.00 110 5.00 10 Seagull Energy Corp. (4) 03/01/89 TX 1/100th share Series B Junior Participating Preferred Stock 17.25 61.50 3.57 10 Security Bancorp 11/28/89 MI 1/100th share of Preferred Stock 21.25 75 3.53 10 Security Investments Group 10/03/89 DE 1/100th share of Junior Participating Preferred Stock 6.25 22 3.52 10 Security Pacific Corporation 05/17/88 DE 1/100th share of Series E Junior Participating Preferred Stock 34.38 125 3.64 10 Sensormatic Electronics Corporation 05/18/89 DE 1/100th share of Series A Cumulative Participating Preferred Stock 12.375 40 3.23 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS Quadra Logic Technology Inc. 10 days following 20% acquisition or tender offer for 20% $0.001 prior to 20% acquisition in or in case of fair offer. Standard Standard Quaker Chemical Corp. 10 days following 20% acquisition, 10 business days following 20% tender or greater than 10% beneficial ownership deemed "Adverse Person." $0.01 prior to Stock Acquisition Date. Standard Standard; also triggered by greater than 10% "Adverse Person." Qualmed Inc. 10 business days following 10% acquisition. $0.01 prior to acquisition. Standard Standard; triggered by 10% beneficial ownership. Quest Medical 10 days following 15% acquisition or 20% tender offer. $0.01 prior to 10th day following 15% acquisition. Standard Standard; triggered by 20% beneficial ownership or 1% event except in case of qualifying offer or Permitted Transaction. Quixote Corporation 10 business days following 20% acquisition or tender offer for 30%. $0.01 prior to the 10th business day following 20% acquisition. Standard; Acquiror's Rights become void. Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. R.G. Barry Corporation 20% acquisition or a tender offer for 20% of voting shares of corporation. $0.02 per Right prior to close of business on Stock Acquisition Date. Standard Standard; also triggered by 30% beneficial ownership. RJR Nabisco, Inc. 10 days following 20% acquisition or 10 days following tender offer for 30%. $0.05 prior to the 10th day following 20% acquisition; may be reinstated if Acquiror reduces bene- ficial ownership to 10% or less. Standard Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. RLC Corp. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 10th day following acquisition. Standard Standard Ransburg Corporation 20 days following 20% acquisition or 20 business days following tender offer for 30% or Board declaration that Acquiror is an "Adverse Person." $0.01 prior to 20 days following the Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Not redeemable if Board has declared an "Adverse Person." Standard Standard; also triggered by 20% beneficial ownership; Acquiror's rights become void. Raven Industries 10 days following 20% acquisition or tender offer. $0.01 prior to 10th day following Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 5%. Standard Standard; triggered by beneficial ownership of 30%, 1% event, or additional acquisition by Acquiror. Raychem Corporation 10 days following 15% acquisition or tender offer for 20%. $0.01 prior to the 10th day following 15% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Acquiror's Rights become void. Realist, Inc. 10 days following 15% acquisition or tender offer for 20%. $0.01 prior to the 10th day following 15% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Acquiror's Rights become void. Recognition Equipment Inc. 10 days following 25% acquisition or tender offer for 25% $0.01 prior to 25% acquisition in or in case of fair offer. Standard Standard Reebok International LTD. 10 days following 10% acquisition or tender offer for 10%. $0.01 prior to Stock Acquisition Date Standard Standard Regency Cruises Inc. 10 days following 20% acquisition or tender offer for 25%. $0.01 prior to Stock Acquisition Date can be reinstated if Bene- ficial Ownership falls below 10% Standard Standard Regional Bancorp 10 days following 15% acquisition, 10 business days following 15% tender offer or following "Adverse Person" declaration (10%). $0.02 prior to "Adverse Person" declaration or prior to tenth day fol- lowing Stock Acquisition Date. Standard Standard; triggered by 15% beneficial ownership or by "Adverse Person" declaration. Rehabcare Corporation 10 days following 15% acquisition or tender offer for 15% $0.01 prior to 15% acquisition in or in case of fair offer. Standard Standard Republic Automotive Parts Inc. 10 days following 15% acquisition or tender offer for 15% $0.01 prior to 15% acquisition in or in case of fair offer. Standard Standard Republic Capital GroupInc. 10 business days following 20% acqui- sition or 20% tender offer. $0.01 prior to 10 days following the Stock Acquisition. Standard Standard; based on triggering events. Research Frontiers Inc. 10 days following 20% acquisition. $0.001 prior to acquisition. Standard Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. Rexene Corporation 10 days following 15% acquisition. No redemption value. Standard Standard; also triggered by beneficial ownership of 15%; Acquiror's Rights become void. Reynolds and Reynolds Co. 10 days following 20% acquisition or 20% tender offer $0.01 prior to 20% acquisition Standard Standard Richton International Corporation 15 days following 20% acquisition or 10 business days following tender offer for 30%. $0.05 prior to 15 days following the Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 40% beneficial ownership. Rio Algom Limited 10 days following 20% acquisition or tender offer for 20% $.001 prior to 20% acquisition in or in case of fair offer. Standard Standard Robert Half Int'l Inc. 10 days following 30% acquisition or tender offer for 30%. $0.01 prior to Stock Acquisition Date or 30% Acquisition. Standard Standard Rodman & Renshaw Capital Group Inc. 10 business days following 15% acquisition. $0.01 prior to 10% acquisition. Standard Standard; triggered by 15% beneficial ownership Rollins Environmental Services, Inc. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to acquisition. Standard Standard Rowan Companies Inc. 10 days following 15% acquisition or tender offer for 30% $0.01 prior to 15% acquisition in or in case of fair offer. Standard Standard Ruddick Corp. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date Standard Standard Ryder System, Inc. 10 days following 20% acquisition or tender offer for 30% $0.05 prior to 20% acquisition. Standard Standard; also triggered 10% beneficial ownership. SEI Corporation 10 days following 40% beneficial owner- ship or 20% acquisition since start of plan or up to 65 days following 30% tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 40% beneficial ownership, 20% acquisition since start of plan, or by 1% event. SPS Technologies 10 days following 20% acquisition or tender offer for 20% or after a person is declared an "Adverse Person." $0.01 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership or 1% event. Acquiror's Rights become void. SPX Corporation 10 days following 20% acquisition or tender offer for 20%. NA Standard Standard Sage Software 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to the 10th day following acquisition. Standard Standard; also triggered by beneficial ownership of 25%. Sanderson Farms, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to acquisition. Standard Standard Sanifill Inc. 10 days following 15% acquisition or tender offer for 15% $.01 prior to 15% acquisition in or in case of fair offer. Standard Standard Santa Anita Realty 10 business days following 10% acquisition or tender offer. $0.001 prior to the 10th business day following Stock Acquisition Date. Standard Standard; also triggered by 10% beneficial ownership or 1% event. Santa Fe Energy Resources Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date Standard Standard Sara Lee Corporation 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 20% acquisition or 10 business days fol- lowing (1) a merger or consolidation with a corporation which is not an Acquiror or (2) expiration of Flip-in Rights; may be reinstated if Acquiror reduces beneficial ownership to less than 5%. Standard Standard; also triggered by 30% beneficial ownership. Sea Containers Ltd. 10 days following 20% acquisition or tender offer for 30%. $0.05 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 20% acquisition. Seagull Energy Corp. (4) 10 days following 20% acquisition or 10 business days following 20% tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 20% ownership or by 1% event. Security Bancorp 10 days following 15% acquisition or tender offer. $0.01 prior to 10th day following 15% acquisition or tender offer. Standard Standard; also triggered by 15% beneficial ownership. Security Investments Group 10 days following tender offer for 15%. $0.01 prior to 10th day following flip-in date. Standard Standard; also triggered by beneficial ownership of 15%. Security Pacific Corporation 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.001 prior to 20% acquisition rounded upward for each holder to nearest $0.01. Standard Standard; also triggered by 20% beneficial ownership; Acquiror's Rights become void. Sensormatic Electronics Corporation 10 days following 15% acquisition or tender offer of 15%, also if person acquires 2% Common Stock if such person owned 15% or more on announce- ment date. $0.01 prior to 15% acquisition. Standard Standard; Acquiror's Rights become void. STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER- UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/ EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKET TION Service Corporation International 07/18/88 TX 1/100th share of Series C Junior Participating Preferred Stock. 20.00 85 4.25 10 Service Merchandise Company, Inc. 05/05/89 TN Series A Junior Preferred Stock 20.000 50 2.50 10 Shaklee Corporation 11/08/88 DE 1/1000th share of Series A Participating Preferred Stock 22.13 50 2.26 5 Shared Medical Systems Corp. 05/01/91 DE 1/1000th Share of Preferred Stock 00.25 80 3.95 10 Shaw Industries 03/29/89 GA 1/100th share of Series A Participating Preferred Stock 24.13 100 4.14 10 Shawmut National Corporation 03/01/89 DE 1/100th of a share of Series A Junior Participating Preferred Stock 24.25 100 4.12 10 Sherritt Gordon 11/27/89 ON 1 share of Common Stock NA 41 NA 10 Sherwin- Williams Company 01/25/89 OH 1/100th share of Cumulative Redeemable Serial Preferred Stock 25.88 95 3.67 10 Shoney's Inc. 03/07/88 TN 1 share of Common Stock 24.50 60 2.45 5 Signet Banking Corporation 05/23/89 VA 1/100th of share of Series A Junior Participating Preferred Stock 36.125 140 3.88 10 Silicon General, Inc. 12/06/90 CA 1 share of Common Stock NA 11 NA 10 Silicon Graphics, Inc 2/01/91 DE 1/1000th share of Preferred Stock 33.00 150 4.55 10 Silicon Systems, Inc. 02/21/89 DE 1/100th of a share of Series A Participating Preferred Stock 10.63 55 5.17 10 Sizeler Property I nvestors, Inc. 05/03/89 DE 1 share Common Stock 16.125 60 3.72 10 Skipper's Inc. 02/23/89 WA 1 share of Common Stock 9.13 18 1.97 10 Smith International, Inc. 6/19/90 DE 1/100th share of Preferred Stock 14.50 50 3.45 10 Smithfield Companies, Inc. 08/29/91 VA 1 share of Preferred Stock 8.25 29.5 3.58 10 Smithfield Foods 05/08/91 DE 1/1000th Share of Preferred Stock 22.50 150 6.67 10 SmithKline Beckman Corporation 05/25/88 PA 1/100th share of Series A Participating Cumulative Preferred Stock 49.75 200 4.02 10 Society Corp. 08/25/89 OH 1 share of Common Stock 37.75 130 3.44 10 Software Publishing Corp. 04/23/91 DE 1/1000th Share of Preferred Stock 20.75 150 7.23 10 Solitron Devices, Inc. 05/29/91 DE 1/100th Share of Preferred Stock 1.375 7.5 5.45 10 Southam 02/01/90 TOR 1 share of Common Stock NA 125 NA 10 Southdown, Inc. 3/04/91 LA 1/100th share of Preferred Stock 15.50 60 3.87 10 Southeast Banking Corp. 10/20/89 FL 1/100th share of Series F Junior Participating Preferred Stock 26.13 140 5.36 10 Southern Union Company 02/12/88 DE 1 share of Common Stock 8.63 20 2.32 10 Southmark Corporation 01/20/89 GA 1/4th share of Common Stock 2.00 8 4.00 10 Southtrust Corporation 02/22/89 DE 1/100th share of Series A Junior Participating Preferred Stock 21.50 75 3.49 10 Southwestern Bell Corp. 01/17/89 DE 1/100th Share of Series A Junior Participating Preferred Stock 43.50 160 3.68 10 Southwestern Energy Company 05/05/89 AR 1 share Common Stock 23.25 75 3.22 10 Southwestern Public Service 07/23/91 NM 1 Share Common Stock 29.38 70 2.38 10 Sovereign Bancorp, Inc. 09/19/89 PA 1/100th Share of Series A Junior Participating Preferred Stock 18.75 80 4.27 10 Sovran Financial Corp. 07/18/89 VA 1/100th share Series A Junior Preferred Stock 40.125 140 3.49 10 Span- America Medical Systems Inc. 09/22/93 SC 1/2 share of Common Stock 5.75 16.00 2.78 10 Square D Company 08/24/88 MI 1/2 share of Common Stock 46.88 200 4.27 10 St. Paul Bancorp Inc. 10/26/92 DE 1/100th share of Preferred Stock 20.125 80.00 3.98 10 St. Paul Companies 12/04/89 MN 1/1000th share of Series A Junior Participating Preferred Stock 63.00 185 2.94 10 or 3 years following separation date if it occurs prior to 12/19/96 Standard Federal 09/22/89 Feder- ally Char- ter- ed 1/100th share of Series A Preferred Stock 12.00 45 3.75 10 Standard Microsystems Corporation 01/06/88 DE 1/1000th share of Series A Participating Preferred Stock 7.00 25 3.57 10 Standex International Corp. 01/25/89 DE 1/2 share of Common Stock and one note 22.00 85 3.86 10 Stanhome Inc. 09/07/88 MA 1 share of Common Stock 20.00 85 4.25 10 Star Banc Corporation 10/10/89 OH 1/100th share of Series A Preferred Stock 25.50 100 3.92 10 State Street Boston Corporation 09/15/88 MA 1/100th share of Series A Junior Participating Preferred Stock 25.13 150 5.97 10 Sterling Bancorp 02/16/89 NY 1/100th share of Series C Junior Participating Preferred Stock 9.50 35 3.68 10 Stone Container Corporation 07/25/88 DE 1/100th share of Series D Junior Participating Preferred Stock 34.63 130 3.75 10 Stone Container Corp. 07/23/90 DE 1/100th share of Preferred Stock 15.38 130 8.45 8 Stoneridge Resources, Inc. 02/19/91 DE 1/100th share of Preferred Stock 5.00 15 3.00 0 Storage Technology Corp. 08/08/89 DE 1/100th share of Preferred Stock 21.50 150 6.98 10 Stratus Computer Inc. 12/04/90 MA 1 share of Common Stock 23.50 110 4.68 10 Summit Bancorporation 01/19/90 NJ 1/100th share of Series B Junior Participating Preferred Stock 16.88 70 4.15 10 Summit Bancshares Inc. 04/17/90 TX 1 share of Common Stock NA 50 NA 10 Summit Technology Inc. 05/29/90 MA 1/4 share of Common Stock 8.25 50 6.06 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS Service Corporation International 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. Service Merchandise Company, Inc. 20% acquisition or tender offer. Standard Standard Standard Shaklee Corporation 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to 15% acquisition. Standard Standard; also triggered by 15% beneficial ownership. Shared Medical Systems Corp. 10 days following 15% acquisition or tender offer for 15% $0.001 prior to Stock Acquisiton Date Standard Standard Shaw Industries Following 20% acquisition or 10 days following 20% tender offer without Company's consent. $0.01 prior to Stock Acquisition Date; may be redeemed in merger unrelated to Acquiror. Standard Standard; also triggered by 20% beneficial ownership. Shawmut National Corporation 10 days following 20% acquisition or 10 business days following tender offer for 20% or 10% acquisition by person seeking short term financial gain and/or causing material adverse effect as determined by Board $0.01 prior to the 10th day following Stock Acquisition Date. Standard Standard; Acquiror's Rights become void. Sherritt Gordon 8 trading days following 20% acquisition or tender offer. $0.01 prior to flip-in event; if 90% acquired by Permitted Bid, must be redeemed. Standard Standard; also triggered by 20% beneficial ownership. Sherwin- Williams Company 20 days following 20% acquisition or tender offer for 20%. $0.01 prior to the 20th day following 20% acquisition. Standard Standard; also triggered by 25% beneficial ownership or 1% event. Acquiror's Rights become void. Shoney's Inc. 10 business days following 20% acquisition or tender offer for 30%. $0.01 prior to 10 business days following the Stock Acquisition Date. Standard Standard Signet Banking Corporation 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by beneficial ownership of 20%. Silicon General, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to Stock Acquisition Date or 20% Acquisition. Standard Standard Silicon Graphics, Inc 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date Standard Standard Silicon Systems, Inc. 10 days following 15% acquisition or 10 business days following tender offer that results in 30% ownership. $0.01 prior to the 10th day following Stock Acquisition Date. Standard Standard; also triggered by 20% ownership; Acquiror's Rights become void. Sizeler Property Investors, Inc. 20% acquisition announce- ment date, 10 days following tender offer of 30%, or 10 days following declaration of an "Adverse Person." $0.01 prior to triggering events. Standard Standard; Acquiror's Rights become void. Skipper's Inc. 10 days following 25% acquisition or tender offer that results in 25% ownership or "Adverse Person" owns not less than 20%. $0.01 prior to the earliest of the Expiration Date or 25% acquisition. Standard Standard; also triggered by 25% beneficial ownership. Smith International, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date Standard Standard Smithfield Companies, Inc. 10 days following 15% acquisition or 15% tender offer $0.01 prior to the 15% Stock Acquisiton Date. Date can be reinstated or Beneficial Ownership falls below 15%. Standard Standard Smithfield Foods 10 days following 20% acquisition or 20% tender offer $0.01 prior to Stock Acquisiton Date Standard Standard SmithKline Beckman Corporation 10 days following 20% acquisition or 10 business days following tender offer for 25%. $0.05 prior to the Stock Acquisition Date. Standard Standard; also triggered by 25% beneficial ownership. Society Corp. 20 days following 15% acquisition or tender offer. $0.01 prior to 20th day following acquisition. Standard Standard; also triggered by 15% beneficial ownership. Software Publishing Corp. 10 days following 15% acquisition or tender offer for 15% $0.01 prior to 15% Acquisitions Standard Standard Solitron Devices, Inc. 10 days following 20% acquisition or 20% tender offer $0.01 prior to Stock Acquisiton Date Standard Standard Southam Announcement of 20% acquisition. $0.001 any time prior to Flip-in Event. Standard Standard; also triggered by 20% beneficial ownership. Southdown, Inc. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date can be reinstated if Beneficial Ownership falls below 10%. Standard Standard Southeast Banking Corp. 10 days following 20% acquisition or 10 business days following 20% tender offer. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership or by 1% event. Southern Union Company 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to the 10th day following 20% acquisition; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 30% beneficial ownership. Southmark Corporation 10 days following 20% acquisition, tender offer for 20%, or after a person is declared an "Adverse Person." $0.01 prior to Expiration Date. Standard Standard; Acquiror's Rights become void. Southtrust Corporation 10 days following 20% acquisition or "Adverse Person" declaration or 10 business days following 20% tender offer. $0.01 prior to 10th day following Stock Acquisition Date; may be reinstated if Acquiror reduces ownership below 10%. Standard Standard; triggered by 30% beneficial ownership except in case of Fair Offer, "Adverse Person" declaration, or event that increases Acquiror's ownership by more than 1%. Southwestern Bell Corp. 10 business days following 20% acquisition or 10 business days following tender offer for 20% or 10 days after a person is declared to be an "Adverse Person." $0.05 prior to 10 business days following the Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership; Acquiror's Rights become void. Southwestern Energy Company 10 days following 20% acquisition, more than 2% acquired by person previously holding 20% or more, or after a person is determined an "Adverse Person." $0.01 prior to triggering event or any merger or consolidation. Standard Standard Southwestern Public Service 10 days following 10% acquisition or 10% tender offer $0.01 prior to Stock Acquisiton Date Standard Standard Sovereign Bancorp, Inc. 10 business days following 19.9% acquisition, a tender offer for 19.9%, or the declaration of an "Adverse Person" with at least 4.9% of the Common Stock. $0.001 prior to the 10th day following acquisition. Standard Standard; also triggered by a 1% event. Sovran Financial Corp. 20% acquisition or tender offer for 10%. $0.01 prior to acquisition. Standard Standard; also triggered by 20% beneficial ownership. Span- America Medical Systems Inc. 10 business days following 20% acquisition. $0.001 prior to 15% acquisition. Standard Standard; triggered by 20% beneficial ownership. Square D Company 10 days following a 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to a 20% acquisition. Board may exchange at a ratio of 1 Common Share per Right between the points of 20% and 50% acquisition. Standard Standard; also triggered by a 1% event. Acquiror's Rights become void. St. Paul Bancorp Inc. 10 days following 10% acquisition or tender offer for 10% $0.01 prior to 10% acquisition in or in case of fair offer. Standard Standard St. Paul Companies 10 days following 15% acquisition or tender offer. $0.01 prior to 10th day following Stock Acquisition Date; may be resisted prior to flip-over event if Acquiror reduces ownership to 10%. Standard Standard Standard Federal 10 business days following 20% acquisition, commence- ment of a tender offer, or the determination by the Board that a person having at least 15% of the Common Stock is an "Adverse Person." $0.01 prior to 10th day following acquisition or determination of an "Adverse Person." Standard Standard Standard Microsystems Corporation 15 days following 20% acquisition or 10 business days following 30% offer. $0.01 prior to 15 days following the Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 30% beneficial ownership. Standex International Corp. 10 days following 20% acquisition or 10 business days following tender offer for 30%. $0.01 prior to 10 days following the Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 25% beneficial ownership or 1% event; Acquiror's Rights become void. Stanhome Inc. 10 days following a 20% acquisition; 10 business days following tender offer for 30%; or 10 business days following a Board declaration that an "Adverse Person" owns at least 15% of outstanding shares. $0.04 prior to 10 days following the Stock Acquisition Date and may be reinstated if Acquiror reduces benefi- cial ownership to 10% or less. Standard; Acquiror's Rights become void. Standard; also triggered by 25% beneficial ownership or a Board declaration of an "Adverse Person." Acquiror's Rights become void. Star Banc Corporation 20 business days following 20% acquisition, 30% tender offer, or 10% acquisition and Adverse Person declaration. $0.01 prior to 20th business day following Stock Acquisition Date; may be reinstated if Acquiror reduces owner- ship below 10%. Standard Standard; also triggered by 30% beneficial ownership. State Street Boston Corporation 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Acquiror's Rights become void. Sterling Bancorp 10 days following 20% acquisition or not later than 19th day following tender offer for 30%. $0.01 prior to the 11th day following the Shares Acquisition Date. Standard Standard; also triggered by 20% ownership; Acquiror's rights become void. Stone Container Corporation 10 days following 20% acquisition or 10 business days following tender offer for 30%. $0.01 prior to the 10th business day following the 20% acquisition, may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by beneficial ownership of 30%; Acquiror's Rights become void. Stone Container Corp. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date. Can be reinstated if Benefi- cial Ownership falls below 20%. Standard Standard Stoneridge Resources, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date Standard Standard Storage Technology Corp. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date. Standard Standard Stratus Computer Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date Standard Summit Bancorporation 10 days following 15% acquisition or 15% "Adverse Person" $0.01 prior to 10th day following Stock Acquisition Date; may be reinstated if beneficial ownership to below 10%. Standard Standard; also triggered by 10% beneficial ownership or 15% "Adverse Person". Summit Bancshares Inc. 10 business days following 20% acquisition or 30% tender offer. $0.01 prior to 10th day following 20% acquisition. Standard Triggered by 1% event, 40% beneficial ownership exercise price reduced to the greater of par value or 25% of their current market price. Summit Technology Inc. 10 days following 15% acquisition or "Grandfather Stockholder" acquiring 20%. $0.001 per Right Standard prior to Share Acquisition Date. Standard Standard STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER-UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKETTION Sun Microsystems, Inc. 05/05/89 DE 1 share Common Stock 16.75 100 5.97 10 Sunrise Medical Inc. 04/24/90 DE 1/2 share of Common Stock 12.0 55.00 4.58 10 Super Food Services, Inc. 01/27/89 DE 1/100th share Junior Participating Preferred Stock 17 100 5.88 10 Super Valu Stores, Inc. 04/12/89 DE 1/1000th share of Series B Junior Participating Preferred Stock 24.88 95 3.22 10 Synalloy Corporation 03/27/89 SC 4/10th share of Common Stock 7.75 15 1.94 10 Syncor International 11/07/89 DE 1/4 of a Common share 7.00 20 2.88 10 Synergen Inc. 10/24/91 DE 1/100th share of Preferred Stock 46.33 20.00 0.43 10 Synoptics Communications Inc. 03/05/90 CA 1/2 share of Common Stock 15.75 140 8.89 10 System Industries, Inc. 09/09/88 DE 1/100th share of Series A Junior Participating Preferred Stock 6.00 27 4.50 10 TCF Financial Corporation 05/23/89 DE 1/100th of share of Series A Junior Participating Preferred Stock. 13.0 60 4.62 10 TCI International 12/18/89 DE 1/100th share of Common Stock 6.50 30 4.62 10 TGX Corporation Inc. 10/04/88 DE 1/100th share of Series A Junior Preferred Stock 1.63 10.5 6.44 10 TNP Enterprises, Inc. 10/24/88 TX 1 share of Common Stock 19.50 45 2.31 10 TSI Corp. 02/12/91 DE 1/100th share Preferred Stock 15.50 19.80 1.28 10 TW Services, Inc. 09/19/88 DE 1/100th share of Series A Preferred Stock 23.25 75 3.23 10 Team, Inc. 10/24/90 TX 1/100th share of Preferred Stock 10.00 100 10.00 10 Tecumseh Products Company 08/30/92 MI 1/2 share of Common Stock (A) 60.5 160.00 2.64 9 Tecumseh Products Company 1/23/91 MI 1 share of Common Stock 80.00 320 4.00 9 Tektronix, Inc. 8/16/90 OR 1/1000th share of Preferred Stock 12.88 60 4.66 10 TeleCom Corp. 04/23/91 TX 1/100th Share of Preferred Stock 1.25 8 6.40 10 Teletronix, Inc. 8/16/90 OR 1 share of Preferred Stock NA 60 NA NA Temple- Inland Inc. 02/03/89 DE 1/100th of a share of Series A Junior Participating Preferred Stock 56.25 200 3.56 10 Tenneco Inc. 05/25/88 DE 1/100th share of Series A Participating Junior Preferred Stock 45.75 130 2.84 10 Teradyne Inc. 03/14/90 MA 1 share Common Stock 9.38 40 4.26 10 Terminal Data Corp 11/23/92 DE 1/100th Share of Preferred Stock 4.00 20 5.0 10 Texaco, Inc. 03/16/89 DE 1/100th of a share of Series D Junior Participating Preferred Stock 53.63 150 2.80 10 Texas Air Corporation 06/09/88 DE 1/200th share of Series A Junior participating Preferred Stock 12.00 60 5.00 10 Texas Eastern Corporation 03/15/89 DE 1/100th of a share of 1989 Junior Participating Preferred Stock 50.13 100 1.99 10 Texas Instruments Incorporated 06/17/88 DE 1/100th share of participating Cumulative Preferred Stock 47.63 200 4.20 10 Texfi Industries, Inc. 07/22/88 DE 1/100th share of Series A Junior Participating Preferred Stock 6.75 30 4.44 10 Tiffany & Company 11/18/88 DE 1/100th share of Series A Junior Participating Cumulative Preferred Stock 43.50 140 3.22 10 Time Incorporated 01/19/89 restating 4/29/86 8A. DE 1/100th share of Series A Participating Preferred Stock 110.38 300 2.72 10 Tolland Bank 06/20/89 CT 1 share of Common Stock 10.38 40 3.85 10 Tom Brown Inc. 3/01/91 DE 1/100th share of Preferred Stock NA 20 NA 10 Tony Lama Co., Inc. 04/23/90 TX 1 share of Common Stock 6.75 28 4.15 10 Topps Company Inc. 12/02/91 DE 1/100th share of Preferred Stock 14.00 62.00 4.43 10 Trans Financial Bancorp 01/20/92 KY 1/100th share of Preferred Stock 15.5 45.00 2.90 10 Trans Financial Bancorp 01/20/92 KY 1/1,000th share of Preferred Stock 15.50 45.00 2.90 10 TransNet Corp. 01/14/88 DE 1 share of Common Stock. 2.06 7.50 3.64 NA Triad Systems Corporation 10/28/88 DE 1 share of Common Stock NA 47 NA 10 Triangle Corp. 7/15/90 DE 1/100th share of Preferred Stock 4.88 25 5.12 10 Trinity Industries 04/11/89 DE 1/100th share of Series A Junior Participating Preferred Stock. 35.5 175 4.93 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS Sun Microsystems, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 10th day following acquisition. Standard Standard; also triggered by 30% beneficial ownership. Sunrise Medical Inc. 10 days following 25% acquisition or tender offer for 25% $0.01 prior to 25% acquisition in or in case of fair offer. Standard Standard Super Food Services, Inc. 10 business days following 20% acquisition or tender offer. $0.02 prior to 10th business day following Stock Acquisition Date. Standard Standard; triggered by beneficial ownership of 20%; Acquirors Rights become void. Super Valu Stores, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Synalloy Corporation 10 days following 22% acquisition or 10 business days following 25% tender offer. $0.01 prior to 10 days following Stock Acquisition Date; may be reinstated if Acquiror reduces ownership to 10%. Standard Standard Standard; triggered by 25% beneficial ownership, unless transaction approval by 85% of stockholders other than Acquiror. Syncor International 10 business days following 20% acquisition or tender offer $0.01 prior to 10 business days following Stock Acquisition Date. Standard Triggered by 20% beneficial ownership unless there is a Qualified Offer. Synergen Inc. 10 days following 20% acquisition or tender offer for 20% $0.001 prior to 20% acquisition in or in case of fair offer. Standard Standard Synoptics Communications Inc. 20% acquisition or 10 days following 20% tender offer. $0.01 after stock Acquisition Date but prior to any schedule 13 Event. Standard Standard; also triggered by 20% beneficial ownership, or 1% event. System Industries, Inc. 10 days following 20% acquisition or 10 business days following tender offer for 30%. $0.01 prior to 5 p.m. CA time, on the 10th day following 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership or 1% event. Acquiror's Rights become void. TCF Financial Corporation 10 days following 15% acquisition or tender offer of 15%. $0.01 prior to 15% acquisition Standard Standard TCI International 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to Stock Acquisition Date Standard Standard; also triggered by 20% beneficial ownership. TGX Corporation Inc. 10 days following 20% acquisition or tender offer for 30%. $0.001 prior to 20% acquisition. Standard Standard; also triggered by 30% beneficial ownership or 1% event. Acquiror's Rights become void. TNP Enterprises, Inc. 20 days following 20% acquisition or tender offer for 30%. $0.05 prior to the 20th day following 20% acquisition Standard Standard; also triggered by 20% beneficial ownership. Acquiror's Rights become void. TSI Corp. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to Stock Acquisition Date. Can be reinstated if Benefi- cial Ownership falls below 20%. Standard Standard TW Services, Inc. 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to the 10th day following the Share Acquisition Date. Standard Standard; Acquiror's rights become void. Team, Inc. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date. Can be reinstated if Beneficial Ownership falls below 10%. Standard Standard Tecumseh Products Company 10 days following 10% acquisition or tender offer for 10% $0.005 prior to 10% acquisition in or in case of fair offer. Standard Standard Tecumseh Products Company 10 days following 10% acquisition or tender offer for 10%. $0.01 prior to Stock Acquisition Date Standard Standard Tektronix, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date Standard Standard TeleCom Corp. 10 days following 30% acquisition or 10 business days following tender offer for 35% $0.01 prior to Stock Acquisiton Date Standard Standard Teletronix, Inc. 10 days following 20% acquisition or tender offer for 20%. NA Standard Standard Temple- Inland Inc. 10 business days following 20% acquisition or tender offer for more than 25%. $0.01 prior to the 10th day following the Stock Acquisition Date. Standard Standard; also triggered by 25% ownership; Acquiror's Rights become void. Tenneco Inc. 10 business days following 20% acquisition or tender offer. $0.05 prior to the 20th day following 20% acquisition. Standard Standard; also triggered by 40% beneficial ownership. Acquiror's Rights become void. Teradyne Inc. 10 days following 20% acquisition, 10 business days following 30% tender offer or 15% "Adverse Person" $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 30% beneficial ownership, 1% event, or 15% "Adverse Person". Terminal Data Corp 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to acquisition. Standard Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. Texaco, Inc. 10 business days following 20% acquisition or 10 business days following tender offer that would result in 20% ownership. $0.01 prior to the 10th day following the Stock Acquisition Date. Standard Standard; also triggered by 20% ownership; Acquiror's Rights become void. Texas Air Corporation 10 days following 25% acquisition or 10 business days following tender offer for 25%. $0.01 prior to the 10th day following the Share Acquisition Date. Standard; Acquiror's Rights become void. Standard; also triggered by beneficial ownership of 25%; Acquiror's Rights become void. Texas Eastern Corporation 10 days following 10% ownership. NA Standard Standard; also triggered by 20% ownership; Acquiror's Rights become void. Texas Instruments Incorporated 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to the 10th day following the Stock Acquisition Date. Standard; Acquiror's Rights become void. Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. Texfi Industries, Inc. 10 days following 15% acquisition or tender offer for 20% or Board determination of an "Adverse Person" with 12% acquisition or registration for any such exchange offer under the Securities Act of 1933. $0.01 prior to 20% acquisition (12% acquisi- tion by "Adverse Person"), or a 15% holder engaging in self-dealing transactions. Standard Standard; also triggered by beneficial ownership of 20% (12% or more for an "Adverse Person"); Acquiror's Rights become void. Tiffany & Company 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard. Time Incorporated 10 days following 15% acquisition or 10 days following tender offer for 20%. $0.05 prior to 10 days following the Share Acquisition Date or the occurrence of the triggering event. Standard Standard; also triggered by 20% beneficial ownership. Tolland Bank 10 days following 20% acquisition or tender offer. $0.001 prior to Stock Acquisition Date or Adverse Person declaration. Standard Standard; also triggered by 20% beneficial ownership or Adverse Person declaration. Tom Brown Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to Stock Acquisition Date. Can be reinstated if Benefi- cial Ownership falls below 20% Standard Standard Tony Lama Co., Inc. 17.5% acquisition or 17.5% tender offer. $0.01 prior to 10 days following Stock Acquisition Date. Standard Standard; also triggered by 17.5% acquisition. Topps Company Inc. 10 days following 15% acquisition or tender offer for 15% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard Trans Financial Bancorp 10 days following 15% acquisition or tender offer for 25% $0.01 prior to 15% acquisition in or in case of fair offer. Standard Standard Trans Financial Bancorp 10 days following 15% acquisition or tender offer for 15% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard TransNet Corp. 10 days following 20% acquisition, 20% tender offer, or 10% "Adverse Person." $0.01 10 days following Stock Acquisition Date or determination of "Adverse Person." Standard Standard; also triggered by 20% beneficial ownership and 10% "Adverse Person." Triad Systems Corporation 20% acquisition or 10 days after tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard Triangle Corp. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date. Can be reinstated if Benefi- cial Ownership falls below 10%. Standard Standard Trinity Industries 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 10th day following stock acquisition date Standard Standard STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER-UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKETTION Trinova Corporation 01/26/89 OH 1/100th share of Cumulative Redeemable Stock 28.14 125 4.44 10 Triton Energy Corp. 6/14/90 TX 1/1000th share of Preferred Stock 11.75 40 3.40 10 Trust Company Bancorporation 03/29/90 NJ 1/100th share of Series B Preferred Stock, no par value 18.50 150 8.11 10 Tultex Corp. 02/22/90 VA 1/1000th share of Series A Junior Participating Cumulative Preferred Stock 8.63 40 4.63 10 Twin Disc, Incorporated 06/17/88 WI 1/100th share of Series A Junior Preferred Stock 27.00 80 2.96 10 Tyler Corporation 01/29/93 DE 1/100th Share of Preferred Stock 5.25 21 4.0 10 UJB Financial Corp. 08/17/89 NJ 1/100th share of Series R Preferred Stock 26.25 90 3.43 10 ULISCO Corporation 02/26/88 VA 1 share of Common Stock 23.38 100 4.28 10 UNUM Corporation 03/11/88 DE 1/100th share of Series A Junior Participating Preferred Stock 21.88 80 3.66 10 USAir 06/29/89 DE 1/100th share Series D Participating Preferred Stock 47.375 100 2.11 7 USBancorp, Inc. 11/10/89 PA 1/10th Share of Share of Series B Preferred Stock 14.88 40 2.69 5 U.S. Facilities Corp. 5/24/90 DE 1 share of Common Stock NA 22.50 NA 10 USLIFE Corporation 01/26/89 NY NA 37.88 NA NA NA U.S. Shoe Corporation 04/04/88 OH 1/100th share of Series A Preference 20.38 200 9.81 10 U.S. Trust Corporation 01/26/88 NY 1/100th share of Series A Participating Cumulative Preferred Stock 40.25 100 2.48 10 U.S. West, Inc. 04/07/89 CO 1/100th of share of Series A Junior Participating Cumulative Preferred Stock. 62.375 180 2.89 10 USX Corp. 10/10/89 DE 1/100th share Series A Junior Preferred Stock 38.63 120 3.11 10 UTL Corporation 10/21/88 DE 1 share of Common Stock 4.63 25 5.40 10 Union Carbide Corporation 07/26/89 NY 1 share Common Stock 26.75 85 3.18 10 The Union Corporation 02/17/88 DE 1/2 share of Common Stock 7.13 10.50 1.47 10 Union Planters Corpora- tion (4) 01/19/89 TN 1/100th share Series A Preferred Stock 12.63 90 7.13 10 United Banks of Colorado 7/25/90 CO 1/100th share of Preferred Stock 19.75 60 3.04 8 United Coin Mines Ltd. 02/02/90 TOR 1 share of Common Stock 2.59 5 [Cdn.] NA 10 United Companies Financial 02/01/89 LA 1/100th share of Series A Junior Participating Preferred Stock 17.50 80 4.57 10 United Saver's Bancorp 06/29/89 NH 1 share of Common Stock 12.00 60 5.00 10 United Water Resources Inc. 07/06/89 NJ 1/100th Share Series A Participating P referred Stock 16.75 60 3.58 10 Unitrin Inc. 08/03/94 DE 1/1,000th of Preferred 48.75 125.00 2.56 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS Trinova Corporation 20 business days following 20% acquisition or tender offer for 20%. $0.01 prior to the close of business on the earlier of (1) the first occurrence of an Acquiring Person or 10 years. Standard Standard; also triggered by 20% beneficial ownership. Acquiror's Rights become void. Triton Energy Corp. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date. Can be reinstated if Beneficial Ownership falls below 10%. Standard Standard Trust Company Bancorporation 10% acquisition or 10 days following 10% tender offer. $0.01 prior to 10% acquisition Standard Standard; triggered by 10% beneficial ownership. Tultex Corp. 10 days following 10% acquisition or 10 business days following 10% tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; triggered by 10% beneficial ownership. Twin Disc, Incorporated 10 business days following 20% acquisition (30% in the case of person who currently owns 20% or more) or tender offer for 30%. $0.05 prior to the 10th business day following the Stock Acquisition Date; may be reinstated if Acquiror reduces beneficial ownership t to 10% or less. Standard Standard; also triggered by 30% beneficial ownership; Acquiror's Rights become void. Tyler Corporation 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to acquisition. Standard Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. UJB Financial Corp. 10 days following 15% acquisition or tender offer for 30%. $0.01 prior to 10th day following acquisition. Standard Standard; also triggered by 15% beneficial ownership ULISCO Corporation 10 days following 20% acquisition or tender offer. $0.05 prior to time there is an Acquiring Person. Standard Standard; also triggered by 20% beneficial ownership. UNUM Corporation 10 days following 20% acquisition, 10 business days following tender offer for 30%, or promptly after Board declaration of Adverse Person $0.05 prior to 10 days following the Stock Acquisi- tion Date; may be reinstated if Acquiror reduces beneficial ownership to less than 10%. Standard Standard; also triggered by 30% beneficial ownership USAir 10 days following 20% acquisition or tender offer for 20% $0.03 30 days following acquisition Standard Standard, also triggered by 20% beneficial ownership. USBancorp, Inc. 20 days following 20% acquisition, 10% acquisition and Adverse Person Declaration, or tender offer, which if com- pleted, would make Acquiror an Acquiring or Adverse Person. $0.01 prior to 20th day following Stock Acquisition Date. Standard Standard; triggered by 20% beneficial ownership or Adverse Person declaration. U.S. Facilities Corp. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to Stock Acquisition Date Standard Standard USLIFE Corporation NA NA NA NA U.S. Shoe Corporation 10 days following 20% acquisition or tender offer for 30%. $0.05 prior to time there is an Acquiring Person. Standard Standard; also triggered by 50% beneficial ownership. U.S. Trust Corporation 10 days following 20% acquisition, approval to acquire 25% pursuant to the Bank Holding Company Act of 1956, as amended, or notice of nondisapproval under the Change in Bank Control Act. $0.01 prior to 10th day following the Share Acquisition Date. Standard Standard; also triggered by 40% beneficial ownership. U.S. West, Inc. 10 business days following 20% acquisition or tender offer for 30%. $0.01 prior to 20% acquisition Standard Standard USX Corp. 15 days following 15% acquisition or tender offer. $0.01 prior to 15th day following stock Acquisition Date Standard Triggered by 15% beneficial ownership except for Qualified Offer. UTL Corporation 10 days following 20% acquisition or 10 business days following 30% tender offer. $0.05 prior to 15 days following 20% acquisition. Standard Standard; also triggered by 35% beneficial ownership. Union Carbide Corporation 10 days following 20% acquisition or tender offer $0.01 prior to 10th day following acquisition Standard Standard; also triggered by 20% beneficial ownership. The Union Corporation 30 days following 15% acquisition or 10 business days following tender offer for 30%. $0.01 prior to 30 days following 15% acquisition, may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 40% beneficial ownership. Union Planters Corporation(4) 10 days following 21.50% acquisition or tender offer. $0.01 prior to 10th day following Stock Acquisition Date or in case of fair offer. Standard Standard; also triggered by 21.50% beneficial ownership or by 10% beneficial ownership following tender offer or 20 days following expiration of tender offer. United Banks of Colorado 10 days following 10% acquisition or tender offer for 10%. $0.01 prior to Stock Acquisition Date. Standard Standard United Coin Mines Ltd. Public announcement of 20% acquisition or 20% tender offer. $0.0001 any time prior to Flip-in event. None Standard United Companies Financial 10 days following 45% acquisition or 10 business days following 50% tender offer. $0.01 prior to 45% Acquisition; may be reinstated prior to triggering event if Acquiror reduces beneficial ownership to 20%. Standard Standard; triggered by 50% beneficial ownership or event that increases Acquiror's ownership by 1%, except in case of Qualified Offer. United Saver's Bancorp 10 days following 20% acquisition or 10 business days following 20% tender offer. $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard United Water Resources Inc. 10 days following 20% or tender offer for 20%. $0.01 prior to acquisition. Standard Standard Unitrin Inc. 10 days following 15% acquisition $0.01 prior to acquisition Standard Standard; also triggered by 15% beneficial ownership STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER-UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKETTION Unitrode Corp. 05/02/90 MD 1/100th share of Series A Junior Participating Preferred Stock 3.88 30 7.73 10 Universal Corporation 02/02/89 VA 1/100th share of Junior Participating Preferred Stock 34.13 110 3.22 10 Universal Foods Corporation 10/03/88 WI 1 share of Common Stock 23.75 75 3.16 10 Universal Voltronics Corporation 05/12/89 DE 1 share Common Stock 1.625 50 30.77 10 Unum Corp. 03/13/92 DE 1/100th share of Preferred Stock 37.25 150.00 4.03 10 The Upjohn Company 03/23/89 06/17/86 DE 1/100th of a share of Series A Participating Cumulative Preferred Stock 27.75 400 14.41 10 V.F. Corporation 01/13/88 PA 1/100th share of Series A Junior Participating Preferred Stock 27.75 100 3.60 10 VMX Inc. 02/15/90 DE 1/2 share of Common Stock 1.94 12 6.19 10 VWR Corporation 05/20/88 DE 1 share of Common Stock 20.00 90 4.50 10 Valley National Corporation 02/25/88 AZ 1/100th share of Series A Participating Preferred Stock 29.38 100 3.40 10 Valley Resources 06/18/91 RI 1/100th Share of Preferred Stock 11.63 35 3.01 10 Van Dorn Company (Update) 01/15/92 OH 1/100th share of Preferred Stock 17.625 125 7.09 6 Varo, Inc. 03/11/88 TX 1 share of Common Stock 19.00 50 2.63 10 Veeco Instruments Inc. 05/23/88 NY 1/100th share of Series A Participating Cumulative Preferred Shares 14.13 95 6.72 10 Velobind Inc. 09/08/89 DE 1 share of Common Stock 6.00 38 6.33 10 Vermont American Corporation 02/17/88 DE 1/100th share of Series A Junior Preferred Stock 17.05 70 4.11 10 Vencor Inc. 07/21/93 DE 1/100 share of Preferred Stock 27.25 110 4.04 Versa Technologies 12/13/88 DE 1/100th share of Junior Participating Cumulative Preferred Shares 13.33 60 4.50 10 Village Financial Svcs., LTD 7/18/90 DE 1 share of Preferred Stock NA 40 NA NA Vista Chemical Company 05/31/88 DE 1 share of Common Stock 48.38 150 3.10 10 Vitalink Communications 12/14/89 DE 1 share of Common Stock 15.50 115 7.42 10 Volunteer Bancshares, Inc. 10/31/89 TN 1 share of Common Stock 13.75 60 4.36 10 Vortec Corporation 11/12/87 OH 1 share of Common Stock 2.88 12 4.17 10 WICOR Inc. 08/29/89 WI 1 share of Common Stock 23.38 75 3.21 10 WLR Foods 02/04/94 VA 1/100th of Preferred 28.25 68.00 2.41 10 W.W. Grainger, Inc. 04/26/89 IL 1/100th of share of Series A Junior Participating Preferred Stock. 57.75 250 4.33 10 Walbro Corporation 12/06/88 DE 1/100th share of Series A Junior Participating Preferred Stock 16.75 75 4.48 10 Wallace Computer Services Inc. 5/14/90 DE 1/200 share of Series A Preferred Stock 25.50 115 4.51 10 The Walt Disney Company 06/21/89 DE 1/100th share of Series R Preferred Stock 91.75 350 3.81 10 Waltham Corporation 01/23/89 DE 1/100th share of Junior Participating Cumulative Preferred Stock. 10.25 51 4.98 10 Warner- Lambert Company 06/28/88 DE 1/100 share of Series A Participating Cumulative Preferred Stock 66.75 270 4.04 10 Warwick Insurance Managers, Inc. 07/25/88 NJ 1/100 share of Series A Junior Preferred Stock. 8.75 25 2.86 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS Unitrode Corp. 10 days following 20% acquisition or 10 business days following 20% tender offer or 10% "Adverse Person." $0.01 prior to 10th day following Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership, 1% event or 10% "Adverse Person." Universal Corporation 20 days following 10% acquisition or 10 business days following 10% tender offer. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Acquiror's Rights become void. Also triggered by 1% event. Universal Foods Corporation 10 days following 20% acquisition or 10 business days following 20% tender offer. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Universal Voltronics Corporation 10 business days following 15% acquisition or following tender offer. $0.001 prior to 10th day following stock acquisition date or prior to final expiration date. Standard Standard; acquiror's rights become void. Unum Corp. 10 days following 10% acquisition or tender offer for 10% $0.01 prior to 10% acquisition in or in case of fair offer. Standard Standard The Upjohn Company 10 days following 20% acquisition or 10 business days following tender offer that would result in 30% ownership. $0.05 prior to the Stock Acquisition Date. Standard Standard; Acquiror's Rights become void. V.F. Corporation 10 days following acquisition or tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard VMX Inc. 10 days following 20% merger or 10 business days following 20% tender offer. $0.001 prior to 20% acquisition. Standard Standard; also triggered by 30% beneficial ownership. VWR Corporation 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to the 10th business day following the day the Rights are distributed. Standard; Acquiror's Rights become void. Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. Valley National Corporation 10 days following 20% acquisition or tender offer for 30%. $0.05 prior to 20% acquisition, or until 10 days after if tender offer approved by an investment bank and percent- age increased to 85%; will be reinstated if Acquiror reduces beneficial ownership to less than 5%. Standard Standard; also triggered by 25% beneficial ownership. Valley Resources 10 days following 10% acquisition or tender offer for 10% $0.01 prior to Share Acquisiton Date Standard Standard Van Dorn Company (Update) 10 days following 20% acquisition or tender offer for 20% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard Varo, Inc. 10 days following 20% acquisition or tender offer for 25%. $0.01 prior to 10 days following the Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership. Veeco Instruments Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 10 days following the Share Acquisition Date. Standard Standard; also triggered by 20% acquisition. Velobind Inc. 10 days following 20% acquisition or 20% tender offer. $0.01 prior to 10th business day following Stock Acquisition Date. Standard Standard; triggered by 20% beneficial ownership. Vermont American Corporation 10 days following 10% acquisition or 15% tender offer for Class A shares. $0.02 prior to Stock Acquisition Date. Standard Standard; triggered by 15% beneficial ownership, except of permitted offer. Vencor Inc. 10 days following 15% acquisition or tender offer for 15%. 0.01/15% prior to acquisition Standard Standard Versa Technologies 20 business days following 20% acquisition or 30% tender offer. $0.01 prior to any triggering event. Standard Standard; triggered by 30% beneficial ownership except in case of fair offer. Village Financial Svcs., LTD 10 days following 20% acquisition or tender offer for 20%. NA NA NA Vista Chemical Company 10 business days following 20% acquisition or 10 days following tender offer for 20%. $0.01 prior to 10 business days following 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership. Vitalink Communications 10 days following 20% acquisition or tender offer. $0.01 prior to 10th day following 20% acquisition; may be reinstated if Acquiror reduces beneficial ownership to 10%; includes White Knight Provision. Standard Standard; also triggered by 20% beneficial ownership. Volunteer Bancshares, Inc. 10 days following 20% acquisition or tender offer. $0.01 prior to 10th day following 20% acquisition; may be reinstated if ownership reduced below 20%. Standard Standard; triggered by 25% beneficial ownership or by 1% event. Vortec Corporation 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to 10 days following 20% acquisition or tender offer for 30%. For each Right, will receive cash premium between highest price paid by Acquiror and average closing price. For each Common Share and each Right, will receive cash in an amount equal to highest price paid by Acquiror or consideration, if so elected, as provided in the acquisition agreement. WICOR Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to acquisition. Standard Standard; also triggered by a 1% event. WLR Foods 10 days following 15% acquisition $0.01 prior to acquisition Standard Standard; also triggered by 15% beneficial ownership W.W. Grainger, Inc. 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to 13th day following shares acquisition date. Standard Standard Walbro Corporation 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to 15% acquisition. Standard Standard; Acquiror's Rights become void. Wallace Computer Services Inc. 20% acquisition or 20% tender offer $0.01 prior to 10th day following triggering events Standard Standard The Walt Disney Company 10 days following 25% acquisition or tender offer of 25%. $0.01 prior to 10th day following acquisition. Standard Standard; also triggered by 25% beneficial ownership. Waltham Corporation 10 days following 20% acquisition, 10 business days following 20% tender offer, or 10 business days following Adverse Person declaration. $0.02 prior Adverse Person declaration or 10th day following, Stock Acquisition Date. Standard Standard; also triggered by 20% beneficial ownership or Adverse Person declaration. Warner- Lambert Company 10 business days following 20% acquisition or tender offer for 20%. $0.01 prior to the 10th business day following 20% acquisition or prior to 30% acquisition. Standard Standard; also triggered by beneficial ownership of 20% Acquiror's Rights become void. Warwick Insurance Managers, Inc. 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by beneficial ownership of 40%; Acquiror's Rights become void. STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER-UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKETTION Washington Bancorporation 10/19/88 DE 1 share of Common Stock 16.00 55 3.44 10 Washington Water Power Co. 2/16/90 WA 1/100th share of Preferred Stock 29.75 80 2.69 10 Waste Management Inc. 8/15/90 DE NA 39.63 NA NA NA Wavetek Corporation 06/21/88 DE 1 share of Common Stock 7.13 25 3.51 10 Wellfleet Communications 07/04/94 DE 1/100th of Preferred 25.25 135.00 5.35 10 Wellman, Inc. 08/06/91 DE 1 Share of Common Stock 24.13 90 3.73 10 Wendy's International, Inc. 08/04/88 OH 1/100th share of Series A Preferred Stock 5.88 25 4.26 10 The West Company 01/16/90 PA 1/1000th share of Preferred Stock 18.50 75 4.05 10 West One Bancorp 10/19/89 ID 1/100th share of Series A Junior Participating Preferred Stock 26.17 150 5.73 10 Westbank Corp 01/12/90 MA 1 share of Common Stock 5.45 36 6.61 10 Western Co. North America 03/05/90 DE 1/100th share of Participating Preferred Stock without par value 17.63 70 3.97 10 Western Digital 12/01/89 DE 1/100th share of Junior Participating Preferred Stock 8.25 50 6.06 10 Western Microwave 02/16/89 VA 1 share of Common Stock 2.25 10.50 4.67 10 Westinghouse Electric Corporation 12/07/88 PA 1/100th share of Series A Participating Cumulative Preferred Stock 53.38 200 3.75 10 Westmark International Incorporated 02/19/88 DE 1 share of Common Stock 17.50 60 3.43 10 Westmoreland Coal Company 01/28/93 DE 1/100th Share of Preferred Stock 10.00 30 3.0 10 Wetterau 11/09/89 MO 1/100th share of Series A Junior Participating Preferred Stock 29.38 100 3.40 10 Whirlpool Corporation 05/12/88 DE 1/100th share of Series A Participating Cumulative Preferred Stock 26.38 100 3.79 10 Whitman Corporation 01/20/89 DE 1/100th share of Junior Participating Second Preferred Stock 36.88 120 3.25 10 Whittaker Corporation 11/21/88 DE 1/100th share of Series A Participating Cumulative Preferred Stock 42.00 125 2.98 10 Wicat Systems Inc. (Update) 09/27/91 DE 1/6 M share of Preferred Stock 3.38 15.00 4.44 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS Washington Bancorporation 10 days following 20% acquisition or tender offer for 20%. $0.01 prior to the 10th day following 20% acquisition. Standard; Acquiror's Rights become void. Standard; also triggered by 30% beneficial ownership. Acquiror's Rights become void; additional acquisitions of stock by Washington National Holdings N.V. will not trigger defensive provisions. Washington Water Power Co. date of 10% acquisition or 10 days following 10% tender offer. $0.01 prior to 10% acquisition. Standard Standard Waste Management Inc. NA NA NA NA Wavetek Corporation 10 days following 25% acquisition or tender offer for 30%. $0.01 prior to 25% acquisition; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 30% beneficial ownership; Acquiror's Rights become void. Wellfleet Communications 10 days following 20% acquisition $0.01 prior to 10% acquisition Standard Standard; also triggered by 20% beneficial ownership Wellman, Inc. 10 days following 15% acquisition or tender offer for 15% $0.01 prior to Share Acquisition Standard Standard Wendy's International, Inc. 20% acquisition or 10 days following tender offer for 20%. $0.01 prior to 20% acquisition and may be reinstated if Acquiror reduces beneficial ownership to less than 20%. Standard; Acquiror's Rights become void. Standard; also triggered by 20% beneficial ownership. Acquiror's Rights become void. The West Company 10 days following 15% acquisition or 18% tender. $0.001 prior to 18% acquisition (flip-in) and 10 days prior to 15% acquisition (flip-over) Standard Standard; triggered by 18% beneficial ownership. West One Bancorp 10 business days following 20% acquisition, 25% tender offer, or 10% acquisition and Adverse Person declaration. $0.1 prior to 10th business day following Stock Acquisition Date or Adverse Person declaration; may be reinstated if Acquiror reduces ownership below 10%. Standard Standard; triggered by 25% beneficial ownership except in case of Permitted Offer; Acquiror's Rights become void. Westbank Corp 10 days following 25% acquisition, 10 business days following 30% tender offer or follow 15% Adverse Person declaration. $0.0001 prior to Adverse Person declaration or 10th day following Stock Acquisition Date. Standard Standard; triggered by 30% beneficial ownership; Adverse Person declaration, 1% event, or reduction in dividends Western Co. North America 10 business days following 15% tender offer or 15% acquisition. May terminate any time prior to triggering event. Standard Standard; triggered by 15% beneficial ownership. Western Digital 10 days following 25% acquisition or 10 business days following 25% tender offer. $0.01 prior to Distribution Date. Standard Standard; also triggered by 25% beneficial ownership. Western Microwave 10 days following 20% acquisition or 10 business days following tender offer of 30%. $0.01 prior to 10th day following acquisition. Standard Standard; also triggered by 30% beneficial ownership or increase in acquiror's ownership by more than 1%. Westinghouse Electric Corporation 10 days following 20% acquisition or tender offer for 30%. $0.01 prior to the 10th day following 20% acquisition. Standard Standard; also triggered by 25% beneficial ownership. Acquiror's Rights become void. Westmark International Incorporated 10 days following 20% acquisition or tender offer. $0.01 prior to 20% acquisition. Board may exchange one Common Share per Right after Acquiror accumulates 20% but before accumulation of 50%. Standard Standard Westmoreland Coal Company 10 days following 20% acquisition. $0.01 prior to 10% acquisition. Standard Standard; also triggered by beneficial ownership of 20%; Acquiror's Rights become void. Wetterau 10 business days following 20% acquisition or tender offer without Company's consent $0.01 prior to Stock Acquisition Date. Standard Standard; triggered by existence of Acquiring Person. Whirlpool Corporation 10 days following 20% acquisition or 10 business days following tender offer for 25%. $0.05 prior to 10 days following the Stock Acquisition Date. Standard Standard; also triggered by 25% beneficial ownership; Acquiror's rights become void. Whitman Corporation 10 days following 10% acquisition or 10 business days following tender offer for 10% $0.01 prior to 10% acquisition. Standard Standard; Acquiror's Rights become void. Whittaker Corporation 10 days following 20% acquisition or 10 business days following a tender offer for 20%. $0.01 prior to 10 days following 20% acquisition. Standard Standard; Acquiror's Rights become void. Wicat Systems Inc. (Update) 10 days following 15% acquisition or tender offer for 15% $0.01 prior to 20% acquisition in or in case of fair offer. Standard Standard STATE OF YEARS DATE OF INCOR- RIGHT EXER- EXER-UNTIL ANNOUNCE- PORA- TO MARKET CISE CISE/EXPIRA- COMPANY MENT TION PURCHASE PRICE PRICE MARKETTION Wickes Companies, Inc. 09/13/88 DE 1 share of Common Stock 13.63 26.25 1.93 The rights will expire on 12/31/88, unless the Rights become exercisable prior to such time, in which case the Rights will expire 12 months following the date on which they become exercisable. Willcox & Gibbs, Inc. 01/10/89 NY 1/100th share of Junior Participating Second Preferred Stock 16.75 75 4.48 10 The William Carter Company 04/01/88 MA 1/100th share of Series A Junior Participating Preferred Stock 45.00 10 2.22 10 Wilson Food Corporation 04/19/88 DE 1/100th share of Preferred Stock 13.00 35 2.69 10 Wiser Oil 10/27/93 DE 1/1000th of Preferred 18.13 72.00 3.97 10 Wolohan Lumber 01/26/90 MI 1 share of Common Stock 16.25 90 5.54 10 Woodhead Industries Inc. 7/25/90 DE 1 share of Common Stock 15.75 40 2.54 6 Wyle Laboratories 09/28/89 CA 1/100th share of Junior Participating Cumulative Preferred Stock 8.50 35 4.12 10 Wynn's International, Inc. 03/03/89 DE 1/100th of a share of Junior Participating Preferred Stock 26.38 100 3.79 10 Wyse Technology 02/18/88 CA 1 share of Common Stock 18.00 100 5.56 5 Xillnx Inc. 10/04/91 DE 1/100th share of Preferred Stock 28.25 150.00 5.31 10 Xytronyx Inc. 04/02/91 DE 1/100th share of Preferred Stock 19.63 120 6.11 10 Zayre Corp. 04/26/88 DE 1/100th share of Series B Junior Participating Preferred Stock 23.38 125 5.35 10 FLIP- FLIP- OVER IN TRIGGERING REDEMPTION PROVI- PROVI- COMPANY EVENTS CONDITIONS SIONS SIONS Wickes Companies, Inc. 10 business days following 20% acquisition. $0.01 prior to earlier of (1) the Separation Time or (2) the Expiration Date. Standard; Acquiror's Rights become void. NA Willcox & Gibbs, Inc. 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to close of business on the 10th day following the share Acquisition Date. Standard Standard; Acquiror's Rights become void. The William Carter Company 10 days following 20% acquisition or 10 business days following tender offer for 30%. $0.01 prior to 10 days following the Stock Acquisition Date. Standard Standard; also triggered by 30% beneficial ownership; Acquiror's right become void. Wilson Food Corporation 10 business days following 20% acquisition or tender offer for 25%. $0.01 prior to 10 days following the Stock Acquisition Date. Standard Standard; also triggered by 25% beneficial ownership. Wiser Oil 10 days following 20% acquisition $0.001 prior to acquisition Standard Standard; also triggered by 20% beneficial ownership Wolohan Lumber 10 business days following 25% acquisition, 25% tender offer, or 10% Adverse Person declaration. $0.01 prior to 10th business day following Stock Acquisition Date. No redemption allowed after Adverse Person declaration. Rights may be reinstated if Acquiror reduces owner- ship to 10%. Standard Standard; also triggered by 25% beneficial ownership or Adverse Person declaration. Woodhead Industries Inc. 10 days following 15% acquisition or tender offer for 15%. $0.05 prior to Stock Acquisition Date can be reinstated if Benefi- cial Ownership falls below 10%. Standard Standard Wyle Laboratories 10 business days following 25% acquisition or 10 business days following tender offer for 25%. $0.01 prior to 10th day following 25% acquisition. Standard Triggered by 25% ownership. Wynn's International, Inc. 10 business days following 25% acquisition or 10 business days following tender offer that would result in 30% ownership. $0.01 prior to and including the 10th business day after the Stock Acquisition Date. Standard Standard; Acquiror's Rights become void. Wyse Technology 10 days following 20% acquisition or 10 business days following tender offer for 30%. $0.01 prior to close of business on 10th day following 20% acquisition; may be reinstated if Acquiror reduces beneficial ownership to 10% or less. Standard Standard; also triggered by 30% beneficial ownership. Xillnx Inc. 10 days following 15% acquisition or tender offer for 15% $0.01 prior to 15% acquisition in or in case of fair offer. Standard Standard Xytronyx Inc. 10 days following 15% acquisition or tender offer for 15%. $0.01 prior to 15% acquisition. May be reinstated if Beneficial Ownership falls below 15%. Standard Standard Zayre Corp. 10 days following 20% acquisition or 10 business days following tender offer for 20%. $0.01 prior to 20% acquisition. Standard Standard; also triggered by 20% beneficial ownership.
EX-8 6 EXHIBIT (B)(3) STRICTLY CONFIDENTIAL BIG O TIRES, INC. SHAREHOLDERS' RIGHTS PLAN SUPPLEMENTAL INFORMATION AUGUST 1994 PAINEWEBBER INCORPORATED TABLE OF CONTENTS Part I Historical and Projected Summary Financial Statistics Part II Price/Earnings Multiple Analysis Part III Selected Comparable Company Analysis Part IV Determination of Exercise Price Part V Hypothetical Effect on Capitalization Part VI Summary Pricing and Trading Information on Companies Adopting Shareholders' Rights Plans PART I HISTORICAL AND PROJECTED SUMMARY FINANCIAL STATISTICS HISTORICAL SUMMARY FINANCIAL STATISTICS (1) ($ IN MILLIONS, EXCEPT PER SHARE DATA)
1988 1989 1990 1991 1992 1993 Net Sales $93.52 $108.23 $106.90 $113.84 $119.80 $122.96 Sales Growth Rate -- 15.7% -1.2% 6.5% 5.2% 2.6% COGS 72.73 85.63 84.62 88.64 93.78 96.88 _____ _____ _____ _____ _____ _____ Gross Profit 20.79 22.60 22.28 25.20 26.02 26.08 Gross Margin 22.2% 20.9% 20.8% 22.1% 21.7% 21.2% Operating Expenses 17.20 18.90 19.13 20.17 20.08 20.55 _____ _____ _____ _____ _____ _____ Operating Income 3.59 3.70 3.15 5.03 5.94 5.54 Operating Margin 3.8% 3.4% 3.0% 4.4% 5.0% 4.5% Interest Expense/ (Income) 1.23 1.33 1.89 1.58 1.17 1.22 ____ ____ ____ ____ ____ ____ Pre-Tax Income 2.36 2.38 1.26 3.45 4.77 4.32 Income Taxes 1.10 1.08 0.56 1.52 1.98 1.84 ____ ____ ____ ____ ____ ____ Net Income $1.27 $1.30 $0.71 $1.93 $2.78 $2.47 _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ Earnings Per Share $0.43 $0.40 $0.20 $0.55 $0.80 $0.73 Shares Outstanding 2.94 3.22 3.50 3.51 3.50 3.41
_______________ (1) Data excludes extraordinary items and is adjusted for stock splits. PROJECTED SUMMARY FINANCIAL STATISTICS ($ IN MILLIONS, EXCEPT PER SHARE DATA)
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Net Sales $132.43 $140.14 $150.04 $161.64 $171.86 $181.90 $191.95 $201.98 $212.49 $223.54 $235.16 Sales Growth Rate -- 5.8% 7.1% 7.7% 6.3% 5.8% 5.5% 5.2% 5.2% 5.2% 5.2% COGS 103.84 110.91 120.58 130.72 138.51 146.54 154.33 162.01 169.99 178.83 188.13 ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Gross Profit 28.58 29.24 29.46 30.93 33.35 35.36 37.62 39.97 42.50 44.71 47.03 Gross Margin 21.6% 20.9% 19.6% 19.1% 19.4% 19.4% 19.6% 19.8% 20.0% 20.0% 20.0% Operating Expenses 21.39 20.76 20.01 20.19 21.61 22.84 24.15 25.48 26.77 28.17 29.63 ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Operating Income 7.19 8.48 9.45 10.74 11.74 12.52 13.47 14.49 15.72 16.54 17.40 Operating Margin 5.4% 6.0% 6.3% 6.6% 6.8% 6.9% 7.0% 7.2% 7.4% 7.4% 7.4% Interest Expense/ (Income) 1.13 1.35 1.13 0.97 0.72 0.43 0.13 (0.24) (0.21) (0.22) (0.24) ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Pre-Tax Income 6.06 7.13 8.32 9.77 11.03 12.08 13.34 14.73 15.94 16.77 17.64 Income Taxes 2.55 3.00 3.50 4.11 4.65 5.11 5.65 6.25 6.76 7.11 7.48 ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Net Income $ 3.51 $ 4.13 $ 4.82 $ 5.66 $ 6.37 $ 6.98 $ 7.69 $ 8.48 $ 9.18 $ 9.66 $10.16 ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Earnings Per Share $ 1.01 $ 1.16 $ 1.33 $ 1.53 $ 1.69 $ 1.82 $ 1.97 $ 2.13 $ 2.31 $ 2.42 $ 2.55 Shares Outstanding 3.47 3.56 3.62 3.70 3.77 3.83 3.90 3.98 3.98 3.98 3.98
PART II PRICE/EARNINGS MULTIPLE ANALYSIS PRICE/EARNINGS MULTIPLE ANALYSIS - TEN-YEAR AVERAGE P/E RATIOS [GRAPH APPEARS HERE] PaineWebber Incorporated P/E Ratios Weekly: August 17, 1984 to August 17, 1994 S&P (400 INDUSTRIALS) INDEX1 INDEX2 06-Apr-84 10.91 8.64 #N/A 13-Apr-84 11.05 8.63 #N/A 20-Apr-84 11.10 8.64 #N/A 27-Apr-84 11.26 8.66 #N/A 04-May-84 11.18 8.54 #N/A 11-May-84 11.13 8.60 #N/A 18-May-84 10.96 7.97 #N/A 25-May-84 10.67 7.72 #N/A 01-Jun-84 10.79 7.81 #N/A 08-Jun-84 10.95 7.87 #N/A 15-Jun-84 10.49 7.92 #N/A 22-Jun-84 10.90 7.77 #N/A 29-Jun-84 10.83 7.90 #N/A 06-Jul-84 9.92 7.66 #N/A 13-Jul-84 9.81 7.47 #N/A 20-Jul-84 9.73 7.42 #N/A 27-Jul-84 9.82 7.43 #N/A 03-Aug-84 10.55 7.86 #N/A 10-Aug-84 10.77 7.92 #N/A 17-Aug-84 10.68 7.80 #N/A 24-Aug-84 10.90 8.02 #N/A 31-Aug-84 10.85 7.93 #N/A 07-Sep-84 10.69 8.04 #N/A 14-Sep-84 10.94 7.91 #N/A 21-Sep-84 10.70 8.05 #N/A 28-Sep-84 10.73 8.34 #N/A 05-Oct-84 10.27 7.93 #N/A 12-Oct-84 10.34 7.93 #N/A 19-Oct-84 10.55 8.27 #N/A 26-Oct-84 10.41 8.47 #N/A 02-Nov-84 10.53 8.55 #N/A 09-Nov-84 10.54 8.68 #N/A 16-Nov-84 10.31 8.58 #N/A 23-Nov-84 10.48 8.38 #N/A 30-Nov-84 10.24 8.59 #N/A 07-Dec-84 10.16 8.23 #N/A 14-Dec-84 10.16 8.62 #N/A 21-Dec-84 10.34 8.81 #N/A 28-Dec-84 10.39 8.62 #N/A 04-Jan-85 10.14 8.08 #N/A 11-Jan-85 10.41 8.12 #N/A 18-Jan-85 10.64 8.38 #N/A 25-Jan-85 11.04 8.77 #N/A 01-Feb-85 11.12 8.94 #N/A 08-Feb-85 11.34 9.01 #N/A 15-Feb-85 11.27 9.24 #N/A 22-Feb-85 11.14 9.17 #N/A 01-Mar-85 11.41 9.53 #N/A 08-Mar-85 11.14 9.18 #N/A 15-Mar-85 10.95 9.09 #N/A 22-Mar-85 11.11 9.02 #N/A 29-Mar-85 11.22 9.21 #N/A 05-Apr-85 11.32 9.16 #N/A 12-Apr-85 11.41 9.26 #N/A 19-Apr-85 11.44 8.93 #N/A 26-Apr-85 11.48 8.93 #N/A 03-May-85 11.33 9.06 #N/A 10-May-85 11.57 9.15 #N/A 17-May-85 11.74 9.13 #N/A 24-May-85 11.84 9.30 #N/A 31-May-85 11.90 9.33 #N/A 07-Jun-85 11.88 9.33 #N/A 14-Jun-85 11.71 9.21 #N/A 21-Jun-85 11.85 8.00 #N/A 28-Jun-85 12.02 7.86 #N/A 05-Jul-85 12.99 8.31 #N/A 12-Jul-85 13.00 8.51 #N/A 19-Jul-85 13.21 8.90 #N/A 26-Jul-85 13.13 8.55 #N/A 02-Aug-85 13.05 8.55 #N/A 09-Aug-85 12.82 8.43 #N/A 16-Aug-85 12.66 8.35 #N/A 23-Aug-85 12.72 8.45 #N/A 30-Aug-85 12.83 8.45 #N/A 06-Sep-85 12.82 8.47 #N/A 13-Sep-85 12.49 8.21 #N/A 20-Sep-85 12.41 8.03 #N/A 27-Sep-85 12.40 8.31 #N/A 04-Oct-85 13.15 9.52 #N/A 11-Oct-85 13.21 9.79 #N/A 18-Oct-85 13.41 9.85 #N/A 25-Oct-85 13.42 9.97 #N/A 01-Nov-85 13.68 10.10 #N/A 08-Nov-85 13.81 10.42 #N/A 15-Nov-85 14.14 10.86 #N/A 22-Nov-85 14.41 10.86 #N/A 29-Nov-85 14.47 11.05 #N/A 06-Dec-85 14.52 11.51 #N/A 13-Dec-85 15.00 11.91 #N/A 20-Dec-85 15.05 11.89 #N/A 27-Dec-85 14.98 11.71 #N/A 03-Jan-86 15.35 13.13 #N/A 10-Jan-86 14.99 12.15 #N/A 17-Jan-86 15.15 12.52 #N/A 24-Jan-86 14.97 12.59 #N/A 31-Jan-86 15.31 12.91 #N/A 07-Feb-86 15.54 13.49 #N/A 14-Feb-86 15.89 13.48 #N/A 21-Feb-86 16.25 13.78 #N/A 28-Feb-86 16.41 13.47 #N/A 07-Mar-86 16.28 13.87 #N/A 14-Mar-86 17.09 14.08 #N/A 21-Mar-86 16.93 14.15 #N/A 28-Mar-86 17.32 14.64 #N/A 04-Apr-86 16.83 14.33 #N/A 11-Apr-86 17.41 13.93 #N/A 18-Apr-86 17.91 14.60 #N/A 25-Apr-86 17.99 14.63 #N/A 02-May-86 17.45 14.60 #N/A 09-May-86 17.72 15.16 #N/A 16-May-86 17.33 14.19 #N/A 23-May-86 17.96 14.07 #N/A 30-May-86 18.42 14.16 #N/A 06-Jun-86 18.35 14.15 #N/A 13-Jun-86 18.35 14.75 #N/A 20-Jun-86 18.44 14.35 #N/A 27-Jun-86 18.56 14.80 #N/A 04-Jul-86 18.17 13.94 #N/A 11-Jul-86 17.38 12.96 #N/A 18-Jul-86 16.90 12.90 #N/A 25-Jul-86 17.15 12.92 #N/A 01-Aug-86 16.76 13.01 #N/A 08-Aug-86 16.92 12.95 #N/A 15-Aug-86 17.64 13.37 #N/A 22-Aug-86 17.79 13.16 #N/A 29-Aug-86 17.98 12.96 #N/A 05-Sep-86 17.92 13.17 #N/A 12-Sep-86 16.53 12.84 #N/A 19-Sep-86 16.62 13.09 #N/A 26-Sep-86 16.59 13.45 #N/A 03-Oct-86 16.63 12.09 #N/A 10-Oct-86 16.76 11.90 #N/A 17-Oct-86 17.04 12.07 #N/A 24-Oct-86 17.01 13.09 #N/A 31-Oct-86 17.42 13.82 #N/A 07-Nov-86 17.58 13.93 #N/A 14-Nov-86 17.52 14.10 #N/A 21-Nov-86 17.60 13.57 #N/A 28-Nov-86 17.86 13.39 #N/A 05-Dec-86 17.97 13.78 #N/A 12-Dec-86 17.70 13.25 #N/A 19-Dec-86 17.87 13.98 #N/A 26-Dec-86 17.69 13.78 #N/A 02-Jan-87 19.06 12.99 #N/A 09-Jan-87 20.02 13.42 #N/A 16-Jan-87 20.70 14.40 #N/A 23-Jan-87 21.01 14.87 #N/A 30-Jan-87 21.40 14.88 #N/A 06-Feb-87 21.95 16.13 #N/A 13-Feb-87 22.03 15.99 #N/A 20-Feb-87 22.45 16.23 #N/A 27-Feb-87 22.40 15.52 #N/A 06-Mar-87 23.00 16.55 #N/A 13-Mar-87 22.99 17.15 #N/A 20-Mar-87 23.73 16.50 #N/A 27-Mar-87 23.62 16.37 #N/A 03-Apr-87 22.94 14.86 #N/A 10-Apr-87 22.43 14.77 #N/A 17-Apr-87 21.98 14.09 #N/A 24-Apr-87 21.59 14.38 #N/A 01-May-87 22.08 14.49 #N/A 08-May-87 22.53 15.10 #N/A 15-May-87 22.10 15.07 #N/A 22-May-87 21.68 14.46 #N/A 29-May-87 22.25 14.57 #N/A 05-Jun-87 22.49 14.36 #N/A 12-Jun-87 23.06 15.10 #N/A 19-Jun-87 23.50 14.61 #N/A 26-Jun-87 23.55 15.01 #N/A 03-Jul-87 21.93 14.07 #N/A 10-Jul-87 22.23 14.11 #N/A 17-Jul-87 22.75 14.24 #N/A 24-Jul-87 22.36 14.29 #N/A 31-Jul-87 23.06 14.96 #N/A 07-Aug-87 23.36 15.05 #N/A 14-Aug-87 24.05 15.73 #N/A 21-Aug-87 24.23 16.02 #N/A 28-Aug-87 23.62 15.31 #N/A 04-Sep-87 22.86 15.02 #N/A 11-Sep-87 23.29 15.17 #N/A 18-Sep-87 22.73 14.81 #N/A 25-Sep-87 23.10 14.14 #N/A 02-Oct-87 21.24 14.09 #N/A 09-Oct-87 20.02 13.49 #N/A 16-Oct-87 18.03 12.04 #N/A 23-Oct-87 15.63 10.22 #N/A 30-Oct-87 15.99 9.49 #N/A 06-Nov-87 15.83 9.70 #N/A 13-Nov-87 15.58 10.22 #N/A 20-Nov-87 15.34 10.40 #N/A 27-Nov-87 15.25 11.05 #N/A 04-Dec-87 14.15 10.34 #N/A 11-Dec-87 15.03 10.14 #N/A 18-Dec-87 15.93 10.91 #N/A 25-Dec-87 16.20 11.70 #N/A 01-Jan-88 14.09 10.34 #N/A 08-Jan-88 13.84 10.21 #N/A 15-Jan-88 14.32 9.97 #N/A 22-Jan-88 13.92 9.96 #N/A 29-Jan-88 14.48 10.41 #N/A 05-Feb-88 14.12 10.53 #N/A 12-Feb-88 14.59 10.61 #N/A 19-Feb-88 14.86 11.44 #N/A 26-Feb-88 14.92 11.46 #N/A 04-Mar-88 15.23 11.65 #N/A 11-Mar-88 15.15 11.89 #N/A 18-Mar-88 15.51 12.79 #N/A 25-Mar-88 14.76 12.42 #N/A 01-Apr-88 13.61 12.14 #N/A 08-Apr-88 14.21 12.55 #N/A 15-Apr-88 13.72 11.79 #N/A 22-Apr-88 13.73 11.51 #N/A 29-Apr-88 13.80 11.81 #N/A 06-May-88 13.59 11.97 #N/A 13-May-88 13.51 11.96 #N/A 20-May-88 13.30 12.39 #N/A 27-May-88 13.26 12.50 #N/A 03-Jun-88 13.94 12.54 #N/A 10-Jun-88 14.21 12.49 #N/A 17-Jun-88 14.17 12.20 #N/A 24-Jun-88 14.33 12.32 #N/A 01-Jul-88 13.21 12.47 #N/A 08-Jul-88 13.14 12.08 #N/A 15-Jul-88 13.23 12.31 #N/A 22-Jul-88 12.81 12.36 #N/A 29-Jul-88 13.22 12.18 #N/A 05-Aug-88 13.14 11.95 #N/A 12-Aug-88 12.71 11.77 #N/A 19-Aug-88 12.56 12.00 #N/A 26-Aug-88 12.54 11.69 #N/A 02-Sep-88 12.77 11.50 #N/A 09-Sep-88 12.88 11.25 #N/A 16-Sep-88 13.08 11.83 #N/A 23-Sep-88 13.02 13.86 #N/A 30-Sep-88 13.12 13.55 #N/A 07-Oct-88 12.80 13.27 14-Oct-88 12.70 13.77 #N/A 21-Oct-88 13.11 14.17 #N/A 28-Oct-88 12.86 13.39 #N/A 04-Nov-88 12.76 13.29 #N/A 11-Nov-88 12.36 13.28 #N/A 18-Nov-88 12.29 11.64 #N/A 25-Nov-88 12.34 12.67 #N/A 02-Dec-88 12.56 12.76 #N/A 09-Dec-88 12.80 13.22 #N/A 16-Dec-88 12.78 13.02 #N/A 23-Dec-88 12.89 13.14 #N/A 30-Dec-88 12.89 13.17 #N/A 06-Jan-89 12.48 12.10 #N/A 13-Jan-89 12.63 11.94 #N/A 20-Jan-89 12.73 11.78 #N/A 27-Jan-89 13.05 11.45 #N/A 03-Feb-89 13.21 11.50 #N/A 10-Feb-89 12.96 13.05 #N/A 17-Feb-89 13.16 12.50 #N/A 24-Feb-89 12.73 12.31 #N/A 03-Mar-89 12.92 12.95 #N/A 10-Mar-89 12.99 13.01 #N/A 17-Mar-89 12.98 12.58 #N/A 24-Mar-89 12.79 12.41 #N/A 31-Mar-89 13.04 12.91 #N/A 07-Apr-89 12.57 12.24 #N/A 14-Apr-89 12.77 12.29 #N/A 21-Apr-89 13.12 12.17 #N/A 28-Apr-89 13.09 12.12 #N/A 05-May-89 13.00 11.92 #N/A 12-May-89 13.25 12.37 #N/A 19-May-89 13.54 13.14 #N/A 26-May-89 13.55 13.27 #N/A 02-Jun-89 13.69 13.44 #N/A 09-Jun-89 13.71 13.36 #N/A 16-Jun-89 13.50 13.54 #N/A 23-Jun-89 13.77 13.86 #N/A 30-Jun-89 13.34 13.23 #N/A 07-Jul-89 13.58 12.36 #N/A 14-Jul-89 13.86 12.26 #N/A 21-Jul-89 14.10 13.27 #N/A 28-Jul-89 14.32 14.23 #N/A 04-Aug-89 14.39 14.36 #N/A 11-Aug-89 14.44 15.32 #N/A 18-Aug-89 14.49 14.82 #N/A 25-Aug-89 14.71 14.04 #N/A 01-Sep-89 14.83 14.51 #N/A 08-Sep-89 14.62 14.61 #N/A 15-Sep-89 14.44 14.13 #N/A 22-Sep-89 14.49 14.51 #N/A 29-Sep-89 14.57 14.99 #N/A 06-Oct-89 15.17 14.45 #N/A 13-Oct-89 14.08 13.48 #N/A 20-Oct-89 14.69 13.79 #N/A 27-Oct-89 14.17 13.18 #N/A 03-Nov-89 14.27 13.07 #N/A 10-Nov-89 14.33 13.30 #N/A 17-Nov-89 14.46 13.61 #N/A 24-Nov-89 14.57 13.65 #N/A 01-Dec-89 14.86 14.02 #N/A 08-Dec-89 14.80 14.02 #N/A 15-Dec-89 14.83 13.34 #N/A 22-Dec-89 14.70 12.87 #N/A 29-Dec-89 14.96 12.77 #N/A 05-Jan-90 15.39 12.29 #N/A 12-Jan-90 14.88 11.88 #N/A 19-Jan-90 14.86 11.27 #N/A 26-Jan-90 14.27 11.05 #N/A 02-Feb-90 14.52 11.73 #N/A 09-Feb-90 14.69 12.23 #N/A 16-Feb-90 14.62 12.23 #N/A 23-Feb-90 14.22 12.07 #N/A 02-Mar-90 14.71 12.92 #N/A 09-Mar-90 14.87 12.96 #N/A 16-Mar-90 15.10 13.25 #N/A 23-Mar-90 14.91 13.40 #N/A 30-Mar-90 15.02 13.42 #N/A 06-Apr-90 15.85 12.80 #N/A 13-Apr-90 16.02 13.01 #N/A 20-Apr-90 15.62 13.45 #N/A 27-Apr-90 15.35 12.89 #N/A 04-May-90 15.79 13.05 #N/A 11-May-90 16.40 13.25 #N/A 18-May-90 16.54 12.94 #N/A 25-May-90 16.57 12.59 #N/A 01-Jun-90 16.99 12.90 #N/A 08-Jun-90 16.72 13.14 #N/A 15-Jun-90 17.02 13.40 #N/A 22-Jun-90 16.71 13.01 #N/A 29-Jun-90 16.85 12.14 #N/A 06-Jul-90 17.08 11.28 #N/A 13-Jul-90 17.61 12.24 #N/A 20-Jul-90 17.33 12.46 #N/A 27-Jul-90 16.90 12.70 #N/A 03-Aug-90 16.46 11.17 #N/A 10-Aug-90 16.01 9.98 #N/A 17-Aug-90 15.64 9.89 #N/A 24-Aug-90 14.91 8.97 #N/A 31-Aug-90 15.45 9.93 #N/A 07-Sep-90 15.47 9.86 #N/A 14-Sep-90 15.15 9.71 #N/A 21-Sep-90 14.84 9.80 #N/A 28-Sep-90 14.58 9.73 #N/A 05-Oct-90 15.10 9.16 #N/A 12-Oct-90 14.46 8.23 #N/A 19-Oct-90 15.11 9.10 #N/A 26-Oct-90 14.75 9.63 #N/A 02-Nov-90 15.01 9.97 #N/A 09-Nov-90 15.10 10.18 #N/A 16-Nov-90 15.26 10.96 #N/A 23-Nov-90 15.21 10.64 #N/A 30-Nov-90 15.55 11.20 #N/A 07-Dec-90 15.78 10.90 #N/A 14-Dec-90 15.74 11.39 #N/A 21-Dec-90 15.96 11.54 #N/A 28-Dec-90 15.85 11.44 #N/A 04-Jan-91 15.48 10.83 #N/A 11-Jan-91 15.21 11.57 #N/A 18-Jan-91 16.08 11.77 #N/A 25-Jan-91 16.33 11.88 #N/A 01-Feb-91 16.68 12.39 #N/A 08-Feb-91 17.45 13.00 #N/A 15-Feb-91 17.93 13.50 #N/A 22-Feb-91 17.81 13.29 #N/A 01-Mar-91 18.06 13.58 #N/A 08-Mar-91 18.38 13.78 #N/A 15-Mar-91 18.28 14.56 #N/A 22-Mar-91 17.94 14.98 #N/A 29-Mar-91 18.29 14.87 #N/A 05-Apr-91 18.88 15.80 28.79 12-Apr-91 19.16 15.35 32.95 19-Apr-91 19.38 14.84 32.45 26-Apr-91 19.11 14.64 32.32 03-May-91 19.22 15.04 33.33 10-May-91 19.03 15.65 32.07 17-May-91 18.83 15.89 30.45 24-May-91 19.11 16.11 31.62 31-May-91 19.75 17.03 30.67 07-Jun-91 19.19 17.03 30.00 14-Jun-91 19.35 18.25 30.56 21-Jun-91 19.14 18.28 30.23 28-Jun-91 18.78 17.90 30.66 05-Jul-91 20.73 17.44 34.57 12-Jul-91 21.08 17.56 34.57 19-Jul-91 21.30 17.64 35.57 26-Jul-91 21.07 17.33 34.88 02-Aug-91 21.45 17.85 34.37 09-Aug-91 21.43 19.29 35.50 16-Aug-91 21.28 18.79 34.24 23-Aug-91 21.79 19.35 36.18 30-Aug-91 21.87 21.21 36.98 06-Sep-91 21.47 20.29 30.63 13-Sep-91 21.13 19.36 31.19 20-Sep-91 21.35 20.06 35.65 27-Sep-91 21.21 20.56 34.21 04-Oct-91 23.38 18.98 34.09 11-Oct-91 23.38 18.90 33.22 18-Oct-91 24.12 20.84 34.93 25-Oct-91 23.58 21.66 33.64 01-Nov-91 23.95 21.97 36.11 08-Nov-91 24.01 22.34 38.32 15-Nov-91 23.38 21.15 40.57 22-Nov-91 23.04 21.30 40.19 29-Nov-91 22.96 21.46 39.19 06-Dec-91 23.18 21.60 40.98 13-Dec-91 23.50 23.20 40.18 20-Dec-91 23.66 24.62 41.55 27-Dec-91 24.88 26.39 45.07 03-Jan-92 29.62 24.77 47.84 10-Jan-92 29.40 23.16 49.08 17-Jan-92 29.76 24.72 47.00 24-Jan-92 29.44 24.54 46.11 31-Jan-92 29.01 23.71 48.77 07-Feb-92 29.25 24.24 57.02 14-Feb-92 29.33 25.11 54.06 21-Feb-92 29.26 25.78 55.50 28-Feb-92 29.34 25.38 54.92 06-Mar-92 28.77 25.75 48.67 13-Mar-92 28.86 25.84 48.45 20-Mar-92 29.22 26.29 50.72 27-Mar-92 28.69 26.66 52.87 03-Apr-92 28.33 23.73 46.97 10-Apr-92 28.51 23.11 48.45 17-Apr-92 29.30 24.84 49.81 24-Apr-92 28.64 24.32 46.70 01-May-92 28.92 23.92 48.35 08-May-92 29.12 24.44 49.23 15-May-92 28.63 24.28 46.96 22-May-92 28.95 24.31 46.39 29-May-92 29.12 23.84 47.11 05-Jun-92 28.95 23.98 41.31 12-Jun-92 28.61 22.45 37.82 19-Jun-92 28.14 21.36 33.99 26-Jun-92 28.08 22.46 35.80 03-Jul-92 27.00 21.60 35.51 10-Jul-92 27.13 22.69 35.38 17-Jul-92 27.26 22.20 36.12 24-Jul-92 26.96 22.39 37.30 31-Jul-92 27.81 24.42 39.06 07-Aug-92 27.45 24.34 36.65 14-Aug-92 27.52 24.02 40.45 21-Aug-92 27.16 23.53 39.93 28-Aug-92 27.23 22.82 37.20 04-Sep-92 27.41 23.55 36.18 11-Sep-92 27.69 24.71 35.73 18-Sep-92 27.91 25.10 38.84 25-Sep-92 27.20 24.60 38.91 02-Oct-92 25.54 23.13 38.30 09-Oct-92 25.03 21.99 36.64 16-Oct-92 25.58 23.87 37.47 23-Oct-92 25.81 25.59 37.76 30-Oct-92 26.06 25.05 38.70 06-Nov-92 26.02 25.54 40.27 13-Nov-92 26.34 25.98 42.76 20-Nov-92 26.59 26.34 43.03 27-Nov-92 26.78 26.61 43.79 04-Dec-92 26.93 27.12 45.22 11-Dec-92 26.99 26.33 43.03 18-Dec-92 27.39 26.49 43.01 25-Dec-92 27.23 28.64 44.08 01-Jan-93 26.06 25.85 43.96 08-Jan-93 25.65 26.30 42.63 15-Jan-93 26.04 26.59 42.50 22-Jan-93 25.91 25.67 40.52 29-Jan-93 26.12 25.62 40.00 05-Feb-93 26.63 27.16 41.25 12-Feb-93 26.35 26.82 41.22 19-Feb-93 25.61 25.26 41.21 26-Feb-93 26.16 25.59 42.21 05-Mar-93 26.36 27.30 42.83 12-Mar-93 26.58 28.08 45.09 19-Mar-93 26.59 28.20 46.07 26-Mar-93 26.35 28.80 45.99 02-Apr-93 24.93 27.46 44.19 09-Apr-93 24.81 27.61 43.25 16-Apr-93 25.13 27.60 45.83 23-Apr-93 24.66 25.46 43.21 30-Apr-93 24.95 24.87 41.54 07-May-93 25.16 25.50 44.41 14-May-93 25.08 22.35 44.82 21-May-93 25.53 23.13 47.79 28-May-93 25.74 23.44 49.51 04-Jun-93 25.72 23.89 48.15 11-Jun-93 25.51 17.62 46.30 18-Jun-93 25.24 18.52 44.82 25-Jun-93 25.33 18.60 43.96 02-Jul-93 27.24 17.84 46.52 09-Jul-93 27.32 17.50 45.63 16-Jul-93 27.14 18.77 45.66 23-Jul-93 27.20 18.50 45.93 30-Jul-93 27.18 19.06 46.43 06-Aug-93 27.21 18.47 47.49 13-Aug-93 27.23 18.54 49.39 20-Aug-93 27.81 19.57 51.59 27-Aug-93 27.98 19.52 50.62 03-Sep-93 27.98 19.15 49.83 10-Sep-93 27.85 19.70 49.58 17-Sep-93 27.66 20.42 49.19 24-Sep-93 27.68 18.58 47.47 01-Oct-93 26.44 18.70 45.85 08-Oct-93 26.46 18.77 46.05 15-Oct-93 27.15 16.39 47.27 22-Oct-93 26.91 16.60 46.85 29-Oct-93 27.25 16.81 49.37 05-Nov-93 26.94 16.43 48.81 12-Nov-93 27.41 16.76 50.75 19-Nov-93 27.33 16.55 49.31 26-Nov-93 27.27 16.24 49.38 03-Dec-93 27.35 17.43 50.54 10-Dec-93 27.31 17.58 50.60 17-Dec-93 27.39 18.54 48.44 24-Dec-93 27.46 18.41 47.92 31-Dec-93 27.49 19.01 50.04 07-Jan-94 24.91 19.22 48.56 14-Jan-94 25.17 20.59 48.87 21-Jan-94 25.20 20.99 49.20 28-Jan-94 25.28 20.12 50.16 04-Feb-94 24.93 21.31 48.69 11-Feb-94 25.00 21.37 49.81 18-Feb-94 24.98 21.42 48.57 25-Feb-94 24.84 21.59 49.34 04-Mar-94 24.81 22.44 48.61 11-Mar-94 24.93 21.51 49.49 18-Mar-94 25.19 21.82 50.39 25-Mar-94 24.57 21.45 48.53 01-Apr-94 22.84 20.04 45.99 08-Apr-94 22.90 20.86 46.77 15-Apr-94 22.70 20.63 46.46 22-Apr-94 22.75 21.39 46.01 29-Apr-94 23.01 20.49 48.48 06-May-94 22.91 20.38 48.09 13-May-94 22.77 19.48 45.50 20-May-94 23.25 20.47 44.50 27-May-94 23.37 20.79 45.87 03-Jun-94 23.48 20.49 43.56 10-Jun-94 23.31 20.43 43.89 17-Jun-94 23.36 19.77 42.61 24-Jun-94 22.58 18.95 38.34 01-Jul-94 19.59 18.04 40.14 08-Jul-94 19.77 18.28 37.92 15-Jul-94 19.98 18.88 37.90 22-Jul-94 19.97 18.35 37.26 29-Jul-94 20.18 18.79 38.21 05-Aug-94 20.11 18.74 37.43 12-Aug-94 20.34 18.20 36.30 17-Aug-94 20.55 18.66 36.18 INDEX1 is a composite of: BRD, CTB, SAME, TBCC INDEX2 is a composite of: AZO, DAP, HLO, ORLY Source: Tradeline Daily Prices/S&P Compustat 12-Month Earnings PART III SELECTED COMPARABLE COMPANY ANALYSIS SUMMARY ANALYSIS OF COMPARABLE COMPANIES
Summary Analysis of Comparable Companies ($ in millions, Discount Auto Hi-Lo O Reilly except share data) Big O Tires Inc Autozone Inc PTS Inc Automotive Inc Automotive Inc ___________________________________________________________________________________________________________________________ PRICE & CAPITALIZATION DATA Latest Price per Share (8/19/94) $15.25 $22.75 $21.63 $11.63 $25.25 Market Value of Common Equity $49.8 $3,299.0 $300.7 $124.4 $218.6 Total Preferred Equity Total Debt 25.1 4.3 66.5 33.7 1.0 Other Long-Term Liabilities 0.6 10.6 4.1 0.6 Less: Cash & Equivalents (5.7) (73.6) (8.3) (1.0) (7.2) ________________________________________________________________________________ TOTAL VALUE $69.7 $3,240.3 $358.8 $161.2 $213.0 ________________________________________________________________________________________________________________ VALUATION DATA MEAN MEDIAN Total Value/LTM Revenues 0.6 x 2.3 x 1.8 x 0.7 x 1.4 x 1.6 x 1.6 x Total Value/LTM EBITDA 9.1 16.1 12.1 8.2 12.7 12.3 12.4 Total Value/3-yr Avg. EBITDA 9.7 NMF 17.2 8.2 16.7 14.0 16.7 Total Value/LTM EBIT 11.5 18.8 14.5 11.4 15.2 15.0 14.8 Total Value/Total Capitalization 1.2 6.5 2.2 1.1 3.2 3.3 2.7 Total Value/Total Assets 0.9 3.8 2.0 0.9 2.6 2.3 2.3 Price/ LTM EPS 19.1 x 17.5 x 22.1 x 15.5 x 23.8 x 19.7 x 19.8 x Price/Projected Est. 1 EPS 17.9 28.1 19.1 13.2 21.0 20.4 20.1 Price/Projected Est. 2 EPS NA 22.8 15.3 11.3 17.4 16.7 16.4 Equity Value/LTM Cash Flow 9.9 25.9 18.0 9.3 19.4 18.1 18.7 Equity Value/Book Value 1.7 6.9 3.2 1.2 3.4 3.7 3.3 ________________________________________________________________________________________________________________ OPERATING DATA FOR LTM ENDING Jun-1994 Jun-1994 Jun-1994 Jun-1994 Jun-1994 Total Revenues $121.6 $1,423.4 $198.2 $221.7 $153.2 EBIT 6.1 172.4 24.8 14.1 14.0 EBITDA 7.7 201.2 29.7 19.6 16.8 Net Income 2.7 105.1 11.9 7.9 9.1 Cash Flow 5.0 127.2 16.7 13.4 11.3 EBIT Margin 5.0% 12.1% 12.5% 6.4% 9.1% 10.0% 10.6% EBITDA Margin 6.3 14.1 15.0 8.9 10.9 12.2 12.5 Return on Avg. Net Capitalization 11.7 48.8 19.4 10.8 29.3 27.1 24.3 Net Income Margin 2.2 7.4 6.0 3.6 6.0 5.7 6.0 Return on Avg. Common Equity 8.5 25.1 13.8 7.7 15.5 15.5 14.6 Cash Flow/Total Assets 6.8 15.0 9.2 7.8 14.0 11.5 11.6
($ in millions, Discount Auto Hi-Lo O Reilly except share data) Big O Tires Inc Autozone Inc PTS Inc Automotive Inc Automotive Inc ___________________________________________________________________________________________________________________________ BALANCE SHEET DATA Total Assets $74.7 $845.9 $181.0 $172.9 $80.9 Total Capitalization 58.6 496.3 159.9 148.4 65.7 Common Equity 33.0 478.5 93.4 106.5 64.1 Debt/Total Capitalization 42.8% 0.9% 41.6% 22.7% 1.6% Shares Outstanding 3.3 145.0 13.9 10.7 8.7 ___________________________________________________________________________________________________________________________ PERFORMANCE VARIABLES 3-YEAR GROWTH RATES Total Revenues 3.9% 22.0% 27.5% 14.8% 20.2% EBITDA 2.1 34.7 29.2 (6.3) 19.3 Net Income 13.4 40.3 46.2 (1.4) 22.9 Cash Flow (1.8) 42.7 36.3 (1.5) 22.6 Total Assets (0.4) 32.2 25.8 12.3 21.5 3-YEAR AVERAGES EBITDA Margin 6.0% 12.0% 14.6% 11.0% 11.2% Net Income Margin 2.0 6.3 5.8 4.1 5.8
SUMMARY ANALYSIS OF COMPARABLE COMPANIES ($ in millions, Cooper Tire & except share data) Big O Tires Inc Brad Ragan, Inc. Rubber Co. S & M Co TBC Corp. ___________________________________________________________________________________________________________________________ PRICE & CAPITALIZATION DATA Latest Price per Share (8/19/94) $15.25 $31.50 $24.50 $1.19 $10.13 Market Value of Common Equity $49.8 $69.0 $2,048.8 $1.7 $283.6 Total Preferred Equity Total Debt 25.1 31.6 43.7 4.6 40.3 Other Long-Term Liabilities 0.6 4.5 185.3 0.3 0.3 Less: Cash & Equivalents (5.7) (0.7) (28.7) (0.1) TOTAL VALUE $69.7 $104.4 $2,249.1 $6.6 $324.2 ___________________________________________________________________________________________________________________________ VALUATION DATA MEAN MEDIAN Total Value/LTM Revenues 0.6 x 0.4 x 1.8 x 0.3 x 0.6 x 0.8 x 0.5 x Total Value/LTM EBITDA 9.1 14.1 9.9 NMF 9.4 11.1 9.9 Total Value/3-yr Avg. EBITDA 9.7 NMF 11.6 7.0 9.3 9.3 9.3 Total Value/LTM EBIT 11.5 16.9 12.8 14.1 10.6 13.6 13.4 Total Value/Total Capitalization 1.2 1.3 2.7 0.8 2.0 1.7 1.6 Total Value/Total Assets 0.9 0.8 2.3 0.7 1.7 1.4 1.3 Price/LTM EPS 19.1 x 16.8 x 19.1 x 26.1 x 14.7 x 19.2 x 18.0 x Price/Projected Est. 1 EPS 17.9 NA 17.0 NA 12.7 14.8 14.8 Price/Projected Est. 2 EPS NA NA 14.7 NA 11.1 12.9 12.9 Equity Value/LTM Cash Flow 9.9 13.6 12.2 3.1 12.1 10.2 12.1 Equity Value/Book Value 1.7 1.5 3.4 0.6 2.4 2.0 1.9 ___________________________________________________________________________________________________________________________ OPERATING DATA FOR LTM ENDING Jun-1994 Jun-1994 Jun-1994 Jun-1994 Jun-1994 Total Revenues $121.6 $243.7 $1,280.3 $19.0 $555.3 EBIT 6.1 6.2 176.1 0.5 30.5 EBITDA 7.7 7.4 226.6 0.8 34.6 Net Income 2.7 4.2 107.0 0.1 19.5 Cash Flow 5.0 5.1 168.5 0.5 23.5 EBIT Margin 5.0% 2.5% 13.8% 2.5% 5.5% 6.1% 4.0% EBITDA Margin 6.3 3.0 17.7 4.3 6.2 7.8 5.3 Return on Avg. Net Capitalization 11.7 7.6 23.2 6.0 18.3 13.8 12.9 Net Income Margin 2.2 1.7 8.4 0.3 3.5 3.5 2.6 Return on Avg. Common Equity 8.5 9.3 19.3 2.2 17.1 12.0 13.2 Cash Flow/Total Assets 6.8 4.0 17.6 5.4 12.4 9.9 8.9
($ in millions, Cooper Tire & except share data) Big O Tires Inc Brad Ragan, Inc. Rubber Co. S & M Co TBC Corp. ___________________________________________________________________________________________________________________________ BALANCE SHEET DATA Total Assets $74.7 $125.8 $959.5 $9.9 $189.7 Total Capitalization 58.6 83.0 848.5 7.9 161.0 Common Equity 33.0 46.9 595.4 3.0 120.4 Debt/Total Capitalization 42.8% 38.1% 5.2% 58.6% 25.0% Shares Outstanding 3.3 2.2 83.6 1.4 28.0 ___________________________________________________________________________________________________________________________ PERFORMANCE VARIABLES 3-Year Growth Rates Total Revenues 3.9% 8.1% 9.2% 0.8% 6.7% EBITDA 2.1 NMF 15.0 (9.0) 11.9 Net Income 13.4 NMF 13.4 (34.0) 10.0 Cash Flow (1.8) NMF 16.6 (6.4) 15.2 Total Assets (0.4) 3.9 15.2 0.4 11.0 3-YEAR AVERAGES EBITDA Margin 6.0% 1.2% 17.3% 5.0% 6.4% Net Income Margin 2.0 (0.1) 8.6 0.8 3.7
PART IV DETERMINATION OF EXERCISE PRICE DETERMINATION OF EXERCISE PRICE IMPLIED STOCK PRICE ANALYSIS Estimated EPS Assuming P/E Multiple Range of: FY 2004 16x 18x 20x 22x 24x $2.55 $40.82 $45.92 $51.02 $56.12 $61.23
IMPLIED TEN YEAR RETURN TO SHAREHOLDERS Estimated EPS Assuming P/E Multiple Range of: FY 2004 16x 18x 20x 22x 24x $2.55 10.1% 11.4% 12.6% 13.7% 14.7%
MULTIPLE OF EXERCISE PRICE/STOCK PRICE Stock EXERCISE PRICE Price $40.00 $45.00 $50.00 $55.00 $60.00 $65.00 $70.00 $13.50 2.96 x 3.33 x 3.70 x 4.07 x 4.44 x 4.81 x 5.19 x $14.00 2.86 x 3.21 x 3.57 x 3.93 x 4.29 x 4.64 x 5.00 x $14.50 2.76 x 3.10 x 3.45 x 3.79 x 4.14 x 4.48 x 4.83 x $15.00 2.67 x 3.00 x 3.33 x 3.67 x 4.00 x 4.33 x 4.67 x $15.50 2.58 x 2.90 x 3.23 x 3.55 x 3.87 x 4.19 x 4.52 x $16.00 2.50 x 2.81 x 3.13 x 3.44 x 3.75 x 4.06 x 4.38 x $16.50 2.42 x 2.73 x 3.03 x 3.33 x 3.64 x 3.94 x 4.24 x $17.00 2.35 x 2.65 x 2.94 x 3.24 x 3.53 x 3.82 x 4.12 x $17.50 2.29 x 2.57 x 2.86 x 3.14 x 3.43 x 3.71 x 4.00 x Note: Average Stock Price Over Last 30 Days: $15.57
PART V HYPOTHETICAL EFFECT ON CAPITALIZATION HYPOTHETICAL EFFECT ON CAPITALIZATION ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 30 Day Average Triggering Stock Price $15.57 Percentage 15.0% Exercise Common Equivalent of Price $60.00 New Shares Issued 21.39
PRO FORMA AS OF EXERCISE JUNE 30, 1994 ADJUSTMENTS OF RIGHTS _____________ ___________ _________ Total Debt $25.1 $25.1 Shareholders' Equity 33.0 166.5 199.5 Total Capitalization 58.0 166.5 224.6 Shares Outstanding 3.27 21.4 24.7 Increase in Shares Outstanding 655.1% New (%) Owned by Acquiror 1.99% (%) Dilution to Acquiror (86.8%)
PART VI SUMMARY PRICING AND TRADING INFORMATION ON COMPANIES ADOPTING SHAREHOLDERS' RIGHTS PLANS SUMMARY PRICING AND TRADING INFORMATION ON COMPANIES ADOPTING SHAREHOLDERS' RIGHTS PLANS (a)
Average Percentage Change Average Percentage Change of Stock Price from: of S&P 400 Index from: 20 Business Date of 20 Business Date of Days Prior to Date Announcement Days Prior to Date Announcement Number Average of Announcement to 20 Business Days of Announcement to 20 Business Days of Exercise/ Median to Date of After Date of to Date of After Date of Date Companies Market % Change Announcement Announcement Announcement Announcement ____ _________ ______ ________ ____________ ____________ ____________ ___________________ 1-Jan-94 20 4.58 x Absolute 3.60% 3.62% 0.08% 0.40% Present Net (b) 3.52% 3.22% 1-Jan-93 38 5.08 x Absolute 1.72% (2.23%) 0.51% 0.30% 31-Dec-93 Net (b) 1.21% (2.53%) 1-Jan-92 47 4.81 x Absolute 0.93% (0.41%) (0.22%) (0.37%) 31-Dec-92 Net (b) 1.15% (0.04%) 1-Jan-91 98 4.29 x Absolute 0.00% 4.27% 0.60% 0.82% 31-Dec-91 Net (b) 1.82% 5.61% 1-Jan-90 152 4.58 x Absolute (2.44%) (2.02%) 0.09% (0.18%) 31-Dec-90 Net (b) (2.36%) 6.48% 1-Jan-89 329 4.21 x (c) Absolute 1.47% 0.39% 2.38% 1.62% 31-Dec-89 Net (b) (0.37%) 8.76% 1-Jan-88 306 4.44 x (c) Absolute 3.07% 1.49% 1.90% 1.98% 31-Dec-88 Net (b) 1.92% 1.68%
_____________________________ (a) Information provided by Prentice Hall Legal and Financial Services (b) As compared to the S&P 400 Industrial Index. (c) Average Exercise/Market price does not include certain companies which were deemed to be large outlying computations. EX-9 7 EXHIBIT (B)(4) EXHIBIT ______ TO FORM __________ DATED ___________________________ PROJECT SNOW REVIEW OF STRATEGIC ALTERNATIVES SEPTEMBER 12, 1994 TABLE OF CONTENTS PART I OVERVIEW PART II STATUS QUO PART III SHARE REPURCHASE PROGRAM PART IV EXTRAORDINARY DIVIDEND PART V LEVERAGED/MANAGEMENT BUYOUT PART VI MERGER/SALE OF COMPANY TO STRATEGIC BUYER PART VII SUMMARY RESULTS THE ANALYSES SET FORTH HEREIN WERE PREPARED BY PAINEWEBBER INCORPORATED ("PAINEWEBBER") BASED UPON FACTUAL INFORMATION OBTAINED FROM THE COMPANY AND OTHER SOURCES, INCLUDING ESTIMATES AND PROJECTIONS PREPARED BY THE MANAGEMENT OF THE COMPANY. PAINEWEBBER HAS NOT INDEPENDENTLY VERIFIED THE ACCURACY OF ANY SUCH INFORMATION NOR HAS PAINEWEBBER VERIFIED THE REASONABLENESS OF ANY OF THE ASSUMPTIONS UNDERLYING ANY SUCH ESTIMATES OR PROJECTIONS. PAINEWEBBER ASSUMES NO RESPONSIBILITY FOR THE ACCURACY OR COMPLETENESS OR ANY SUCH INFORMATION, ESTIMATES OR PROJECTIONS AND MAKES NO REPRESENTATION OR WARRANTY, EXPRESSED OR IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION PROVIDED TO OR OTHERWISE RELIED UPON BY PAINEWEBBER IN CONNECTION WITH THIS REPORT. ANY CHANGE IN THE ASSUMPTIONS USED BY THE COMPANY IN PREPARING ITS ESTIMATES AND PROJECTIONS (WHICH ASSUMPTIONS INVOLVE SUBSTANTIAL ELEMENTS OF SUBJECTIVE JUDGEMENT) COULD HAVE RESULTED IN A DIFFERENT RESULT OR CONCLUSION BEING REACHED BY PAINEWEBBER IN THIS REPORT. PART I OVERVIEW OVERVIEW SCOPE OF ASSIGNMENT Excerpts from July 5, 1994 Press Release: Snow has hired PaineWebber to "evaluate alternatives for enhancing the company's value." Snow asked PaineWebber to review its current financial model and business plan and develop an analysis of financial alternatives available to the company. GOAL: MAXIMIZE VALUE FOR ALL SHAREHOLDERS OVERVIEW HISTORICAL PERSPECTIVE - STOCK PRICE TIMELINE [LINE GRAPH APPEARS HERE] DATE STOCK PRICE COMMENTS 06/11/92 9.375000 REVERSE STOCK SPLIT 06/12/92 9.375000 06/15/92 9.375000 06/16/92 8.875000 06/17/92 8.625000 06/18/92 8.375000 06/19/92 8.250000 06/22/92 8.000000 06/23/92 8.000000 06/24/92 7.815000 06/25/92 7.565000 06/26/92 7.690000 06/29/92 7.755000 06/30/92 7.690000 07/01/92 7.690000 07/02/92 7.690000 07/06/92 7.690000 07/07/92 7.755000 07/08/92 7.565000 07/09/92 7.625000 07/10/92 7.505000 07/13/92 7.565000 07/14/92 7.440000 07/15/92 7.565000 07/16/92 7.625000 07/17/92 7.625000 07/20/92 7.940000 07/21/92 8.625000 07/22/92 9.065000 07/23/92 9.815000 07/24/92 9.755000 07/27/92 9.690000 07/28/92 9.125000 07/29/92 8.940000 07/30/92 8.625000 07/31/92 8.815000 08/03/92 8.840000 08/04/92 9.440000 08/05/92 10.030000 08/06/92 10.755000 08/07/92 11.215000 08/10/92 11.340000 08/11/92 11.315000 08/12/92 11.440000 08/13/92 11.690000 08/14/92 11.965000 08/17/92 12.190000 08/18/92 12.280000 08/19/92 12.440000 08/20/92 12.815000 08/21/92 13.125000 08/24/92 12.875000 08/25/92 12.875000 08/26/92 13.005000 08/27/92 13.005000 08/28/92 12.940000 08/31/92 12.690000 09/01/92 12.815000 09/02/92 12.190000 09/03/92 11.625000 09/04/92 11.250000 09/08/92 11.250000 09/09/92 11.750000 09/10/92 12.625000 09/11/92 13.565000 09/14/92 14.125000 09/15/92 13.125000 09/16/92 13.190000 09/17/92 13.440000 09/18/92 13.440000 09/21/92 13.380000 09/22/92 13.250000 09/23/92 13.250000 09/24/92 13.250000 09/25/92 12.750000 09/28/92 12.315000 09/29/92 11.875000 09/30/92 11.880000 10/01/92 12.000000 10/02/92 12.125000 10/05/92 11.875000 10/06/92 11.750000 10/07/92 11.750000 10/08/92 11.500000 10/09/92 11.625000 10/12/92 11.500000 10/13/92 11.065000 10/14/92 12.005000 10/15/92 12.500000 10/16/92 13.000000 10/19/92 13.125000 10/20/92 13.125000 10/21/92 12.755000 10/22/92 12.125000 10/23/92 11.940000 10/26/92 11.875000 10/27/92 11.875000 10/28/92 11.625000 10/29/92 11.500000 10/30/92 11.750000 11/02/92 11.875000 11/03/92 11.625000 11/04/92 11.625000 11/05/92 11.625000 11/06/92 11.750000 11/09/92 11.815000 11/10/92 12.690000 11/11/92 13.315000 11/12/92 13.315000 11/13/92 13.315000 11/16/92 13.315000 11/17/92 13.375000 11/18/92 13.880000 11/19/92 13.625000 11/20/92 13.440000 11/23/92 13.815000 11/24/92 13.750000 11/27/92 14.000000 11/30/92 14.000000 12/01/92 14.190000 12/02/92 14.125000 12/03/92 14.565000 12/04/92 14.440000 12/07/92 14.505000 12/08/92 14.190000 12/09/92 13.690000 12/10/92 13.065000 12/11/92 13.065000 12/14/92 13.125000 12/15/92 13.440000 12/16/92 13.500000 12/17/92 13.500000 12/18/92 13.690000 12/21/92 13.625000 12/22/92 13.250000 12/23/92 13.505000 12/28/92 13.565000 12/30/92 13.565000 12/31/92 13.375000 01/01/93 13.130000 01/04/93 13.500000 01/05/93 13.000000 01/06/93 13.500000 01/07/93 13.375000 01/08/93 13.375000 01/11/93 12.500000 01/12/93 12.750000 01/13/93 12.500000 01/14/93 12.875000 01/15/93 12.625000 01/18/93 12.125000 01/19/93 12.125000 01/20/93 11.750000 01/21/93 12.250000 01/22/93 12.250000 01/25/93 12.250000 01/26/93 13.250000 01/27/93 13.250000 01/28/93 13.500000 01/29/93 13.750000 02/01/93 13.500000 02/02/93 13.750000 02/03/93 13.500000 02/04/93 13.000000 02/05/93 12.500000 02/08/93 12.380000 02/09/93 14.000000 02/10/93 13.130000 02/11/93 13.630000 02/12/93 13.630000 02/16/93 13.250000 02/17/93 12.750000 02/18/93 13.000000 02/19/93 13.380000 02/22/93 13.000000 02/23/93 12.630000 02/24/93 12.880000 02/25/93 13.130000 02/26/93 13.500000 03/01/93 13.880000 03/02/93 13.750000 03/03/93 13.750000 03/04/93 13.130000 03/05/93 12.880000 03/08/93 13.000000 03/09/93 12.750000 03/10/93 12.380000 03/11/93 12.500000 03/12/93 12.000000 03/15/93 12.630000 03/16/93 12.130000 03/17/93 12.250000 03/18/93 12.250000 03/19/93 12.380000 03/22/93 12.380000 03/23/93 12.000000 03/24/93 11.880000 03/25/93 11.750000 03/26/93 12.250000 03/29/93 11.500000 03/30/93 11.380000 03/31/93 12.250000 04/02/93 12.000000 04/05/93 11.380000 04/06/93 11.130000 04/07/93 11.880000 04/08/93 13.250000 04/12/93 13.000000 04/13/93 13.130000 04/14/93 12.500000 04/15/93 12.750000 04/16/93 12.250000 04/19/93 12.880000 04/20/93 12.250000 04/21/93 12.750000 04/22/93 12.750000 04/23/93 12.750000 04/26/93 13.130000 04/28/93 12.630000 04/29/93 12.630000 04/30/93 12.750000 05/03/93 12.880000 05/04/93 13.750000 05/05/93 13.500000 05/06/93 13.250000 05/07/93 13.250000 05/10/93 13.380000 05/11/93 13.500000 05/12/93 13.630000 05/13/93 13.250000 05/14/93 13.130000 05/17/93 13.125000 05/18/93 13.630000 05/19/93 13.000000 05/20/93 13.000000 05/21/93 13.630000 05/24/93 13.000000 05/25/93 13.500000 05/26/93 13.250000 05/27/93 13.500000 05/28/93 13.630000 06/01/93 13.500000 06/02/93 15.250000 06/03/93 15.880000 06/04/93 15.750000 06/07/93 14.880000 06/08/93 14.750000 06/09/93 15.880000 ROLL-OUT OF NEW LAS VEGAS CENTER 06/10/93 15.500000 06/11/93 14.500000 06/14/93 14.750000 06/15/93 14.750000 06/16/93 14.250000 06/17/93 14.130000 06/18/93 14.500000 06/21/93 14.250000 06/22/93 14.750000 06/23/93 14.380000 06/24/93 14.750000 06/25/93 15.000000 06/28/93 14.750000 06/29/93 15.250000 06/30/93 15.000000 07/01/93 15.000000 07/02/93 15.250000 07/06/93 15.000000 07/07/93 15.250000 07/08/93 15.130000 07/09/93 14.000000 07/12/93 13.380000 07/13/93 14.500000 07/14/93 14.500000 07/15/93 15.250000 07/16/93 15.130000 07/19/93 14.880000 07/20/93 15.000000 07/21/93 14.380000 07/22/93 14.380000 07/23/93 15.000000 07/26/93 14.630000 07/27/93 14.880000 07/28/93 15.500000 07/29/93 15.500000 07/30/93 15.630000 08/02/93 16.130000 08/03/93 15.750000 08/04/93 15.250000 08/05/93 15.380000 08/06/93 15.880000 08/09/93 15.880000 08/10/93 16.630000 08/11/93 16.250000 08/12/93 17.000000 08/13/93 16.750000 08/16/93 16.250000 08/17/93 16.500000 08/18/93 16.750000 08/19/93 16.750000 08/20/93 16.630000 08/23/93 16.250000 08/24/93 16.250000 08/25/93 16.750000 08/26/93 16.250000 08/27/93 16.380000 08/30/93 16.630000 08/31/93 16.500000 09/01/93 17.130000 09/02/93 16.500000 09/03/93 17.000000 09/07/93 16.250000 09/08/93 16.500000 09/09/93 16.500000 09/10/93 16.000000 09/13/93 16.000000 09/14/93 15.750000 09/15/93 16.000000 09/16/93 16.000000 09/17/93 16.250000 09/20/93 16.250000 09/21/93 15.500000 09/22/93 15.750000 09/23/93 15.500000 09/24/93 15.000000 09/27/93 14.750000 09/28/93 15.000000 09/29/93 14.880000 09/30/93 15.130000 10/01/93 15.000000 10/04/93 15.000000 10/05/93 15.000000 10/06/93 15.250000 10/07/93 14.750000 10/08/93 15.250000 10/11/93 15.000000 10/12/93 15.130000 10/13/93 15.000000 10/14/93 15.000000 10/15/93 16.000000 10/18/93 15.750000 10/19/93 15.880000 10/20/93 15.250000 10/21/93 15.500000 10/22/93 14.750000 10/25/93 15.500000 10/26/93 15.500000 10/27/93 16.250000 10/28/93 15.880000 10/29/93 16.130000 11/01/93 16.000000 11/02/93 15.500000 11/03/93 16.000000 11/04/93 15.250000 11/05/93 14.630000 11/08/93 15.250000 11/09/93 15.500000 11/10/93 15.250000 11/11/93 14.880000 11/12/93 14.880000 11/15/93 15.000000 11/16/93 14.750000 11/17/93 14.750000 11/18/93 15.000000 11/19/93 14.630000 11/22/93 14.250000 11/23/93 14.380000 11/29/93 14.380000 11/30/93 15.000000 12/01/93 15.250000 12/02/93 15.500000 12/03/93 15.500000 12/06/93 15.250000 12/07/93 15.250000 12/08/93 15.250000 12/10/93 15.375000 12/13/93 14.750000 12/14/93 14.250000 12/15/93 14.250000 12/16/93 14.375000 12/17/93 14.125000 12/20/93 13.875000 12/21/93 14.750000 12/22/93 14.500000 12/23/93 14.875000 12/27/93 14.875000 12/28/93 14.625000 12/30/93 14.250000 12/31/93 14.250000 01/01/94 14.250000 01/03/94 14.125000 01/04/94 13.875000 01/05/94 14.000000 01/06/94 14.500000 01/07/94 14.000000 01/10/94 14.000000 01/11/94 13.750000 01/12/94 14.000000 01/13/94 13.500000 01/14/94 13.750000 01/17/94 13.500000 01/18/94 13.000000 01/19/94 13.750000 01/20/94 13.375000 01/21/94 13.500000 01/24/94 13.500000 01/25/94 13.125000 01/26/94 13.125000 01/27/94 13.125000 01/28/94 13.625000 01/31/94 14.250000 02/01/94 15.750000 02/02/94 15.500000 02/03/94 15.750000 02/04/94 15.500000 02/07/94 15.375000 02/08/94 15.000000 02/09/94 14.750000 02/10/94 14.500000 02/11/94 14.500000 02/14/94 14.750000 02/15/94 14.500000 02/16/94 14.500000 02/17/94 14.750000 02/18/94 14.375000 02/22/94 14.375000 02/23/94 14.750000 02/24/94 14.750000 02/25/94 13.750000 02/28/94 13.625000 03/01/94 14.250000 03/02/94 13.375000 03/03/94 14.000000 03/04/94 14.000000 03/07/94 14.625000 03/08/94 14.875000 03/09/94 14.875000 03/10/94 14.500000 03/11/94 14.875000 03/14/94 14.625000 03/15/94 15.250000 03/16/94 14.875000 03/17/94 14.750000 03/18/94 15.250000 03/21/94 15.375000 03/22/94 15.750000 03/23/94 15.750000 03/24/94 15.500000 03/25/94 16.000000 03/28/94 16.000000 03/29/94 15.000000 03/30/94 15.500000 03/31/94 14.750000 04/04/94 13.125000 04/05/94 14.750000 04/06/94 14.000000 04/07/94 14.375000 04/08/94 13.875000 04/11/94 13.750000 04/12/94 14.250000 04/13/94 14.000000 04/15/94 15.375000 04/18/94 14.750000 04/19/94 14.500000 04/20/94 14.625000 04/21/94 15.000000 04/22/94 15.375000 04/25/94 15.000000 04/26/94 15.500000 04/28/94 15.500000 04/29/94 15.125000 05/02/94 15.500000 05/03/94 15.750000 05/04/94 15.750000 05/05/94 15.500000 05/06/94 15.000000 05/09/94 15.750000 05/10/94 15.250000 05/11/94 14.750000 05/12/94 14.625000 05/13/94 14.625000 05/17/94 15.250000 05/18/94 15.500000 05/19/94 16.000000 05/20/94 15.500000 05/23/94 15.750000 M. KANE & CO. HIRED TO EVALUATE NEW STORE ACQUISITIONS 05/24/94 15.250000 05/25/94 15.000000 05/26/94 15.000000 05/27/94 15.000000 05/31/94 15.000000 06/01/94 15.250000 06/02/94 15.375000 06/03/94 15.250000 06/06/94 15.750000 06/07/94 15.625000 06/08/94 15.625000 STOCKHOLDERS APPROVE PROPOSAL TO EXPLORE ALTERNATIVES 06/09/94 16.000000 06/10/94 15.500000 06/13/94 15.500000 06/14/94 15.750000 06/15/94 16.125000 06/16/94 16.375000 06/17/94 16.750000 06/20/94 15.875000 06/21/94 16.250000 06/22/94 15.750000 06/23/94 15.750000 06/24/94 15.250000 06/27/94 16.000000 06/28/94 16.250000 06/29/94 16.250000 07/01/94 15.750000 07/05/94 15.250000 PAINEWEBBER HIRED TO EVALUATE ALTERNATIVES 07/06/94 14.750000 07/07/94 14.750000 07/08/94 15.250000 07/11/94 15.000000 07/12/94 15.500000 07/13/94 15.630000 07/14/94 15.750000 07/15/94 15.750000 07/18/94 15.000000 07/19/94 16.250000 07/20/94 15.630000 07/21/94 15.630000 07/22/94 16.250000 07/25/94 15.750000 07/26/94 15.880000 07/27/94 15.750000 07/28/94 15.750000 07/29/94 15.750000 08/01/94 15.750000 ANNOUNCES NEW MARKETING PROGRAM 08/02/94 15.500000 08/03/94 15.630000 08/04/94 15.630000 08/05/94 15.437500 08/08/94 15.000000 08/09/94 15.000000 08/10/94 15.750000 08/11/94 15.000000 08/12/94 15.630000 08/15/94 15.130000 08/16/94 15.630000 08/17/94 15.250000 08/19/94 16.000000 08/22/94 15.880000 08/23/94 15.750000 08/24/94 15.380000 08/25/94 15.750000 08/26/94 15.380000 BOARD APPROVES SHAREHOLDER RIGHTS PLAN 08/29/94 14.880000 08/30/94 15.750000 08/31/94 15.750000 09/01/94 15.880000 OVERVIEW HISTORICAL PERSPECTIVE [ONE BAR GRAPH APPEARS HERE] MEASUREMENT PT- FYE SALES $ NET INCOME $ EPS $ 12/31/88 93,520,000 1,279,000 0.43 12/31/89 108,230,000 1,300,000 0.40 12/31/90 106,900,000 710,000 0.20 12/31/91 113,840,000 1,930,000 0.55 12/31/92 119,800,000 2,780,000 0.80 12/31/93 122,960,000 2,479,000 0.73 OVERVIEW OUTLOOK [ONE BAR GRAPH APPEARS HERE] MEASUREMENT PT- FYE SALES $ NET INCOME $ EPS $ 12/31/94 125,832,000 2,415,000 0.72 12/31/95 135,854,000 2,794,000 0.82 12/31/96 150,201,000 4,768,000 1.39 12/31/97 167,581,000 7,035,000 2.05 12/31/98 185,075,000 8,763,000 2.54 12/31/99 202,805,000 10,192,000 2.95 OVERVIEW HISTORICAL PERSPECTIVE [ONE BAR GRAPH APPEARS HERE] MEASUREMENT PT- FYE SALES/ SALES/ NET INCOME/ NET INCOME/ BUDGET $ ACTUALS $ BUDGET $ ACTUAL $ 12/31/1992 118,384,000 119,799,000 2,650,000 2,783,000 12/31/1993 128,602,000 122,960,000 3,165,000 1,595,000 1994 61,838,000 57,479,000 1,260,000 854,000 (FIRST 6 MONTHS) OVERVIEW PAST VERSUS FUTURE [2 BAR GRAPHS APPEAR HERE] MEASUREMENT PT- PAST SALES FYE $ 12/31/88 93,523,000 12/31/89 108,228,000 12/31/90 106,902,000 12/31/91 113,836,000 12/31/92 119,799,000 12/31/93 122,960,000 FUTURE SALES FYE $ 12/31/94 125,832,000 12/31/95 135,854,000 12/31/96 150,201,000 12/31/97 167,581,000 12/31/98 185,075,000 12/31/99 202,805,000 OVERVIEW PAST VERSUS FUTURE [TWO BAR GRAPHS APPEAR HERE] MEASUREMENT PT- PAST NET INCOME FYE $ 12/31/88 1,530,000 12/31/89 1,612,000 12/31/90 707,000 12/31/91 1,751,000 12/31/92 2,783,000 12/31/93 1,595,000 FUTURE NET INCOME FYE $ 12/31/94 2,415,000 12/31/95 2,794,000 12/31/96 4,768,000 12/31/97 7,035,000 12/31/98 8,763,000 12/31/99 10,197,000 OVERVIEW PAST VERSUS FUTURE [TWO BAR GRAPHS APPEAR HERE)] MEASUREMENT PT- PAST EARNINGS PER SHARE FYE $ 12/31/88 0.43 12/31/89 0.40 12/31/90 0.20 12/31/91 0.55 12/31/92 0.80 12/31/93 0.73 FUTURE EARNINGS PER SHARE FYE $ 12/31/94 0.72 12/31/95 0.82 12/31/96 1.39 12/31/97 2.05 12/31/98 2.54 12/31/99 2.95 OVERVIEW DESCRIPTION OF ANALYSES PERFORMED In conjunction with the Company's management team and Board of Directors, PaineWebber reviewed the following forecasts: - Aggressive Growth Case - Moderate Growth Case PaineWebber reviewed the following alternatives using the forecast cases: - Status Quo - Share Repurchase Program - Extraordinary Dividend - Leveraged/Management Buyout - Merger or Sale of Company to a Strategic Buyer PART II STATUS QUO STATUS QUO SUMMARY FORECAST DESCRIPTION AGGRESSIVE GROWTH CASE - New Marketing Plan Executed According to Current Business Plan - Full Roll-Out of Spec Store Development Program - Store Openings Based on Current Business Plan
2nd Half 1994 1995 1996 1997 1998 1999 ____ ____ ____ ____ ____ ____ Stores Opened 18 45 55 55 60 60 Stores Closed 4 5 5 5 10 10 __ __ __ __ __ __ Net New Stores 14 40 50 50 50 50
MODERATE GROWTH CASE - New Store Roll-Out and Spec Store Development Program Reduced by Approximately 50%
2nd Half 1994 1995 1996 1997 1998 1999 ____ ____ ____ ____ ____ ____ Stores Opened 18 23 28 28 30 30 Stores Closed 4 5 5 5 10 10 __ __ __ __ __ __ Net New Stores 14 18 23 23 20 20
STATUS QUO CRITICAL ELEMENTS OF CURRENT BUSINESS PLAN - - New Marketing Plan - Level of Gross Margin Reductions - Shift in Snow Balance - Increased Tire Volume per Store - - Las Vegas Distribution - SG&A Reductions - Delivery Costs - - Warranty Cost Reductions - New Store Openings - Cost of Closings - SG&A Efficiencies - Additional Borrowing Capacity/ Contingent Liabilities STATUS QUO SUMMARY FINANCIAL STATISTICS
AGGRESSIVE GROWTH CASE 1993 1994 1995 1996 1997 1998 1999 ____ ____ ____ ____ ____ ____ ____ Revenues $122,960 $125,832 $135,854 $150,201 $167,581 $185,075 $202,805 Gross Profit 25,131 26,418 25,150 29,279 34,158 38,188 41,715 Gross Margin 20.4% 21.0% 18.5% 19.5% 20.4% 20.6% 20.6% SG&A 18,035 18,294 16,604 17,334 18,644 19,981 21,353 As % of Revenues 14.7% 14.5% 12.2% 11.5% 11.1% 10.8% 10.5% EBITDA 6,058 7,456 8,729 12,276 16,040 18,927 21,281 Net Income $1,881 $2,415 $2,794 $4,768 $7,035 $8,763 $10,197 EPS $0.55 $0.72 $0.82 $1.39 $2.05 $2.54 $2.95
MODERATE GROWTH CASE
1993 1994 1995 1996 1997 1998 1999 ____ ____ ____ ____ ____ ____ ____ Revenues $122,960 $125,832 $133,425 $140,364 $148,531 $156,256 $163,560 Gross Profit 25,131 26,418 24,712 27,405 30,348 32,339 33,744 Gross Margin 20.4% 21.0% 18.5% 19.5% 20.4% 20.7% 20.6% SG&A 18,035 18,294 16,450 16,783 17,625 18,468 19,313 As % of Revenues 14.7% 14.5% 12.3% 12.0% 11.9% 11.8% 11.8% EBITDA 6,058 7,456 8,429 10,874 13,075 14,325 14,987 Net Income $1,881 $2,415 $2,769 $4,219 $5,623 $6,431 $6,927 EPS $0.55 $0.72 $0.81 $1.23 $1.63 $1.87 $2.00
STATUS QUO SUMMARY STATISTICS [TWO BAR GRAPHS HERE] REVENUES REVENUE GROWTH FYE GROWTH CASE $ % 12/31/93 AGGRESSIVE 112,960,000 2.6 12/31/93 MODERATE 112,960,000 2.6 12/31/94 AGGRESSIVE 125,832,000 2.3 12/31/94 MODERATE 125,832,000 2.3 12/31/95 AGGRESSIVE 135,854,000 8.0 12/31/95 MODERATE 133,425,000 6.0 12/31/96 AGGRESSIVE 150,201,000 10.6 12/31/96 MODERATE 140,364,000 5.2 12/31/97 AGGRESSIVE 167,581,000 11.6 12/31/97 MODERATE 148,531,000 5.8 12/31/98 AGGRESSIVE 185,075,000 10.4 12/31/98 MODERATE 156,256,000 5.2 12/31/99 AGGRESSIVE 202,805,000 9.6 12/31/99 MODERATE 163,560,000 4.7 GROSS MARGIN FYE GROWTH CASE $ % 12/31/93 AGGRESSIVE 25,131,000 20.4 12/31/93 MODERATE 25,131,000 20.4 12/31/94 AGGRESSIVE 26,418,000 21.0 12/31/94 MODERATE 26,418,000 21.0 12/31/95 AGGRESSIVE 25,150,000 18.5 12/31/95 MODERATE 24,712,000 18.5 12/31/96 AGGRESSIVE 29,279,000 19.5 12/31/96 MODERATE 27,405,000 19.5 12/31/97 AGGRESSIVE 34,158,000 20.4 12/31/97 MODERATE 30,348,000 20.4 12/31/98 AGGRESSIVE 38,188,000 20.6 12/31/98 MODERATE 32,339,000 20.7 12/31/99 AGGRESSIVE 41,715,000 20.6 12/31/99 MODERATE 33,744,000 20.6 STATUS QUO SUMMARY STATISTICS [TWO BAR GRAPHS HERE] SG&A AS % OF REVENUES FYE GROWTH CASE $ % 12/31/93 AGGRESSIVE 18,035,000 14.7 12/31/93 MODERATE 18,035,000 14.7 12/31/94 AGGRESSIVE 18,294,000 14.5 12/31/94 MODERATE 18,294,000 14.5 12/31/95 AGGRESSIVE 16,604,000 12.2 12/31/95 MODERATE 16,450,000 12.3 12/31/96 AGGRESSIVE 17,334,000 11.5 12/31/96 MODERATE 16,783,000 12.0 12/31/97 AGGRESSIVE 18,644,000 11.1 12/31/97 MODERATE 17,625,000 11.9 12/31/98 AGGRESSIVE 19,981,000 10.8 12/31/98 MODERATE 18,468,000 11.8 12/31/99 AGGRESSIVE 21,353,000 10.5 12/31/99 MODERATE 19,313,000 11.8 EBIT EBIT MARGIN FYE GROWTH CASE $ % 12/31/93 AGGRESSIVE 4,500,000 3.7 12/31/93 MODERATE 4,500,000 3.7 12/31/94 AGGRESSIVE 5,650,000 4.5 12/31/94 MODERATE 5,650,000 4.5 12/31/95 AGGRESSIVE 6,278,000 4.6 12/31/95 MODERATE 6,134,000 4.6 12/31/96 AGGRESSIVE 9,727,000 6.5 12/31/96 MODERATE 8,535,000 6.1 12/31/97 AGGRESSIVE 13,493,000 8.1 12/31/97 MODERATE 10,792,000 7.3 12/31/98 AGGRESSIVE 16,333,000 8.8 12/31/98 MODERATE 12,041,000 7.7 12/31/99 AGGRESSIVE 18,636,000 9.2 12/31/99 MODERATE 12,700,000 7.8 STATUS QUO SUMMARY STATISTICS [TWO BAR GRAPHS HERE] NET INCOME NET INCOME MARGIN FYE GROWTH CASE $ % 12/31/93 AGGRESSIVE 1,881,000 1.5 12/31/93 MODERATE 1,881,000 1.5 12/31/94 AGGRESSIVE 2,415,000 1.9 12/31/94 MODERATE 2,415,000 1.9 12/31/95 AGGRESSIVE 2,769,000 2.1 12/31/95 MODERATE 2,769,000 2.1 12/31/96 AGGRESSIVE 4,768,000 3.2 12/31/96 MODERATE 4,219,000 3.0 12/31/97 AGGRESSIVE 7,035,000 4.2 12/31/97 MODERATE 5,623,000 3.8 12/31/98 AGGRESSIVE 8,763,000 4.7 12/31/98 MODERATE 6,431,000 4.1 12/31/99 AGGRESSIVE 10,197,000 5.0 12/31/99 MODERATE 6,927,000 4.2 EARNINGS PER SHARE EPS GROWTH FYE GROWTH CASE $ % 12/31/93 AGGRESSIVE .55 31.3 12/31/93 MODERATE .55 31.3 12/31/94 AGGRESSIVE .72 30.9 12/31/94 MODERATE .72 30.9 12/31/95 AGGRESSIVE .81 13.9 12/31/95 MODERATE .82 12.5 12/31/96 AGGRESSIVE 1.39 69.5 12/31/96 MODERATE 1.23 51.9 12/31/97 AGGRESSIVE 2.05 47.5 12/31/97 MODERATE 1.63 32.5 12/31/98 AGGRESSIVE 2.54 23.9 12/31/98 MODERATE 1.87 14.7 12/31/99 AGGRESSIVE 2.95 16.1 12/31/99 MODERATE 2.00 7.0 STATUS QUO IMPLIED PRICE PER SHARE
1995 1995 AGGRESSIVE GROWTH CASE MODERATE GROWTH CASE 1995E EPS: $0.82 1995E EPS: $0.81 EQUITY COST PRICE/EARNINGS RATIO EQUITY COST PRICE/EARNINGS RATIO OF CAPITAL 14x 16x 18x 20x 22x OF CAPITAL 14x 16x 18x 20x 22x __________ __________________________________________________ __________ ____________________________________________________ 13% $10.16 $11.61 $13.06 $14.51 $15.96 13% $10.04 $11.47 $12.90 $14.34 $15.77 14% $10.07 $11.51 $12.95 $14.39 $15.82 14% $ 9.95 $11.37 $12.79 $14.21 $15.63 15% $ 9.98 $11.41 $12.83 $14.26 $15.69 15% $ 9.86 $11.27 $12.68 $14.09 $15.50 16% $ 9.90 $11.31 $12.72 $14.14 $15.55 16% $ 9.78 $11.17 $12.57 $13.97 $15.36 17% $ 9.81 $11.21 $12.62 $14.02 $15.42 17% $ 9.69 $11.08 $12.46 $13.85 $15.23
1996 1996 AGGRESSIVE GROWTH CASE MODERATE GROWTH CASE 1996E EPS: $1.39 1996E EPS: $1.23 EQUITY COST PRICE/EARNINGS RATIO EQUITY COST PRICE/EARNINGS RATIO OF CAPITAL 14x 16x 18x 20x 22x OF CAPITAL 14x 16x 18x 20x 22x __________ __________________________________________________ __________ __________________________________________________ 13% $15.24 $17.42 $19.59 $21.77 $23.95 13% $13.49 $15.41 $17.34 $19.27 $21.19 14% $14.97 $17.11 $19.25 $21.39 $23.53 14% $13.25 $15.14 $17.04 $18.93 $20.82 15% $14.71 $16.82 $18.92 $21.82 $23.12 15% $13.02 $14.88 $16.74 $18.60 $20.46 16% $14.46 $16.53 $18.59 $20.66 $22.73 16% $12.80 $14.63 $16.45 $18.28 $20.11 17% $14.22 $16.25 $18.28 $20.31 $22.34 17% $12.58 $14.38 $16.17 $17.97 $19.77
STATUS QUO IMPLIED PRICE PER SHARE
1999 1999 AGGRESSIVE GROWTH CASE MODERATE GROWTH CASE 1999E EPS: $2.95 1999E EPS: $2.00 DISCOUNT PRICE/EARNINGS RATIO DISCOUNT PRICE/EARNINGS RATIO RATE 14x 16x 18x 20x 22x RATE 14x 16x 18x 20x 22x __________ __________________________________________________ __________ __________________________________________________ 13% $22.42 $25.62 $28.82 $32.02 $35.23 13% $15.20 $17.37 $19.54 $21.71 $23.88 14% $21.45 $24.51 $27.58 $30.64 $33.71 14% $14.54 $16.62 $18.70 $20.77 $22.85 15% $20.53 $23.47 $26.40 $29.33 $32.27 15% $13.92 $15.91 $17.90 $19.89 $21.88 16% $19.66 $22.47 $25.28 $28.09 $30.90 16% $13.33 $15.24 $17.14 $19.04 $20.95 17% $18.84 $21.53 $24.22 $26.91 $29.60 17% $12.77 $14.60 $16.42 $18.24 $20.07
PART III SHARE REPURCHASE PROGRAM SHARE REPURCHASE PROGRAM SUMMARY ANALYSIS Key Variable: - Cost of funds versus return on equity Issues to Consider: - Additional borrowing capacity - Impact on funds available for store openings Assumptions: - $10.0 million used to repurchase shares at $16.00 per share - Resultant values based on 1995 pro forma earnings per share SHARE REPURCHASE PROGRAM SUMMARY ANALYSIS
AGGRESSIVE GROWTH CASE MODERATE GROWTH CASE RESULTANT SHARE VALUES FROM $10 MILLION SHARE REPURCHASE PROGRAM RESULTANT SHARE VALUES FROM $10 MILLION SHARE REPURCHASE PROGRAM POST-REPO MARGINAL COST OF DEBT POST-REPO MARGINAL COST OF DEBT P/E 9% 10% 11% 12% 13% P/E 9% 10% 11% 12% 13% ___ __ ___ ___ ___ ___ ___ __ ___ ___ ___ ___ 14x $11.37 $11.08 $10.79 $10.50 $10.21 14x $11.25 $10.96 $10.67 $10.38 $10.09 16 13.00 12.66 12.33 12.00 11.67 16 12.85 12.52 12.19 11.86 11.53 18 14.62 14.25 13.88 13.50 13.13 18 14.46 14.09 13.71 13.34 12.97 20 16.24 15.83 15.42 15.00 14.59 20 16.07 15.65 15.24 14.82 14.41 22 17.87 17.41 16.96 16.50 16.05 22 17.67 17.22 16.76 16.31 15.85
PART IV EXTRAORDINARY DIVIDEND EXTRAORDINARY DIVIDEND SUMMARY ANALYSIS Key Variable: - Cost of funds versus return on equity Issues to Consider: - Additional borrowing capacity - Impact on funds available for store openings - Tax implications Assumptions: - $10.0 million used to pay one-time dividend - Resultant values based on 1995 pro forma earnings per share EXTRAORDINARY DIVIDEND SUMMARY ANALYSIS
AGGRESSIVE GROWTH CASE MODERATE GROWTH CASE VALUE OF EXTRAORDINARY DIVIDEND VALUE OF EXTRAORDINARY DIVIDEND BORROWING RATE BORROWING RATE P/E 9% 10% 11% 12% 13% P/E 9% 10% 11% 12% 13% ___ __ ___ ___ ___ ___ ___ __ ___ ___ ___ ___ 14x $12.22 $11.98 $11.74 $11.51 $11.27 14x $12.11 $11.88 $11.64 $11.40 $11.17 16 13.54 13.27 13.00 12.73 12.46 16 13.43 13.16 12.89 12.62 12.34 18 14.87 14.57 14.26 13.96 13.65 18 14.74 14.44 14.13 13.83 13.52 20 16.20 15.86 15.52 15.19 14.85 20 16.05 15.72 15.38 15.04 14.70 22 17.53 17.16 16.78 16.41 16.04 22 17.37 16.99 16.62 16.25 15.88
PART V LEVERAGED/MANAGEMENT BUYOUT LEVERAGED/MANAGEMENT BUYOUT SUMMARY ANALYSIS Key Variable: - Required return to subordinated debt and equity sponsor Assumptions: - Minimum interest coverage of 2.5x EBITDA/Interest - Subordinated debt has 13% interest rate, 20% all-in return LEVERAGED/MANAGEMENT BUYOUT SUMMARY ANALYSIS
AGGRESSIVE GROWTH CASE MODERATE GROWTH CASE REQUIRED REQUIRED EQUITY EQUITY RATE OF EBITDA EXIT MULTIPLE RATE OF EBITDA EXIT MULTIPLE RETURN 6x 6.5x 7x 7.5x 8x RETURN 6x 6.5x 7x 7.5x 8x ___________________________________________________________ ______________________________________________________ 30.0% $12.35 $13.17 $13.98 $14.80 $15.63 30.0% $ 9.60 $10.18 $10.73 $11.32 $11.93 32.5% 11.66 12.40 13.15 13.88 14.60 32.5% 9.15 9.68 10.21 10.75 11.28 35.0% 11.03 11.70 12.38 13.05 13.73 35.0% 8.74 9.23 9.68 10.20 10.65 37.5% 10.48 11.08 11.70 12.35 12.95 37.5% 8.40 8.83 9.27 9.72 10.10 40.0% 9.96 10.53 11.10 11.66 12.22 40.0% 8.07 8.47 8.85 9.26 9.65
PAGE VI MERGER/SALE OF COMPANY TO STRATEGIC BUYER MERGER/SALE OF COMPANY TO STRATEGIC BUYER SUMMARY ANALYSIS Key Variable: - - Strategic buyer has lower cost of capital and return requirements than financial buyers Assumptions: - - Minimum interest coverage of 2.5x EBITDA/Interest - - Financed with bank debt at 9% interest rate/all-in return - - Strategic buyer can realize synergies of 25% of corporate SG&A MERGER/SALE OF COMPANY TO STRATEGIC BUYER SUMMARY ANALYSIS
EXIT IN 1995 EXIT IN 1995 AGGRESSIVE GROWTH CASE MODERATE GROWTH CASE REQUIRED REQUIRED EQUITY EQUITY RATE OF EBITDA EXIT MULTIPLE RATE OF EBITDA EXIT MULTIPLE RETURN 6x 6.5x 7x 7.5x 8x RETURN 6x 6.5x 7x 7.5x 8x ___________________________________________________________ ___________________________________________________________ 10.0% $12.20 $13.60 $15.00 $16.40 $17.80 10.0% $12.35 $13.72 $15.08 $16.44 $17.80 12.5% 12.13 13.50 14.86 16.24 17.61 12.5% 12.28 13.61 14.94 16.27 17.60 15.0% 12.06 13.40 14.74 16.08 17.42 15.0% 12.21 13.61 14.81 16.11 17.41 17.5% 12.00 13.30 14.61 15.93 17.24 17.5% 12.14 13.41 14.69 15.93 17.23 20.0% 11.93 13.22 14.50 15.78 17.07 20.0% 12.07 13.32 14.57 15.82 17.07
EXIT IN 1996 EXIT IN 1996 AGGRESSIVE GROWTH CASE MODERATE GROWTH CASE REQUIRED REQUIRED EQUITY EQUITY RATE OF EBITDA EXIT MULTIPLE RATE OF EBITDA EXIT MULTIPLE RETURN 6x 6.5x 7x 7.5x 8x RETURN 6x 6.5x 7x 7.5x 8x ___________________________________________________________ ___________________________________________________________ 10.0% $17.60 $19.28 $21.00 $22.70 $24.40 10.0% $16.45 $18.00 $19.53 $21.07 $22.60 12.5% 17.22 18.85 20.47 22.18 23.73 12.5% 16.13 17.60 19.06 20.55 22.01 15.0% 16.87 18.42 19.98 21.53 23.10 15.0% 15.82 17.23 18.63 20.05 21.45 17.5% 16.53 18.02 19.52 21.00 22.72 17.5% 15.53 16.88 18.23 19.57 20.92 20.0% 16.22 17.64 19.08 20.52 21.95 20.0% 15.27 16.56 17.85 19.14 20.43
EXIT IN 1999 EXIT IN 1999 AGGRESSIVE GROWTH CASE MODERATE GROWTH CASE REQUIRED REQUIRED EQUITY EQUITY RATE OF EBITDA EXIT MULTIPLE RATE OF EBITDA EXIT MULTIPLE RETURN 6x 6.5x 7x 7.5x 8x RETURN 6x 6.5x 7x 7.5x 8x ___________________________________________________________ _______________________________________________________ 10.0% $28.65 $30.74 $32.90 $34.96 $37.00 10.0% $22.34 $23.95 $25.48 $27.00 $28.60 12.5% 26.50 28.43 30.30 32.20 34.05 12.5% 20.95 22.35 23.70 25.02 26.50 15.0% 24.73 26.40 28.09 29.78 31.50 15.0% 19.70 20.92 22.20 23.40 24.65 17.5% 23.12 24.64 26.14 27.67 29.20 17.5% 18.60 19.75 20.87 21.95 23.10 20.0% 21.70 23.07 24.43 25.80 27.20 20.0% 17.64 18.65 19.67 20.65 21.65
PART VII SUMMARY RESULTS OVERVIEW SUMMARY RESULTS OF ANALYSES PERFORMED [BAR GRAPH HERE] MEASUREMENT PT- STRATEGIC ALTERNATIVE RANGE SHOWING RANGE SHOWING AGGRESSIVE MODERATE GROWTH CASE GROWTH CASE STATUS QUO (1) 23-30 15-21 STATUS QUO (2) 13-19 13-17 SHARE REPURCHASE 12-16 12-16 EXTRAORDINARY DIVIDEND 13-16 13-16 LBO/MBO 11-14 9-12 MERGER/SALE (1) 25-32 20-25 MERGER/SALE (2) 15-20 15-19 NOTE: ALL SHARE PRICES ARE IN PRESENT VALUE TERMS AS OF DECEMBER 31, 1994. (1) BASED ON PROJECTED PERFORMANCE THROUGH 1999 (2) BASED ON PROJECTED PERFORMANCE THROUGH 1995 AND 1996 EX-10 8 EXHIBIT (B)(5) PROJECT SNOW SUPPLEMENTAL INFORMATION SEPTEMBER 12, 1994 TABLE OF CONTENTS Part I Management Forecasts - Key Assumptions Part II Status Quo Scenarios - Aggressive Growth Case - Moderate Growth Case Part III Leveraged/Management Buyout Scenarios - Aggressive Growth Case - Moderate Growth Case Part IV Merger/Sale of Company to Strategic Buyer Scenarios - Aggressive Growth Case - Moderate Growth Case Part V Comparable Company Analysis Part VI Weighted Average Cost of Capital Analysis PART I KEY ASSUMPTIONS MANAGEMENT FORECASTS KEY ASSUMPTIONS REVENUE FORECAST Revenues are forecast on a per store basis, based upon historical results, with adjustments for the implementation of the new marketing plan mid-year 1994. Total tires sold per store are forecast to increase approximately 10% in the second half of 1994 as compared to the comparable period in 1993. This represents a 29.5% increase as compared to the first six months of 1994. No additional growth in total tires sold per store is assumed for the remainder of the forecast period. The mix of Snow sold as a percent of all tires sold is forecast to increase from 66% in the first half of 1994 to 75% for the second half of 1994 and for the remainder of the forecast period. Revenue received from the sale of tires is forecast to decrease 8% on a per tire basis for the forecast period as compared with the first half of 1994 as a result of the implementation of the new marketing plan. Revenue per Snow tire is held flat throughout the remainder of the forecast period. No change in revenue per tire is forecast for non-Snow. Revenue from the sale of other Snow supplied products (i.e. wheels, shocks, etc.) is forecast to increase at a 2% annual rate. New stores are forecast operational for 40% of the year in which they first opened. Revenue is ramped up over a two-and-one-half year period, increasing from 80%, to 90% to 100% of a typical store over this time period. In calculating franchise royalty revenue, service revenue and revenue from the sale of non-Snow supplied products is forecast to increase at a 2% annual rate. COST OF GOODS SOLD Cost of tires on a per unit basis is forecast based on historical costs for the first half of 1994. As a result of the price decrease to dealers in Snow branded tires, the resulting gross profit margin to the Company is forecast to decrease from 23% to 17% on Snow from the first half of 1994 to the second half of 1994. As a result of a forecast reduction in warranty costs in the years 1996 to 1998 and no reduction in the price of tires sold, gross profit margins on Snow are forecast to increase during this period. Margins on non-Snow, and other products are assumed to remain constant at their historical levels. Warranty and tire freight costs are forecast independent of the cost of the tires from the manufacturers. Warranty costs are forecast, on a per tire basis, to increase 3% in 1995, and decrease 25% percent per year in 1996 and 1997, decrease an additional 10% in 1998 and remain flat thereafter. Freight costs are forecast to increase $0.50 per tire when the new Las Vegas distribution facility opens, estimated to occur on April 1, 1995. SELLING, GENERAL AND ADMINISTRATIVE EXPENSE S, G & A expense, excluding depreciation and amortization, is forecast separately for corporate, regions and retail. Corporate S, G & A is forecast to remain flat for the second half on 1994 and is increased 5% per year for the remainder of the forecast period. S, G & A expense for the regions is forecast to increase proportionally with the increase in non-retail sales. Retail S, G & A expense is forecast as $360,000 per Company-owned store. SPEC STORE DEVELOPMENT PROGRAM The Aggressive Growth Case forecast assumes the Company is successful in implementing its spec store development program as currently envisioned. Important assumptions in this analysis include:
Six Months Ended Year Ended December 31, __________________________________ 12/31/94 1995 1996 1997 1998 1999 _________ ____ ____ ____ ____ ____ Spec stores started 8 23 27 31 31 31 Spec stores opened 0 16 30 31 31 31
** The Moderate Growth Case forecast assumes half of the spec store starts beginning in 1995. Spec stores are built at a total cost of $650,000. 90% of spec stores are assumed sold to new franchisees for $650,000. 50% of these franchisees are given a $30,000 bridge loan, repaid over five years. The remaining 10% are retained by the Company and leased to franchisees at a resulting return on capital invested of 10%. No sale of retained real estate is assumed. Additionally, the Company continues to build six stores per year through its development joint venture program at a cost to the Company of $60,000 per joint venture. These stores are leased to new or existing franchisees and sold to the franchisee in year four at cost. NEW STORE OPENINGS The Aggressive Growth Case forecast assumes new stores are opened and closed primarily in conformance with the Company's latest business development plan. The forecast is summarized below:
Six Months Ended Year Ended December 31, _____________________________ 12/31/94 1995 1996 1997 1998 1999 _________ ____ ____ ____ ____ ____ STORES AT BEGINNING OF PERIOD Franchise Stores 361 377 417 467 517 567 Company Stores 5 3 3 3 3 3 ___ ___ ___ ___ ___ ___ Total 366 380 420 470 520 570 Franchise Stores Opened 18 45 55 55 60 60 STORES CLOSED Franchise Stores 2 5 5 5 10 10 Company Stores 2 0 0 0 0 0 ___ ___ ___ ___ ___ ___ Total 4 5 5 5 10 10 STORES AT END OF PERIOD Franchise Stores 377 417 467 517 567 617 Company Stores 3 3 3 3 3 3 ___ ___ ___ ___ ___ ___ Total 380 420 470 520 570 620
** The Moderate Growth Case forecast assumes half of the new store openings beginning in 1995. All new stores are added through existing dealer expansions or new franchisees. No new stores are added through conversions, master franchises, operational joint ventures or additions to Company stores. No costs are imputed with the closing of a store other than the loss of the associated revenue. OTHER CAPITAL EXPENDITURES The Company's primary capital requirements are for the construction of the Las Vegas distribution facility in 1995 and for the implementation of the spec program and the Management Information System. Cash proceeds are assumed to be received in 1995 for the sale of the Vacaville and Denver distribution centers. LONG-TERM DEBT Retained real estate is assumed 80% financed through a financing similar to that which the Company currently has in place with AT&T. Other cash requirements are assumed financed through the BBC line-of-credit. PART II STATUS QUO SCENARIOS AGGRESSIVE CASE SNOW PROJECTION MODEL
SUMMARY STATISTICS HISTORICAL PROJECTED _________ _______ ___________________________________________________________________ INCOME STATEMENT SUMMARY 1992 1993 1994 1995 1996 1997 1998 1999 ________________________ _________ ________ ________ ________ ________ ________ ________ ________ Net Sales $119,799 $122,960 $125,832 $135,854 $150,201 $167,581 $185,075 $202,805 EBITDA 7,624 6,058 7,456 8,729 12,276 16,040 18,927 21,281 EBIT 5,936 4,500 5,650 6,278 9,727 13,493 16,333 18,636 Total Interest 1,170 1,219 1,686 1,628 1,587 1,460 1,406 1,422 Net Interest 1,170 1,219 1,468 1,452 1,491 1,343 1,182 1,007 Net Income $2,783 $1,881 $2,415 $2,794 $4,768 $7,035 $8,763 $10,197 Earnings Per Share $0.80 $0.55 $0.72 $0.82 $1.39 $2.05 $2.54 $2.95 GROWTH/MARGIN ANALYSIS Net Sales Growth 5.2% 2.6% 2.3% 8.0% 10.6% 11.6% 10.4% 9.6% Gross Margin 20.9% 20.4% 21.0% 18.5% 19.5% 20.4% 20.6% 20.6% EBITDA Margin 6.4% 4.9% 5.9% 6.4% 8.2% 9.6% 10.2% 10.5% EBIT Margin 5.0% 3.7 4.5% 4.6% 6.5% 8.1% 8.8% 9.2% Net Income Margin 2.3% 1.5% 1.9% 2.1% 3.2% 4.2% 4.7% 5.0% COVERAGES EBITDA/Total Interest 6.5x 5.0x 4.4x 5.4x 7.7x 11.0x 13.5x 15.0x EBITDA/Net Interest 6.5x 5.0x 5.1x 6.0x 8.2x 11.9x 16.0x 21.1x EBITDA/Cap Ex/Tot. Interest 5.9x 3.2x 3.3x -1.7x 6.6x 10.4x 12.8x 14.3x EBIT/Total Interest 5.1x 3.7x 3.4x 3.9x 6.1x 9.2x 11.6x 13.1x EBIT/ Net Interest 5.1x 3.7x 3.8x 4.3x 6.5x 10.0x 13.8x 18.5x Total Debt/EBITDA 1.4x 2.3x 2.6x 2.3x 1.4x 1.0x 0.8x 0.7x Debt/Total Capitalization 30.3% 43.2% 36.0% 35.0% 29.3% 24.2% 20.7% 18.4% Debt/Equity 0.4x 0.8x 0.6x 0.5x 0.4x 0.3x 0.3x 0.2x Store Count (end of period) Franchise Stores 344 362 377 417 467 517 567 617 Company Stores 10 8 3 3 3 3 3 3 ------- ------- ------- ------- ------- ------- ------- ------- Total Stores 354 370 380 420 470 520 570 620
AGGRESSIVE CASE SNOW PROJECTION MODEL
Acquisition Adjustments OPENING BALANCE SHEET As of Adj Equity Loans to Refinance Purchase Pay Allocate Pro Forms 12/31/94 FMV Invt. Newco Debt Company Fees Goodwill 6/30/94 ________ ______ ________ _______ _________ ________ ____ ________ _________ Assets Current Assets Cash/ Investments $4,200 $4,200 $0 $0 $0 $0 $0 $4,200 Receivables 8,407 8,407 8,407 Inventory 15,261 15,261 15,261 Deferred Income Taxes 2,501 2,501 2,501 Other Current Assets 1,047 1,047 1,047 ________ ______ ________ _______ _________ ________ ____ ________ _________ Total Current Assets 31,417 31,417 0 0 0 0 0 0 31,417 Real Estate Retained 1,324 1,324 1,324 Real Estate CIP 3,085 3,085 3,085 Other Prop.& Equip.,net 14,003 14,003 14,003 ________ ______ ________ _______ _________ ________ ____ ________ _______ Total PP&E 18,411 18,411 18,411 Transaction Costs 241 241 0 241 Investment/Other Asset 2,043 2,043 2,043 Invest in Oper JV 1,414 1,414 1,414 Invest in Dev JV 300 300 300 Notes Receivable 1,362 1,362 1,362 Distribution Rights 9,046 9,046 9,046 Goodwill 0 0 0 0 ________ ______ ________ _______ _________ ________ ____ ________ _______ Total Assets $64,234 $64,234 $0 $0 $0 $0 $0 $0 $64,234 ________ ______ ________ _______ _________ ________ ____ ________ _______ ________ ______ ________ _______ _________ ________ ____ ________ _______ Current Liabilities Accounts Payable 3,679 3,679 3,679 Accrued Expenses 2,229 2,229 2,229 Warranty Reserve 3,854 3,854 3,854 ________ ______ ________ _______ _________ ________ ____ ________ _______ Total Current Liabilities 9,763 9,763 9,763 Deferred Income Taxes 0 0 0 ESOP Obligation 453 453 453 Deferred Income 121 121 121 Existing Debt Senior Notes 8,000 8,000 8,000 Long Term Debt(IN) 1,451 1,451 1,451 Long Term Debt (KellySpr.) 4,400 4,400 4,400 Other Senior Debt 3,019 3,019 3,019 AT&T LTD 1,795 1,795 1,795 LOC-BBC 734 734 734 Acquisition Financing Senior Debt 0 0 0 0 Sub Debt 0 0 0 0 ________ ______ ________ _______ _________ ________ ____ ________ ________ Total Debt 19,399 19,399 0 0 0 0 0 0 19,399 New Common Stock 0 0 0 0 Common Stock 14,808 0 0 ESOP Obligation (453) (453) (453) Retained Earnings 20,144 34,952 0 0 34,952 ________ ______ ________ _______ _________ ________ ____ ________ ________ Total Equity 34,499 34,499 34,499 ________ ______ ________ _______ _________ ________ ____ ________ ________ Total Liab. & Equity $64,234 $64,234 $64,234 ________ ______ ________ _______ _________ ________ ____ ________ ________ ________ ______ ________ _______ _________ ________ ____ ________ ________
AGGRESSIVE CASE SNOW PROJECTED MODEL
Historical Projected INCOME STATEMENT Year Ended Dec. 31, 6 Months Ended Year Ended December 31, ------------------------- ------------------------ -------------------------------------------------- (in thousands) 1992 1993 6/30/94 12/31/94 1994 1995 1996 1997 1998 1999 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- RSC Sales $111,657 $113,225 $53,067 $64,127 $117,195 $127,920 $141,503 $157,949 $174,505 $191,274 Incremental Retail Sales 1,816 3,238 1,085 833 1,918 934 934 934 934 934 Franchise Fee Income 5,856 6,116 3,085 3,207 6,292 6,622 7,378 8,297 9,234 10,195 O Advertising 470 381 242 186 428 379 386 402 402 402 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Net Sales 119,799 122,960 57,480 68,353 125,832 135,854 150,201 167,581 185,075 202,805 Cost Of Goods Sold(1) 94,720 97,829 44,424 54,990 99,414 110,704 120,922 133,423 146,887 161,089 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Gross Profit 25,078 25,131 13,056 13,363 26,418 25,150 29,279 34,158 38,188 41,715 Selling Gen. & Admin 17,455 18,035 9,388 8,906 18,294 16,604 17,334 18,664 19,981 21,353 Depreciation 1,120 1,168 605 794 1,399 2,044 2,163 2,211 2,260 2,310 Amort. of Finance Costs 0 0 0 0 0 0 0 0 0 0 Goodwill Amortization 0 0 0 0 0 0 0 0 0 0 Other Amortization 568 390 208 199 407 407 386 336 335 335 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total S G & A(1) 19,143 19,593 10,201 9,899 20,100 19,055 19,883 21,191 22,576 23,998 Operating Income 5,936 5,538 2,855 3,464 6,319 6,095 9,396 12,967 15,612 17,717 Lease (Income)-10% 0 0 0 (33) (33) (183) (331) (526) (721) (919) Other Expenses/(Income) 0 1,038 702 0 702 0 0 0 0 0 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- EBIT 5,936 4,500 2,153 3,497 5,650 6,278 9,727 13,493 16,333 18,636 Projected Costs Savings Interest Expense Existing Debt 1,170 1,219 667 1,019 1,686 1,628 1,587 1,460 1,406 1,422 Acquisition Financing Senior Debt 0 0 0 0 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 0 0 0 0 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Interest Expense 1,170 1,129 667 1,019 1,686 1,628 1,587 1,460 1,406 1,422 Interest Income 0 0 0 217 217 177 96 116 224 415 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Net Interest Expense 1,170 1,129 667 801 1,468 1,452 1,491 1,343 1,182 1,007 Earnings Before Taxes 4,766 3,281 1,486 2,695 4,181 4,826 8,236 12,150 15,151 17,630 Income Taxes 1,983 1,400 631 1,135 1,766 2,032 3,467 5,115 6,387 7,433 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Net Income To Common $2,783 $1,881 $855 $1,561 $2,415 $2,794 $4,768 $7,035 $8,763 $10,197 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Earnings Per Share Actual $0.80 $0.55 $0.26 $0.46 $0.72 $0.82 $1.39 $2.05 $2.54 $2.95 Excl. One Time Items $0.73 $0.38 $0.84 Weighted Average Shares 3,497 3,410 3,333 3,416 3,374 3,424 3,432 3,440 3,448 3,456 _____________________________
(1) All freight expense is in COGS AGGRESSIVE CASE SNOW PROJECTION MODEL
Historical Projected BALANCE SHEET Year Ended Dec. 31, 6 Months Ended Year Ended December 31, ---------------------- ----------------------- ----------------------------------------------- (in thousands) 1992 1993 6/30/94 12/31/94 1994 1995 1996 1997 1998 1999 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Assets Current Assets Cash/Investments $1,590 $1,113 $5,706 $4,200 $4,200 $0 $0 $2,574 $8,406 $16,505 Receivables 8,835 7,722 9,870 8,407 8,407 9,077 10,036 11,197 12,366 13,550 Inventory 15,348 11,748 21,433 15,261 15,261 15,815 16,123 17,790 19,585 21,479 Deferred Income Taxes 1,970 1,802 2,025 2,501 2,501 2,891 3,280 3,669 4,059 4,448 Other Current Assets 443 758 2,023 1,047 1,047 1,047 1,047 1,047 1,047 1,047 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Current Assets 28,186 23,143 41,057 31,417 31,417 28,830 30,485 36,277 45,463 57,029 Real Estate Retained 0 0 1,324 1,324 2,334 4,284 6,234 8,184 10,199 Real Estate CIP 0 0 1,750 3,085 3,085 5,581 5,551 5,551 5,551 5,551 Other P & E, net 12,166 13,153 13,477 14,003 14,003 18,895 18,635 17,308 16,003 14,649 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total PP&E 12,166 13,153 15,227 18,411 18,411 26,900 28,470 29,093 29,738 30,398 Investment/Other Asset 1,969 2,955 2,843 2,043 2,043 2,183 2,323 2,463 2,603 2,743 Invst in Oper JV 1,609 1,385 1,414 1,414 1,414 1,414 1,414 1,414 1,414 1,414 Invst in Dev JV 0 0 0 300 300 660 1,020 1,380 1,440 1,440 Bridge Loan Receivable 0 0 0 0 0 210 573 878 1,123 1,317 Notes Receivable 4,915 6,616 4,984 1,362 1,362 1,162 962 762 562 362 Distribution Rights 8,834 9,355 9,216 9,046 9,046 8,797 8,518 8,240 7,964 7,688 Transaction Costs 0 0 0 241 241 215 189 163 137 111 Goodwill 0 0 0 0 0 0 0 0 0 0 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Assets $57,679 $56,607 $74,741 $64,234 $64,234 $70,370 $73,954 $80,670 $90,444 $102,502 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Current Liabilities Accounts Payable 5,085 3,613 7,792 3,679 3,679 4,613 5,038 5,559 6,120 6,712 Accrued Expenses 3,067 3,396 4,787 2,229 2,229 3,346 3,700 4,129 4,558 4,995 Warranty Reserve 2,654 3,254 3,554 3,854 3,854 4.454 5,054 5,654 6,254 6,854 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Current Liab. 10,806 10,263 16,133 9,763 9,763 12,413 13,793 15,342 16,933 18,561 Deferred Income Taxes 500 38 0 0 0 0 0 0 0 0 ESOP Obligation: 1,277 975 429 453 453 260 0 0 0 0 Deferred Income 192 157 140 121 121 0 0 0 0 0 Existing Debt Term Loan BBC 2,000 1,400 0 0 0 0 0 0 0 0 Senior Notes 0 0 8,000 8,000 8,000 8,000 8,000 8,000 6,857 5,714 Long Term Debt(IN) 0 0 1,451 1,451 1,451 1,413 1,373 1,330 1,284 1,238 LTD (Kelly Spring) 440 5,600 5,000 4,400 4,400 3,200 2,000 800 0 0 Other Senior Debt 7,324 6,686 3,664 3,019 3,019 186 140 114 92 70 AT&T LTD 0 0 754 1,795 1,795 2,571 4,069 5,535 6,966 8,410 LOC-BBC 950 0 6,208 734 734 4,842 2,065 0 0 0 Acquisition Financing Senior Debt 0 0 0 0 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 0 0 0 0 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Debt 10,714 13,686 25,077 19,399 19,399 20,212 17,647 15,779 15,199 15,432 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Liabilities 23,489 25,119 41,779 29,736 29,736 32,884 31,440 31,121 32,132 33,993 New Common Stock 0 0 0 0 0 0 0 0 0 0 Common Stock 19,334 14,735 14,808 14,808 0 0 0 0 0 0 ESOP Obligation (1,277) (975) (429) (453) (453) (260) 0 0 0 0 Retained Earnings 16,133 17,728 18,583 20,144 34,952 37,746 42,514 49,549 58,312 68,509 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Equity 34,190 31,488 32,962 34,499 34,499 37,486 42,514 49,549 58,312 68,509 Total Liab.& Equity $57,679 $56,607 $74,741 $64,234 $64,234 $70,370 $73,954 $80,670 $90,444 $102,502 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
AGGRESSIVE CASE SNOW PROJECTION MODEL
Projected CASH FLOW STATEMENT --------------------------------------------------------- (In thousands) 6 Months Year Ended December, 31, Ended _____________________________________________________ 12/31/94 1995 1996 1997 1998 1999 ________ ______ ______ _____ ______ _______ Cash Flow From Operations Net income $1,561 $2,794 $4,768 $7,035 $8,763 $10,197 Depreciation 794 2,044 2,163 2,211 2,260 2,310 Amortization 199 407 386 336 335 335 Increase Deferred Income/Taxes (19) (121) 0 0 0 0 ________ ______ ______ _____ ______ _______ Total Cash Flow From Operations 2,535 5,124 7,318 9,581 11,358 12,842 Changes in Working Capital Accounts Receivable 1,463 (670) (959) (1,161) (1,169) (1,185) Inventories 6,172 (554) (308) (1,667) (1,795) (1,894) Deferred Income Taxes (476) (389) (389) (389) (389) (389) Other Current Assets 976 0 0 0 0 0 Accounts Payable (4,113) 933 426 521 561 592 Accrued Expenses (2,558) 1,117 354 428 430 437 Warranty Reserve 300 600 600 600 600 600 ________ ______ ______ _____ ______ _______ Total Changes In Working Capital 1,764 1,037 (276) (1,668) (1,762) (1,839) Cash (Used For) Generated By Investments Capital Expenditures (1,320) (11,519) (1,813) (884) (955) (955) Proceeds From Sale Of Properties 0 4,493 0 0 0 0 Investment in Oper JV 0 0 0 0 0 0 Investment in Dev JV (300) (360) (360) (360) (60) 0 Investment In Conversions 0 0 0 0 0 0 Real Estate Retained (1,324) (1,010) (1,950) (1,950) (1,950) (2,015) Real Estate CIP (1,335) (2,496) 30 (0) (0) (0) Bridge Loan 0 (210) (363) (305) (244) (194) ________ ______ ______ _____ ______ _______ Total Investments (4,278) (11,102) (4,456) (3,499) (3,209) (3,164) Changes in Other Assets Investments/Other Assets 800 (140) (140) (140) (140) (140) Notes Receivable 3,622 200 200 200 200 200 Distribution Rights 170 249 279 278 276 276 Note Pay Fees Expenses (241) 26 26 26 26 26 Less: Amortization (199) (407) (386) (336) (335) (335) ________ ______ ______ _____ ______ _______ Total Other 4,152 (72) (21) 28 27 27 Net From Operations 4,172 (5,013) 2,564 4,442 6,413 7,866 Cash Flow From Financing Activities Existing Debt (5,678) 813 (2,564) (1,868) (580) 233 Senior Debt 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 Net cash used in financing activities (5,678) 813 (2,564) (1,868) (580) 233 Net Increase (Decrease) in Cash (1,506) (4,200) 0 2,574 5,833 8,099 Cash, Beginning of Period 5,706 4,200 0 0 2,574 8,406 Cash Generated (Used) (1,506) (4,200) 0 2,574 5,833 8,099 ________ ______ ______ _____ ______ _______ Cash, End of Period $4,200 $0 $0 $2,574 $8,406 $16,505 Min Cash Balance 1994 $4,200
AGGRESSIVE CASE SNOW PROJECTION MODEL Projected DEBT SCHEDULE --------------------------------------------------------- (In thousands) 6 Months Year Ended December, 31, Ended ------------------------------------------------------- 12/31/94 1995 1996 1997 1998 1999 ________ ______ ______ _____ ______ _______ Beginning Debt Balance Existing Debt Senior Notes 8,000 8,000 8,000 8,000 8,000 6,857 Long Term Debt (IN) 1,451 1,451 1,413 1,373 1,330 1,284 Long Term Debt (Kelly Springfield) 5,000 4,400 3,200 2,000 800 0 Other Senior Debt 3,664 3,019 186 140 114 92 AT&T LTD 754 1,795 2,571 4,069 5,535 6,966 LOC-BBC 6,208 734 4,842 2,065 0 0 Acquisition Financing Senior Debt 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 ______ ______ ______ ______ ______ ______ Total Beginning Debt Balance 25,077 19,399 20,212 17,647 15,779 15,199 Debt (Repayment Borrowings) Existing Debt Senior Notes 0 0 0 0 (1,143) (1,143) Long Term Debt (IN) 0 (38) (40) (43) (46) (46) Long Term Debt (Kelly Springfield) (600) (1,200) (1,200) (1,200) (800) 0 Other Senior Debt (645) (2,833) (46) (26) (22) (22) AT&T LTD 1,041 776 1,498 1,466 1,431 1,444 LOC-BBC (5,474) 4,108 (2,777) (2,065) 0 0 ______ ______ ______ ______ ______ ______ Total Existing Debt Borrowing (Repayment) (5,678) 813 (2,564) (1,868) (580) 233 Acquisition Financing Senior Debt 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 ______ ______ ______ ______ ______ ______ Total Borrowing (Repayment) (5,678) 813 (2,564) (1,868) (580) 233 Ending Debt Balances Existing Debt Senior Notes 8,000 8,000 8,000 8,000 6,857 5,714 Long Term Debt (IN) 1,451 1,413 1,373 1,330 1,284 1,238 Long Term Debt (Kelly Springfield) 4,400 3,200 2,000 800 0 0 Other Senior Debt 3,019 186 140 114 92 70 AT&T LTD 1,795 2,571 4,069 5,535 6,966 8,410 LOC-BBC 734 4,842 2,065 0 0 0 Acquisition Financing Senior Debt 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 ______ ______ ______ ______ ______ ______ Total Ending Debt Balance 19,399 20,212 17,647 15,779 15,199 15,432
AGGRESSIVE CASE SNOW PROJECTION MODEL
PROJECTED INTEREST EXPENSE SCHEDULE --------------------------------------------------------- 6 Months Year Ended December, 31, Ended ------------------------------------------------------- 12/31/94 1995 1996 1997 1998 1999 --------- -------- --------- --------- ---------- -------- Interest Expense Existing Debt Rate Senior Notes 8.71% 348 697 697 697 647 547 Long Term Debt (IN) 7.75% 56 111 108 105 101 98 Long Term Debt (Kelly Springfield) 5.75% 135 219 150 81 23 0 Other Senior Debt 9.60% 160 154 16 12 10 8 AT&T LTD 10.00% 64 218 332 480 625 769 Prepayment Penalties --- 112 0 0 0 0 0 LOC-BBC 8.25% 143 230 285 85 0 0 ______ ______ ______ ______ ______ ______ Total Existing Debt Interest Expense 1,019 1,628 1,587 1,460 1,406 1,422 Acquisition Financing Senior Debt 0.0% 0 0 0 0 0 0 Sub Debt 0.0% 0 0 0 0 0 0 ______ ______ ______ ______ ______ ______ Total Interest Expense $1,019 $1,628 $1,587 $1,460 $1,406 $1,422 Income on Cash 3.00% 74 63 0 39 165 374 Income on Bridge Notes Rec 0.00% 0 0 0 0 0 0 Income on Notes Rec 9.00% 143 114 96 78 60 42 ________ ______ ______ _____ ______ _______ $217 $177 $96 $116 $224 $415
MODERATE CASE PROJECTION MODEL
SUMMARY STATISTICS HISTORICAL PROJECTED ________________ ________________________________________________________________ INCOME STATEMENT SUMMARY 1992 1993 1994 1995 1996 1997 1998 1999 ____ ____ ____ ____ ____ ____ ____ ____ Net Sales $119,799 $122,960 $125,832 $133,425 $140,364 $148,531 $156,256 $163,560 EBITDA 7,624 6,058 7,456 8,429 10,874 13,075 14,325 14,987 EBIT 5,936 4,500 5,650 6,134 8,535 10,792 12,041 12,700 Total Interest 1,170 1,219 1,686 1,528 1,351 1,240 1,200 1,144 Net Interest 1,170 1,219 1,468 1,351 1,248 1,080 922 724 Net Income $2,783 $1,881 $2,415 $2,769 $4,219 $5,623 $6,431 $6,927 Earnings Per Share $0.80 $0.55 $0.72 $0.81 $1.23 $1.63 $1.87 $2.00 Growth Margin Analysis Net Sales Growth 5.2% 2.6% 2.3% 6.0% 5.2% 5.8% 5.2% 4.7% Gross Margin 20.9% 20.4% 21.0% 18.5% 19.5% 20.4% 20.7% 20.6% EBITDA Margin 6.4% 4.9% 5.9% 6.3% 7.7% 8.8% 9.2% 9.2% EBIT Margin 5.0% 3.7 4.5% 4.6% 6.1% 7.3% 7.7% 7.8% Net Income Margin 2.3% 1.5% 1.9% 2.1% 3.0% 3.8% 4.1% 4.2% COVERAGES EBITDA/Total Interest 6.5x 5.0x 4.4x 5.5x 8.0x 10.5x 11.9x 13.1x EBITDA/Net Interest 6.5x 5.0x 5.1x 6.2x 8.7x 12.1x 15.5x 20.7x EBITDA/Cap Ex/Tot. Interest 5.9x 3.2x 3.3x -2.0x 6.7x 9.8x 11.1x 12.3x EBIT/Total Interest 5.1x 3.7x 3.4x 4.0x 6.3x 8.7x 10.0x 11.1x EBIT/ Net Interest 5.1x 3.7x 3.8x 4.5x 6.8x 10.0x 13.1x 17.5x Total Debt/EBITDA 1.4x 2.3x 2.6x 2.1x 1.3x 1.1x 0.9x 0.8x Debt/Total Capitalization 30.3% 43.2% 36.0% 32.2% 25.8% 22.8% 19.1% 16.8% Debt/Equity 0.4x 0.8x 0.6x 0.5x 0.3x 0.3x 0.2x 0.2x STORE COUNT (END OF PERIOD) Franchise Stores 344 362 377 395 418 441 461 481 Company Stores 10 8 3 3 3 3 3 3 ___ ___ ___ ___ ___ ___ ___ ___ Total Stores 354 370 380 398 421 444 464 484
AGGRESSIVE CASE - LEVERAGED BUYOUT SCENARIO SUMMARY STATISTICS
HISTORICAL PROJECTED ________________ ________________________________________________________________ INCOME STATEMENT SUMMARY 1992 1993 1994 1995 1996 1997 1998 1999 ____ ____ ____ ____ ____ ____ ____ ____ Net Sales $119,799 $122,960 $125,832 $135,854 $150,201 $167,581 $185,075 $202,805 EBITDA 7,624 6,058 7,456 8,729 12,276 16,040 18,927 21,281 EBIT 5,936 4,500 5,650 5,956 9,405 13,171 16,011 18,315 Total Interest 1,170 1,219 1,686 3,488 3,708 3,570 3,262 3,075 Net Interest 1,170 1,219 1,468 3,312 3,613 3,492 3,203 2,930 Net Income $2,783 $1,881 $2,415 $4,480 $3,302 $5,553 $7,357 $8,847 Earnings Per Share $0.80 $0.55 $0.72 $0.43 $0.96 $1.61 $2.13 $2.56 GROWTH MARGIN ANALYSIS Net Sales Growth 5.2% 2.6% 2.3% 8.0% 10.6% 11.6% 10.4% 9.6% Gross Margin 20.9% 20.4% 21.0% 18.5% 19.5% 20.4% 20.6% 20.6% EBITDA Margin 6.4% 4.9% 5.9% 6.4% 8.2% 9.6% 10.2% 10.5% EBIT Margin 5.0% 3.7 4.5% 4.4% 6.3% 7.9% 8.7% 9.0% Net Income Margin 2.3% 1.5% 1.9% 1.1% 2.2% 3.3% 4.0% 4.4% COVERAGES EBITDA/Total Interest 6.5x 5.0x 4.4x 2.5x 3.3x 4.5x 5.8x 6.9x EBITDA/Net Interest 6.5x 5.0x 5.1x 2.6x 3.4x 4.6x 5.9x 7.3x EBITDA/Cap Ex/Tot. Interest 5.9x 3.2x 3.3x -0.8x 2.8x 4.2x 5.5x 6.6x EBIT/Total Interest 5.1x 3.7x 3.4x 1.7x 2.5x 3.7x 4.9x 6.0x EBIT/ Net Interest 5.1x 3.7x 3.8x 1.8x 2.6x 3.8x 5.0x 6.3x Total Debt/EBITDA 1.4x 2.3x 2.6x 4.4x 3.0x 2.1x 1.5x 1.3x Debt/Total Capitalization 30.3% 43.2% 36.0% 59.2% 55.2% 48.6% 39.7% 35.3% Debt/Equity 0.4x 0.8x 0.6x 1.5x 1.2x 0.9x 0.7x 0.5x STORE COUNT (END OF PERIOD) Franchise Stores 344 362 377 417 467 517 567 617 Company Stores 10 8 3 3 3 3 3 3 ___ ___ ___ ___ ___ ___ ___ ___ Total Stores 354 370 380 420 470 520 570 620
MODERATE CASE - SNOW PROJECTION MODEL
ACQUISITION ADJUSTMENTS OPENING BALANCE SHEET As of Adj Equity Loans to Refinance Purchase Pay Allocate Pro Forms 12/31/94 FMV Invt. Newco Debt Company Fees Goodwill 6/30/94 -------- ------- ------- -------- --------- -------- ------- -------- --------- Assets Current Assets Cash/ Investments $4,200 $4,200 $0 $0 $0 $0 $0 $4,200 Receivables 8,407 8,407 8,407 Inventory 15,261 15,261 15,261 Deferred Income Taxes 2,501 2,501 2,501 Other Current Assets 1,047 1,047 1,047 -------- ------- ------- -------- --------- -------- ------- -------- --------- Total Current Assets 31,417 31,417 0 0 0 0 0 0 31,417 Real Estate Retained 1,324 1,324 1,324 Real Estate CIP 3,085 3,085 3,085 Other Prop.& Equip.,net 14,003 14,003 14,003 -------- ------- ------- -------- --------- -------- ------- -------- --------- Total PP&E 18,411 18,411 18,411 Transaction Costs 241 241 0 241 Investment/Other Asset 2,043 2,043 2,043 Invest in Oper JV 1,414 1,414 1,414 Invest in Dev JV 300 300 300 Notes Receivable 1,362 1,362 1,362 Distribution Rights 9,046 9,046 9,046 Goodwill 0 0 0 0 -------- ------- ------- -------- --------- -------- ------- -------- --------- Total Assets $64,234 $64,234 $0 $0 $0 $0 $0 $0 $64,234 -------- ------- ------- -------- --------- -------- ------- -------- --------- -------- ------- ------- -------- --------- -------- ------- -------- --------- Current Liabilities Accounts Payable 3,679 3,679 3,679 Accrued Expenses 2,229 2,229 2,229 Warranty Reserve 3,854 3,854 3,854 -------- ------- ------- -------- --------- -------- ------- -------- --------- Total Current Liabilities 9,763 9,763 9,763 Deferred Income Taxes 0 0 0 ESOP Obligation 453 453 453 Deferred Income 121 121 121 Existing Debt Senior Notes 8,000 8,000 8,000 Long Term Debt(IN) 1,451 1,451 1,451 Long Term Debt(KellySpr.) 4,400 4,400 4,400 Other Senior Debt 3,019 3,019 3,019 AT&T LTD 1,795 1,795 1,795 LOC-BBC 734 734 734 Acquisition Financing Senior Debt 0 0 0 0 Sub Debt 0 0 0 0 -------- ------- ------- -------- --------- -------- ------- -------- --------- Total Debt 19,399 19,399 0 0 0 0 0 0 19,399 New Common Stock 0 0 0 0 Common Stock 14,808 0 0 ESOP Obligation (453) (453) (453) Retained Earnings 20,144 34,952 0 0 34,952 -------- ------- ------- -------- --------- -------- ------- -------- --------- Total Equity 34,499 34,449 34,499 -------- ------- ------- -------- --------- -------- ------- -------- --------- Total Liab. & Equity $64,234 $64,234 $64,234 -------- ------- ------- -------- --------- -------- ------- -------- --------- -------- ------- ------- -------- --------- -------- ------- -------- ---------
MODERATE CASE SNOW PROJECTION MODEL
Historical BALANCE SHEET Year Ended Dec. 31, Projected ------------------------- At Pro Forma (in thousands) 1992 1993 6/30/94 31-Dec-94 31-Dec-94 1995 1996 1997 1998 1999 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- ASSETS Current Assets Cash/Investments $1,590 $1,113 $5,706 $4,200 $4,200 $0 $537 $4,941 $9,611 $15,639 Receivables 8,835 7,722 9,870 8,407 8,407 8,915 9,378 9,924 10,440 10,928 Inventory 15,348 11,748 21,433 15,261 15,261 15,530 15,061 15,758 16,522 17,309 Deferred Income Taxes 1,970 1,802 2,025 2,501 2,501 2,891 3,280 3,669 4,059 4,448 Other Current Assets 443 758 2,023 1,047 1,047 1,047 1,047 1,047 1,047 1,047 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Current Assets 28,186 23,143 41,057 31,417 31,417 28,383 29,304 35,339 41,679 49,372 Real Estate Retained 0 0 1,324 1,324 2,009 3,024 4,032 5,039 6,079 Real Estate CIP 0 0 1,750 3,085 3,085 3,706 3,675 3,664 3,664 3,664 Other P & E, net 12,166 13,153 13,477 14,003 14,003 19,140 19,001 17,937 16,943 15,946 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total PP&E 12,166 13,153 15,227 18,411 18,411 24,855 25,699 25,633 25,646 25,689 Investment/Other Asset 1,969 2,955 2,843 2,043 2,043 2,183 2,323 2,463 2,603 2,743 Invst in Oper JV 1,609 1,385 1,414 1,414 1,414 1,414 1,414 1,414 1,414 1,414 Invst in Dev JV 0 0 0 300 300 660 1,020 1,380 1,440 1,440 Bridge Loan Receivable 0 0 0 0 0 142 325 477 598 695 Notes Receivable 4,915 6,616 4,984 1,362 1,362 1,162 962 762 562 362 Distribution Rights 8,834 9,355 9,216 9,046 9,046 8,797 8,518 8,240 7,964 7,688 Transaction Costs 0 0 0 241 241 215 189 163 137 111 Goodwill 0 0 0 0 0 0 0 0 0 0 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Assets $57,679 $56,607 $74,741 $64,234 $64,234 $67,812 $69,754 $75,871 $82,043 $89,513 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Current Liabilities Accounts Payable 5,058 3,613 7,792 3,679 3,679 4,530 4,707 4,924 5,163 5,409 Accrued Expenses 3,067 3,396 4,787 2,229 2,229 3,286 3,458 3,659 3,849 4,028 Warranty Reserve 2,654 3,254 3,554 3,854 3,854 4,454 5,054 5,654 6,254 6,854 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Current Liab. 10,806 10,263 16,133 9,763 9,763 12,270 13,219 14,238 15,266 16,291 Deferred Income Taxes 500 38 0 0 0 0 0 0 0 0 ESOP Obligation: 1,277 975 429 453 453 260 0 0 0 0 Deferred Income 192 157 140 121 121 0 0 0 0 0 Existing Debt Term Loan BBC 2,000 1,400 0 0 0 0 0 0 0 0 Senior Notes 0 0 8,000 8,000 8,000 8,000 8,000 8,000 6,857 5,714 Long Term Debt(IN) 0 0 1,451 1,451 1,451 1,413 1,373 1,330 1,284 1,238 LTD (Kelly Spring) 440 5,600 5,000 4,400 4,400 3,200 2,000 800 0 0 Other Senior Debt 7,324 6,686 3,664 3,019 3,019 186 140 114 92 70 AT&T LTD 0 0 754 1,795 1,795 2,315 3,082 3,826 4,550 5,278 LOC-BBC 950 0 6,208 734 734 2,706 0 0 0 0 Acquisition Financing Senior Debt 0 0 0 0 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 0 0 0 0 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Debt 10,714 13,686 25,077 19,399 19,399 17,821 14,595 14,070 12,783 12,300 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Liabilities 23,489 25,119 41,779 29,736 29,736 30,351 27,814 28,308 28,048 28,592 New Common Stock 0 0 0 0 0 0 0 0 0 0 Common Stock 19,334 14,735 14,808 14,808 0 0 0 0 0 0 ESOP Obligation (1,277) (975) (429) (453) (453) (260) 0 0 0 0 Retained Earnings 16,133 17,728 18,583 20,144 34,952 37,721 41,940 47,563 53,994 60,921 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Equity 34,190 31,488 32,962 34,499 34,499 37,461 41,940 47,563 53,994 60,921 Total Liab.& Equity $57,679 $56,607 $74,741 $64,234 $64,234 $67,812 $69,754 $75,871 $82,043 $89,513 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
MODERATE CASE - SNOW PROJECTION MODEL
Projected DEBT SCHEDULE --------------------------------------------------------- (In thousands) 6 Months Year Ended December, 31, Ended ----------------------------------------------------------- 12/31/94 1995 1996 1997 1998 1999 -------- ------- ------- ------- ------- ------- Beginning Debt Balance Existing Debt Senior Notes 8,000 8,000 8,000 8,000 8,000 6,857 Long Term Debt (IN) 1,451 1,451 1,413 1,373 1,330 1,284 Long Term Debt (Kelly Springfield) 5,000 4,400 3,200 2,000 800 0 Other Senior Debt 3,664 3,019 186 140 114 92 AT&T LTD 754 1,795 2,315 3,082 3,826 4,550 LOC-BBC 6,208 734 2,706 0 0 0 Acquisition Financing Senior Debt 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 -------- ------- ------- ------- ------- ------- Total Beginning Debt Balance 25,077 19,399 17,821 14,595 14,070 12,783 Debt (Repayment Borrowings) Existing Debt Senior Notes 0 0 0 0 (1,143) (1,143) Long Term Debt (IN) 0 (38) (40) (43) (46) (46) Long Term Debt (Kelly Springfield) (600) (1,200) (1,200) (1,200) (800) 0 Other Senior Debt (645) (2,833) (46) (26) (22) (22) AT&T LTD 1,041 520 767 744 723 729 LOC-BBC (5,474) 1,973 (2,706) 0 0 0 -------- ------- ------- ------- ------- ------- Total Existing Debt Borrowing (Repayment) (5,678) (1,578) (3,226) (525) (1,288) (482) Acquisition Financing Senior Debt 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 -------- ------- ------- ------- ------- ------- Total Borrowing (Repayment) (5,678) (1,578) (3,226) (525) (1,288) (482) Ending Debt Balances Existing Debt Senior Notes 8,000 8,000 8,000 8,000 6,857 5,714 Long Term Debt (IN) 1,451 1,413 1,373 1,330 1,284 1,238 Long Term Debt (Kelly Springfield) 4,400 3,200 2,000 800 0 0 Other Senior Debt 3,019 186 140 114 92 70 AT&T LTD 1,795 2,315 3,082 3,826 4,550 5,278 LOC-BBC 734 2,706 0 0 0 0 Acquisition Financing Senior Debt 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 -------- ------- ------- ------- ------- ------- Total Ending Debt Balance 19,399 17,821 14,595 14,070 12,783 12,300
MODERATE CASE - SNOW PROJECTION MODEL
PROJECTED INTEREST EXPENSE SCHEDULE --------------------------------------------------------- 6 Months Year Ended December, 31, Ended ------------------------------------------------------- 12/31/94 1995 1996 1997 1998 1999 --------- -------- --------- --------- ---------- -------- Interest Expense Existing Debt Rate Senior Notes 8.71% 348 697 697 697 647 547 Long Term Debt (IN) 7.75% 56 111 108 105 101 98 Long Term Debt (Kelly Springfield) 5.75% 135 219 150 81 23 0 Other Senior Debt 9.60% 160 154 16 12 10 8 AT&T LTD 10.00% 64 206 270 345 419 491 Prepayment Penalties --- 112 0 0 0 0 0 LOC-BBC 8.25% 143 142 112 0 0 0 ______ ______ ______ ______ ______ ______ Total Existing Debt Interest Expense 1,019 1,528 1,351 1,240 1,200 1,144 Acquisition Financing Senior Debt 0.0% 0 0 0 0 0 0 Sub Debt 0.0% 0 0 0 0 0 0 ______ ______ ______ ______ ______ ______ Total Interest Expense $1,019 $1,528 $1,351 $1,240 $1,200 $1,144 Income on Cash 3.00% 74 63 8 82 218 379 Income on Bridge Notes Rec 0.00% 0 0 0 0 0 0 Income on Notes Rec 9.00% 143 114 96 78 60 42 ________ ______ ______ _____ ______ _______ $217 $177 $104 $160 $278 $420
PART III LEVERAGED/MANAGEMENT BUYOUT SCENARIOS AGGRESSIVE CASE - LEVERAGED BUYOUT SCENARIO
GENERAL ASSUMPTIONS TRANSACTION PURCHASE TERMS ____________________________________________________ _________________________________________________ LBO/Sale of Company ____________________________________ Common Shares Outstanding 3,266 Equity Value 40,926 Stock Options 244 Total Debt Assumed 19,399 Total Shares 3,510 Less: Excess Cash (4,200) ________ ________ Avg. Exercise Price of Stock Options $6.35 Total Value (TV) 56,125 Cash Paid per Share $11.66 Market Price as of $16.00 Estimated Transaction Costs 2,000 Premium (Discount) Over Market Price -27.13% Less: Assumed Debt (19,399) Less: Cash Proc.-Stock Options (1,552) Total Debt Outstanding Before Purchase 19,399 Existing Debt Refinanced 0 Financing Needed $37,174 Debt Assumed 19,399 Rate % Equity ____ ________ Bank Debt 0 9.0% --- EBITDA Exit Multiple 7.0x Subordinated Debt 12,660 13.0% 6.2% Goodwill Amortization Period 40 yrs. Equity 1 - Investor 24,514 --- 93.9% Transaction Cost Amortization Period 10 yrs Equity 2 - Management 0 --- 0.0% ______ ________ 37,174 100.0%
PURCHASE PRICE MULTIPLES RATES OF RETURN SENSITIVITY ___________________________________________________ ___________________________________________________ 1993 1994 1995 % Equity EBITDA Exit Multiple ____ ____ ____ ____________________________________ TV/Sales 0.5x 0.4x 0.4x Allocation 6.0x 7.0x 8.0x ________________________________________________ TV/EBITDA 9.3x 7.5x 6.4x Equity-Inves. 93.9% 32.5% 37.4% 41.7% TV/EBIT 12.5x 9.9x 9.4x Equity-Mngt. NMF NMF NMF NMF Price/Earnings 16.1x 13.9x 27.0x Sub Debt 6.2% 20.0% 21.2% 22.3%
COVERAGES PRO FORMA 1994 1995 1996 1997 1998 1999 ____ ____ ____ ____ ____ ____ EBITDA/Total Interest 2.2x 2.502x 3.3x 4.5x 5.8x 6.9x EBIT/Total Interest 1.7x 1.7x 2.5x 3.7x 4.9x 6.0x Total Debt/EBITDA 4.3x 4.4x 3.0x 2.1x 1.5x 1.3x Debt/Total Cap 56.7% 59.2% 55.2% 48.6% 39.7% 35.3% Net Debt $32,059 $38,064 $36,644 $33,362 $28,034 $21,196 Cumulative Debt Repayment --- (6,005) 1,420 3,282 5,328 6,838 FINANCIAL EPS $0.72 $0.43 $0.96 $1.61 $2.13 $2.56
AGGRESSIVE CASE LEVERAGED BUYOUT SCENARIO
Acquisition Adjustments OPENING BALANCE SHEET As of Adj Equity Loans to Refinance Purchase Pay Allocate Pro Forms 12/31/94 FMV Invt. Newco Debt Company Fees Goodwill 6/30/94 -------- -------- -------- -------- --------- -------- ------- --------- --------- ASSETS Current Assets Cash/ Investments $4,200 $4,200 $24,514 $12,660 $0 ($39,374) ($2,000) $0 Receivables 8,407 8,407 8,407 Inventory 15,261 15,261 15,261 Deferred Income Taxes 2,501 2,501 2,501 Other Current Assets 1,047 1,047 1,047 -------- -------- -------- -------- --------- -------- ------- --------- -------- Total Current Assets 31,417 31,417 24,514 12,660 0 (39,374) (2,000) 0 27,217 Real Estate Retained 1,324 1,324 1,324 Real Estate CIP 3,085 3,085 3,085 Other Prop.& Equip.,net 14,003 14,003 14,003 -------- -------- -------- -------- --------- -------- ------- --------- --------- Total PP&E 18,411 18,411 18,411 Transaction Costs 241 241 2,000 2,241 Investment/Other Asset 2,043 2,043 2,043 Invest in Oper JV 1,414 1,414 1,414 Invest in Dev JV 300 300 300 Notes Receivable 1,362 1,362 1,362 Distribution Rights 9,046 9,046 9,046 Goodwill 0 0 4,875 4,875 -------- -------- -------- -------- --------- -------- ------- --------- --------- Total Assets $64,234 $64,234 $24,514 $12,660 $0 ($39,374) $0 $4,875 $66,909 -------- -------- -------- -------- --------- -------- ------- --------- --------- -------- -------- -------- -------- --------- -------- ------- --------- --------- Current Liabilities Accounts Payable 3,679 3,679 3,679 Accrued Expenses 2,229 2,229 2,229 Warranty Reserve 3,854 3,854 3,854 -------- -------- -------- -------- --------- -------- ------- --------- --------- Total Current Liabilities 9,763 9,763 9,763 Deferred Income Taxes 0 0 0 ESOP Obligation 453 453 453 Deferred Income 121 121 121 Existing Debt Senior Notes 8,000 8,000 8,000 Long Term Debt(IN) 1,451 1,451 1,451 Long Term Debt(KellySpr.) 4,400 4,400 4,400 Other Senior Debt 3,019 3,019 3,019 AT&T LTD 1,795 1,795 1,795 LOC-BBC 734 734 734 Acquisition Financing Senior Debt 0 0 0 0 Sub Debt 0 0 $12,660 12,660 -------- -------- -------- -------- --------- -------- ------- --------- --------- Total Debt 19,399 19,399 0 $12,660 0 0 0 0 32,059 New Common Stock 0 0 24,514 24,514 Common Stock 14,808 0 0 ESOP Obligation (453) (453) (453) Retained Earnings 20,144 34,952 ($39,374) 4,875 453 -------- -------- -------- -------- --------- -------- ------- --------- --------- Total Equity 34,499 34,449 24,514 -------- -------- -------- -------- --------- -------- ------- --------- --------- Total Liab. & Equity $64,234 $64,234 $66,909 -------- -------- -------- -------- --------- -------- ------- --------- --------- -------- -------- -------- -------- --------- -------- ------- --------- ---------
AGGRESSIVE CASE - SNOW LEVERAGED BUYOUT SCENARIO
Historical Projected BALANCE SHEET Year Ended Dec. 31, 6 Months Ended Year Ended December 31, ------------------ ----------------------- ---------------------------------------------------------- (in thousands) 1992 1993 6/30/94 12/31/94 1994 1995 1996 1997 1998 1999 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- RSC Sales $111,657 $113,225 $53,067 $64,127 $117,195 $127,920 $141,503 $157,949 $174,505 $191,274 Incremental Retail Sales 1,816 3,238 1,085 833 1,918 934 934 934 934 934 Franchise Fee Income 5,856 6,116 3,085 3,207 6,292 6,622 7,378 8,297 9,234 10,195 O Advertising 470 381 242 186 428 379 386 402 402 402 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Net Sales 119,799 122,960 57,480 68,353 125,832 135,854 150,201 167,581 185,075 202,805 Cost Of Goods Sold(1) 94,720 97,829 44,424 54,990 99,414 110,704 120,922 133,423 146,887 161,089 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Gross Profit 25,078 25,131 13,056 13,363 26,418 25,150 29,279 34,158 38,188 41,715 Selling Gen. & Admin 17,455 18,035 9,388 8,906 18,294 16,604 17,334 18,664 19,981 21,353 Depreciation 1,120 1,168 605 794 1,399 2,044 2,163 2,211 2,260 2,310 Amort. of Finance Costs 0 0 0 0 0 200 200 200 200 200 Goodwill Amortization 0 0 0 0 0 122 122 122 122 122 Other Amortization 568 390 208 199 407 407 386 336 335 335 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total S G & A(1) 19,143 19,593 10,201 9,899 20,100 19,377 20,205 21,512 22,898 24,320 Operating Income 5,936 5,538 2,855 3,464 6,319 5,773 9,074 12,645 15,290 17,395 Lease (Income)-10% 0 0 0 (33) (33) (183) (331) (526) (721) (919) Other Expenses/(Income) 0 1,038 702 0 702 0 0 0 0 0 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- EBIT 5,936 4,500 2,153 3,497 5,650 5,956 9,405 13,171 16,011 18,315 Projected Costs Savings Interest Expense Existing Debt 1,170 1,219 667 1,019 1,686 1,843 2,062 1,924 1,617 1,429 Acquisition Financing Senior Debt 0 0 0 0 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 1,646 1,646 1,646 1,646 1,646 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Interest Expense 1,170 1,219 667 1,019 1,686 3,488 3,708 3,570 3,262 3,075 Interest Income 0 0 0 217 217 177 96 786 60 145 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Net Interest Expense 1,170 1,219 667 801 1,468 3,312 3,613 3,492 3,203 2,930 Earnings Before Taxes 4,766 3,281 1,486 2,695 4,181 2,644 5,792 9,679 12,808 15,385 Income Taxes 1,983 1,400 631 1,135 1,766 1,164 2,490 4,126 5,451 6,538 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Net Income To Common $2,783 $1,881 $855 $1,561 $2,415 $1,480 $3,302 $5,553 $7,357 $8,847 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Earnings Per Share Actual $0.80 $0.55 $0.26 $0.46 $0.72 $0.43 $0.96 $1.61 $2.13 $2.56 Excl. One Time Items $0.73 $0.38 $0.84 Weighted Average Shares 3,497 3,410 3,333 3,416 3,374 3,424 3,432 3,440 3,448 3,456 - -------------------------- (1) All freight expense is in COGS
AGGRESSIVE CASE - SNOW LEVERAGED BUYOUT SCENARIO
Historical BALANCE SHEET Year Ended Dec. 31, Projected ------------------------- At Pro Forma (in thousands) 1992 1993 6/30/94 31-Dec-94 31-Dec-94 1995 1996 1997 1998 1999 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- ASSETS Current Assets Cash/Investments $1,590 $1,113 $5,706 $4,200 $0 ($0) $0 $0 $0 $6,896 Receivables 8,835 7,722 9,870 8,407 8,407 9,077 10,036 11,197 12,366 13,550 Inventory 15,348 11,748 21,433 15,261 15,261 15,815 16,123 17,790 19,585 21,479 Deferred Income Taxes 1,970 1,802 2,025 2,501 2,501 2,891 3,280 3,669 4,059 4,448 Other Current Assets 443 758 2,023 1,047 1,047 1,047 1,047 1,047 1,047 1,047 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Current Assets 28,186 23,143 41,057 31,417 27,217 28,830 30,485 33,703 37,056 47,420 Real Estate Retained 0 0 1,324 1,324 2,334 4,284 6,234 8,184 10,199 Real Estate CIP 0 0 1,750 3,085 3,085 5,581 5,551 5,551 5,551 5,551 Other P & E, net 12,166 13,153 13,477 14,003 14,003 18,895 18,635 17,308 16,003 14,649 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total PP&E 12,166 13,153 15,227 18,411 18,411 26,900 28,470 29,093 29,738 30,398 Investment/Other Asset 1,969 2,955 2,843 2,043 2,043 2,183 2,323 2,463 2,603 2,743 Invst in Oper JV 1,609 1,385 1,414 1,414 1,414 1,414 1,414 1,414 1,414 1,414 Invst in Dev JV 0 0 0 300 300 660 1,020 1,380 1,440 1,440 Bridge Loan Receivable 0 0 0 0 0 210 573 878 1,123 1,317 Notes Receivable 4,915 6,616 4,984 1,362 1,362 1,162 962 762 562 362 Distribution Rights 8,834 9,355 9,216 9,046 9,046 8,797 8,518 8,240 7,964 7,688 Transaction Costs 0 0 0 241 2,241 2,015 1,789 1,563 1,337 1,111 Goodwill 0 0 0 0 4,875 4,753 4,631 4,510 4,388 4,266 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Assets $57,679 $56,607 $74,741 $64,234 $66,909 $76,924 $80,185 $84,006 $87,625 $98,158 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Current Liabilities Accounts Payable 5,085 3,613 7,792 3,679 3,679 4,613 5,038 5,559 6,120 6,712 Accrued Expenses 3,067 3,396 4,787 2,229 2,229 3,346 3,700 4,129 4,558 4,995 Warranty Reserve 2,654 3,254 3,554 3,854 3,854 4,454 5,054 5,654 6,254 6,854 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Current Liab. 10,806 10,263 16,133 9,763 9,763 12,413 13,793 15,342 16,933 18,561 Deferred Income Taxes 500 38 0 0 0 0 0 0 0 0 ESOP Obligation: 1,277 975 429 453 453 260 0 0 0 0 Deferred Income 192 157 140 121 121 0 0 0 0 0 Existing Debt Term Loan BBC 2,000 1,400 0 0 0 0 0 0 0 0 Senior Notes 0 0 8,000 8,000 8,000 8,000 8,000 8,000 6,857 5,714 Long Term Debt(IN) 0 0 1,451 1,451 1,451 1,413 1,373 1,330 1,284 1,238 LTD (Kelly Spring) 440 5,600 5,000 4,400 4,400 3,200 2,000 800 0 0 Other Senior Debt 7,324 6,686 3,664 3,019 3,019 186 140 114 92 70 AT&T LTD 0 0 754 1,795 1,795 2,571 4,069 5,535 6,966 8,410 LOC-BBC 950 0 6,208 734 734 10,034 8,402 4,923 175 0 Acquisition Financing Senior Debt 0 0 0 0 0 0 0 0 0 0 Sub Debt 0 0 0 0 12,660 12,660 12,660 12,660 12,660 12,660 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Debt 10,714 13,686 25,077 19,399 32,059 38,064 36,644 33,362 28,034 28,092 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Liabilities 23,489 25,119 41,779 29,736 42,396 50,737 50,437 48,704 44,967 46,653 New Common Stock 0 0 0 0 24,514 24,514 24,514 24,514 24,514 24,514 Common Stock 19,334 14,735 14,808 14,808 0 0 0 0 0 0 ESOP Obligation (1,277) (975) (429) (453) (453) (260) 0 0 0 0 Retained Earnings 16,133 17,728 18,583 20,144 453 1,933 5,235 10,788 18,145 26,992 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Equity 34,190 31,488 32,962 34,499 24,514 26,186 29,749 35,302 42,685 51,505 Total Liab.& Equity $57,679 $56,607 $74,741 $64,234 $66,909 $76,924 $80,185 $84,006 $87,625 $98,158 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
AGGRESSIVE CASE - SNOW PROJECTION MODEL
Projected CASH FLOW STATEMENT --------------------------------------------------------- (In thousands) 6 Months Year Ended December, 31, Ended _____________________________________________________ 12/31/94 1995 1996 1997 1998 1999 ________ ______ ______ _____ ______ _______ CASH FLOW FROM OPERATIONS Net income $1,561 $1,480 $3,302 $5,553 $7,357 $8,847 Depreciation 794 2,044 2,163 2,211 2,260 2,310 Amortization 199 729 708 658 657 657 Increase Deferred Income/Taxes (19) (121) 0 0 0 0 ------- ------- ------ ------ ------ ------ Total Cash Flow From Operations 2,535 4,132 6,174 8,421 10,273 11,814 CHANGES IN WORKING CAPITAL Accounts Receivable 1,463 (670) (959) (1,161) (1,169) (1,185) Inventories 6,172 (554) (308) (1,667) (1,795) (1,894) Deferred Income Taxes (476) (389) (389) (389) (389) (389) Other Current Assets 976 0 0 0 0 0 Accounts Payable (4,113) 933 426 521 561 592 Accrued Expenses (2,558) 1,117 354 428 430 437 Warranty Reserve 300 600 600 600 600 600 ------- ------- ------ ------ ------ ------ Total Changes In Working Capital 1,764 1,037 (276) (1,668) (1,762) (1,839) CASH (USED FOR) GENERATED BY INVESTMENTS Capital Expenditures (1,320) (11,519) (1,813) (884) (955) (955) Proceeds From Sale Of Properties 0 4,493 0 0 0 0 Investment in Oper JV 0 0 0 0 0 0 Investment in Dev JV (300) (360) (360) (360) (60) 0 Investment In Conversions 0 0 0 0 0 0 Real Estate Retained (1,324) (1,010) (1,950) (1,950) (1,950) (2,015) Real Estate CIP (1,335) (2,496) 30 (0) (0) (0) Bridge Loan 0 (201) (363) (305) (244) (194) ------- ------- ------ ------ ------ ------ Total Investments (4,278) (11,102) (4,456) (3,499) (3,209) (3,164) CHANGES IN OTHER ASSETS Investments/Other Assets 800 (140) (140) (140) (140) (140) Notes Receivable 3,622 200 200 200 200 200 Distribution Rights 170 249 279 278 276 276 Note Pay Fees Expenses (241) 26 26 26 26 26 Less: Amortization (199) (407) (386) (336) (335) (335) ------- ------- ------ ------ ------ ------ Total Other 4,152 (72) (21) 28 27 27 Net From Operations 4,172 (6,005) 1,420 3,282 5,328 6,838 CASH FLOW FROM FINANCING ACTIVITIES Existing Debt (5,678) 6,005 (1,420) (3,282) (5,328) 58 Senior Debt 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 Net cash used in financing activities (5,678) 6,005 (1,420) (3,282) (5,382) 58 NET INCREASE (DECREASE) IN CASH (1,506) (0) 0 0 0 6,896 Cash, Beginning of Period 5,706 0 (0) 0 0 0 Cash Generated (Used) (1,506) (0) 0 0 0 6,896 ------- ------- ------ ------ ------ ------ Cash, End of Period $4,200 ($0) $0 $0 $0 $6,896 Min Cash Balance 1994 $4,200
AGGRESSIVE CASE - SNOW LEVERAGED BUYOUT SCENARIOS
Projected DEBT SCHEDULE --------------------------------------------------------- (In thousands) 6 Months Year Ended December, 31, Ended _____________________________________________________ 12/31/94 1995 1996 1997 1998 1999 -------- -------- -------- -------- -------- -------- BEGINNING DEBT BALANCE Existing Debt Senior Notes 8,000 8,000 8,000 8,000 8,000 6,857 Long Term Debt (IN) 1,451 1,451 1,413 1,373 1,330 1,284 Long Term Debt (Kelly Springfield) 5,000 4,400 3,200 2,000 800 0 Other Senior Debt 3,664 3,019 186 140 114 92 AT&T LTD 754 1,795 2,571 4,069 5,535 6,966 LOC-BBC 6,208 734 10,034 8,402 4,923 175 Acquisition Financing Senior Debt 0 0 0 0 0 0 Sub Debt 0 12,660 12,660 12,660 12,660 12,660 -------- -------- -------- -------- -------- -------- Total Beginning Debt Balance 25,077 32,059 38,064 36,664 33,362 28,034 DEBT (REPAYMENT BORROWINGS) Existing Debt Senior Notes 0 0 0 0 (1,143) (1,143) Long Term Debt (IN) 0 (38) (40) (43) (46) (46) Long Term Debt (Kelly Springfield) (600) (1,200) (1,200) (1,200) (800) 0 Other Senior Debt (645) (2,833) (46) (26) (22) (22) AT&T LTD 1,041 776 1,498 1,466 1,431 1,444 LOC-BBC (5,474) 9,301 (1,632) (3,479) (4,748) (175) -------- -------- -------- -------- -------- -------- Total Existing Debt Borrowing (Repayment) (5,678) 6,005 (1,420) (3,282) (5,328) 58 Acquisition Financing Senior Debt 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 -------- -------- -------- -------- -------- -------- Total Borrowing (Repayment) (5,678) 6,005 (1,420) (3,282) (5,328) 58 Ending Debt Balances Existing Debt Senior Notes 8,000 8,000 8,000 8,000 6,857 5,714 Long Term Debt (IN) 1,451 1,413 1,373 1,330 1,284 1,238 Long Term Debt (Kelly Springfield) 4,400 3,200 2,000 800 0 0 Other Senior Debt 3,019 186 140 114 92 70 AT&T LTD 1,795 2,571 4,069 5,535 6,966 8,410 LOC-BBC 734 10,034 8,402 4,923 175 0 Acquisition Financing Senior Debt 0 0 0 0 0 0 Sub Debt 0 12,660 12,660 12,660 12,660 12,660 -------- -------- -------- -------- -------- -------- Total Ending Debt Balance 19,399 38,064 36,644 33,362 28,034 28,092
AGGRESSIVE CASE - SNOW LEVERAGED BUYOUT SCENARIO
PROJECTED INTEREST EXPENSE SCHEDULE --------------------------------------------------------- (In thousands) 6 Months Year Ended December, 31, Ended _____________________________________________________ 12/31/94 1995 1996 1997 1998 1999 -------- -------- -------- -------- -------- -------- INTEREST EXPENSE Existing Debt Rate Senior Notes 8.71% 348 697 697 697 647 547 Long Term Debt (IN) 7.75% 56 111 108 105 101 98 Long Term Debt (Kelly Springfield) 5.75% 135 219 150 81 23 0 Other Senior Debt 9.60% 160 154 16 12 10 8 AT&T LTD 10.00% 64 218 332 480 625 769 Prepayment Penalties --- 112 0 0 0 0 0 LOC-BBC 8.25% 143 444 760 550 210 7 -------- -------- -------- -------- -------- -------- Total Existing Debt Interest Expense 1,019 1,843 2,062 1,924 1,617 1,429 Acquisition Financing Senior Debt 9.0% 0 0 0 0 0 0 Sub Debt 13.0% 0 1,646 1,646 1,646 1,646 1,646 -------- -------- -------- -------- -------- -------- Total Interest Expense $1,019 $3,488 $3,708 $3,570 $3,262 $3,075 Income on Cash 3.00% 74 63 (0) 0 0 103 Income on Bridge Notes Rec 0.00% 0 0 0 0 0 0 Income on Notes Rec 9.00% 143 114 96 78 60 42 -------- -------- -------- -------- -------- -------- $217 $177 $96 $78 $60 $145
EQUITY 1--INVESTORS RETURN
CASH FLOW ---------------------------------------------------------------------------------------- EXIT MULTIPLE OWNERSHIP% OUT FLOW PERIOD 1 PERIOD 2 PERIOD 3 PERIOD 4 PERIOD 5 IRR 32.5% 6.0x 94% ($24,514) ---- ---- ---- ----- 99,942 37.4% 7.0x 94% ($24,514) ---- ---- ---- ----- 119,915 41.7% 8.0x 94% ($24,514) ---- ---- ---- ----- 139,887 EQUITY 2--MANAGEMENT RETURN CASH FLOW ---------------------------------------------------------------------------------------- EXIT MULTIPLE OWNERSHIP% OUT FLOW PERIOD 1 PERIOD 2 PERIOD 3 PERIOD 4 PERIOD 5 IRR #Value! 6.0x NMF 0 ---- ---- ---- ----- #VALUE! #Value! 7.0x NMF 0 ---- ---- ---- ----- #VALUE! #Value! 8.0x NMF 0 ---- ---- ---- ----- #VALUE! SUB DEBT INVESTOR RETURN CASH FLOW ---------------------------------------------------------------------------------------- EXIT MULTIPLE OWNERSHIP% OUT FLOW PERIOD 1 PERIOD 2 PERIOD 3 PERIOD 4 PERIOD 5 IRR 20.0% 6.0x 6% ($12,660) 1,646 1,646 1,646 1,646 20,855 21.2% 7.0x 6% ($12,660) 1,646 1,646 1,646 1,646 22,164 22.3% 8.0x 6% ($12,660) 1,646 1,646 1,646 1,646 23,473
MODERATE CASE - SNOW LEVERAGED BUYOUT SCENARIO SUMMARY STATISTICS
HISTORICAL PROJECTED -------------------- ------------------------------------------------------------------- INCOME STATEMENT SUMMARY 1992 1993 1994 1995 1996 1997 1998 1999 -------- -------- -------- -------- -------- -------- -------- -------- Net Sales $119,799 $122,960 $125,832 $133,425 $140,364 $148,531 $156,256 $163,560 EBITDA 7,624 6,058 7,456 8,249 10,874 13,075 14,325 14,987 EBIT 5,936 4,500 5,650 6,032 8,433 10,690 11,939 12,598 Total Interest 1,170 1,219 1,686 3,373 3,435 3,211 2,934 2,776 Net Interest 1,170 1,219 1,468 3,196 3,339 3,134 2,857 2,624 Net Income $2,783 $1,881 $2,415 $1,683 $2,991 $4,417 $5,295 $5,811 Earnings Per Share $0.80 $0.55 $0.72 $0.49 $0.87 $1.28 $1.54 $1.68 GROWTH MARGIN ANALYSIS Net Sales Growth 5.2% 2.6% 2.3% 6.0% 5.2% 5.8% 5.2% 4.7% Gross Margin 20.9% 20.4% 21.0% 18.5% 19.5% 20.4% 20.7% 20.6% EBITDA Margin 6.4% 4.9% 5.9% 6.3% 7.7% 8.8% 9.2% 9.2% EBIT Margin 5.0% 3.7% 4.5% 4.5% 6.0% 7.2% 7.6% 7.7% Net Income Margin 2.3% 1.5% 1.9% 1.3% 2.1% 3.0% 3.4% 3.6% COVERAGES EBITDA/Total Interest 6.5x 5.0x 4.4x 2.5x 3.2x 4.1x 4.9x 5.4x EBITDA/Net Interest 6.5x 5.0x 5.1x 2.6x 3.3x 4.2x 5.0x 5.7x EBITDA/Cap Ex/Tot. Interest 5.9x 3.2x 3.3x -0.9x 2.6x 3.8x 4.6x 5.1x EBIT/Total Interest 5.1x 3.7x 3.4x 1.8x 2.5x 3.3x 4.1x 4.5x EBIT/ Net Interest 5.1x 3.7x 3.8x 1.9x 2.5x 3.4x 4.2x 4.8x Total Debt/EBITDA 1.4x 2.3x 2.6x 4.2x 3.0x 2.2x 1.8x 1.7x Debt/Total Capitalization 30.3% 43.2% 36.0% 66.8% 61.1% 53.4% 45.2% 40.5% Debt/Equity 0.4x 0.8x 0.6x 2.0x 1.6x 1.1x 0.8x 0.7x STORE COUNT (END OF PERIOD) Franchise Stores 344 362 377 395 418 441 461 481 Company Stores 10 8 3 3 3 3 3 3 -------- -------- -------- -------- -------- -------- -------- -------- Total Stores 354 370 380 398 421 444 464 484
MODERATE CASE - SNOW LEVERAGED BUYOUT SCENARIO
GENERAL ASSUMPTIONS TRANSACTION PURCHASE TERMS ____________________________________________________ _________________________________________________ LBO/Sale of Company ____________________________________ Common Shares Outstanding 3,266 Equity Value 32,116 Stock Options 244 Total Debt Assumed 19,399 Total Shares 3,510 Less: Excess Cash (4,200) ------ ------- Avg. Exercise Price of Stock Options $6.35 Total Value (TV) 47,315 Cash Proceeds From Exercise Optoins 1,522 Cash Paid per Share $ 9.15 Market Price as of $16.00 Estimated Transaction Costs 2,000 Premium (Discount) Over Market Price -42.81% Less: Assumed Debt (19,399) Less: Cash Proc.-Stock Options (1,552) Total Debt Outstanding Before Purchase 19,399 Existing Debt Refinanced 0 Financing Needed $28,364 Debt Assumed 19,399 Rate % Equity ---- -------- Bank Debt 0 9.0% --- EBITDA Exit Multiple 7.0x Subordinated Debt 12,550 13.0% 9.2% Goodwill Amortization Period 40 yrs. Equity 1 - Investor 15,814 --- 90.8% Transaction Cost Amortization Period 10 yrs Equity 2 - Management 0 --- 0.0% ------ ------ 28,364 100.0%
PURCHASE PRICE MULTIPLES RATES OF RETURN SENSITIVITY ___________________________________________________ ___________________________________________________ 1993 1994 1995 % Equity EBITDA Exit Multiple ____ ____ ____ ____________________________________ TV/Sales 0.4x 0.4x 0.4x Allocation 6.0x 7.0x 8.0x ________________________________________________ TV/EBITDA 7.8x 6.3x 5.6x Equity-Inves. 90.8% 32.5% 37.7% 42.2% TV/EBIT 10.5x 8.4x 7.8x Equity-Mngt. NMF NMF NMF NMF Price/Earnings 12.6x 10.9x 18.6x Sub Debt 9.2% 20.0% 21.3% 22.5%
COVERAGES PRO FORMA 1994 1995 1996 1997 1998 1999 ____ ____ ____ ____ ____ ____ EBITDA/Total Interest 2.2x 2.502x 3.2x 4.1x 4.9x 5.4x EBIT/Total Interest 1.7x 1.8x 2.5x 3.3x 4.1x 4.5x Total Debt/EBITDA 4.3x 4.2x 3.0x 2.2x 1.8x 1.7x Debt/Total Cap 66.9% 66.8% 61.1% 53.4% 45.2% 40.5% Net Debt $31,949 $35,555 $32,919 $29,095 $24,173 $18,676 Cumulative Debt Repayment --- (3,606) 2,636 3,824 4,923 5,496 FINANCIAL EPS $0.72 $0.49 $0.87 $1.28 $1.54 $1.68
MODERATE CASE - LEVERAGED BUYOUT SCENARIO
Acquisition Adjustments Acquisition Adjustments OPENING BALANCE SHEET As of Adj Equity Loans to Refinance Purchase Pay Allocate Pro Forms 12/31/94 FMV Invt. Newco Debt Company Fees Goodwill 6/30/94 -------- ------ -------- -------- --------- -------- ----- -------- ---------- Assets Current Assets Investments $4,200 $4,200 $15,814 $12,550 $0 ($30,564) ($2,000) $0 Receivables 8,407 8,407 8,407 Inventory 15,261 15,261 15,261 Deferred Income Taxes 2,501 2,501 2,501 Other Current Assets 1,047 1,047 1,047 -------- ------- -------- -------- --------- -------- ------- -------- ------- Total Current Assets 31,417 31,417 15,814 12,550 0 (30,564) (2,000) 0 27,217 Real Estate Retained 1,324 1,324 1,324 Real Estate CIP 3,085 3,085 3,085 Other Prop.& Equip.,net 14,003 14,003 14,003 -------- ------- ------- Total PP&E 18,411 18,411 18,411 Transaction Costs 241 241 2,000 2,241 Investment/Other Asset 2,043 2,043 2,043 Invest in Oper JV 1,414 1,414 1,414 Invest in Dev JV 300 300 300 Notes Receivable 1,362 1,362 1,362 Distribution Rights 9,046 9,046 9,046 Goodwill 0 0 (3,935) (3,935) -------- ------- -------- -------- --------- -------- ------- -------- ------- Total Assets $64,234 $64,234 $15,814 $12,550 $0 ($30,564) $0 ($3,935) $58,099 -------- ------- -------- -------- --------- -------- ------- -------- --------- -------- ------- -------- -------- --------- -------- ------- -------- --------- Current Liabilities Accounts Payable 3,679 3,679 3,679 Accrued Expenses 2,229 2,229 2,229 Warranty Reserve 3,854 3,854 3,854 -------- ------- -------- -------- --------- -------- ------- -------- ------- Total Current Liabilities 9,763 9,763 9,763 Deferred Income Taxes 0 0 0 ESOP Obligation 453 453 453 Deferred Income 121 121 121 Existing Debt Senior Notes 8,000 8,000 8,000 Long Term Debt(IN) 1,451 1,451 1,451 Long Term Debt(KellySpr.) 4,400 4,400 4,400 Other Senior Debt 3,019 3,019 3,019 AT&T LTD 1,795 1,795 1,795 LOC-BBC 734 734 734 Acquisition Financing Senior Debt 0 0 0 0 Sub Debt 0 0 12,550 12,550 -------- ------- -------- -------- --------- -------- ------- -------- ------- Total Debt 19,399 19,399 0 12,550 0 0 0 0 31,949 New Common Stock 0 0 15,814 15,814 Common Stock 14,808 0 0 ESOP Obligation (453) (453) (453) Retained Earnings 20,144 34,952 (30,564) (3,935) 453 -------- ------- -------- -------- --------- -------- ------- -------- ------- Total Equity 34,499 34,449 15,814 -------- ------- -------- -------- --------- -------- ------- -------- ------- Total Liab. & Equity $64,234 $64,234 $58,099 -------- ------- -------- -------- --------- -------- ------- -------- ------- -------- ------- -------- -------- --------- -------- ------- -------- -------
MODERATE CASE - SNOW LEVERAGED BUYOUT SCENARIO
Historical Projected INCOME STATEMENT Year Ended Dec. 31, 6 Months Ended Year Ended December 31, ------------------------- ------------------------ -------------------------------------------------- (in thousands) 1992 1993 6/30/94 12/31/94 1994 1995 1996 1997 1998 1999 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- RSC Sales $111,657 $113,225 $53,067 $64,127 $117,195 $125,611 $132,157 $139,855 $147,143 $154,025 Incremental Retail Sales 1,816 3,238 1,085 833 1,918 934 934 934 934 934 Franchise Fee Income 5,856 6,116 3,085 3,207 6,292 6,501 6,888 7,341 7,778 8,199 O Advertising 470 381 242 186 428 379 386 402 402 402 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Net Sales 119,799 122,960 57,480 68,353 125,832 133,425 140,364 148,531 156,256 163,560 Cost Of Goods Sold(1) 94,720 97,829 44,424 54,990 99,414 108,713 112,959 118,183 123,917 129,816 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Gross Profit 25,078 25,131 13,056 13,363 26,418 24,712 27,405 30,348 32,339 33,744 Selling Gen. & Admin 17,455 18,035 9,388 8,906 18,294 16,450 16,783 17,625 18,468 19,313 Depreciation 1,120 1,168 605 794 1,399 1,889 1,953 1,948 1,949 1,952 Amort. of Finance Costs 0 0 0 0 0 0 0 0 0 0 Goodwill Amortization 0 0 0 0 0 0 0 0 0 0 Other Amortization 568 390 208 199 407 407 386 336 335 335 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total S G & A(F1) 19,143 19,593 10,201 9,899 20,100 18,745 19,122 19,909 20,752 21,600 Operating Income 5,936 5,538 2,855 3,464 6,319 5,967 8,283 10,439 11,587 12,144 Lease (Income)-10% 0 0 0 (33) (33) (167) (252) (353) (454) (556) Other Expenses/(Income) 0 1,038 702 0 702 0 0 0 0 0 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- EBIT 5,963 4,500 2,153 3,497 5,650 6,134 8,535 10,792 12,041 12,700 Projected Costs Savings Interest Expense Existing Debt 1,170 1,219 667 1,019 1,686 1,528 1,351 1,240 1,200 1,144 Acquisition Financing Senior Debt 0 0 0 0 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 0 0 0 0 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Interest Expense 1,170 1,219 667 1,019 1,686 1,528 1,351 1,240 1,200 1,144 Interest Income 0 0 0 217 217 177 104 160 278 420 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Net Interest Expense 1,170 1,219 667 801 1,468 1,351 1,248 1,080 922 724 Earnings Before Taxes 4,766 3,281 1,486 2,695 4,181 4,783 7,287 9,712 11,119 11,976 Income Taxes 1,983 1,400 631 1,135 1,766 2,014 3,068 4,089 4,688 5,049 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Net Income To Common $2,783 $1,881 $855 $1,561 $2,415 $2,769 $4,219 $5,623 $6,431 $6,927 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- EARNINGS PER SHARE Actual $0.80 $0.55 $0.26 $0.46 $0.72 $0.81 $1.23 $1.63 $1.87 $2.00 Excl. One Time Items $0.73 $0.38 $0.84 Weighted Average Shares 3,497 3,410 3,333 3,416 3,374 3,424 3,432 3,440 3,448 3,456 - -------------------------- (1) All freight expense is in COGS
MODERATE CASE - SNOW LEVERAGED BUYOUT SCENARIO
Historical Pro Projected BALANCE SHEET Year Ended Dec. 31, At Forma December 31, ------------------- -------------------- -------------------------------------------------- (in thousands) 1992 1993 6/30/94 12/31/94 1994 1995 1996 1997 1998 1999 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- ASSETS Current Assets Cash/Investments $1,590 $1,113 $5,706 $4,200 $4,200 $0 $537 $4,941 $9,611 $15,639 Receivables 8,835 7,722 9,870 8,407 8,407 8,915 9,378 9,924 10,440 10,928 Inventory 15,348 11,748 21,433 15,261 15,261 15,530 15,061 15,758 16,522 17,309 Deferred Income Taxes 1,970 1,802 2,025 2,501 2,501 2,891 3,280 3,669 4,059 4,448 Other Current Assets 443 758 2,023 1,047 1,047 1,047 1,047 1,047 1,047 1,047 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Current Assets 28,186 23,143 41,057 31,417 27,217 28,383 29,304 35,339 41,679 49,372 Real Estate Retained 0 0 1,324 1,324 2,009 3,024 4,032 5,039 6,079 Real Estate CIP 0 0 1,750 3,085 3,085 3,706 3,675 3,664 3,664 3,664 Other P & E, net 12,166 13,153 13,477 14,003 14,003 19,140 19,001 17,937 16,943 15,946 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total PP&E 12,166 13,153 15,227 18,411 18,411 24,855 25,699 25,633 25,646 25,689 Investment/Other Asset 1,969 2,955 2,843 2,043 2,043 2,183 2,323 2,463 2,603 2,743 Invst in Oper JV 1,609 1,385 1,414 1,414 1,414 1,414 1,414 1,414 1,414 1,414 Invst in Dev JV 0 0 0 300 300 660 1,020 1,380 1,440 1,440 Bridge Loan Receivable 0 0 0 0 0 142 325 477 598 695 Notes Receivable 4,915 6,616 4,984 1,362 1,362 1,162 962 762 562 362 Distribution Rights 8,834 9,355 9,216 9,046 9,046 8,797 8,518 8,240 7,964 7,688 Transaction Costs 0 0 0 241 2,241 2,015 1,789 1,563 1,337 111 Goodwill 0 0 0 0 0 0 0 0 0 0 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Assets $57,679 $56,607 $74,741 $64,234 $64,234 $67,812 $66,754 $75,871 $82,043 $89,513 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Current Liabilities Accounts Payable 5,085 3,613 7,792 3,679 3,679 4,530 4,707 4,924 5,163 5,409 Accrued Expenses 3,067 3,396 4,787 2,229 2,229 3,286 3,458 3,659 3,849 4,028 Warranty Reserve 2,654 3,254 3,554 3,854 3,854 4,454 5,054 5,654 6,254 6,854 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Current Liab. 10,806 10,263 16,133 9,763 9,763 12,270 13,219 14,238 15,266 16,291 Deferred Income Taxes 500 38 0 0 0 0 0 0 0 0 ESOP Obligation: 1,277 975 429 453 453 260 0 0 0 0 Deferred Income 192 157 140 121 121 0 0 0 0 0 Existing Debt Term Loan BBC 2,000 1,400 0 0 0 0 0 0 0 0 Senior Notes 0 0 8,000 8,000 8,000 8,000 8,000 8,000 6,857 5,714 Long Term Debt(IN) 0 0 1,451 1,451 1,451 1,413 1,373 1,330 1,284 1,238 LTD (Kelly Spring) 440 5,600 5,000 4,400 4,400 3,200 2,000 800 0 0 Other Senior Debt 7,324 6,686 3,664 3,019 3,019 186 140 114 92 70 AT&T LTD 0 0 754 1,795 1,795 2,315 3,082 3,826 4,550 5,278 LOC-BBC 950 0 6,208 734 734 2,706 0 0 0 0 Acquisition Financing Senior Debt 0 0 0 0 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 0 0 0 0 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Debt 10,714 13,686 25,077 19,399 19,399 17,821 14,595 14,070 12,783 12,300 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Liabilities 23,489 25,119 41,779 29,736 29,736 30,351 27,814 28,308 28,048 28,592 New Common Stock 0 0 0 0 0 0 0 0 0 0 Common Stock 19,334 14,735 14,808 14,808 0 0 0 0 0 0 ESOP Obligation (1,277) (975) (429) (453) (453) (260) 0 0 0 0 Retained Earnings 16,133 17,728 18,583 20,144 34,952 37,721 41,940 47,563 53,994 60,921 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Equity 34,190 31,488 32,962 34,499 34,499 37,461 41,940 47,563 53,994 60,921 Total Liab.& Equity $57,679 $56,607 $74,741 $64,234 $64,234 $67,812 $69,754 $75,871 $82,043 $89,513 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
MODERATE CASE - SNOW LEVERAGED BUYOUT SCENARIO
CASH FLOW STATEMENT --------------------------------------------------------- (In thousands) 6 Months Year Ended December, 31, Ended _____________________________________________________ 12/31/94 1995 1996 1997 1998 1999 -------- ------- ------- ------- ------- ------- CASH FLOW FROM OPERATIONS Net income $1,561 $2,769 $4,219 $5,623 $6,431 $6,927 Depreciation 794 1,889 1,953 1,948 1,949 1,952 Amortization 199 407 386 336 335 335 Increase Deferred Income/Taxes (19) (121) 0 0 0 0 -------- ------- ------- ------- ------- ------- Total Cash Flow From Operations 2,535 4,944 6,558 7,907 8,715 9,214 Changes in Working Capital Accounts Receivable 1,463 (507) (464) (546) (516) (488) Inventories 6,172 (269) 469 (696) (764) (787) Deferred Income Taxes (476) (389) (389) (389) (389) (389) Other Current Assets 976 0 0 0 0 0 Accounts Payable (4,113) 850 177 218 239 246 Accrued Expenses (2,558) 1,057 172 201 189 180 Warranty Reserve 300 600 600 600 600 600 -------- ------- ------- ------- ------- ------- Total Changes In Working Capital 1,764 1,341 565 (613) (642) (638) Cash (Used For) Generated By Investments Capital Expenditures (1,320) (11,519) (1,813) (884) (955) (955) Proceeds From Sale Of Properties 0 4,493 0 0 0 0 Investment in Oper JV 0 0 0 0 0 0 Investment in Dev JV (300) (360) (360) (360) (60) 0 Investment In Conversions 0 0 0 0 0 0 Real Estate Retained (1,324) (685) (1,015) (1,009) (1,006) (1,040) Real Estate CIP (1,335) (621) 31 11 (0) (0) Bridge Loan 0 (142) (182) (152) (121) (96) -------- ------- ------- ------- ------- ------- Total Investments (4,278) (8,835) (3,339) (2,394) (2,143) (2,091) CHANGES IN OTHER ASSETS Investments/Other Assets 800 (140) (140) (140) (140) (140) Notes Receivable 3,622 200 200 200 200 200 Distribution Rights 170 249 279 278 276 276 Note Pay Fees Expenses (241) 26 26 26 26 26 Less: Amortization (199) (407) (386) (336) (335) (335) -------- ------- ------- ------- ------- ------- Total Other 4,152 (72) (21) 28 27 27 NET FROM OPERATIONS 4,172 (2,6622 3,763 4,929 5,957 6,511 CASH FLOW FROM FINANCING ACTIVITIES Existing Debt (5,678) (1,578) (3,226) (525) (1,288) (482) Senior Debt 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 Net cash used in financing activities (5,678) (1,578) (3,226) (525) (1,288) (482) NET INCREASE (DECREASE) IN CASH (1,506) (4,200) 537 4,404 4,669 6,029 Cash, Beginning of Period 5,706 4,200 0 537 4,941 9,611 Cash Generated (Used) (1,506) (4,200) 537 4,404 4,669 6,029 -------- ------- ------- ------- ------- ------- Cash, End of Period $4,200 $0 $537 $4,941 $9,611 $15,639 Min Cash Balance 1994 $4,200
Projected DEBT SCHEDULE --------------------------------------------------------- (In thousands) 6 Months Year Ended December, 31, Ended ------------------------------------------------------- 12/31/94 1995 1996 1997 1998 1999 ________ ______ ______ _____ ______ _______ Beginning Debt Balance Existing Debt Senior Notes 8,000 8,000 8,000 8,000 8,000 6,857 Long Term Debt (IN) 1,451 1,451 1,413 1,373 1,330 1,284 Long Term Debt (Kelly Springfield) 5,000 4,400 3,200 2,000 800 0 Other Senior Debt 3,664 3,019 186 140 114 92 AT&T LTD 754 1,795 2,315 3,082 3,826 4,550 LOC-BBC 6,208 734 7,891 5,774 2,475 0 Acquisition Financing Senior Debt 0 0 0 0 0 0 Sub Debt 0 12,550 12,550 12,550 12,550 12,550 ______ ______ ______ ______ ______ ______ Total Beginning Debt Balance 25,077 31,949 35,555 32,919 29,095 25,333 Debt (Repayment Borrowings) Existing Debt Senior Notes 0 0 0 0 (1,143) (1,143) Long Term Debt (IN) 0 (38) (40) (43) (46) (46) Long Term Debt (Kelly Springfield) (600) (1,200) (1,200) (1,200) (800) 0 Other Senior Debt (645) (2,833) (46) (26) (22) (22) AT&T LTD 1,041 520 767 744 723 729 LOC-BBC (5,474) 7,157 (2,117) (3,229) (2,475) 0 ______ ______ ______ ______ ______ ______ Total Existing Debt Borrowing (Repayment) (5,678) 3,606 (2,636) (3,824) (3,763) (482) Acquisition Financing Senior Debt 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 ______ ______ ______ ______ ______ ______ Total Borrowing (Repayment) (5,678) 3,606 (2,636) (3,824) (3,763) (482) Ending Debt Balances Existing Debt Senior Notes 8,000 8,000 8,000 8,000 6,857 5,714 Long Term Debt (IN) 1,451 1,413 1,373 1,330 1,284 1,238 Long Term Debt (Kelly Springfield) 4,400 3,200 2,000 800 0 0 Other Senior Debt 3,019 186 140 114 92 70 AT&T LTD 1,795 2,315 3,082 3,826 4,550 5,278 LOC-BBC 734 7,891 5,774 2,475 0 0 Acquisition Financing 0 0 0 0 0 0 Senior Debt 0 0 0 0 0 0 Sub Debt 0 12,550 12,550 12,550 12,550 12,550 ______ ______ ______ ______ ______ ______ Total Ending Debt Balance 19,399 35,555 32,919 29,095 25,333 24,850
PROJECTED INTEREST EXPENSE SCHEDULE --------------------------------------------------------- 6 Months Year Ended December, 31, Ended ------------------------------------------------------- 12/31/94 1995 1996 1997 1998 1999 --------- -------- --------- --------- ---------- -------- Interest Expense Existing Debt Rate Senior Notes 8.71% 348 697 697 697 647 547 Long Term Debt (IN) 7.75% 56 111 108 105 101 98 Long Term Debt (Kelly Springfield) 5.75% 135 219 150 81 23 0 Other Senior Debt 9.60% 160 154 16 12 10 8 AT&T LTD 10.00% 64 206 270 345 419 491 Prepayment Penalties --- 112 0 0 0 0 0 LOC-BBC 8.25% 143 356 564 340 102 0 ______ ______ ______ ______ ______ ______ Total Existing Debt Interest Expense 1,019 1,741 1,803 1,580 1,302 1,144 Acquisition Financing Senior Debt 9.0% 0 0 0 0 0 0 Sub Debt 13.0% 0 1,632 1,632 1,632 1,632 1,632 ______ ______ ______ ______ ______ ______ Total Interest Expense $1,019 $3,373 $3,435 $3,211 $2,934 $2,776 Income on Cash 3.00% 74 63 0 (0) 17 110 Income on Bridge Notes Rec 0.00% 0 0 0 0 0 0 Income on Notes Rec 9.00% 143 114 96 78 60 42 ________ ______ ______ _____ ______ _______ $217 $177 $96 $78 $77 $152
EQUITY 1--INVESTORS RETURN
CASH FLOW ----------------------------------------------------------------------------- Exit Multiple Ownership% OUT FLOW PERIOD 1 PERIOD 2 PERIOD 3 PERIOD 4 PERIOD 5 IRR 32.5% 6.0x 91% ($15,814) ---- ---- ---- ----- 64,691 37.7% 7.0x 91% ($15,814) ---- ---- ---- ----- 78,299 42.2% 8.0x 91% ($15,814) ---- ---- ---- ----- 91,907 EQUITY 2--MANAGEMENT RETURN CASH FLOW ---------------------------------------------------------------------------------------- Exit Multiple Ownership% OUT FLOW PERIOD 1 PERIOD 2 PERIOD 3 PERIOD 4 PERIOD 5 IRR #Value! 6.0x NMF 0 ---- ---- ---- ----- #VALUE! #Value! 7.0x NMF 0 ---- ---- ---- ----- #VALUE! #Value! 8.0x NMF 0 ---- ---- ---- ----- #VALUE! SUB DEBT INVESTOR RETURN CASH FLOW ------------------------------------------------------------------------------ Exit Multiple Ownership% OUT FLOW PERIOD 1 PERIOD 2 PERIOD 3 PERIOD 4 PERIOD 5 IRR 20.0% 6.0x 9% ($12,550) 1,632 1,632 1,632 1,632 20,736 21.2% 7.0x 9% ($12,550) 1,632 1,632 1,632 1,632 22,115 22.3% 8.0x 9% ($12,550) 1,632 1,632 1,632 1,632 23,494
PART IV MERGER/SALE OF COMPANY TO STRATEGIC BUYER SCENARIOS AGGRESSIVE CASE - SNOW LEVERAGED BUYOUT SCENARIO SUMMARY STATISTICS
HISTORICAL PROJECTED ________ ________ ___________________________________________________________________ INCOME STATEMENT SUMMARY 1992 1993 1994 1995 1996 1997 1998 1999 ____ ____ ____ ____ ____ ____ ____ ____ Net Sales $119,799 $122,960 $125,832 $135,854 $150,201 $167,581 $185,075 $202,805 EBITDA 7,624 6,058 7,456 10,812 14,463 18,336 21,338 23,813 EBIT 5,936 4,500 5,650 6,892 10,445 14,321 17,275 19,699 Total Interest 1,170 1,219 1,686 4,316 4,472 4,262 4,011 3,926 Net Interest 1,170 1,219 1,468 4,140 4,377 4,184 3,902 3,663 Net Income $2,783 $1,881 $2,415 $1,059 $2,979 $5,335 $7,200 $8,740 Earnings Per Share $0.80 $0.55 $0.72 $0.31 $0.87 $1.55 $2.09 $2.53 Growth Margin Analysis Net Sales Growth 5.2% 2.6% 2.3% 8.0% 10.6% 11.6% 10.4% 9.6% Gross Margin 20.9% 20.4% 21.0% 18.5% 19.5% 20.4% 20.6% 20.6% EBITDA Margin 6.4% 4.9% 5.9% 8.0% 9.6% 10.9% 11.5% 11.7% EBIT Margin 5.0% 3.7% 4.5% 5.1% 7.0% 8.5% 9.3% 9.7% Net Income Margin 2.3% 1.5% 1.9% 0.8% 2.0% 3.2% 3.9% 4.3% COVERAGES EBITDA/Total Interest 6.5x 5.0x 4.4x 2.5x 3.2x 4.3x 5.3x 6.1x EBITDA/Net Interest 6.5x 5.0x 5.1x 2.6x 3.3x 4.4x 5.5x 6.5x EBITDA/Cap Ex/Tot. Interest 5.9x 3.2x 3.3x -0.2x 2.8x 4.1x 5.1x 5.8x EBIT/Total Interest 5.1x 3.7x 3.4x 1.6x 2.3x 3.4x 4.3x 5.0x EBIT/ Net Interest 5.1x 3.7x 3.8x 1.7x 2.4x 3.4x 4.4x 5.4x Total Debt/EBITDA 1.4x 2.3x 2.6x 4.9x 3.5x 2.5x 2.0x 1.8x Debt/Total Capitalization 30.3% 43.2% 36.0% 48.2% 45.7% 41.4% 37.3% 34.8% Debt/Equity 0.4x 0.8x 0.6x 0.9x 0.8x 0.7x 0.6x 0.5x Store Count (end of period) Franchise Stores 344 362 377 417 467 517 567 617 Company Stores 10 8 3 3 3 3 3 3 ___ ___ ___ ___ ___ ___ ___ ___ Total Stores 354 370 380 420 470 520 570 620
AGGRESSIVE CASE - LEVERAGED BUYOUT SCENARIO
GENERAL ASSUMPTIONS TRANSACTION PURCHASE TERMS ____________________________________________________ _________________________________________________ LBO/Sale of Company ____________________________________ Common Shares Outstanding 3,266 Equity Value 86,801 Stock Options 244 Total Debt Assumed 19,399 Total Shares 3,510 Less: Excess Cash (4,200) ________ ________ Avg. Exercise Price of Stock Options $6.35 Total Value (TV) 102,000 Cash Proceeds From Exercise Optoins 1,522 Cash Paid per Share $24.73 Market Price as of $16.00 Estimated Transaction Costs 2,000 Premium (Discount) Over Market Price 54.56% Less: Assumed Debt (19,399) Less: Cash Proc.-Stock Options (1,552) Total Debt Outstanding Before Purchase 19,399 Existing Debt Refinanced 0 Financing Needed $83,049 Debt Assumed 19,399 Rate % Equity ____ ________ Bank Debt 27,820 9.0% --- EBITDA Exit Multiple 7.0x Subordinated Debt 0 13.0% 0.0% Goodwill Amortization Period 40 yrs. Equity 1 - Investor 55,229 --- 100.0% Transaction Cost Amortization Period 10 yrs Equity 2 - Management 0 --- 0.0% ______ ________ 83,049 100.0%
PURCHASE PRICE MULTIPLES RATES OF RETURN SENSITIVITY ___________________________________________________ ___________________________________________________ 1993 1994 1995 % Equity EBITDA Exit Multiple ____ ____ ____ ____________________________________ TV/Sales 0.8x 0.8x 0.8x Allocation 6.0x 7.0x 8.0x ________________________________________________ TV/EBITDA 16.8x 13.7x 9.4x Equity-Inves. 100.0% 15.0% 19.5% 23.5% TV/EBIT 22.7x 18.1x 14.8x Equity-Mngt. NMF NMF NMF NMF Price/Earnings 34.1x 29.6x 79.9x Sub Debt NMF NMF NMF NMF
COVERAGES PRO FORMA 1994 1995 1996 1997 1998 1999 ____ ____ ____ ____ ____ ____ EBITDA/Total Interest 1.8X 2.50x 3.2x 4.3x 5.3x 6.1x EBIT/Total Interest 1.3x 1.6x 2.3x 3.4x 4.3x 5.0x Total Debt/EBITDA 6.3x 4.9X 3.5x 2.5x 2.0x 1.8x Debt/Total Cap 46.1% 48.2% 45.7% 41.4% 37.3% 34.8% Net Debt $47,219 $52,498 $50,254 $46,043 $39,725 $31,847 Cumulative Debt Repayment --- (5,279) 2,244 4,211 6,319 7,878 FINANCIAL STATISTICS EPS $0.72 $0.31 $0.87 $1.55 $2.09 $2.53
AGGRESSIVE CASE - LEVERAGED BUYOUT SCENARIO
OPENING BALANCE SHEET As of Adj Equity Loans to Refinance Purchase Pay Allocate Pro Forms 12/31/94 FMV Invt. Newco Debt Company Fees Goodwill 6/30/94 -------- ------- ------- -------- --------- -------- ------- -------- --------- ASSETS Current Assets Cash/ Investments $4,200 $4,200 $55,229 $27,820 $0 ($85,249) ($2,000) $0 Receivables 8,407 8,407 8,407 Inventory 15,261 15,261 15,261 Deferred Income Taxes 2,501 2,501 2,501 Other Current Assets 1,047 1,047 1,047 -------- ------- ------- -------- --------- -------- ------- -------- --------- Total Current Assets 31,417 31,417 55,229 27,820 0 (85,249) (2,000) 0 27,217 Real Estate Retained 1,324 1,324 1,324 Real Estate CIP 3,085 3,085 3,085 Other Prop.& Equip.,net 14,003 14,003 14,003 -------- ------- ------- -------- --------- -------- ------- -------- --------- Total PP&E 18,411 18,411 18,411 Transaction Costs 241 241 2,000 2,241 Investment/Other Asset 2,043 2,043 2,043 Invest in Oper JV 1,414 1,414 1,414 Invest in Dev JV 300 300 300 Notes Receivable 1,362 1,362 1,362 Distribution Rights 9,046 9,046 9,046 Goodwill 0 0 50,750 50,750 -------- ------- ------- -------- --------- -------- ------- -------- --------- Total Assets $64,234 $64,234 $55,229 $27,820 $0 ($85,249) $0 $50,750 $112,784 -------- ------- ------- -------- --------- -------- ------- -------- --------- -------- ------- ------- -------- --------- -------- ------- -------- --------- Current Liabilities Accounts Payable 3,679 3,679 3,679 Accrued Expenses 2,229 2,229 2,229 Warranty Reserve 3,854 3,854 3,854 -------- ------- ------- -------- --------- -------- ------- -------- --------- Total Current Liabilities 9,763 9,763 9,763 Deferred Income Taxes 0 0 0 ESOP Obligation 453 453 453 Deferred Income 121 121 121 Existing Debt Senior Notes 8,000 8,000 8,000 Long Term Debt(IN) 1,451 1,451 1,451 Long Term Debt(KellySpr.) 4,400 4,400 4,400 Other Senior Debt 3,019 3,019 3,019 AT&T LTD 1,795 1,795 1,795 LOC-BBC 734 734 734 Acquisition Financing Senior Debt 0 0 27,820 27,820 Sub Debt 0 0 0 0 -------- ------- ------- -------- --------- -------- ------- -------- --------- Total Debt 19,399 19,399 0 27,820 0 0 0 0 47,219 New Common Stock 0 0 55,229 55,229 Common Stock 14,808 0 0 ESOP Obligation (453) (453) (453) Retained Earnings 20,144 34,952 (85,249) 50,750 453 -------- ------- ------- -------- --------- -------- ------- -------- --------- Total Equity 34,499 34,449 55,229 -------- ------ -------- Total Liab. & Equity $64,234 $64,234 $112,784 -------- ------- ------- -------- --------- -------- ------- -------- --------- -------- ------- ------- -------- --------- -------- ------- -------- ---------
AGGRESSIVE CASE - SNOW LEVERAGED BUYOUT SCENARIO
Historical Projected INCOME STATEMENT Year Ended Dec. 31, 6 Months Ended Year Ended December 31, ------------------------- ------------------------ -------------------------------------------------- (in thousands) 1992 1993 6/30/94 12/31/94 1994 1995 1996 1997 1998 1999 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- RSC Sales $111,657 $113,225 $53,067 $64,127 $117,195 $127,920 $141,503 $157,949 $174,505 $191,274 Incremental Retail Sales 1,816 3,238 1,085 833 1,918 934 934 934 934 934 Franchise Fee Income 5,856 6,116 3,085 3,207 6,292 6,622 7,378 8,297 9,234 10,195 O Advertising 470 381 242 186 428 379 386 402 402 402 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Net Sales 119,799 122,960 57,480 68,353 125,832 135,854 150,201 167,581 185,075 202,805 Cost Of Goods Sold(1) 94,720 97,829 44,424 54,990 99,414 110,704 120,922 133,423 146,887 161,089 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Gross Profit 25,078 25,131 13,056 13,363 26,418 25,150 29,279 34,158 38,188 41,715 Selling Gen. & Admin 17,455 18,035 9,388 8,906 18,294 14,521 15,147 16,348 17,571 18,822 Depreciation 1,120 1,168 605 794 1,399 2,044 2,163 2,211 2,260 2,310 Amort. of Finance Costs 0 0 0 0 0 200 200 200 200 200 Goodwill Amortization 0 0 0 0 0 1,269 1,269 1,269 1,269 1,269 Other Amortization 568 390 208 199 407 407 386 336 335 335 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total S G & A(1) 19,143 19,593 10,201 9,899 20,100 18,441 19,165 20,363 21,634 22,935 Operating Income 5,936 5,538 2,855 3,464 6,319 6,709 10,114 13,795 16,554 18,780 Lease (Income)-10% 0 0 0 (33) (33) (183) (331) (526) (721) (919) Other Expenses/(Income) 0 1,038 702 0 702 0 0 0 0 0 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- EBIT 5,936 4,500 2,153 3,497 5,650 6,892 10,445 14,321 17,275 19,699 Interest Expense Existing Debt 1,170 1,219 667 1,019 1,686 1,813 1,968 1,758 1,507 1,422 Acquisition Financing Senior Debt 0 0 0 0 0 2,504 2,504 2,504 2,504 2,504 Sub Debt 0 0 0 0 0 0 0 0 0 0 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Interest Expense 1,170 1,219 667 1,019 1,686 4,316 4,472 4,262 4,011 3,926 Interest Income 0 0 0 217 217 177 96 78 109 262 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Net Interest Expense 1,170 1,219 667 801 1,468 4,140 4,377 4,184 3,902 3,663 Earnings Before Taxes 4,766 3,281 1,486 2,695 4,181 2,752 6,068 10,136 13,373 16,036 Income Taxes 1,983 1,400 631 1,135 1,766 1,693 3,089 4,802 6,173 7,296 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Net Income To Common $2,783 $1,881 $855 $1,561 $2,415 $1,059 $2,979 $5,335 $7,200 $8,740 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Earnings Per Share Actual $0.80 $0.55 $0.26 $0.46 $0.72 $0.31 $0.87 $1.55 $2.09 $2.53 Excl. One Time Items $0.73 $0.38 $0.84 Weighted Average Shares 3,497 3,410 3,333 3,416 3,374 3,424 3,432 3,440 3,448 3,456 - -------------------------- (1) All freight expense is in COGS
Historical Projected BALANCE SHEET Year Ended Dec. 31, 6 Months Ended Year Ended December 31, ------------------------- ------------------------ -------------------------------------------------- (in thousands) 1992 1993 6/30/94 12/31/94 1994 1995 1996 1997 1998 1999 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- ASSETS Current Assets Cash/Investments $1,590 $1,113 $5,706 $4,200 $0 ($0) $0 $0 $3,294 $11,405 Receivables 8,835 7,722 9,870 8,407 8,407 9,077 10,036 11,197 12,366 13,550 Inventory 15,348 11,748 21,433 15,261 15,261 15,815 16,123 17,790 19,585 21,479 Deferred Income Taxes 1,970 1,802 2,025 2,501 2,501 2,891 3,280 3,669 4,059 4,448 Other Current Assets 443 758 2,023 1,047 1,047 1,047 1,047 1,047 1,047 1,047 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Current Assets 28,186 23,143 41,057 31,417 27,217 28,383 30,485 33,703 40,351 51,929 Real Estate Retained 0 0 1,324 1,324 2,334 4,284 6,234 8,184 10,199 Real Estate CIP 0 0 1,750 3,085 3,085 5,581 5,551 5,551 5,551 5,551 Other P & E, net 12,166 13,153 13,477 14,003 14,003 18,985 18,635 17,308 16,003 14,649 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total PP&E 12,166 13,153 15,227 18,411 18,411 26,900 28,470 29,093 29,738 30,398 Investment/Other Asset 1,969 2,955 2,843 2,043 2,043 2,183 2,323 2,463 2,603 2,743 Invst in Oper JV 1,609 1,385 1,414 1,414 1,414 1,414 1,414 1,414 1,414 1,414 Invst in Dev JV 0 0 0 300 300 660 1,020 1,380 1,440 1,440 Bridge Loan Receivable 0 0 0 0 0 210 573 878 1,123 1,317 Notes Receivable 4,915 6,616 4,984 1,362 1,362 1,162 962 762 562 362 Distribution Rights 8,834 9,355 9,216 9,046 9,046 8,797 8,518 8,240 7,964 7,688 Transaction Costs 0 0 0 241 2,241 2,015 1,789 1,563 1,337 1,111 Goodwill 0 0 0 0 50,750 49,481 48,213 46,944 45,675 44,406 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Assets $57,679 $56,607 $74,741 $64,234 $112,784 $121,652 $123,767 $126,440 $132,207 $142,808 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Current Liabilities Accounts Payable 5,085 3,613 7,792 3,679 3,679 4,613 5,038 5,559 6,120 6,712 Accrued Expenses 3,067 3,396 4,787 2,229 2,229 3,346 3,700 4,129 4,558 4,995 Warranty Reserve 2,654 3,254 3,554 3,854 3,854 4,454 5,054 5,654 6,254 6,854 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Current Liab. 10,806 10,263 16,133 9,763 9,763 12,413 13,793 15,342 16,933 18,561 Deferred Income Taxes 500 38 0 0 0 0 0 0 0 0 ESOP Obligation: 1,277 975 429 453 453 260 0 0 0 0 Deferred Income 192 157 140 121 121 0 0 0 0 0 Existing Debt Term Loan BBC 2,000 1,400 0 0 0 0 0 0 0 0 Senior Notes 0 0 8,000 8,000 8,000 8,000 8,000 8,000 6,857 5,714 Long Term Debt(IN) 0 0 1,451 1,451 1,451 1,413 1,373 1,330 1,284 1,238 LTD (Kelly Spring) 440 5,600 5,000 4,400 4,400 3,200 2,000 800 0 0 Other Senior Debt 7,324 6,686 3,664 3,019 3,019 186 140 114 92 70 AT&T LTD 0 0 754 1,795 1,795 2,571 4,069 5,535 6,966 8,418 LOC-BBC 950 0 6,208 734 734 9,308 6,852 2,444 0 0 Acquisition Financing Senior Debt 0 0 0 0 27,820 27,820 27,820 27,820 27,820 27,820 Sub Debt 0 0 0 0 0 0 0 0 0 0 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- TOTAL DEBT 10,714 13,686 25,077 19,399 47,219 52,498 50,254 46,043 43,019 43,252 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Liabilities 23,489 25,119 41,779 29,736 57,566 65,171 64,046 61,385 59,952 61,813 New Common Stock 0 0 0 0 55,229 55,229 55,229 55,229 55,229 55,229 Common Stock 19,334 14,735 14,808 14,808 0 0 0 0 0 0 ESOP Obligation (1,277) (975) (429) (453) (453) (260) 0 0 0 0 Retained Earnings 16,133 17,728 18,583 20,144 453 1,512 4,491 9,826 17,026 25,766 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Equity 34,190 31,488 32,962 34,499 55,229 56,481 59,720 65,055 72,255 80,995 Total Liab.& Equity $57,679 $56,607 $74,741 $64,234 $112,784 $121,652 $123,767 $126,440 $132,207 $142,808
Projected CASH FLOW STATEMENT --------------------------------------------------------- (In thousands) 6 Months Year Ended December, 31, Ended _________________________________________________________ 12/31/94 1995 1996 1997 1998 1999 -------- ------- ------- ------- ------- ------- Cash Flow From Operations Net income $1,561 $1,059 $2,979 $5,335 $7,200 $8,740 Depreciation 794 2,044 2,163 2,211 2,260 2,310 Amortization 199 1,876 1,855 1,805 1,804 1,804 Increase Deferred Income/Taxes (19) (121) 0 0 0 0 -------- ------- ------- ------- ------- ------- Total Cash Flow From Operations 2,535 4,858 6,997 9,350 11,263 12,854 CHANGES IN WORKING CAPITAL Accounts Receivable 1,463 (670) (959) (1,161) (1,169) (1,185) Inventories 6,172 (554) (308) (1,667) (1,795) (1,894) Deferred Income Taxes (476) (389) (389) (389) (389) (389) Other Current Assets 976 0 0 0 0 0 Accounts Payable (4,113) 933 426 521 561 592 Accrued Expenses (2,558) 1,117 354 428 430 437 Warranty Reserve 300 600 600 600 600 600 -------- ------- ------- ------- ------- ------- Total Changes In Working Capital 1,764 1,037 (276) (1,668) (1,762) (1,839) CASH (USED FOR) GENERATED BY INVESTMENTS Capital Expenditures (1,320) (11,519) (1,813) (884) (955) (955) Proceeds From Sale Of Properties 0 4,493 0 0 0 0 Investment in Oper JV 0 0 0 0 0 0 Investment in Dev JV (300) (360) (360) (360) (60) 0 Investment In Conversions 0 0 0 0 0 0 Real Estate Retained (1,324) (1,010) (1,950) (1,950) (1,950) (2,015) Real Estate CIP (1,335) (2,496) 30 (0) (0) (0) Bridge Loan 0 (210) (363) (305) (244) (194) -------- ------- ------- ------- ------- ------- Total Investments (4,278) (11,102) (4,456) (3,499) (3,209) (3,164) CHANGES IN OTHER ASSETS Investments/Other Assets 800 (140) (140) (140) (140) (140) Notes Receivable 3,622 200 200 200 200 200 Distribution Rights 170 249 279 278 276 276 Note Pay Fees Expenses (241) 26 26 26 26 26 Less: Amortization (199) (407) (386) (336) (335) (335) -------- ------- ------- ------- ------- ------- Total Other 4,152 (72) (21) 28 27 27 Net From Operations 4,172 (5,279) 2,244 4,211 6,319 7,878 CASH FLOW FROM FINANCING ACTIVITIES Existing Debt (5,678) 5,279 (2,244) (4,211) (3,024) 233 Senior Debt 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 Net cash used in financing activities (5,678) 5,279 (2,244) (4,211) (3,024) 233 NET INCREASE (DECREASE) IN CASH (1,506) 0 0 (0) 3,294 8,110 Cash, Beginning of Period 5,706 0 0 0 (0) 3,294 Cash Generated (Used) (1,506) 0 0 (0) 3,294 8,110 -------- ------- ------- ------- ------- ------- Cash, End of Period $4,200 $0 $0 ($0) 3,294 $11,405 Min Cash Balance 1994 $4,200
AGGRESSIVE CASE - SNOW LEVERAGED BUYOUT SCENARIO
Projected DEBT SCHEDULE --------------------------------------------------------- (In thousands) 6 Months Year Ended December, 31, Ended ------------------------------------------------------- 12/31/94 1995 1996 1997 1998 1999 ________ ______ ______ _____ ______ _______ Beginning Debt Balance Existing Debt Senior Notes 8,000 8,000 8,000 8,000 8,000 6,857 Long Term Debt (IN) 1,451 1,451 1,413 1,373 1,330 1,284 Long Term Debt (Kelly Springfield) 5,000 4,400 3,200 2,000 800 0 Other Senior Debt 3,664 3,019 186 140 114 92 AT&T LTD 754 1,795 2,571 4,069 5,535 6,966 LOC-BBC 6,208 734 9,308 6,852 2,444 0 Acquisition Financing Senior Debt 0 27,820 27,820 27,820 27,820 27,820 Sub Debt 0 0 0 0 0 0 ______ ______ ______ ______ ______ ______ Total Beginning Debt Balance 25,077 47,219 52,498 50,254 46,043 43,019 Debt (Repayment Borrowings) Existing Debt Senior Notes 0 0 0 0 (1,143) (1,143) Long Term Debt (IN) 0 (38) (40) (43) (46) (46) Long Term Debt (Kelly Springfield) (600) (1,200) (1,200) (1,200) (800) 0 Other Senior Debt (645) (2,833) (46) (26) (22) (22) AT&T LTD 1,041 776 1,498 1,466 1,431 1,444 LOC-BBC (5,474) 8,574 (2,456) (4,407) (2,444) 0 ______ ______ ______ ______ ______ ______ Total Existing Debt Borrowing (Repayment) (5,678) 5,279 (2,244) (4,211) (3,024) 233 Acquisition Financing Senior Debt 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 ______ ______ ______ ______ ______ ______ Total Borrowing (Repayment) (5,678) 5,279 (2,244) (4,211) (3,024) 233 Ending Debt Balances Existing Debt Senior Notes 8,000 8,000 8,000 8,000 6,857 5,714 Long Term Debt (IN) 1,451 1,413 1,373 1,330 1,284 1,238 Long Term Debt (Kelly Springfield) 4,400 3,200 2,000 800 0 0 Other Senior Debt 3,019 186 140 114 92 70 AT&T LTD 1,795 2,571 4,069 5,535 6,966 8,410 LOC-BBC 734 9,308 6,852 2,444 0 0 Acquisition Financing Senior Debt 0 27,820 27,820 27,820 27,820 27,820 Sub Debt 0 0 0 0 0 0 ______ ______ ______ ______ ______ ______ Total Ending Debt Balance 19,399 52,498 50,254 46,043 43,019 43,252
AGGRESSIVE CASE - SNOW LEVERAGED BUYOUT SCENARIO
PROJECTED INTEREST EXPENSE SCHEDULE --------------------------------------------------------- 6 Months Year Ended December, 31, Ended ------------------------------------------------------- 12/31/94 1995 1996 1997 1998 1999 --------- -------- --------- --------- ---------- -------- Interest Expense Existing Debt Rate Senior Notes 8.71% 348 697 697 697 647 547 Long Term Debt (IN) 7.75% 56 111 108 105 101 98 Long Term Debt (Kelly Springfield) 5.75% 135 219 150 81 23 0 Other Senior Debt 9.60% 160 154 16 12 10 8 AT&T LTD 10.00% 64 218 332 480 625 769 Prepayment Penalties --- 112 0 0 0 0 0 LOC-BBC 8.25% 143 414 667 383 101 0 ______ ______ ______ ______ ______ ______ Total Existing Debt Interest Expense 1,019 1,813 1,968 1,758 1,507 1,422 Acquisition Financing Senior Debt 9.0% 0 2,504 2,504 2,504 2,504 2,504 Sub Debt 13.0% 0 0 0 0 0 0 ______ ______ ______ ______ ______ ______ Total Interest Expense $1,019 $4,316 $4,472 $4,262 $4,011 $3,926 Income on Cash 3.00% 74 63 0 (0) 49 220 Income on Bridge Notes Rec 0.00% 0 0 0 0 0 0 Income on Notes Rec 9.00% 143 114 96 78 60 42 ________ ______ ______ _____ ______ _______ $217 $177 $96 $78 $109 $262
EQUITY 1--INVESTORS RETURN CASH FLOW ---------------------------------------------------------------------------------------- Exit Multiple Ownership% OUT FLOW PERIOD 1 PERIOD 2 PERIOD 3 PERIOD 4 PERIOD 5 IRR 15.0% 6.0x 100% ($55,229) ---- ---- ---- ----- 111,030 19.5% 7.0x 100% ($55,229) ---- ---- ---- ----- 134,842 42.2% 8.0x 100% ($55,229) ---- ---- ---- ----- 158,655 EQUITY 2--MANAGEMENT RETURN CASH FLOW ---------------------------------------------------------------------------------------- Exit Multiple Ownership% OUT FLOW PERIOD 1 PERIOD 2 PERIOD 3 PERIOD 4 PERIOD 5 IRR ####### 6.0x NMF 0 ---- ---- ---- ----- #VALUE! ####### 7.0x NMF 0 ---- ---- ---- ----- #VALUE! ####### 8.0x NMF 0 ---- ---- ---- ----- #VALUE! SUB DEBT INVESTOR RETURN CASH FLOW ---------------------------------------------------------------------------------------- Exit Multiple Ownership% OUT FLOW PERIOD 1 PERIOD 2 PERIOD 3 PERIOD 4 PERIOD 5 IRR #NUM! 6.0x 9% 0 ----- ----- ----- ----- ------ #NUM! 7.0x 9% 0 ----- ----- ----- ----- ------ #NUM! 8.0x 9% 0 ----- ----- ----- ----- ------
MODERATE CASE - SNOW LEVERAGED BUYOUT SCENARIO
HISTORICAL PROJECTED ________ ________ ___________________________________________________________________ INCOME STATEMENT SUMMARY 1992 1993 1994 1995 1996 1997 1998 1999 ____ ____ ____ ____ ____ ____ ____ ____ Net Sales $119,799 $122,960 $125,832 $133,425 $140,364 $148,531 $156,256 $163,560 EBITDA 7,624 6,058 7,456 10,512 13,060 15,372 16,736 17,518 EBIT 5,936 4,500 5,650 7,189 9,694 12,061 13,425 14,204 Total Interest 1,170 1,219 1,686 4,211 4,210 3,914 3,700 3,644 Net Interest 1,170 1,219 1,468 4,034 4,114 3,837 3,571 3,373 Net Income $2,783 $1,881 $2,415 $1,478 $2,883 $4,413 $5,350 $5,916 Earnings Per Share $0.80 $0.55 $0.72 $0.43 $0.84 $1.28 $1.55 $1.71 Growth Margin Analysis Net Sales Growth 5.2% 2.6% 2.3% 6.0% 5.2% 5.8% 5.2% 4.7% Gross Margin 20.9% 20.4% 21.0% 18.5% 19.5% 20.4% 20.7% 20.6% EBITDA Margin 6.4% 4.9% 5.9% 7.9% 9.3% 10.3% 10.7% 10.7% EBIT Margin 5.0% 3.7% 4.5% 5.4% 6.9% 8.1% 8.6% 8.7% Net Income Margin 2.3% 1.5% 1.9% 1.1% 2.1% 3.0% 3.4% 3.6% COVERAGES EBITDA/Total Interest 6.5x 5.0x 4.4x 2.5x 3.1x 3.9x 4.5x 4.8x EBITDA/Net Interest 6.5x 5.0x 5.1x 2.6x 3.2x 4.0x 4.7x 5.2x EBITDA/Cap Ex/Tot. Interest 5.9x 3.2x 3.3x -0.2x 2.7x 3.7x 4.3x 4.5x EBIT/Total Interest 5.1x 3.7x 3.4x 1.7x 2.3x 3.1x 3.6x 3.9x EBIT/ Net Interest 5.1x 3.7x 3.8x 1.8x 2.4x 3.1x 3.8x 4.2x Total Debt/EBITDA 1.4x 2.3x 2.6x 4.8x 3.6x 2.7x 2.4x 2.3x Debt/Total Capitalization 30.3% 43.2% 36.0% 56.0% 52.3% 47.2% 43.7% 40.8% Debt/Equity 0.4x 0.8x 0.6x 1.3x 1.1x 0.9x 0.8x 0.7x Store Count (end of period) Franchise Stores 344 362 377 395 418 441 461 481 Company Stores 10 8 3 3 3 3 3 3 ___ ___ ___ ___ ___ ___ ___ ___ Total Stores 354 370 380 398 421 444 464 484
MODERATE CASE - SNOW LEVERAGED BUYOUT SCENARIO
GENERAL ASSUMPTIONS TRANSACTION PURCHASE TERMS ____________________________________________________ _________________________________________________ LBO/Sale of Company ____________________________________ Common Shares Outstanding 3,266 Equity Value 69,146 Stock Options 244 Total Debt Assumed 19,399 Total Shares 3,510 Less: Excess Cash (4,200) ________ ________ Avg. Exercise Price of Stock Options $6.35 Total Value (TV) 84,345 Cash Proceeds From Exercise Optoins 1,522 Cash Paid per Share $19.70 Market Price as of $16.00 Estimated Transaction Costs 2,000 Premium (Discount) Over Market Price 23.13% Less: Assumed Debt (19,399) Less: Cash Proc.-Stock Options (1,552) Total Debt Outstanding Before Purchase 19,399 Existing Debt Refinanced 0 Financing Needed $65,394 Debt Assumed 19,399 Rate % Equity ____ ________ Bank Debt 27,770 9.0% --- EBITDA Exit Multiple 7.0x Subordinated Debt 0 13.0% 0.0% Goodwill Amortization Period 40 yrs. Equity 1 - Investor 37,624 --- 100.0% Transaction Cost Amortization Period 10 yrs Equity 2 - Management 0 --- 0.0% ______ ________ 65,394 100.0%
PURCHASE PRICE MULTIPLES RATES OF RETURN SENSITIVITY ___________________________________________________ ___________________________________________________ 1993 1994 1995 % Equity EBITDA Exit Multiple ____ ____ ____ ____________________________________ TV/Sales 0.7x 0.7x 0.6x Allocation 6.0x 7.0x 8.0x ________________________________________________ TV/EBITDA 13.9x 11.3x 8.0x Equity-Inves. 100.0% 15.0% 19.9% 24.1% TV/EBIT 18.7x 14.9x 11.7x Equity-Mngt. NMF NMF NMF NMF Price/Earnings 27.1x 23.6x 45.6x Sub Debt NMF NMF NMF NMF
COVERAGES PRO FORMA 1994 1995 1996 1997 1998 1999 ____ ____ ____ ____ ____ ____ EBITDA/Total Interest 1.8X 2.50x 3.1x 3.9x 4.5x 4.8x EBIT/Total Interest 1.4x 1.7x 2.3x 3.1x 3.6x 3.9x Total Debt/EBITDA 6.3x 4.8X 3.6x 2.7x 2.4x 2.3x Debt/Total Cap 55.6% 56.0% 52.3% 47.2% 43.7% 40.8% Net Debt $47,219 $50,054 $46,601 $41,855 $35,951 $29,423 Cumulative Debt Repayment --- (2,885) 3,454 4,746 5,904 6,527 FINANCIAL STATISTICS EPS $0.72 $0.43 $0.84 01.28 $1.55 $1.71
MODERATE CASE - SNOW LEVERAGED BUYOUT SCENARIO
Acquisition Adjustments OPENING BALANCE SHEET As of Adj Equity Loans to Refinance Purchase Pay Allocate Pro Forms 12/31/94 FMV Invt. Newco Debt Company Fees Goodwill 6/30/94 -------- ------- ------- ------- ------- -------- ------- -------- --------- ASSETS Current Assets Cash/ Investments $4,200 $4,200 $37,624 $27,770 $0 ($67,594) ($2,000) $0 Receivables 8,407 8,407 8,407 Inventory 15,261 15,261 15,261 Deferred Income Taxes 2,501 2,501 2,501 Other Current Assets 1,047 1,047 1,047 -------- ------- ------- ------- ------- -------- ------- -------- --------- Total Current Assets 31,417 31,417 37,624 27,770 0 (67,594) (2,000) 0 27,217 Real Estate Retained 1,324 1,324 1,324 Real Estate CIP 3,085 3,085 3,085 Other Prop.& Equip.,net 14,003 14,003 14,003 -------- ------- ------- ------- ------- -------- ------- -------- --------- Total PP&E 18,411 18,411 18,411 Transaction Costs 241 241 2,000 2,241 Investment/Other Asset 2,043 2,043 2,043 Invest in Oper JV 1,414 1,414 1,414 Invest in Dev JV 300 300 300 Notes Receivable 1,362 1,362 1,362 Distribution Rights 9,046 9,046 9,046 Goodwill 0 0 33,095 33,095 -------- ------- ------- ------- ------- -------- ------- -------- --------- Total Assets $64,234 $64,234 $37,624 $27,770 $0 ($67,594) $0 $33,095 $95,129 -------- ------- ------- ------- ------- -------- ------- -------- --------- -------- ------- ------- ------- ------- -------- ------- -------- --------- CURRENT LIABILITIES Accounts Payable 3,679 3,679 3,679 Accrued Expenses 2,229 2,229 2,229 Warranty Reserve 3,854 3,854 3,854 -------- ------- ------- ------- ------- -------- ------- -------- --------- Total Current Liabilities 9,763 9,763 9,763 Deferred Income Taxes 0 0 0 ESOP Obligation 453 453 453 Deferred Income 121 121 121 Existing Debt Senior Notes 8,000 8,000 8,000 Long Term Debt(IN) 1,451 1,451 1,451 Long Term Debt(KellySpr.) 4,400 4,400 4,400 Other Senior Debt 3,019 3,019 3,019 AT&T LTD 1,795 1,795 1,795 LOC-BBC 734 734 734 Acquisition Financing Senior Debt 0 0 27,770 27,770 Sub Debt 0 0 0 0 -------- ------- ------- ------- ------- -------- ------- -------- --------- Total Debt 19,399 19,399 0 27,770 0 0 0 0 47,169 New Common Stock 0 0 37,624 37,624 Common Stock 14,808 0 0 ESOP Obligation (453) (453) (453) Retained Earnings 20,144 34,952 (67,594) 0 33,095 453 -------- ------- ------- ------- ------- -------- ------- -------- --------- Total Equity 34,499 34,449 37,624 -------- ------- ------- ------- ------- -------- ------- -------- --------- Total Liab. & Equity $64,234 $64,234 $95,129 -------- ------- ------- ------- ------- -------- ------- -------- --------- -------- ------- ------- ------- ------- -------- ------- -------- ---------
MODERATE CASE - SNOW LEVERAGED BUYOUT SCENARIO
Historical Projected INCOME STATEMENT Year Ended Dec. 31, 6 Months Ended Year Ended December 31, ------------------------- ------------------------ -------------------------------------------------- (in thousands) 1992 1993 6/30/94 12/31/94 1994 1995 1996 1997 1998 1999 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- RSC Sales $111,657 $113,225 $53,067 $64,127 $117,195 $125,611 $132,157 $139,855 $147,143 $154,025 Incremental Retail Sales 1,816 3,238 1,085 833 1,918 934 934 934 934 934 Franchise Fee Income 5,856 6,116 3,085 3,207 6,292 6,501 6,888 7,341 7,778 8,199 O Advertising 470 381 242 186 428 428 379 386 402 402 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Net Sales 119,799 122,960 57,480 68,353 125,832 133,425 140,364 148,531 156,256 163,560 Cost Of Goods Sold(1) 94,720 97,829 44,424 54,990 99,414 108,713 112,959 118,183 123,917 129,816 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Gross Profit 25,078 25,131 13,056 13,363 26,418 24,712 27,405 30,348 32,339 33,744 Selling Gen. & Admin 17,455 18,035 9,388 8,906 18,294 14,367 14,596 15,329 16,057 16,781 Depreciation 1,120 1,168 605 794 1,399 1,889 1,953 1,948 1,949 1,952 Amort. of Finance Costs 0 0 0 0 0 200 200 200 200 200 Goodwill Amortization 0 0 0 0 0 827 827 827 827 827 Other Amortization 568 390 208 199 407 407 386 336 335 335 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total S G & A(1) 19,143 19,593 10,201 9,899 20,100 17,690 17,962 18,640 19,368 20,095 Operating Income 5,936 5,538 2,855 3,464 6,319 7,022 9,443 11,708 12,971 13,648 Lease (Income)-10% 0 0 0 (33) (33) (167) (252) (353) (454) (556) Other Expenses/(Income) 0 1,038 702 0 702 0 0 0 0 0 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- EBIT 5,936 4,500 2,153 3,497 5,650 7,189 9,694 12,061 13,425 14,204 Projected Costs Savings Interest Expense Existing Debt 1,170 1,219 667 1,019 1,686 1,712 1,710 1,415 1,201 1,144 Acquisition Financing Senior Debt 0 0 0 0 0 2,499 2,499 2,499 2,499 2,499 Sub Debt 0 0 0 0 0 0 0 0 0 0 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Interest Expense 1,170 1,219 667 1,019 1,686 4,211 4,210 3,914 3,700 3,644 Interest Income 0 0 0 217 217 177 96 78 129 270 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Net Interest Expense 1,170 1,219 667 801 1,468 4,034 4,114 3,837 3,571 3,373 Earnings Before Taxes 4,766 3,281 1,486 2,695 4,181 3,155 5,580 8,224 9,853 10,831 Income Taxes 1,983 1,400 631 1,135 1,766 1,676 2,698 3,811 4,503 4,915 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Net Income To Common $2,783 $1,881 $855 $1,561 $2,415 $1,478 $2,883 $4,413 $5,350 $5,916 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- EARNINGS PER SHARE Actual $0.80 $0.55 $0.26 $0.46 $0.72 $0.43 $0.84 $1.28 $1.55 $1.71 Excl. One Time Items $0.73 $0.38 $0.84 Weighted Average Shares 3,497 3,410 3,333 3,416 3,374 3,424 3,432 3,440 3,448 3,456 - -------------------------- (1) All freight expense is in COGS
MODERATE CASE - SNOW LEVERAGED BUYOUT SCENARIO
Historical BALANCE SHEET Year Ended Dec. 31, Projected ------------------------- At Pro Forma (in thousands) 1992 1993 6/30/94 31-Dec-94 31-Dec-94 1995 1996 1997 1998 1999 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- ASSETS Current Assets Cash/Investments $1,590 $1,113 $5,706 $4,200 $0 ($0) $0 $0 $4,602 $10,647 Receivables 8,835 7,722 9,870 8,407 8,407 8,915 9,378 9,924 10,440 10,928 Inventory 15,348 11,748 21,433 15,261 15,261 15,530 15,061 15,758 16,522 17,309 Deferred Income Taxes 1,970 1,802 2,025 2,501 2,501 2,891 3,280 3,669 4,059 4,448 Other Current Assets 443 758 2,023 1,047 1,047 1,047 1,047 1,047 1,047 1,047 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Current Assets 28,186 23,143 41,057 31,417 27,217 28,383 28,767 30,398 36,670 44,379 Real Estate Retained 0 0 1,324 1,324 2,009 3,024 4,032 5,039 6,079 Real Estate CIP 0 0 1,750 3,085 3,085 3,706 3,675 3,664 3,664 3,664 Other P & E, net 12,166 13,153 13,477 14,003 14,003 19,140 19,001 17,937 16,743 15,946 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total PP&E 12,166 13,153 15,227 18,411 18,411 24,855 25,699 25,633 25,646 25,689 Investment/Other Asset 1,969 2,955 2,843 2,043 2,043 2,183 2,323 2,463 2,603 2,743 Invst in Oper JV 1,609 1,385 1,414 1,414 1,414 1,414 1,414 1,414 1,414 1,414 Invst in Dev JV 0 0 0 300 300 660 1,020 1,380 1,440 1,440 Bridge Loan Receivable 0 0 0 0 0 142 325 477 598 695 Notes Receivable 4,915 6,616 4,984 1,362 1,362 1,162 962 762 562 362 Distribution Rights 8,834 9,355 9,216 9,046 9,046 8,797 8,518 8,240 7,964 7,688 Transaction Costs 0 0 0 241 2,241 2,015 1,789 1,563 1,337 1,111 Goodwill 0 0 0 0 33,095 32,268 31,440 30,613 29,768 28,958 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Assets $57,679 $56,607 $74,741 $64,234 $95,129 $101,879 $102,257 $102,943 $108,020 $114,479 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Current Liabilities Accounts Payable 5,085 3,613 7,792 3,679 3,679 4,530 4,707 4,924 5,163 5,409 Accrued Expenses 3,067 3,396 4,787 2,229 2,229 3,286 3,458 3,659 3,849 4,028 Warranty Reserve 2,654 3,254 3,554 3,854 3,854 4,454 5,054 5,654 6,254 6,854 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Current Liab. 10,806 10,263 16,133 9,763 9,763 12,270 13,219 14,238 15,266 16,291 Deferred Income Taxes 500 38 0 0 0 0 0 0 0 0 ESOP Obligation: 1,277 975 429 453 453 260 0 0 0 0 Deferred Income 192 157 140 121 121 0 0 0 0 0 Existing Debt Term Loan BBC 2,000 1,400 0 0 0 0 0 0 0 0 Senior Notes 0 0 8,000 8,000 8,000 8,000 8,000 8,000 6,857 5,714 Long Term Debt(IN) 0 0 1,451 1,451 1,451 1,413 1,373 1,330 1,284 1,238 LTD (Kelly Spring) 440 5,600 5,000 4,400 4,400 3,200 2,000 800 0 0 Other Senior Debt 7,324 6,686 3,664 3,019 3,019 186 140 114 92 70 AT&T LTD 0 0 754 1,795 1,795 2,315 3,082 3,826 4,550 5,278 LOC-BBC 950 0 6,208 734 734 7,170 4,236 14 0 0 Acquisition Financing Senior Debt 0 0 0 0 27,770 27,770 27,770 27,770 27,770 27,770 Sub Debt 0 0 0 0 0 0 0 0 0 0 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Debt 10,714 13,686 25,077 19,399 47,169 50,054 46,601 41,855 40,553 40,070 Total Liabilities 23,489 25,119 41,779 29,736 57,506 62,584 59,819 56,092 55,818 56,362 New Common Stock 0 0 0 0 37,624 37,624 37,624 37,624 37,624 37,624 Common Stock 19,334 14,735 14,808 14,808 0 0 0 0 0 0 ESOP Obligation (1,277) (975) (429) (453) (453) (260) 0 0 0 0 Retained Earnings 16,133 17,728 18,583 20,144 453 1,931 4,814 9,227 14,577 20,493 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Equity 34,190 31,488 32,962 34,499 37,624 39,295 42,438 46,851 52,201 58,117 Total Liab.& Equity $57,679 $56,607 $74,741 $64,234 $95,129 $101,879 $102,257 $102,943 $108,020 $114,479 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
MODERATE CASE - SNOW LEVERAGED BUYOUT SCENARIO
Projected CASH FLOW STATEMENT --------------------------------------------------------- (In thousands) 6 Months Year Ended December, 31, Ended _____________________________________________________ 12/31/94 1995 1996 1997 1998 1999 ________ ______ ______ _____ ______ _______ Cash Flow From Operations Net income $1,561 $1,478 $2,883 $4,413 $5,350 $5,916 Depreciation 794 1,889 1,953 1,948 1,949 1,952 Amortization 199 1,434 1,413 1,363 1,362 1,362 Increase Deferred Income/Taxes (19) (121) 0 0 0 0 ________ ______ ______ _____ ______ _______ Total Cash Flow From Operations 2,535 4,680 6,249 7,724 8,661 9,230 Changes in Working Capital Accounts Receivable 1,463 (507) (464) (546) (516) (488) Inventories 6,172 (269) 469 (696) (764) (787) Deferred Income Taxes (476) (389) (389) (389) (389) (389) Other Current Assets 976 0 0 0 0 0 Accounts Payable (4,113) 850 177 218 239 246 Accrued Expenses (2,558) 1,057 172 201 189 180 Warranty Reserve 300 600 600 600 600 600 ________ ______ ______ _____ ______ _______ Total Changes In Working Capital 1,764 1,341 565 (613) (642) (638) Cash (Used For) Generated By Investments Capital Expenditures (1,320) (11,519) (1,813) (884) (955) (955) Proceeds From Sale Of Properties 0 4,493 0 0 0 0 Investment in Oper JV 0 0 0 0 0 0 Investment in Dev JV (300) (360) (360) (360) (60) 0 Investment In Conversions 0 0 0 0 0 0 Real Estate Retained (1,324) (685) (1,015) (1,009) (1,006) (1,040) Real Estate CIP (1,335) (621) 31 11 (0) (0) Bridge Loan 0 (142) (182) (152) (121) (96) Total Investments (4,278) (8,835) (3,339) (2,394) (2,143) (2,091) ________ ______ ______ _____ ______ _______ Changes in Other Assets Investments/Other Assets 800 (140) (140) (140) (140) (140) Notes Receivable 3,622 200 200 200 200 200 Distribution Rights 170 249 279 278 276 276 Note Pay Fees Expenses (241) 26 26 26 26 26 Less: Amortization (199) (407) (386) (336) (335) (335) ________ ______ ______ _____ ______ _______ Total Other 4,152 (72) (21) 28 27 27 Net From Operations 4,172 (2,885) 3,454 4,746 5,904 6,527 Cash Flow From Financing Activities Existing Debt (5,678) 2,885 (3,454) (4,746) (1,302) (482) Senior Debt 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 Net cash used in financing activities (5,678) 2,885 (3,454) (4,746) (1,302) (482) Net Increase (Decrease) in Cash (1,506) 0 (0) 0 4,602 6,045 Cash, Beginning of Period 5,706 0 0 0 (0) 4,602 Cash Generated (Used) (1,506) 0 0 (0) 4,602 6,045 ________ ______ ______ _____ ______ _______ Cash, End of Period $4,200 $0 ($0) ($0) 4,602 $10,647 Min Cash Balance 1994 $4,200
MODERATE CASE - SNOW LEVERAGED BUYOUT SCENARIO
Projected DEBT SCHEDULE --------------------------------------------------------- (In thousands) 6 Months Year Ended December, 31, Ended ----------------------------------------------------------- 12/31/94 1995 1996 1997 1998 1999 ________ ______ ______ _____ ______ _______ Beginning Debt Balance Existing Debt Senior Notes 8,000 8,000 8,000 8,000 8,000 6,857 Long Term Debt (IN) 1,451 1,451 1,413 1,373 1,330 1,284 Long Term Debt (Kelly Springfield) 5,000 4,400 3,200 2,000 800 0 Other Senior Debt 3,664 3,019 186 140 114 92 AT&T LTD 754 1,795 2,315 3,082 3,826 4,550 LOC-BBC 6,208 734 7,170 4,236 14 0 Acquisition Financing Senior Debt 0 27,770 27,770 27,770 27,770 27,770 Sub Debt 0 0 0 0 0 0 ______ ______ ______ ______ ______ ______ Total Beginning Debt Balance 25,077 47,169 50,054 46,601 41,855 40,553 Debt (Repayment Borrowings) Existing Debt Senior Notes 0 0 0 0 (1,143) (1,143) Long Term Debt (IN) 0 (38) (40) (43) (46) (46) Long Term Debt (Kelly Springfield) (600) (1,200) (1,200) (1,200) (800) 0 Other Senior Debt (645) (2,833) (46) (26) (22) (22) AT&T LTD 1,041 520 767 744 723 729 LOC-BBC (5,474) 6,436 (2,934) (4,222) (14) 0 ______ ______ ______ ______ ______ ______ Total Existing Debt Borrowing (Repayment) (5,678) 2,885 (3,454) (4,746) (1,302) (482) Acquisition Financing Senior Debt 0 0 0 0 0 0 Sub Debt 0 0 0 0 0 0 ______ ______ ______ ______ ______ ______ Total Borrowing (Repayment) (5,678) 2,885 (3,454) (4,746) (1,302) (482) Ending Debt Balances Existing Debt Senior Notes 8,000 8,000 8,000 8,000 6,857 5,714 Long Term Debt (IN) 1,451 1,413 1,373 1,330 1,284 1,238 Long Term Debt (Kelly Springfield) 4,400 3,200 2,000 800 0 0 Other Senior Debt 3,019 186 140 114 92 70 AT&T LTD 1,795 2,315 3,082 3,826 4,550 5,278 LOC-BBC 734 7,170 4,236 14 0 0 Acquisition Financing 0 0 0 0 0 0 Senior Debt 0 27,770 27,770 27,770 27,770 27,770 Sub Debt 0 0 0 0 0 0 ______ ______ ______ ______ ______ ______ Total Ending Debt Balance 19,399 50,054 46,601 41,855 40,553 40,070
MODERATE CASE - SNOW LEVERAGED BUYOUT SCENARIO
PROJECTED INTEREST EXPENSE SCHEDULE --------------------------------------------------------- 6 Months Year Ended December, 31, Ended ------------------------------------------------------- 12/31/94 1995 1996 1997 1998 1999 --------- -------- --------- --------- ---------- -------- Interest Expense Existing Debt Rate Senior Notes 8.71% 348 697 697 697 647 547 Long Term Debt (IN) 7.75% 56 111 108 105 101 98 Long Term Debt (Kelly Springfield) 5.75% 135 219 150 81 23 0 Other Senior Debt 9.60% 160 154 16 12 10 8 AT&T LTD 10.00% 64 206 270 345 419 419 Prepayment Penalties --- 112 0 0 0 0 0 LOC-BBC 8.25% 143 326 470 175 1 0 ______ ______ ______ ______ ______ ______ Total Existing Debt Interest Expense 1,019 1,712 1,710 1,415 1,201 1,144 Acquisition Financing Senior Debt 9.0% 0 2,499 2,499 2,499 2,499 2,499 Sub Debt 13.0% 0 0 0 0 0 0 ______ ______ ______ ______ ______ ______ Total Interest Expense $1,019 $4,211 $4,210 $3,914 $3,700 $3,644 Income on Cash 3.00% 74 63 0 (0) 69 229 Income on Bridge Notes Rec 0.00% 0 0 0 0 0 0 Income on Notes Rec 9.00% 143 114 96 78 60 42 ________ ______ ______ _____ ______ _______ $217 $177 $96 $78 $129 $270
MODERATE CASE - SNOW LEVERAGED BUYOUT SCENARIO EQUITY 1--INVESTORS RETURN CASH FLOW ---------------------------------------------------------------------------------------- Exit Multiple Ownership% OUT FLOW PERIOD 1 PERIOD 2 PERIOD 3 PERIOD 4 PERIOD 5 IRR (S) 15.0% 6.0x 100% ($37,624) ---- ---- ---- ----- 75,688 19.9% 7.0x 100% ($37,624) ---- ---- ---- ----- 93,206 24.1% 8.0x 100% ($37,624) ---- ---- ---- ----- 110,725 EQUITY 2--MANAGEMENT RETURN CASH FLOW ---------------------------------------------------------------------------------------- Exit Multiple Ownership% OUT FLOW PERIOD 1 PERIOD 2 PERIOD 3 PERIOD 4 PERIOD 5 IRR ####### 6.0x NMF 0 ---- ---- ---- ----- #VALUE! ####### 7.0x NMF 0 ---- ---- ---- ----- #VALUE! ####### 8.0x NMF 0 ---- ---- ---- ----- #VALUE! SUB DEBT INVESTOR RETURN CASH FLOW ---------------------------------------------------------------------------------------- Exit Multiple Ownership% OUT FLOW PERIOD 1 PERIOD 2 PERIOD 3 PERIOD 4 PERIOD 5 IRR #NUM! 6.0x 0% 0 ----- ----- ----- ----- ------ #NUM! 7.0x 0% 0 ----- ----- ----- ----- ------ #NUM! 8.0x 0% 0 ----- ----- ----- ----- ------
PART V COMPARABLE COMPANY ANALYSIS SUMMARY ANALYSIS OF COMPARABLE COMPANIES
Cooper Tire & ($ in millions, except share data) Big O Tires Inc Brad Ragan, Inc. Rubber Co. S & M Co TBC Corp. ______________________________________________________________________________________________________________________________ PRICE & CAPITALIZATION DATA Latest Price per Share (9/8/94) $15.75 $33.50 $25.63 $1.19 $10.13 Market Value of Common Equity $51.4 $73.4 $2,142.9 $1.7 $283.6 Total Preferred Equity Total Debt 25.1 31.6 43.7 4.6 40.3 Other Long-Term Liabilities 0.6 4.5 185.3 0.3 0.3 Less: Cash & Equivalents (5.7) (0.7) (28.7) (0.1) ________________________________________________________________________ TOTAL VALUE $71.4 $108.8 $2,343.2 $6.6 $324.2 _____________________________________________________________________________________________________________________________ VALUATION DATA Total Value/LTM Revenues 0.6 x 0.4 x 1.8x 0.3 x 0.6 x 0.8x 0.5x Total Value/LTM EBITDA 9.3 14.7 10.3 NMF 9.4 11.5 10.3 Total Value/3-yr Avg. EBITDA 9.9 NMF 12.0 7.0 9.3 9.4 9.3 Total Value/LTM EBIT 11.8 17.6 13.3 14.1 10.6 13.9 13.7 Total Value/Total Capitalization 1.2 1.3 2.8 0.8 2.0 1.7 1.7 Total Value/Total Assets 1.0 0.9 2.4 0.7 1.7 1.4 1.3 Price/LTM EPS 19.8 x 17.9 x 20.0 x 26.1 x 14.7 x 19.7x 19.0x Price/Projected Est. 1 EPS 18.5 NA 17.8 NA 12.7 15.2 15.2 Price/Projected Est. 2 EPS NA NA 15.3 NA 11.1 13.2 13.2 Equity Value/LTM Cash Flow 9.9 13.6 12.2 3.1 12.1 10.2 12.1 Equity Value/Book Value 1.7 1.5 3.4 0.6 2.4 2.0 1.9 _____________________________________________________________________________________________________________________________ OPERATING DATA FOR LTM ENDING Jun-1994 Jun-1994 Jun-1994 Jun-1994 Jun-1994 Total Revenues $121.6 $243.7 $1,280.3 $19.0 $555.3 EBIT 6.1 6.2 176.1 0.5 30.5 EBITDA 7.7 7.4 226.6 0.8 34.6 Net Income 2.7 4.2 107.0 0.1 19.5 Cash Flow 5.0 5.1 168.5 0.5 23.5 EBIT Margin 5.0% 2.5% 13.8% 2.5% 5.5% 6.1% 4.0% EBITDA Margin 6.3 3.0 17.7 4.3 6.2 7.8 5.3 Return on Avg. Net Capitalization 11.7 7.6 23.2 6.0 18.3 13.8 12.9% Net Income Margin 2.2 1.7 8.4 0.3 3.5 3.5 2.6 Return on Avg. Common Equity 8.5 9.3 19.3 2.2 17.1 12.0 13.2 Cash Flow/Total Assets 6.8 4.0 17.6 5.4 12.4 9.9 8.9
Cooper Tire & ($ in millions, except share data) Big O Tires Inc Brad Ragan, Inc. Rubber Co. S & M Co TBC Corp. ______________________________________________________________________________________________________________________________ BALANCE SHEET DATA Total Assets $74.7 $125.8 $959.5 $9.9 $189.7 Total Capitalization 58.6 83.0 848.5 7.9 161.0 Common Equity 33.0 46.9 595.4 3.0 120.4 Debt/Total Capitalization 42.8% 38.1% 5.2% 58.6% 25.0% Shares Outstanding 3.3 2.2 83.6 1.4 28.0 _____________________________________________________________________________________________________________________________ PERFORMANCE VARIABLES 3-YEAR GROWTH RATES Total Revenues 3.9% 8.1% 9.2% 0.8% 6.7% EBITDA 2.1 NMF 15.0 (9.0) 11.9 Net Income 13.4 NMF 13.4 (34.0) 10.0 Cash Flow (1.8) NMF 16.6 (6.4) 15.2 Total Assets (0.4) 3.9 15.2 0.4 11.0 3-YEAR AVERAGES EBITDA Margin 6.0% 1.2% 17.3% 5.0% 6.4% Net Income Margin 2.0 (0.1) 8.6 0.8 3.7
SUMMARY ANALYSIS OF COMPARABLE COMPANIES
Discount Auto Hi-Lo O Reilly ($ in millions, except share data) Big O Tires Inc Autozone Inc PTS Inc Automotive Inc Automotive Inc ____________________________________________________________________________________________________________________________________ PRICE & CAPITALIZATION DATA Latest Price per Share (9/8/94) $15.75 $25.00 $21.75 $10.88 $24.25 Market Value of Common Equity $51.4 $3,625.3 $302.4 $116.4 $210.0 Total Preferred Equity Total Debt 25.1 4.3 66.5 33.7 1.0 Other Long-Term Liabilities 0.6 10.6 4.1 0.6 Less: Cash & Equivalents (5.7) (73.6) (8.3) (1.0) (7.2) TOTAL VALUE $71.4 $3,566.6 $360.6 $153.1 $204.4 _________________________________________________________________________________________ VALUATION DATA MEAN MEDIAN Total Value/LTM Revenues 0.6 x 2.5 x 1.8 x 0.7 x 1.3 x 1.6x 1.6x Total Value/LTM EBITDA 9.3 17.7 12.1 7.8 12.2 12.5 12.2 Total Value/3-yr Avg. EBITDA 9.9 NMF 17.3 7.8 16.0 13.7 16.0 Total Value/LTM EBIT 11.8 20.7 14.5 10.8 14.6 15.2 14.6 Total Value/Total Capitalization 1.2 7.2 2.3 1.0 3.1 3.4 2.7 Total Value/Total Assets 1.0 4.2 2.0 0.9 2.5 2.4 2.3 Price/LTM EPS 19.8 x 19.2 x 22.2 x 14.5 x 22.9 x 19.7x 20.7x Price/Projected Est. 1 EPS 18.5 30.9 19.2 12.4 20.2 20.7 19.7 Price/Projected Est. 2 EPS NA 25.1 15.4 10.6 16.7 17.0 16.1 Equity Value/LTM Cash Flow 9.9 25.9 18.0 9.3 19.4 18.1 18.7 Equity Value/Book Value 1.7 6.9 3.2 1.2 3.4 3.7 3.3 ________________________________________________________________________________________________________ OPERATING DATA FOR LTM ENDING Jun-1994 May-1994 Feb-1994 Jun-1994 Jun-1994 Total Revenues $121.6 $1,423.4 $198.2 $221.7 $153.2 EBIT 6.1 172.4 24.8 14.1 14.0 EBITDA 7.7 201.2 29.7 19.6 16.8 Net Income 2.7 105.1 11.9 7.9 9.1 Cash Flow 5.0 127.2 16.7 13.4 11.3 EBIT Margin 5.0% 12.1% 12.5% 6.4% 9.1% 10.0% 10.6% EBITDA Margin 6.3 14.1 15.0 8.9 10.9 12.2 12.5 Return on Avg. NEt Capitalization 11.7 48.8 19.4 10.8 29.3 27.1 24.3 Net Income Margin 2.2 7.4 6.0 3.6 6.0 5.7 6.0 Return on Avg. Common Equity 8.5 25.1 13.8 7.7 15.5 15.5 14.6 Cash Flow/Total Assets 6.8 15.0 9.2 7.8 14.0 11.5 11.6
Discount Auto Hi-Lo O Reilly ($ in millions, except share data) Big O Tires Inc Autozone Inc PTS Inc Automotive Inc Automotive Inc ____________________________________________________________________________________________________________________________________ BALANCE SHEET DATA Total Assets $74.7 $845.9 $181.0 $172.9 $80.9 Total Capitalization 58.6 496.3 159.9 148.4 65.7 Common Equity 33.0 478.5 93.4 106.5 64.1 Debt/Total Capitalization 42.8% 0.9% 41.6% 22.7% 1.6% Shares Outstanding 3.3 145.0 13.9 10.7 8.7 PERFORMANCE VARIABLES 3-YEAR GROWTH RATES Total Revenues 3.9% 22.0% 27.5% 14.8% 20.2% EBITDA 2.1 34.7 29.2 (6.3) 19.3 Net Income 13.4 40.3 46.2 (1.4) 22.9 Cash Flow (1.8) 42.7 36.3 (1.5) 22.6 Total Assets (0.4) 32.2 25.8 12.3 21.5 3-YEAR AVERAGES EBITDA Margin 6.0% 12.0% 14.6% 11.0% 11.2% Net Income Margin 2.0 6.3 5.8 4.1 5.8
PART VI WEIGHTED AVERAGE COST OF CAPITAL ANALYSIS PROJECT SNOW CALCULATION OF WEIGHTED AVERAGE COST OF CAPITAL COST OF EQUITY k(e) CAPITAL ASSET PRICING MODEL (CAPM): k(e)=R(f) + B x [R(m)-R(f)] k(e) = Cost of Equity R(f) = Risk Free Rate Yield on Five Year U.S. Treasuries as of September 8, 1994 [R(m) - R(f) Equity Risk Premium Arithmetic mean of common stock total returns minus long-term government bond total returns for the period 1926-1993 as reported in Obbotson Associates' Stocks, Bonds, Bills and Inflation 1994 Yearbook B = Beta Level of Systematic Risk Associated with the Company's Stock LEVERING/UNLEVERING BETA: B(1) = B(u) x (1 + D/(D+E)) B(u) = B(1)/(1 + (D/(D+E)) B(1) = Levered Beta B(u) = Unlevered Beta D/E = Market Debt/Equity Ratio WEIGHTED AVERAGE COST OF CAPITAL: WACC = [D/TCX[k(d)x(1-t)] + [E/TCxk(e)] k(e) = Cost of Equity k(d) = Pre-Tax Cost of Debt D/TC = Debt/(Debt + Equity) E/TC = Equity/(Debt + Equity) t = Marginal Tax Rate ASSUMPTIONS: LOW Risk Free Rate(1) 6.90% R(m) - R(f)(2) 7.60% Pre-Tax Cost of Debt 8.50% Marginal Tax Rate 40.00% Debt/(Debt+Eq. MV) 42.80% BETA CALCULATIONS: LOW Unlevered Beta 0.82 Levered Beta(1) 1.16 COST OF EQUITY: LOW Cost of Equity/k(e) 15.75% BETA CALCULATION: After-Tax Cost of Debt 5.10% Equity/(Debt + Equity) 57.20% Debt/(Debt + Equity) 42.80% WACC 11.19% (1) Source: Bloomberg (2) Source: Ibbotson Associates PROJECT SNOW BETA ANALYSIS
DEBT/ REPORTED BETAS DEBT + MKT. UNLEVERED ______________ COMPANY BLOOMBERG VALUE LINE AVERAGE VALUE OF EQUITY BETA - ------- --------- ---------- ------- --------------- ----- Brad Ragan Inc. -- -- 0.0% -- Cooper Tire & Rubber 1.11 -- 1.11 5.2% 1.06 S & M Company -- -- 0.0% -- TBC Corp. 1.06 -- 1.06 25.0% 0.85 Autozone Inc. 1.30 -- 1.30 0.9% 1.29 Discount Auto Parts Inc. 1.30 -- -- 41.6% 0.92 Hi-Lo Automotive 1.05 -- 1.05 22.7% 0.86 O'Reilly Automotive Inc. -- -- 0.0% -- Mean 1.16 -- 1.16 0.99 High 1.30 -- 1.30 1.29 Low 1.05 -- 1.05 0.85 Median 1.11 -- 1.11 0.92
EX-11 9 EXHIBIT (C)(1) (99.2) Exhibit B to Schedule 13D Dated November 9, 1995. DRAFT OF NOVEMBER 7, 1995 STOCK PURCHASE AGREEMENT ______________, 1995 TABLE OF CONTENTS 1. PURCHASE AND SALE OF BALBOA SHARES. 2 1.1 Agreement to Purchase and Sell 2 1.2 Closing 2 1.3 Purchase Price 2 1.4 Reimbursement For Expenses 3 2. REPRESENTATIONS AND WARRANTIES OF SELLER 3 2.1 Organization/Good Standing 3 2.2 Authority 3 2.3 Binding Obligation of Seller 3 2.4 Title to the Balboa Shares 3 2.5 Expense Reimbursement Schedule 4 2.7 Compliance 4 2.8 Subsidiaries 4 2.9 Brokers and Finders 4 2.10 Proxy Statement/Schedule 13(D) 4 2.11 Permits 5 2.12 Litigation 5 2.13 Accuracy of Information 5 2.14 Investment Intent 5 2.15 Reliance Upon Seller's Representations6 2.16 Receipt of Information 6 2.17 Restricted Securities 6 2.18 Investment Experience 6 2.19 Accredited Investor 7 2.20 Legend on Note 8 3. REPRESENTATIONS AND WARRANTIES OF PURCHASER 8 3.1 Organization/Good Standing 8 3.2 Authority 8 3.3 Binding Obligation of Purchaser 8 3.4 Compliance 9 3.5 Subsidiaries 9 3.6 Brokers and Finders 9 3.7 Proxy Statement/Schedule 13(D) 9 3.8 Permits 10 3.9 Litigation 10 3.10 Accuracy of Information 10 4. COVENANTS OF SELLER 10 4.1 Negative Covenants 10 4.2 Compliance, Consents and Approvals 11 4.3 Negotiations 11 5. COVENANTS OF PURCHASER 11 5.1 Negative Covenants 11 5.2 Compliance, Consents and Approvals 11 6. CONFIDENTIALITY 12 7. CONDITIONS OF CLOSE WITH RESPECT TO SELLER 12 7.1 Representations, Warranties and Covenants of Purchaser 12 7.2 Obligations and Conditions of Purchaser 12 7.3 Consents and Approvals/Qualifications 12 7.4 No Violation of Orders, Etc. 12 7.5 Purchase Price 13 7.6 Certificate of Good Standing 13 8. CONDITIONS OF CLOSE WITH RESPECT TO PURCHASER 13 8.1 Representations, Warranties and Covenants of Seller 13 8.2 Obligations and Conditions of Seller 13 8.3 Consents and Approvals/Qualifications 13 8.4 Proceedings and Documents 13 8.5 No Violation of Orders, Etc. 13 8.6 Consummation of Plan of Merger 14 8.7 Elements of Financing 14 8.8 Dealer Participation 14 8.9 Approval of Big O ESOP 14 8.10 Certificate of Good Standing 14 8.11 Approval by Board of Directors of Company 14 8.12 Shareholder Approval 15 9. INDEMNIFICATION 15 9.1 Indemnification By Seller 15 9.2 Indemnification By Purchaser 15 9.3 Notice of Asserted Liability 15 9.4 Survival 16 10. MISCELLANEOUS PROVISIONS 16 10.1 Survival of Representations, Covenants and Warranties 16 10.2 Successors and Assigns 16 10.3 Governing Law 16 10.4 Counterparts 16 10.5 Expenses 16 10.6 Notices 16 10.7 Entire Agreement 17 10.8 Waivers, Amendments and Remedies 17 10.9 Severability 17 10.10 Headings/Recitals/Exhibits 17 10.11 Knowledge 17 10.12 Necessary Action 18 10.13 Time 18 10.14 Attorneys' Fees 18 10.15 California Corporate Securities Laws18 STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT ("Agreement") is made as of __________, 1995, between BALBOA INVESTMENT GROUP, L.P., a California limited - 2 - partnership ("Seller"), KENNETH W. PAVIA, SR., its general partner ("Balboa General Partner") and Big O Tire Dealers, L.P., a California limited partnership to be formed ("Purchaser"). RECITALS A. Seller owns and holds three hundred nine thousand five hundred (309,500) shares of common stock (the "Balboa Shares") of the Big O Tires, Inc., a Nevada corporation ("Company"), par value ten cents ($.10) per share, which Balboa Shares represent approximately nine and two tenths percent (9.2%) of all the issued and outstanding shares of common stock of Company. B. Purchaser has elected to participate in the possible acquisition of Company by and through an entity whose principals may (subject to certain conditions precedent, as shall hereinafter be set forth) be comprised of certain members of the Company's current senior management ("Big O Management"), certain participants in the Company's employee stock ownership plan ("Big O ESOP"), and Purchaser (collectively, the "Holding Company"). Purchaser is required to make an equity contribution to the Holding Company in exchange for the issuance of stock of the Holding Company. In order to make such equity contribution Purchaser is intending to borrow funds from various sources ("Equity Financing"), including acquiring shares of Company Stock by way of giving a secured promissory note to certain existing shareholders of the Company and rolling over such shares into the Holding Company. In connection with the foregoing, Purchaser desires, upon the occurrence, fulfillment and satisfaction of certain conditions precedent as shall hereinafter be set forth, to purchase and acquire the Balboa Shares. The Holding Company has entered into an Agreement and Plan of Merger with the Company, a copy of which is attached hereto as EXHIBIT A (the "Merger Agreement"). C. Each limited partner of Purchaser that owns one or more duly franchised Big O Tire Retail Stores (individually, a "Dealer," collectively, "Dealers") is required to execute a purchase commitment agreement with Company whereby each such Dealer agrees to purchase a minimum number of tire units from Company for a six and one quarter (6.25) year period commencing as of the date of the consummation of the Merger pursuant to the Merger - 3 - Agreement (the "Purchase Commitment"). In connection therewith, during the term of the Purchase Commitment, each such Dealer is required to make a mandatory additional capital contribution to purchase equal to One Dollar ($1.00) for each tire unit purchased from Company (the "Tire Contribution"). D. Subject to the terms an conditions as shall hereinafter be set forth, Seller is willing to transfer and convey the Balboa Shares to Purchaser. NOW, THEREFORE, the parties hereto hereby agree as follows: AGREEMENT 1. PURCHASE AND SALE OF BALBOA SHARES. 1.1 Agreement to Purchase and Sell. On the "Closing Date" (as defined in SECTION 1.2 below), and upon the terms and subject to each and every condition precedent set forth in this Agreement, Seller shall sell, assign, transfer, convey and deliver the Balboa Shares to Purchaser or its designee and Purchaser shall purchase, acquire and accept the Balboa Shares from Seller. 1.2 Closing. Seller and Purchaser intend that the "Closing Date" of the purchase and sale of the Balboa Shares shall take place at the Offices of Gibson, Dunn & Crutcher, 1801 California Street, Suite 4200, Denver, Colorado, 80202, on the date upon which the plan of merger pursuant to the terms of the Merger Agreement shall have been fully and completely consummated or at such other time, place, and date as the parties hereto shall agree in writing ("Closing Date"). Provided further, it is expressly understood and agreed by Seller and Purchaser that the Closing Date shall not occur unless and until (1) the plan of merger pursuant to the Merger Agreement is fully and completely consummated and (2) each and every condition precedent set forth in SECTIONS 7 and 8 of this Agreement shall have been satisfied and fulfilled or waived by the party who holds such waiver right. On the Closing Date, Seller shall transfer and convey to the Purchaser the Balboa Shares. In the event the Closing Date does not occur on or before February 28, 1996, and the parties have not otherwise agreed in writing to extend the Closing Date, this Agreement shall be null and void and have no further force and effect, except that the provisions of SECTIONS 6, 9, and 10 shall - 4 - survive such termination. Provided that, to the extent any provision of this Agreement is required to survive for purposes of the indemnification obligations of each party to the other pursuant to the provisions of SECTION 9 hereof, such provisions shall survive such termination. Provided further, such termination shall not relieve any party of its liability for any misrepresentation, default or breach of this Agreement. 1.3 Purchase Price. The Purchase Price for the Balboa Shares ("Purchase Price") shall be the sum of ____________________________________________ Dollars ($_________) (which represents ________________________________________ (_______) shares at _______ Dollars ($__) per share) which shall be paid by Purchaser to Seller at the Closing Date as follows: 1.3.1 Purchaser shall pay to Seller in cash or equivalent, the sum of _________________________________________________ Dollars ($_________) (the "Cash Portion") (which represents ________________________________________ (_______) shares times ___________ Dollars ($_____) per share) which Cash Portion shall, at the election of Purchaser be paid (1) as part of the "Merger Consideration" (as such term is defined in Section 1.5(a) of the Merger Agreement) or (2) by Purchaser simultaneously with the consummation of the plan of merger pursuant to the Merger Agreement (as specified in Section 1.3 of the Merger Agreement). 1.3.2 The balance of the Purchase Price in the sum of __________________ _____________________ Dollars ($_______) along with the "Reimbursement" (as defined in SECTION 1.4 below) shall be paid pursuant to the terms of a secured promissory note in the form attached hereto as EXHIBIT B (the "Note"). The Note shall be fully amortized over a six (6)-year period, commencing immediately following the Closing Date. Interest on the unpaid principal shall bear interest at the rate of ______ percent (__%) per annum, and the Note shall be payable in seventy-two (72) equal monthly installments over the six (6)-year amortized term commencing on the first day of the month following the Closing Date and on the first day of each and every month thereafter during the amortized period. The Note shall be secured by Purchaser - 5 - granting Seller a security interest in that portion of Purchaser's shareholding in the Holding Company in the same ratio as the total sum of the note bears to the total of Purchaser's Equity Financing; and by Purchaser assigning as collateral that portion of the aggregate of the Dealers Purchase Commitments in the same ratio as the total sum of the note bears to the total of Purchaser's Equity Financing pursuant to the terms of the Security Pledge Agreement in the form attached hereto as EXHIBIT C. Purchaser will take all necessary steps to perfect the security interest as granted and assign as collateral said portion of the Purchasing Commitments. 1.4 Reimbursement For Expenses. As separate and independent consideration for expenses incurred by Seller in putting together proposals for certain shareholder actions and resolutions to the shareholders of the Company in 1993 and 1994 by way of proxy solicitations and related actions, which included proposals that the Company explore all alternatives to enhance the value of the Company, Purchaser hereby agrees to reimburse Seller for such expenses incurred by it in accordance with the schedule ("Reimbursement Schedule") attached hereto as EXHIBIT D up to a maximum reimbursement in the sum of _____________________________ Dollars ($_______) (the "Reimbursement"); provided that such obligation to reimburse Seller for such expenses are subject to and contingent upon and shall not be payable unless and until the consummation of the transaction contemplated by this Agreement and the consummation of the plan of merger contemplated by the Merger Agreement. The payment for such expenses shall be added to the Note and payable in accordance with the terms thereof. 2. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents and warrants to Purchaser that each and every statement contained in this SECTION 2 is correct an complete as of the date of this Agreement and will be correct and complete as of the Closing Date. 2.1 Organization/Good Standing. Seller is a California limited partnership, duly organized, validly existing and in good standing under the laws of the State of California, has all requisite partnership power to own and operate its properties and assets and to carry on its business as it is now - 6 - being conducted. Seller has the full right, power and authority and all partnership and related action has been taken as shall be necessary and required to consummate the transactions contemplated hereby. 2.2 Authority. Kenneth Pavia, Sr., as the general partner of Seller, has the full power, authority and capacity to sign and deliver this Agreement and to take all necessary action on behalf of Seller as shall be necessary and required to consummate the transactions contemplated hereby. 2.3 Binding Obligation of Seller. This Agreement constitutes the legally binding obligation of Seller in accordance with the terms and provisions hereof, subject as to its enforceability to limitations imposed by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or effecting creditors' rights, generally and to the general principals of equity. 2.4 Title to the Balboa Shares. Seller owns and holds the Balboa Shares beneficially and of record, free and clear of any liens, claims, encumbrances or restrictions of any kind or nature whatsoever and, upon delivery of and payment of the Purchase Price for the Balboa Shares as herein provided, Seller shall convey to Purchaser valid title thereto, free and clear of any liens, claims, security interests, encumbrances or restrictions of any nature or description. 2.5 Expense Reimbursement Schedule. The Expense Reimbursement Schedule accurately reflects the expenses described in Section 1.4 hereof so incurred by Seller. 2.6 No Preemptive or Other Rights. No person has any right of first refusal, any preemptive or other rights and there are no rights or restrictions under the terms and provision of Seller's partnership agreement or otherwise which would prohibit, preclude or otherwise affect the sale and transfer of the Balboa Shares to Purchase as contemplated by the terms and provisions of this Agreement. 2.7 COMPLIANCE. Neither the execution and delivery of this Agreement by Seller nor the consummation of the transactions contemplated hereby, nor compliance by Seller with respect to any of the provisions hereof will: - 7 - (1) violate, conflict with or result in the breach of any provision of, or constitute a default (or an event which with notice or lapse of time are both would constitute a default) under, or result in the termination of, or accelerate the performance by, or result in a right of termination or acceleration under, or result in a creation of any liens, security interest, charge or encumbrance upon any of the properties or assets of Seller, under any of the terms or provisions of (i) the partnership agreement of Seller or (ii) any material note, bond, mortgage, indenture, deed of trust, license, lease agreement, executory contract or arrangement or other instrument or obligation to which Seller is a party or to which it or any of its properties or assets may be otherwise subject or bound; or (2) subject to Seller's obligations to take all necessary steps to comply with the statutes or regulations referred to in the last sentence of this paragraph, violate any judgment, ruling, writ, injunction, decree, statute, rule or regulation applicable to Seller, or any of its respective properties or assets. Other than in connection with Seller's obligation to comply with the provisions of the Revised Uniform Limited Partnership Act of the State of California (the "RULPA"), the Securities Exchange Act of 1934, as amended, or any similar successor, federal statute and the rules and regulations thereunder, all as the same, shall be in effect from time-to-time ("Exchange Act"), the Securities Act of 1933, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time-to-time ("Securities Act"), the "take-over" or "blue sky" laws of the various states, the Hart-Scott-Rodino Antitrust Improvement Acts of 1976 and the rules and regulations thereunder ("Hart-Scott-Rodino Act") and any required foreign regulatory approvals, no notice to, filing with, or authorization, consent or approval of any domestic or foreign public body or authority is necessary for the consummation by Seller of the transactions contemplated by this Agreement. 2.8 Subsidiaries. Seller does not own or control, directly or indirectly, any interest in any other corporation, association, or other business entity. Seller is not a participant in any joint venture, partnership, or similar arrangement. 2.9 Brokers and Finders. Seller has not engaged any broker, finder or - 8 - investment banker in connection with this Agreement or the transactions contemplated hereby. 2.10 Proxy Statement/Schedule 13(D). None of the information supplied or to be supplied by Seller or any of its agents, representatives or affiliates for inclusion, or included or incorporated by reference in (a) any proxy statements filed by Company with the Securities and Exchange Commission (the "Commission") or any amendment or supplement thereto, (b) any Schedule 13(D) or any amendment or supplement thereto filed by Seller, Purchaser, the Holding Company or Company, or any of its agents, representatives or affiliates, or (c) any other documents to be filed with the Commission, or any other regulatory agency in connection with the transactions contemplated hereby by Seller, Purchaser, the Holding Company or Company, or any of its agents, representatives or affiliates, will, insofar as such Schedule 13(D) and documents relate to Seller, its affiliates, agents and representatives, at the respective time such Schedule 13(D) and documents are filed, be false or misleading with respect to any material fact, or omit to state any material fact necessary in order to make the statements therein, at the time and in light of the circumstances under which they were made, not false or misleading. The Schedule 13(D) and any related documents required in connection with the transactions contemplated hereunder, will comply as to form and all material respects with the requirements of law insofar as such Schedule 13(D) and documents relate to Seller, its affiliates, agents and representatives. 2.11 Permits. Seller has all franchises, permits, licenses and any similar authority necessary for the conduct of its business as now being conducted by it, the lack of which could materially and adversely effect Seller's ability to perform its obligations under this Agreement; and believes it can obtain, without undue burden or expense, any similar authority. Seller is not in default under in any material respect under any such franchises, permits, licenses or similar authority. 2.12 Litigation. There is no suit, action, proceeding or investigation pending or currently threatened against Seller or any of its affiliates, agents or representatives that questions the validity of this Agreement or any - 9 - documents, instruments or ancillary agreements in connection therewith, or the right of Seller to sell and convey the Balboa Shares and enter into such agreements or to consummate the transactions contemplated hereby or thereby, or that might result, either individually or in the aggregate in any material adverse change in the assets, business or property, prospects or financial condition of Seller, or in any material change in the current equity ownership of Seller. Seller is not a party, or to the best of its knowledge, named in any order, writ, injunction, judgment, or decree of any court, government agency or instrumentality. There is no action, suit or proceeding by Seller currently pending or that Seller currently intends to initiate. 2.13 Accuracy of Information. Except to the extent of any subsequent correction or supplement with respect thereto prior to the date hereof, the written statements, certificates, schedules, lists or any other written information furnished by or on behalf of Seller to Purchaser in connection with this Agreement, when considered as a whole, do not contain and will not contain any untrue statement of any material fact; and do not omit or will not omit to state a material fact necessary in order to make the statements herein or therein in light of the circumstances in which they were made, not misleading. Each document delivered by Seller to Purchaser is a true and complete copy of such document, unmodified except by another document delivered to Purchaser. Notwithstanding the foregoing, a mere inclusion on any particular items of information or statement of fact and any such written information furnished by or on behalf of Seller in connection with this Agreement, even if coupled with a representation or warranty to the effect that such written information is inclusive of all material information or statements of fact with respect to the subject matter thereof, shall not, without more, give rise to any implication or constitute any admission that such particular items or statements are material. Provided, however, Seller agrees to disclose to Purchaser any such material facts and information with respect to the foregoing within its knowledge. 2.14 Investment Intent. With respect to the Note being given by Purchaser to Seller as partial consideration for the Purchase Price, Seller hereby acknowledges, confirms and represents that in accepting - 10 - the Note as partial consideration for payment of the Purchase Price and for payment of the Reimbursement, the Note is being acquired for investment for Seller's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof and that Seller has no present intention of selling, assigning, transferring, conveying or granting any participation in or otherwise distributing the Note. Seller further acknowledges and confirms that it does not have any contract, undertaking, agreement or other arrangement with any person to sell, transfer, assign or grant participation to any such person or to any third party with respect to the Note. 2.15 Reliance Upon Seller's Representations. Seller acknowledges and understands that the Note is not being registered under the Securities Act on the ground that the sale and transfer provided for in this Agreement with respect to the Note and the issuance of the Note hereunder is exempt from registration under the Securities Act pursuant to Section 4(2) thereof and that the Purchaser's reliance on such exemption is predicated on Seller's representations as set forth herein. 2.16 Receipt of Information. Seller believes that it has received all of the information it considers necessary or appropriate for deciding whether to accept the Note as partial consideration for the Purchase Price. Seller further represents that it has had an opportunity to ask questions, receive answers and information from the Purchaser regarding the business, assets and properties, prospects and financial condition of Purchaser and to obtain additional information (to the extent Purchaser possessed such information or could acquire it without unreasonable effort or expense) necessary to verify the accuracy of any information furnished to Seller or to which Seller had access. The foregoing, however, does not limit or modify the representations and warranties of Purchaser provided in SECTION 3 of this Agreement, nor the right of Seller to rely upon such representations and warranties. 2.17 Restricted Securities. Seller acknowledges and understands that in accepting the Note as partial consideration for the Purchase Price, the Note is characterized as "Restricted Securities" under applicable Federal securities laws, inasmuch as it is being acquired from Purchaser in a - 11 - transaction not involving a public offering and that under such laws and applicable regulations, such securities may be sold without registration under the Securities Act, only in limited circumstances. In this connection, Seller represents that it is familiar with Securities Exchange Commission Rule 144, as promulgated by the Commission under the Securities Act as such Rule 144 may be amended from time to time or any similar successor rule that may be promulgated by the Commission, and understands the resale limitations imposed thereby and by the Securities Act. 2.18 Investment Experience. Seller represents that it is experienced in evaluating and investing in securities of companies and acknowledges that it is able to fend for itself, can bear the economic risk of its investment and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the acceptance of the Note as partial consideration for the Purchase Price. Seller further represents that it has not been organized for the purpose of entering into this transaction or otherwise agreeing to the terms of the purchase and sale of the Balboa Shares pursuant to the terms, conditions and provisions of this Agreement, without limitation, accepting the Note as partial consideration for the Purchase Price. 2.19 Accredited Investor. 2.19.1 The term "Accredited Investor" as defined in Rule 501(a) of Regulation D of the Securities Act means: (a) a person or entity who is a general partner, director or executive officer and/or executive officer, director or general partner of the general partner of Purchaser; (b) any bank as defined in Section 3(a)(2) of the Securities Act or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity, any broker or dealer register pursuant to Section 15 of the Exchange Act; any insurance company as defined in Section 2(13) of the Securities Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of - 12 - that Act; any Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958, any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of Five Million Dollars ($5,000,000); any employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company or registered investment advisor, or if the employee benefit plan has total assets in excess of Five Million Dollars ($5,000,000), or if a self-directed plan, with investment decisions made solely by persons that are Accredited Investors; (c) any private business development company as defined in Section 202(a)(22) of the Investment Advisors Act of 1940; (d) any organizations described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust or partnership not formed for the specific purposes of acquiring the securities offered, with total assets in excess of Five Million Dollars ($5,000,000); (e) any natural person who individual net worth, or joint net worth with that persons spouse at the time of its purchase exceeds One Million Dollars ($1,000,000); (f) any natural person who had an individual income in excess of Two Hundred Thousand Dollars ($200,000) in each of the two most recent years or joint income with that person's spouse in excess of Three Hundred Thousand Dollars ($300,000) in each of those years and has a reasonable expectation of reaching the same income level in the current year; (g) any trust with total assets in excess of Five Million Dollars ($5,000,000), not formed for the specific purposes of acquiring the securities offered, whose purchase is directed by a person who has such knowledge and experience in such financial and business matters, that he/she is capable of evaluating the merits and risks of the prospective - 13 - investment; or (h) any entity in which all the equity owners are Accredited Investors. As used in SECTION 2.18.1, the term "net worth" means the excess of total assets over total liabilities. For the purpose of determining the person's net worth, the principal residence owned by an individual should be valued at the fair market value, including the costs of improvements, net of current encumbrances. As used in this SECTION 2.18.1, "income" means actual economic income, which may differ from adjusted gross income for income tax purposes. Accordingly, Seller should consider whether it should add any or all of the following items to its adjusted gross income for income tax purposes in order to reflect more accurately its actual economic income: any amounts attributable to tax exempt income received, losses claimed as a limited partner in any limited partnership, deductions claimed for depletion, contributions to an IRA or Keogh Retirement Plan and alimony payments. 2.19.2 Seller further represents to Purchaser that it is an Accredited Investor. 2.20 Legend on Note. It is acknowledged, understood and agreed that the Note shall bear the following legends. (a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS PURCHASER HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, SATISFACTORY TO PURCHASER AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED, OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT"; and (b) Any legend required by the laws of the State of California or any other applicable state laws. 3. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby represents and warrants to Seller that each and every statement contained in this SECTION 3 is correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date. 3.1 Organization/Good Standing. Purchaser is a California limited - 14 - partnership, duly organized, validly existing and in good standing under the laws of the State of California, has all requisite partnership power to own and operate its properties and assets and to carry on its business as it is now being conducted. Purchaser has the full power and authority and all partnership and related action has been taken as shall be necessary and required to consummate the transaction contemplated hereby. 3.2 Authority. Big O Tire Dealers of America, a California nonprofit mutual benefit corporation, as the general partner of Purchaser, has the full power, authority and capacity to sign and deliver this Agreement and to otherwise take all action on behalf of Purchaser as necessary and required to consummate the transactions contemplated hereby. 3.3 Binding Obligation of Purchaser. This Agreement constitutes the legally binding obligation of Purchaser in accordance with the terms and provisions hereof, subject as to its enforceability to limitations imposed by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or effecting creditors' rights, generally and to the general principals of equity. 3.4 Compliance. Neither the execution and delivery of this Agreement by Purchaser nor the consummation of the transactions contemplated hereby, nor compliance by Purchaser with respect to any of the provisions hereof will: (1) violate, conflict with or result in the breach of any provision of, or constitute a default (or an event which with notice or lapse of time are both would constitute a default) under, or result in the termination of, or accelerate the performance by, or result in a right of termination or acceleration under, or result in a creation of any liens, security interest, charge or encumbrance upon any of the properties or assets of Purchaser, under any of the terms or provisions of (i) the partnership agreement of Purchaser or (ii) any material note, bond, mortgage, indenture, deed of trust, license, lease agreement, executory contract or arrangement or other instrument or obligation to which Purchaser is a party or to which it or any of its properties or assets may be otherwise subject or bound; or (2) subject to Purchaser's obligation to take all necessary steps to comply with the statutes or regulations referred to - 15 - in the last sentence of this paragraph, violate any judgment, ruling, writ, injunction, decree, statute, rule or regulation applicable to Purchaser, or any of its respective properties or assets. Other than in connection with Purchaser's obligation to comply with the provisions of the RULPA, the Exchange Act, the Securities Act, the "take-over" or "blue sky" laws of the various states, the Hart-Scott-Rodino Act and any required foreign regulatory approvals, no notice to, filing with, or authorization, consent or approval of any domestic or foreign public body or authority is necessary for the consummation by Purchaser of the transactions contemplated by this Agreement. 3.5 Subsidiaries. Purchaser does not own or control, directly or indirectly, any interest in any other corporation, association, or other business entity; except that some or all of the limited partners of Purchaser are members of the general partner of Purchaser which is a trade organization comprised of duly franchised retail Big O Tire Store Dealers and formed for the purpose of protecting and advancing their common business interests on a united basis. Purchaser is not a participant in any joint venture, partnership, or similar arrangement. 3.6 Brokers and Finders. Purchaser has not engaged any broker, finder or investment banker in connection with this Agreement or the transactions contemplated hereby, except for the engagement of KPMG Peat Marwick LLP ("KPMG") pursuant to those certain letter agreements dated October 18, and 19, 1994, and May 11, 1995. 3.7 Proxy Statement/Schedule 13(D). None of the information supplied or to be supplied by Purchaser or any of its agents, representatives or affiliates for inclusion, or included or incorporated by reference in (a) any (if required) proxy statements filed by the Company with the Commission or any amendment or supplement thereto, (b) any Schedule 13(D) or any amendment or supplement thereto by Purchaser, Seller, the Holding Company or the Company, or any of its agents, representatives or affiliates, or (c) any other documents to be filed with the Commission, or any other regulatory agency in connection with the transactions contemplated hereby by Seller, Purchaser, the Holding Company or the Company, will, insofar as such Schedule 13(D) and documents relate to - 16 - Purchaser, its affiliates agents and representatives, at the respective time such Schedule 13(D) and documents are filed, be false or misleading with respect to any material fact, or omit to state any material fact necessary in order to make the statements therein, at the time and in light of the circumstances under which they were made, not false or misleading. The Schedule 13(D) and any related documents required in connection with the transactions contemplated hereunder, will comply as to form and all material respects with the requirements of law insofar as such Schedule 13(D) and documents relate to Purchaser, its affiliates, agents and representatives. 3.8 Permits. Purchaser has all franchises, permits, licenses and any similar authority necessary for the conduct of its business as now being conducted by it, lack of which could materially and adversely effect Purchaser's ability to perform its obligations under this Agreement and believes it can, if required in order to perform its obligations hereunder, obtain, without undue burden or expense, any similar authority. Purchaser is not in default under in any material respect under any such franchises, permits, licenses or similar authority. 3.9 Litigation. There is no suit, action, proceeding or investigation pending or currently threatened against Purchaser or any of its affiliates, agents or representatives that questions the validity of this Agreement or any documents, instruments or ancillary agreements in connection therewith, or the right of Purchaser to enter into such agreements or to consummate the transactions contemplated hereby or thereby, or that might result, either individually or in the aggregate in any material adverse change in the assets, business or properties, prospects or financial condition of Purchaser, or in any material change in the current equity ownership of Purchaser. Purchaser is not a party, or to the best of its knowledge, named in any order, writ, injunction, judgment, or decree of any court, government agency or instrumentality. There is no action, suit or proceeding by Purchaser currently pending or that Purchaser currently intends to initiate. 3.10 Accuracy of Information. Except to the extent of any subsequent correction or supplement with respect thereto prior to the date hereof, the - 17 - written statements, certificates, schedules, lists or any other written information furnished by or on behalf of Purchaser to Seller in connection with this Agreement, when considered as a whole, do not contain and will not contain any untrue statement of any material fact; and do not omit or will not omit to state a material fact necessary in order to make the statements herein or therein in light of the circumstances in which they were made, not misleading. Each document delivered by Purchaser to Seller is a true and complete copy of such document, unmodified except by another document delivered to Seller. Notwithstanding the foregoing, a mere inclusion on any particular items of information or statement of fact and any such written information furnished by or on behalf of Purchaser in connection with this Agreement, even if coupled with a representation or warranty to the effect that such written information is inclusive of all material information or statements of fact with respect to the subject matter thereof, shall not, without more, give rise to any implication or constitute any admission that such particular items or statements are material. Provided, however, Purchaser agrees to disclose to Seller any such material facts and information with respect to the foregoing within its knowledge. 4. COVENANTS OF SELLER. Seller hereby covenants and agrees as follows: 4.1 Negative Covenants. During the period commencing as of the date of this Agreement and ending on the Closing Date, except as otherwise expressly provided herein, Seller shall not (1) take any action to amend or otherwise modify its partnership agreement in a manner which would cause it to be unable to perform or otherwise carry out its obligations under this Agreement; (2) issue, grant, sell or enter into any options, warrants, agreements, conversion rights, rights of first refusal, preemptive rights, or other rights to subscribe for, purchase or otherwise acquire the Balboa Shares; (3) create any material lien, charge, security interest, claim or encumbrance upon any of the Balboa Shares; (4) deed, sell, transfer, assign, license or otherwise dispose of any of the Balboa Shares; or (5) otherwise take any action which would materially effect its ability to perform its obligations under this Agreement. 4.2 Compliance, Consents and Approvals. Seller shall - 18 - (1) comply with and obtain all necessary consents, waivers, authorizations and approvals of all governmental and regulatory authorities (including, without limitation, such compliances, consents, waivers, authorizations and approvals as necessary or required under the RULPA, the Exchange Act, the Securities Act, the "take over" or "blue sky" laws of the various states and the Hart-Scott-Rodino Act) and of all other persons, firms, partnerships, or corporations required in connection with the execution, delivery and performance by Seller of each and every term, condition and provision of this Agreement; and (2) diligently assist and cooperate with Purchaser in preparing and filing all documents required to be submitted by Purchaser to any governmental or regulatory authority in connection with such transactions (which assistance and cooperation shall include, without limitation, timely furnishing to Purchaser all information concerning Seller which, in the reasonable opinion of counsel to Purchaser, is required to be included into the documents) and in obtaining any governmental and regulatory authorities, consents, waivers, authorizations or approvals which may be required to be obtained by Purchaser in connection with the transactions contemplated by this Agreement. 4.3 Negotiations. Following the execution of this Agreement by all parties hereto, Seller nor any one acting on behalf of Seller, shall, directly or indirectly, encourage, solicit, engage in discussions or negotiations with, or provide any information to any person, firm, or other entity or group (other than Purchaser or its representatives) concerning any sale, assignment or transfer of the Balboa Shares or other similar transaction involving the Balboa Shares. Seller agrees to promptly communicate to Purchaser any inquiries or communications concerning any transactions which it may receive or which it may become aware of. 5. COVENANTS OF PURCHASER. Purchaser covenants and agrees as follows: 5.1 Negative Covenants. During the period commencing as of the date of this Agreement and ending on the Closing Date, except as otherwise expressly provided herein, Purchaser shall (1) not take any action to cause it to amend or otherwise modify its partnership agreement in a manner which would cause it to - 19 - be unable to perform or otherwise carry out its obligations under this Agreement; or (2) otherwise take any action which would materially effect its ability to perform its obligations under this Agreement. 5.2 Compliance, Consents and Approvals. Purchaser shall (1) comply with and obtain all necessary consents, waivers, authorizations and approvals of all governmental and regulatory authorities (including, without limitation, such compliances, consents, waivers, authorizations and approvals as necessary or required under the RULPA, the Exchange Act, the Securities Act, the "take over" or "blue sky" laws of the various states and the Hart-Scott-Rodino Act) and of all other persons, firms, partnerships or corporations required in connection with the execution, delivery and performance by Purchaser of each and every term, condition and provision of this Agreement; and (2) diligently assist and cooperate with Seller in preparing and filing all documents required to be submitted by Seller to any governmental or regulatory authority in connection with such transactions (which assistance and cooperation shall include, without limitation, timely furnishing to Seller all information concerning Purchaser which, in the reasonable opinion of counsel to Seller, is required to be included into the documents) and in obtaining any governmental and regulatory authorities, consents, waivers, authorizations or approvals which may be required to be obtained by Seller in connection with the transactions contemplated by this Agreement. 6. CONFIDENTIALITY. Seller and Purchaser acknowledge the terms and provisions of the confidentiality letter agreement attached hereto as EXHIBIT F (the "Confidentiality Letter Agreement") entered into by and between the General Partner of Seller and the general partner of Purchaser, reaffirm same, and agree to be fully bound thereby; and further agree that the terms and provisions of this Agreement shall be included within the meaning of "Information" as defined in the Confidentiality Letter Agreement. For purposes of this Agreement, the term "Party" under the Confidentiality Letter Agreement shall be deemed to include Seller and Purchaser. In connection with the foregoing, Seller and Purchaser covenant and agree to treat and hold all Information contained in this Agreement and in an exhibit, schedule, instrument, ancillary agreement or other - 20 - document relating hereto, strictly confidential, except as expressly provided otherwise in the Confidentiality Letter Agreement; and further covenant and agree to consult and confer with each other and each of their respective counsel prior to issuing any public announcement or statement with respect to this Agreement and the Plan of Merger contemplated by the Merger Agreement and any other matter relating to this Agreement. 7. CONDITIONS OF CLOSE WITH RESPECT TO SELLER. All obligations of Seller under this Agreement are subject to fulfillment, at or prior to the Closing Date of the following conditions, part or all of which may be waived by Seller only by written notice to Purchaser on or before the Closing Date. 7.1 Representations, Warranties and Covenants of Purchaser. All representations, warranties and covenants made by Purchaser in this Agreement shall be true, correct and complete on and as of the Closing Date, the same effect as those such representations, warranties and covenants had been made on and as of the Closing Date. 7.2 Obligations and Conditions of Purchaser. Purchaser shall have performed and complied with all covenants and obligations required by it under this Agreement on or prior to the Closing Date. 7.3 Consents and Approvals/Qualifications. All compliances, consents, waivers, authorizations, permits, approvals or qualifications of any governmental authority or regulatory body of the United States or of every state (including, without limitation, such Purchaser compliances, consents, waivers, authorizations, approvals and qualifications with respect to the RULPA, the Exchange Act, the Securities Act, the "take-over" or "blue sky" laws of the various states and the Hart-Scott-Rodino Act as specified in SECTION 5.3 hereof) required in connection with the execution, delivery and performance of this Agreement, shall have been duly obtained and shall be in full force and effect on the Closing Date. 7.4 No Violation of Orders, Etc. There shall not be in effect on the Closing Date any statute, rule or regulation to create executive order, preliminary or permanent injunction or other order issued, promulgated or enacted by any federal, state or local government, or regulatory authority or - 21 - court which declares this Agreement invalid in any respect or prevents the consummation of the transactions contemplated hereby; and no action or proceeding before any federal, state or local court, or governmental or regulatory authority shall be instituted or threatened by any federal, state or local government or governmental or regulatory authority or by any other person, entity or organization which seeks to prevent or delay the consummation of the transactions contemplated by this Agreement (including without limitation, the consummation of the proposed plan of merger pursuant to the terms and provisions of the Merger Agreement) or which challenges the validity or enforceability of this Agreement or any term or provision hereof. 7.5 Purchase Price. Purchaser shall have delivered to Seller the Purchase Price and the Reimbursement and all documents and instruments in connection therewith including, without limitation, the Note and the Security Agreement. 7.6 Certificate of Good Standing. Purchaser shall have delivered to Seller certificates of partnership and tax good standing and legal existence of Purchaser as of nor more than thirty (30) days prior to the Closing Date from the Secretary of State of California. 8. CONDITIONS OF CLOSE WITH RESPECT TO PURCHASER. All obligations of Purchaser under this Agreement are subject to fulfillment, at or prior to the Closing Date of the following conditions, part or all of which may be waived by Purchaser only by written notice to Seller on or before the Closing Date. 8.1 Representations, Warranties and Covenants of Seller. All representations and warranties and covenants made by Seller in this Agreement shall be true, correct and complete on and as of the Closing Date, the same effect as those such representations, warranties and covenants had been made on and as of the Closing Date. 8.2 Obligations and Conditions of Seller. Seller shall have performed and complied with all covenants and obligations required by it under this Agreement on or prior to the Closing Date. 8.3 Consents and Approvals/Qualifications. All compliances, consents, waivers, authorizations, permits, approvals or qualifications of - 22 - any governmental authority or regulatory body of the United States or of every state (including, without limitation, such Seller compliances, consents, waivers, authorizations, approvals and qualifications with respect to the RULPA, the Exchange Act, the Securities Act, the "take-over" or "blue sky" laws of the various states and the Hart-Scott-Rodino Act as specified in SECTION 4.3 hereof) required in connection with the execution, delivery and performance of this Agreement, shall have been duly obtained and shall be in full force and effect on the Closing Date. 8.4 Proceedings and Documents. All corporate, partnership and other proceedings in connection with the transactions contemplated at the Closing (including without limitation, consummation of the proposed plan of merger pursuant to the terms of the Merger Agreement) and all documents incident thereto, shall be reasonably satisfactory in form and substance to Purchaser's counsel, which counsel shall have received all such counterpart original or certified or other copies of such documents as he/she may reasonably request or require. 8.5 No Violation of Orders, Etc. There shall not be in effect on the Closing Date any statute, rule or regulation to create executive order, preliminary or permanent injunction or other order issued, promulgated or enacted by any federal, state or local government, or regulatory authority or court which declares this Agreement invalid in any respect or prevents the consummation of the transactions contemplated hereby; and no action or proceeding before any federal, state or local court, or governmental or regulatory authority shall be instituted or threatened by any federal, state or local government or governmental or regulatory authority or by any other person, entity or organization which seeks to prevent or delay the consummation of the transactions contemplated by this Agreement (including without limitation, the consummation of the proposed plan of merger pursuant to the terms and provisions of the Merger Agreement) or which challenges the validity or enforceability of this Agreement or any term or provision hereof. 8.6 Consummation of Plan of Merger. The consummation of all transactions necessary to consummate the plan of merger pursuant - 23 - to the terms and provisions of the Merger Agreement, as amended, including, without limitation, the satisfaction of each and every condition precedent set forth in Article VI of the Merger Agreement. 8.7 Elements of Financing. The Holding Company having obtained commitments for the required elements of financing in connection with the merger transaction contemplated under the terms and provisions of the Merger Agreement on terms and conditions satisfactory to the Holding Company in its sole discretion, including by way of example the following: (i) obtaining a commitment from a lender for the senior facility in the approximate sum of Forty Million Dollars ($40,000,000); (ii) obtaining a commitment from a lender for a senior subdebt facility in the approximate sum of Ten Million Dollars ($10,000,000); (iii) Purchaser obtaining financing in the sum of Five Million Dollars ($5,000,000) and having arranged to purchase and acquire shares of common stock of Company from other existing shareholders on negotiated terms by way of promissory notes substantially similar to the Note contemplated herein and cash and other property which promissory notes and cash and other property (including the Note herein) total in the aggregate the sum of Five Million Dollars ($5,000,000) for a total of Ten Million Dollars ($10,000,000); and (iv) existing lenders, creditors and other obligees of the Company having agreed to the financial arrangements contemplated in connection with the proposed plan of merger pursuant to the terms and provisions of the Merger Agreement. 8.8 Dealer Participation. At least eighty-five percent (85%) of the Dealers shall have elected to participate in the Merger transaction contemplated under the terms and provisions of the Merger Agreement. 8.9 Approval of Big O ESOP. The Big O ESOP shall have provided its approval as required by the terms of the governing documents of the Big O ESOP and applicable law of the proposed plan of merger contemplated under the terms and provisions of the Merger Agreement and the terms, provisions and conditions by which the Holding Company shall be formed, structured, operated and governed, including, without limitation, having obtained a fairness opinion and appropriate approval by the employees of the Company participating in the Big O - 24 - ESOP; and that pursuant to the foregoing, holders of at least eighty percent (80%) of the shares of Common Stock of the Company owned and held by the Big O ESOP shall have elected to roll over their existing ESOP accounts into investments in securities of Holding Company pursuant to the terms and provisions of the plan of merger contemplated under the Merger Agreement. 8.10 Certificate of Good Standing. Seller shall have delivered to Purchaser certificates of partnership and tax good standing and legal existence of Seller as of no more than thirty (30) days prior to the Closing Date from the Secretary of State of California. 8.11 Approval by Board of Directors of Company. The Board of Directors shall have approved the Holding Company's proposed plan of merger on terms and conditions satisfactory to the Holding Company, in its sole discretion. 8.12 Shareholder Approval. The plan of merger pursuant to the terms and conditions of the Merger Agreement shall have been approved and adopted by the shareholders of the Company. 9. INDEMNIFICATION. 9.1 Indemnification By Seller. Seller agrees to and shall indemnify, protect, defend and hold harmless Purchaser from and against and in respect of any and all claims, losses, damages, costs, expenses, obligations, charges, recoveries, and deficiencies, including interest, penalties and reasonable attorneys' fees and other related expenses (collectively, the "Seller Claims") resulting from or arising out of or relating to any inaccuracy in or breach of any representation, warranty, covenant or agreement of Seller contained in this Agreement or in any schedule, certificate, exhibit, attachment or other instrument furnished or to be furnished by Seller pursuant to the terms and provisions of this Agreement. 9.2 Indemnification By Purchaser. Purchaser agrees to and shall indemnify, protect, defend and hold harmless Seller from and against and in respect of any and all claims, losses, damages, costs, expenses, obligations, charges, recoveries, and deficiencies, including interest penalties and reasonable attorneys' fees and other related expenses (collectively, the - 25 - "Purchaser Claims") resulting from or arising out of or relating to any inaccuracy in or breach of any representation, warranty, covenant or agreement of Purchaser contained in this Agreement or in any schedule, certificate, exhibit, attachment or other instrument furnished or to be furnished by Purchaser pursuant to the terms and provisions of this Agreement. 9.3 Notice of Asserted Liability. Promptly after receipt by any party hereto ("Indemnitee") of notice of any assertion of any claim where the commencement of any action against it in respect of which Indemnitee or reimbursement may be sought hereunder (an "Assertion"), such Indemnitee shall promptly give written notice (the "Claims Notice") to the other party obligated to provide indemnification pursuant to this SECTION 9 (the "Indemnitor") of the Assertion, but failure to so notify the Indemnitor shall not relieve such Indemnitor of its liability to the Indemnitee hereunder. Indemnitor shall be obligated to assume the defense of such Assertion at its own expense with counsel chosen by the Indemnitor in reasonably satisfactory to the Indemnitee. Notwithstanding that the Indemnitor shall be obligated to assume the defense of any Assertion, Indemnitee shall have the right to participate in the investigation and defense thereof, with separate counsel chosen by such Indemnitee but in such event the fees and expenses of such counsel shall be paid by such Indemnitee unless (i) Indemnitor shall agree to pay such fees and expenses, (ii) the Indemnitor shall have failed to assume the defense of such Assertion and to employ counsel satisfactory to such Indemnitee or (iii) in the reasonable judgment of the Indemnitee, based upon the advice of its counsel, a potential conflict of interest may exist between the Indemnitor and the Indemnitee with respect to such Assertion (in which case, such Indemnitee notifies the Indemnitor that such Indemnitee elects to employ separate counsel at the Indemnitor's expense, the Indemnitor shall not have the right to assume the defense of such Assertion on behalf of such Indemnitee. Notwithstanding anything to the contrary in this SECTION 9.3, the Indemnitor shall not, without the prior written consent of such Indemnitee, (a) settle or compromise any action or consent to the entering of any judgment which does not include as an unconditional term thereof the delivery by the claimant or - 26 - plaintiff to such Indemnitee of a duly executed written release of such Indemnitee from all liability in respect of such Assertion, which release shall be satisfactory in form and substance to counsel to such Indemnitee, or (b) settle or compromise any action in a manner that, in the sole judgment of such Indemnitee or its counsel, may materially and adversely affect such Indemnitee other than as a result of money damages or other money judgments. 9.4 Survival. The indemnification, protection, defense and hold harmless obligations of the parties contained in this SECTION 9 shall survive the closing or other termination of this Agreement. 10. MISCELLANEOUS PROVISIONS. 10.1 Survival of Representations, Covenants and Warranties. The respective representations, covenants and warranties of each of the parties to this Agreement shall survive the execution and delivery of this Agreement, and the closing or other termination of this Agreement. 10.2 Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties hereto. Provided, however, that nothing contained in this Agreement, whether express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 10.3 Governing Law. This Agreement shall be governed by and construed under the laws of the State of California as applied. 10.4 Counterparts. This Agreement may be executed in two or more counterparts each of which shall be deemed an original, but all of which together shall constitute one instrument. 10.5 Expenses. Each party shall bear its respective expenses incurred in connection with the preparation, execution and performance of this Agreement and the transactions contemplated hereby, including, without limitation, all fees and expenses of agents, representatives, counsel, accountants and other professional advisors. - 27 - 10.6 Notices. Unless otherwise provided, all notices and othercommunications required or permitted under this Agreement shall be in writing and shall be mailed by U.S. first-class mail, postage prepaid, sent by facsimile or delivered personally by hand or by a nationally recognized courier addressed to the party to be notified at the address or facsimile number as follows, or at such other address or facsimile number as such party may designate by ten (10) days advance notice to the other party: If to Purchaser: Big O Tire Dealers, L.P. c/o Richard P. Waxman, Esq. Wendel, Rosen, Black & Dean P.O. Box 2047 Oakland, CA 94604-2047 With copy to: WENDEL, ROSEN, BLACK & DEAN P.O. Box 2047 Oakland, CA 94604-2047 Attn: Richard P. Waxman, Esq. If to Seller: Kenneth W. Pavia, Sr. General Partner Balboa Investment, L.P. 1101 East Balboa Blvd. Newport Beach, CA 92661-1313 With copy to: Latham & Watkins 505 Montgomery Street, Suite 1900 San Francisco, CA 94111-2562 Attn: Scott R. Haber, Esq. All such notices and other written communication shall be effective on the date of mailing, facsimile transfer or delivery. 10.7 Entire Agreement. This Agreement together with all schedules, exhibits, attachments, instruments and documents referred to herein constitute the entire agreement among the parties and neither party shall be liable or bound to the other party in any manner by any warranties, representations or covenants except as specifically set forth herein or therein. 10.8 Waivers, Amendments and Remedies. This Agreement may be amended to, preceded, cancelled, renewed or extended, and the terms hereof may be waived, only by a written instrument signed by Purchaser and Seller or, in the case of a waiver, by the party waiving compliance. No delay on the part of any party in exercise any right power or privilege hereunder shall operate as a waiver thereof; nor shall any waiver on the part of any party of any such right, power or privilege, or any single or partial exercise of any such right, power - 28 - or privilege preclude any further exercise thereof or the exercise of any other such right, power or privilege. The rights and remedies herein provided are cumulative and are not exclusive in any rights or remedies that any party may otherwise have at law or in equity. The rights and remedies of any party based upon, arising out of or otherwise in respect of any inaccuracy in or breach of any representation, warranty, covenant or agreement contained in this Agreement shall in no way be limited by the fact the act, omission, occurrence or other state of facts upon which any claim of any such inaccuracy or breach is based may also be the subject matter of any other representation, warranty, covenant or agreement contained in this Agreement (or in any other agreement among the parties herein as to which there is no inaccuracy or breach). 10.9 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provisions shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be unenforceable in accordance with its terms. 10.10 Headings/Recitals/Exhibits. The section headings in this Agreement are solely for convenience of reference and do not affect the meaning or interpretation of this Agreement or any term or provision hereof. The recitals set forth in the introductory paragraphs hereof and each exhibit, schedule or other attachment referred to in this Agreement and attached hereto from an integral part of this Agreement are incorporated herein by this reference and made a part hereof. 10.11 Knowledge. Where any representation, warranty or statement contained in this Agreement or in any certificate or document delivered in connection with this Agreement is expressly qualified to the knowledge of the person making such representation, warranty or statement, it shall mean the knowledge of such person actually possesses by having made a reasonable inquiry as to the matters which are the subject thereof. 10.12 Necessary Action. Each of the parties will use its reasonable efforts to take all actions and to do all things as shall be necessary, proper or advisable to consummate and make effective the transactions contemplated by - 29 - this Agreement. 10.13 Time. Time is of the essence of this Agreement. 10.14 Attorneys' Fees. (a) If any action at law is necessary to enforce or interpret the terms of this Agreement and all exhibits, schedules, instruments and documents referred to herein, the prevailing party shall be entitled to reasonable attorneys' fees, costs and disbursements in addition to any other relief to which such party may be entitled. (b) Attorneys' fees incurred by any party to this Agreement in enforcing any judgment, order or action brought to resolve any controversy arising under this Agreement shall be recoverable by the prevailing party. Such rights to recover postjudgment attorneys' fees shall be separate and distinct from the right to recover attorneys' fees pursuant to subsection (a) above. The provisions of this paragraph 10.14(b) shall be severable from all provisions of this Agreement and shall survive any judgment and shall not be deemed merged into any judgment. 10.15 California Corporate Securities Laws. SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL. UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT. IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to be executed as of the date first above written. "SELLER" "PURCHASER BALBOA INVESTMENT GROUP, L.P. BIG O TIRE DEALERS, L.P. By: BIG O TIRE DEALERS OF AMERICA Its: General Partner By____________________________ Kenneth W. Pavia, Sr. General Partner By__________________________ Wesley Stephenson - 30 - Its: President SECURITY AND PLEDGE AGREEMENT THIS SECURITY AND PLEDGE AGREEMENT (the "Agreement") is made as of this ____ day of ________________, 1995, is by and between BIG O DEALERS, L.P., a California limited partnership ("Pledgor"), BALBOA INVESTMENT GROUP, L.P., a _______________ limited partnership (the "Secured Party") and _____________________________ (the "Escrow Holder"). RECITALS A. Pledgor is the maker under that certain promissory note of even date herewith in favor of Secured Party in the principal amount of ___________________________ Dollars ($_______) (the "Note"). B. The note provides that the obligations of Pledgor under the Note are to be secured by a security interest in, and a pledge of a portion of Debtor's interest in BOTI Holdings, Inc., a Nevada corporation ("Holding Company") NOW, THEREFORE, the parties hereto agree as follows: AGREEMENT In consideration of the foregoing recitals and agreements and undertakings set forth below, Secured Party and Pledgor agree as follows: 1. APPOINTMENT OF ESCROW HOLDER. Pledgor and Secured Party hereby appoint Escrow Holder for the purposes set forth in this Agreement, and Escrow Holder accepts such appointment on the terms and conditions set forth herein. 2. SECURITY INTEREST. To secure the performance of all of the obligations of Pledgor under the Note, Pledgor hereby grants a security interest in and hereby deposits with Escrow Holder a certificate or certificates evidencing ________________ (__) of Pledgor's shares of common stock of Holding Company owned and held by Pledgor (the "Pledged Shares") and a reasonable number of stock powers substantially in the form set forth in EXHIBIT A attached hereto, executed in blank with respect thereto, which shares and stock powers are to be held by the Escrow Holder for use in accordance with the terms and provisions of this Agreement. The Escrow Holder may, but need not, have the Pledged Stock registered in its name, as Escrow Holder, pursuant - 31 - to this Agreement. 3. OBLIGATIONS SECURED. Pledgor agrees that the security interest created hereby secures performance of Pledgor's obligations under the Note and all amendments, extensions, renewals and substitutions therefor or thereto. 4. WARRANTIES AND OBLIGATIONS OF PLEDGOR. Pledgor hereby affirms, warrants, represents, covenants, and agrees as follows: 4.1 Pledgor has full power and authority to execute and deliver and to perform and observe the provisions of this Agreement, and to carry out the transactions contemplated hereby and thereby. The execution, delivery and performance by Pledgor of this Agreement have been duly authorized by all necessary corporate action required on its part. This Agreement will constitute a legal, valid and binding obligation of Pledgor, enforceable against Pledgor in accordance with its terms, subject to applicable bankruptcy and other laws for the relief of debtors. 4.2 The execution, delivery and performance of this Agreement by Pledgor will not result in a violation of its charter documents or any mortgage, deed of trust, indenture, material contract, instrument, agreement, judgment, decree, order, statute, law, rule or regulation to which Pledgor is subject, or be in conflict with, result in a breach of or constitute (with due notice and/or lapse of time or both) a default under any such mortgage, deed of trust, indenture, material contract, instrument or agreement, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the respective properties or assets of Pledgor, except as contemplated by the provisions of this Agreement. 4.3 Any consent, approval or authorization of or designation or filing with any governmental authority on the part of Pledgor which is required in connection with the security interest granted under this Agreement has been obtained or effected. 4.4 Pledgor shall pay, perform or otherwise satisfy the Note, when the same shall become due, whether by acceleration or otherwise. 4.5 The Pledged Shares are owned by Pledgor, free and clear of all - 32 - liens, interests and encumbrances. 5. WARRANTIES AND REPRESENTATIONS TO REMAIN IN EFFECT. Pledgor further warrants to Secured Party, and covenants and agrees with Secured Party, that all of those warranties and representations and agreements set forth in paragraph 4 hereof shall be in full force and effect until the Note has been paid in full. 6. VOTING OF PLEDGED SHARES; DIVIDENDS. So long as no event of default exists hereunder Pledgor shall be entitled to vote the Pledged Shares in respect of any matters of business not constituting violations of this Agreement. Upon any default by Pledgor under the Note, Secured Party shall, in addition to any other remedies, be entitled at its option to vote all Pledged Shares held by Escrow Holder until such time as the default is cured by payment of the amount in default. In connection therewith, Pledgor grants the Secured Party an irrevocable proxy to vote the Pledged Shares. Such proxy is coupled with an interest and shall remain in full force and effect until such time as the obligation under the Note is paid in full. All dividends declared and paid on the Pledged Shares during the existence of this Agreement shall be paid to the Pledgor so long as Pledgor is not in default hereunder or under the Note. Upon any such default, Secured Party, in addition to any other remedies available, shall be entitled at its option to be paid and to retain all such dividends pro rata until such time as the default is cured. 7. TERMINATION UPON FULL PAYMENT. When all sums of principal and interest due under all of the notes in the Series have been paid, all Pledged Shares held by the Escrow Holder shall be delivered to Pledgor. Provided that, the Pledged Shares shall be released by the Escrow Holder only after written notice from the Secured Party or such other holder of the Note (or upon adequate proof submitted by the Pledgor) that payment of principal and interest has been made in full. 8. EVENTS OF DEFAULT. An event of default shall be deemed to exist hereunder at any time when: (a) The Pledgor shall have failed to pay any payment due under the Note; or (b) The Pledgor shall have (i) adopted a plan of - 33 - dissolution or partial liquidation or taken any steps towards such end; or (ii) been declared a bankrupt or insolvent; or (iii) made a general assignment for the benefit of creditors, or entered into an arrangement with any creditor; or (iv) suffered the appointment of a receiver by a court of competent jurisdiction; or (v) suffered a material detrimental loss of business or the occurrence of any event which would reasonably be expected to cause a substantial reduction in the value of the Pledged Shares; or (vi) caused or permitted the occurrence of any event or transaction which could reasonably be expected to have a substantial detrimental effect upon the value of the Pledged Shares. Upon the existence of an act of default Secured Party, at its option, may by written notice to Pledgor declare the Note immediately due and payable and may proceed to enforce its rights under this Agreement, as well as pursuing any other remedies at law or in equity. 9. SALE OF PLEDGED STOCK ON DEFAULT/RETENTION. In the event of default by Pledgor of its obligations under the Note and without limiting the remedy or remedies therefor, Escrow Holder shall, subject to applicable law, attempt to sell, upon written instruction from Secured Party, after five (5) days written notice to Pledgor specifying the time and place of sale, so much of the Pledged Shares as may be necessary to produce the sum required in order to pay the total amount then due under the terms of the Note. Said sale may be public or private in the sole discretion of the Secured Party or the Secured Party may elect, pursuant to applicable law, to retain the Pledged Shares in satisfaction of Pledgor's obligations to Secured Party under the Notes. 10. SALE PROCEEDS. In case of said sale, Escrow Holder shall deliver the Pledged Shares to the purchasers thereof and shall apply any and all monies or credits, including the proceeds of any such sale or sales, to the cost of sale, including reasonable attorneys' fees of the Escrow Holder, and the balance after such sale shall be credited against the amount due and owing under the Note. Any sum remaining thereafter is to be delivered to Pledgor or to whomsoever may be lawfully entitled to receive such surplus. At any such sale, whether public or private, the holder of the Note or its/his/her representative shall have the right to purchase the property sold, or any part - 34 - thereof, directly or in the name or names of either persons, and may bid by allowing credit in the bid amount against sums due and owing under the Note or hereunder. 11. NOTICES. All notices or other communications required or permitted hereunder shall be in writing and shall be mailed by U.S. first-class mail, postage prepaid, sent by facsimile or delivered personally by hand or by a nationally recognized courier addressed tot he party to be notified at the address or facsimile number as follows, or at such other address or facsimile number as such party may designate upon not less than ten (10) days' advance written notice to the other party: If to Pledgor: _____________________________ _____________________________ _____________________________ (_____)______________________ With a copy to: Wendel, Rosen, Black & Dean P.O. Box 2047 Oakland, CA 94604-2047 (510) 834-1928 (facsimile) Attn: Richard P. Waxman If to Secured Party: Balboa Investment Group, L.P. 1101 East Balboa Blvd. Newport Beach, CA 92661-1313 (___)______________ (facsimile) Attn: Kenneth W. Pavia, Sr., General Partner With a copy to: Latham & Watkins 505 Montgomery Street, Suite 1900 San Francisco, CA 94111-2562 (415)______________ (facsimile) Attn: Scott R. Haber 12. CALIFORNIA LAW. This Agreement shall be deemed to be a contract made and entered into under and pursuant to the law of the State of California, and shall be a California contract, and shall be construed and enforced in accordance with the laws of the State of California. 13. WAIVER OF LAW. Except as otherwise expressly specified in this Agreement, all of the provisions of law providing for the retention of pledged property and prescribing the conditions, demands, and notice of mailing are to the extent permissible hereby expressly waived by Pledgor. 14. NONWAIVER. Should Escrow Holder postpone any action to be taken hereunder, or accept a payment on a date beyond the due date of the Note, such - 35 - action shall not constitute a waiver of any of the rights of the Secured Party hereunder or under the Note. 15. BINDING EFFECT. This Agreement shall inure to the benefit of and shall be binding upon the parties hereto, and each of them, and their respective heirs, executors, administrators, personal representatives, legal representatives, successors and assigns. 16. AMENDMENT. This Agreement shall not be amendable except by a written agreement of amendment executed by each of the parties hereto. 17. ATTORNEYS' FEES. In the event that any action is brought to enforce any of the provisions of this Agreement, or to obtain money damages for the breach thereof, and such action results in the award of a judgment for money damages or in the granting of any injunction in favor of one of the parties to this Agreement, all expenses, including reasonable attorneys' fees, shall be paid by the nonprevailing party. 18. RELEASE OF ESCROW HOLDER. Pledgor and Secured Party hereby release Escrow Holder from any liability arising from Escrow Holder's performance hereunder, except liability for acts of gross negligence or willful misconduct. Specifically, Escrow Holder shall not be liable for failure of any of the conditions of the pledge or for failure to ascertain the terms or conditions, or comply with, any of the provisions of any agreement or other document referred to in this Agreement nor shall the Escrow Holder be liable for the wrongful assertion by either Pledgor or Secured Party of its rights and/or remedies hereunder. Escrow Holder shall not be liable for forgeries or impersonations. Should any controversy arise between the parties hereto, or with any third person, Escrow Holder shall not be required to determine the same or take any action, but may await the settlement of such controversy by appropriate legal proceedings. Pledgor and Secured Party and each of them, hereby agree to and shall indemnify, protect, defend and hold harmless the Escrow Holder and its partners, agents, employees, directors, officers, and principals from all liabilities, obligations, losses, damages, actions, suits, costs and expenses (including, without limitation, attorneys' fees) of whatever kind or nature imposed on, incurred by, or asserted against the Escrow Holder which are in any - 36 - way related to or arise out of the execution and delivery of this Agreement and any action taken hereunder by Escrow Holder. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. "PLEDGOR" "SECURED PARTY" BIG O DEALERS, L.P., a California limited BALBOA INVESTMENT GROUP, L.P., a partnership California limited partnership By: BIG O TIRE DEALERS OF AMERICA, a Californa nonprofit By: ________________________ mutual benefit corporation, general Kenneth W. Pavia, Sr. partner Its General Partner By______________________________ Wesley Stephenson Its President "ESCROW HOLDER" ______________________________________ By____________________________________ Name__________________________________ Its_____________________________________ EXHIBIT A STOCK ASSIGNMENT SEPARATE FROM CERTIFICATES FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto __________________________________________, _______________________________________ shares of the common stock of BOTI Holdings, Inc., a Nevada corporation ("Holding Company"), standing in the name of Big O Dealers, L.P., a California limited partnership, on the books of Holding Company, represented by Certificate No. _________ herewith and irrevocably constitutes and appoints ____________________________________ attorney to transfer the said stock of the books of Holding Company with full power of substitution. Dated: ____________, 1995 BIG O DEALERS, L.P., a California limited - 37 - partnership By: BIG O TIRE DEALERS OF AMERICA, a California nonprofit mutual benefit corporation, general partner By____________________________________ Wesley Stephenson Its President THE SECURITY OFFERED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR AN OPINION OF COUNSEL ACCEPTABLE TO [1], A CALIFORNIA LIMITED PARTNERSHIP, THAT SUCH REGISTRATION IS NOT REQUIRED. PROMISSORY NOTE $_____________ ____________, 1995 FOR VALUE RECEIVED, the undersigned, BIG O DEALERS, L.P., a California limited partnership (the "Maker"), hereby promises to pay to the order of BALBOA INVESTMENT GROUP, L.P., a California limited partnership (together with any successors or assigns, the "Payee"), at the time and in the manner hereinafter provided, the principal sum of ___________________________________ ($_______), together with interest computed thereon at the rate hereinafter provided. All amounts due and payable hereunder shall be paid in immediately available funds of the United States. The outstanding principal amount of this Note shall bear interest from the date hereof until the due date at the rate of ______ percent (__%) per annum, and shall be payable in seventy-two (72) equal monthly installments of principal and interest ___________________ ___________________ Dollars ($_________) on the first day of each month commencing _____________, 199___, and continuing through ______________, 20__. An amortization schedule is attached hereto as SCHEDULE 1 and incorporated herein by this reference. - 38 - All payments shall be payable to Payee at 1101 East Balboa Blvd., Newport Beach, California 92661-1313, or at such other place as Payee may designate from time to time in writing to Maker. All payments shall be first applied to the payment of interest due, then to the payment of any other sums payable hereunder and finally to the principal amount then remaining unpaid. This Note may be prepaid in whole or in part from time to time, without premium or penalty. If any payment due hereunder is not received by Payee on or before the tenth (10th) day after such payment is due, the late payment shall be subject to a six percent (6%) penalty. Maker shall be deemed in default hereunder in the event (i) any payment due hereunder is not received by Payee on or before the fifteenth (15th) day after such payment is due, or (ii) Maker shall fail to perform any term, covenant or agreement Maker is obligated to perform or observe contained in this Note or the Security Agreement defined below. If an event of default is not cured within ten (10) days following written notice from Payee, then all sums (including, without limitation, principal, interest and penalties) then due and payable shall, at the option of Payee, become immediately due and payable. Payment of the principal of and accrued interest on this Note shall be secured by a security interest in and pledge of _____ shares of common stock of BOTI Holdings, Inc., a Nevada corporation, pursuant to that certain Security and Pledge Agreement of even date herewith, by and between the Maker and Payee (the "Security Agreement"). In the event of default hereunder and placement of this Note in the hands of an attorney for collection (whether or not suit is filed), or if this Note is collected by suit or legal proceedings or through bankruptcy proceedings, the Maker agrees to pay in addition to all sums then due hereon, including principal and interest, all expenses of collection, including, without limitation, reasonable attorneys' fees. The Maker and any and all sureties, guarantors and endorsers of this Note and all other parties now or hereafter liable hereon, severally waive grace, demand, presentment for payment, notice of dishonor, protest and notice of protest, notice of intention to accelerate, notice of - 39 - acceleration, any other notice and diligence in collecting and bringing suit against any party hereto and agree (i) to all extensions and partial payments, with or without notice, before or after maturity, (ii) to any substitution, exchange or release of any security now or hereafter given for this Note, (iii) to the release of any party primarily or secondarily liable hereon, and (iv) that it will not be necessary for the holder hereof, in order to enforce payment of this Note, to first institute or exhaust such holder's remedies against the Maker or any other party liable therefor or against any security for this Note. No delay on the part of the Payee in exercising any power or right under this Note shall operate as a waiver of such power or right, nor shall any single or partial exercise of any power or right preclude further exercise of that power or right. All agreements between the Maker and the holder hereof, whether now existing or hereafter arising and whether written or oral, are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration of the maturity hereof or otherwise, shall the amount paid, or agreed to be paid, to the holder hereof for the use, forbearance or detention of the funds advanced pursuant to this Note, or otherwise, or for the payment of performance of any covenant or obligation contained herein or in any other document or instrument evidencing, securing or pertaining to this Note exceed the maximum amount permissible under applicable law. If from any circumstances whatsoever fulfillment of any provision hereof or any other document or instrument described by law, then ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity, and if from any such circumstances the holder hereof shall ever receive anything of value deemed interest by applicable law, which would exceed interest at the highest lawful rate, such amount which would be excessive interest shall be applied to the reduction of the unpaid principal balance of this Note or on account of any other principal indebtedness of the Maker to the holder hereof, and not to the payment of interest, or if such excessive interest exceeds the unpaid principal balance of this Note and such other indebtedness, such excess shall be refunded to the Maker. All sums paid, or agreed to be paid, by the Maker for the use, forbearance or detention of the indebtedness of the Maker to the - 40 - holder of this Note shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full term of such indebtedness until payment in full so that the actual rate of interest on account of such indebtedness is uniform throughout the term hereof. The terms and provisions of this paragraph shall control and supersede every other provision of all agreements between the Maker and the holder hereof. This Note shall be governed by and construed in accordance with the laws of the State of California, and shall be deemed to have been executed and delivered in the State of California. All references to the Maker herein shall, and shall be deemed to, include its successors and assigns, and all covenants, stipulations, promises and agreements contained herein by or on behalf of the Maker shall be binding upon its successors and assigns, whether so expressed or not. IN WITNESS WHEREOF, this Note has been duly executed and delivered by Maker as of the date first above written. "Maker" BIG O TIRE DEALERS, L.P., a California limited partnership By: BIG O TIRE DEALERS OF AMERICA, a California nonprofit mutual benefit corporation, general partner By___________________________ Name_________________________ Its___________________________ - 41 - EX-12 10 EXHIBIT (C)(2) (99.3) Exhibit C to Schedule 13D Dated November 9, 1995. STOCK PURCHASE AGREEMENT _______________, 1995 TABLE OF CONTENTS 1. PURCHASE AND SALE OF SHARES 2 1.1 Agreement to Purchase and Sell 2 1.2 Closing 2 1.3 Purchase Price 2 2. REPRESENTATIONS AND WARRANTIES OF SELLER 3 2.1 Organization/Good Standing 3 2.2 Authority 3 2.3 Binding Obligation of Seller 3 2.4 Title to the Shares 3 2.5 No Preemptive or Other Rights 3 2.6 Compliance 3 2.7 Subsidiaries 4 2.8 Brokers and Finders 4 2.9 Proxy Statement/Schedule 13(D) 4 2.10 Permits 4 2.11 Litigation 5 2.12 Accuracy of Information 5 2.13 Investment Intent 5 2.14 Reliance Upon Seller's Representations 5 2.15 Receipt of Information 5 2.16 Restricted Securities 6 2.17 Investment Experience 6 2.18 Accredited Investor 6 2.19 Legend on Note 7 3. REPRESENTATIONS AND WARRANTIES OF PURCHASER 8 3.1 Organization/Good Standing 8 3.2 Authority 8 3.3 Binding Obligation of Purchaser 8 3.4 Compliance 8 3.5 Subsidiaries 9 3.6 Brokers and Finders 9 3.7 Proxy Statement/Schedule 13(D) 9 3.8 Permits 9 3.9 Litigation 9 3.10 Accuracy of Information 9 4. COVENANTS OF SELLER 10 4.1 Negative Covenants 10 4.2 Compliance, Consents and Approvals 10 4.3 Negotiations 10 5. COVENANTS OF PURCHASER 11 5.1 Negative Covenants 11 5.2 Compliance, Consents and Approvals 11 6. CONFIDENTIALITY 11 7. CONDITIONS OF CLOSE WITH RESPECT TO SELLER 11 7.1 Representations, Warranties and Covenants of Purchaser 11 7.2 Obligations and Conditions of Purchaser 12 7.3 Consents and Approvals/Qualifications 12 7.4 No Violation of Orders, Etc. 12 7.5 Purchase Price 12 8. CONDITIONS OF CLOSE WITH RESPECT TO PURCHASER 12 8.1 Representations, Warranties and Covenants of Seller 12 8.2 Obligations and Conditions of Seller 12 8.3 Consents and Approvals/Qualifications - 2 - 12 8.4 Proceedings and Documents 13 8.5 No Violation of Orders, Etc. 13 8.6 Consummation of Plan of Merger 13 8.7 Elements of Financing 13 8.8 Approval of Big O ESOP 13 8.9 Certificate of Good Standing 14 8.10 Approval by Board of Directors of Company 14 8.11 Shareholder Approval 14 9. INDEMNIFICATION 14 9.1 Indemnification By Seller 14 9.2 Indemnification By Purchaser 14 9.3 Notice of Asserted Liability 14 9.4 Survival 15 10. MISCELLANEOUS PROVISIONS 15 10.1 Survival of Representations, Covenants and Warranties 15 10.2 Successors and Assigns 15 10.3 Governing Law 15 10.4 Counterparts 15 10.5 Expenses 15 10.6 Notices 15 10.7 Entire Agreement 16 10.8 Waivers, Amendments and Remedies 16 10.9 Severability 17 10.10 Headings/Recitals/Exhibits 17 10.11 Knowledge 17 10.12 Necessary Action 17 10.13 Time 17 10.14 Attorneys' Fees 17 10.15 California Corporate Securities Laws 17 - 3 - STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT ("Agreement") is made as of __________, 1995, between ___________________________________________________________ ("Seller"), and Big O Dealers, L.P., a California limited partnership to be formed ("Purchaser"). RECITALS A. Seller owns and holds ________________________________________ (_______) shares of common stock (the "Shares") of the Big O Tires, Inc., a Nevada corporation ("Company"), par value ten cents ($.10) per share, which Shares represent approximately ____________________ percent (_____%) of all the issued and outstanding shares of common stock of Company. B. Purchaser has elected to participate in the possible acquisition of Company by and through an entity whose principals may (subject to certain conditions precedent, as shall hereinafter be set forth) be comprised of certain members of the Company's current senior management ("Big O Management"), certain participants in the Company's employee stock ownership plan ("Big O ESOP"), and Purchaser (collectively, the "Holding Company"). Purchaser is required to make an equity contribution to the Holding Company in exchange for the issuance of shares of stock of the Holding Company. In order to make such equity contribution, Purchaser is intending to borrow funds from various lending sources ("Equity Financing") including acquiring shares of Company stock by way of giving a secured promissory note to certain existing shareholders of the Company and rolling over such shares of Company stock into the Holding Company. In connection with the foregoing, Purchaser desires, upon the occurrence, fulfillment and satisfaction of certain conditions precedent as shall hereinafter be set forth, to purchase and acquire the Shares. The Holding Company has entered into an Agreement and Plan of Merger with the Company a copy of which attached hereto as EXHIBIT A (the "Merger Agreement"). C. Each limited partner of Purchaser that owns one or more duly franchised Big O Tire retail store (a "Dealer") is required to execute a purchase commitment agreement with the Company whereby each such Dealer agrees - 4 - to purchase a minimum number of tire units from the Company for a six and one quarter (6.25) year period commencing as of the date of the consummation of the Merger pursuant to the Merger Agreement (the "Purchase Commitment"). In connection therewith, during the term of the Purchase Commitment, each such Dealer is required to make a mandatory additional capital contribution to purchase equal to One Dollar ($1.00) for each tire unit purchased from Company (the "Tire Contribution"). D. Subject to the terms an conditions as shall hereinafter be set forth, Seller is willing to transfer and convey the Shares to Purchaser. NOW, THEREFORE, the parties hereto hereby agree as follows: AGREEMENT I. PURCHASE AND SALE OF SHARES. 1.1 AGREEMENT TO PURCHASE AND SELL. On the "Closing Date" (as defined in SECTION 1.2 below), and upon the terms and subject to each and every condition precedent set forth in this Agreement, Seller shall sell, assign, transfer, convey and deliver the Shares to Purchaser or its designee and Purchaser shall purchase, acquire and accept the Shares from Seller. 1.2 Seller and Purchaser intend that the "Closing Date" of the purchase and sale of the Shares shall take place at the Offices of Gibson, Dunn & Crutcher, 1801 California Street, Suite 4200, Denver, Colorado, 80202, on the date upon which the plan of merger pursuant to the terms of the Merger Agreement shall have been fully and completely consummated or at such other time, place, and date as the parties hereto shall agree in writing ("Closing Date"). Provided further, it is expressly understood and agreed by Seller and Purchaser that the Closing Date shall not occur unless and until (1) the plan of merger pursuant to the Merger Agreement is fully and completely consummated and (2) each and every condition precedent set forth in SECTIONS 7 and 8 of this Agreement shall have been satisfied and fulfilled or waived by the party who holds such waiver right. On the Closing Date, Seller shall transfer and convey to the Purchaser the Shares. In the event the Closing Date does not occur on or before February 28, - 5 - 1996, and the parties have not otherwise agreed in writing to extend the Closing Date, this Agreement shall be null and void and have no further force and effect, except that the provisions of SECTIONS 6, 9, and 10 shall survive such termination. Provided that, to the extent any provision of this Agreement is required to survive for purposes of the indemnification obligations of each party to the other pursuant to the provisions of SECTION 9 hereof, such provisions shall survive such termination. Provided further, such termination shall not relieve any party of its liability for any misrepresentation, default or breach of this Agreement. 1.3 Purchase Price. The Purchase Price for the Shares ("Purchase Price") shall be the sum of ____________________________________________ Dollars ($_________) (which represents ________________________________________ (_______) Shares at Sixteen and 50/100 Dollars ($16.50 per Share) which shall be paid by Purchaser to Seller at the Closing Date as follows: [1.3.1 Purchaser shall pay to Seller in cash or equivalent, an amount equal to _______________________ Dollars ($__________) (the "Cash Portion"), which Cash Portion shall, at the sole election of Purchaser be paid (1) as part of the "Merger Consideration" (as such term is defined in Section 1.5(a) of the Merger Agreement) or (2) by Purchaser simultaneously with the consummation of the plan of merger (as specified in Section 1.3 of the Merger Agreement). 1.3.2 The balance of the Purchase Price, equal to the sum ____________________________ Dollars ($________) shall be paid pursuant to the terms of a secured promissory note in the form attached hereto as EXHIBIT B (the "Note"). The Note shall be fully amortized over a six (6)-year period, commencing immediately following the Closing Date. Interest on the unpaid principal shall bear interest at the rate of _____ percent (___%) per annum, and the Note shall be payable in seventy-two (72) equal monthly installments over the six (6)-year amortized term commencing on the first day of the month following the Closing Date and on the first day of each and every month thereafter during the amortized period. The Note shall be secured by Purchaser granting Seller a security interest in that portion of Purchaser's shareholdings - 6 - in the Holding Company in the same ratio as the total sum of the Note bears to the total of Purchaser's Equity Financing pursuant to the terms and provisions of that certain Security and Pledge Agreement in the form attached hereto as EXHIBIT C; and by Purchaser assigning as collateral that portion of the aggregate of the Dealers' Purchase Commitments in the same ratio as the total sum of the Note bears to the total of Purchaser's Equity Financing. Purchaser will take all necessary steps to perfect the security interest as granted and assign as collateral said portion of the Purchase Commitments. 2. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents and warrants to Purchaser that each and every statement contained in this SECTION 2 is correct an complete as of the date of this Agreement and will be correct and complete as of the Closing Date. 2.1 ORGANIZATION/GOOD STANDING. [IF AN ENTITY: Seller is a ______________, duly organized, validly existing and in good standing under the laws of the State of __________________, has all requisite partnership/corporate power to own and operate its properties and assets and to carry on its business as it is now being conducted.] Seller has the full right, power and authority and all action has been taken as shall be necessary and required to consummate the transactions contemplated hereby. 2.2 AUTHORITY. Seller, or if not Seller, the person who has signed this document on behalf of Seller, has the full power, authority and capacity to sign and deliver this Agreement and to take all necessary action on behalf of Seller as shall be necessary and required to consummate the transactions contemplated hereby. 2.3 BINDING OBLIGATION OF SELLER. This Agreement constitutes the legally binding obligation of Seller in accordance with the terms and provisions hereof, subject as to its enforceability to limitations imposed by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or effecting creditors' rights, generally and to the general principals of equity. 2.4 TITLE TO THE SHARES. Seller owns and holds the Shares beneficially and of record, free and clear of any liens, claims, encumbrances or restrictions - 7 - of any kind or nature whatsoever and, upon delivery of and payment of the Purchase Price for the Shares as herein provided, Seller shall convey to Purchaser valid title thereto, free and clear of any liens, claims, security interests, encumbrances or restrictions of any nature or description. 2.5 NO PREEMPTIVE OR OTHER RIGHTS. No person has any right of first refusal, any preemptive or other rights and there are no rights or restrictions under the terms and provision of any agreement to which Seller is subject or otherwise a party which would prohibit, preclude or otherwise affect the sale and transfer of the Shares to Purchaser as contemplated by the terms and provisions of this Agreement. 2.6 COMPLIANCE. Neither the execution and delivery of this Agreement by Seller nor the consummation of the transactions contemplated hereby, nor compliance by Seller with respect to any of the provisions hereof will: (1) violate, conflict with or result in the breach of any provision of, or constitute a default (or an event which with notice or lapse of time are both would constitute a default) under, or result in the termination of, or accelerate the performance by, or result in a right of termination or acceleration under, or result in a creation of any liens, security interest, charge or encumbrance upon any of the properties or assets of Seller, under any of the terms or provisions of [(i) the (partnership agreement) (articles of incorporation or bylaws) of Seller or] (ii) any material note, bond, mortgage, indenture, deed of trust, license, lease agreement, executory contract or arrangement or other instrument or obligation to which Seller is a party or to which it or any of its properties or assets may be otherwise subject or bound; or (2) subject to Seller's obligations to take all necessary steps to comply with the statutes or regulations referred to in the last sentence of this paragraph, violate any judgment, ruling, writ, injunction, decree, statute, rule or regulation applicable to Seller, or any of its respective properties or assets. Other than in connection with Seller's obligation to comply with the provisions of the Securities Exchange Act of 1934, as amended, or any similar successor, federal statute and the rules and regulations thereunder, all as the same, shall be in effect from time-to-time ("Exchange Act"), the - 8 - Securities Act of 1933, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time-to-time ("Securities Act"), the "take-over" or "blue sky" laws of the various states, the Hart-Scott-Rodino Antitrust Improvement Acts of 1976 and the rules and regulations thereunder ("Hart-Scott-Rodino Act") and any required foreign regulatory approvals, no notice to, filing with, or authorization, consent or approval of any domestic or foreign public body or authority is necessary for the consummation by Seller of the transactions contemplated by this Agreement. 2.7 SUBSIDIARIES. Seller does not own or control, directly or indirectly, any interest in any other corporation, association, or other business entity. Seller is not a participant in any joint venture, partnership, or similar arrangement. 2.8 BROKERS AND FINDERS. Seller has not engaged any broker, finder or investment banker in connection with this Agreement or the transactions contemplated hereby. 2.9 PROXY STATEMENT/SCHEDULE 13(D). None of the information supplied or to be supplied by Seller or any of its agents, representatives or affiliates for inclusion, or included or incorporated by reference in (a) any proxy statements filed by the Company with the Securities and Exchange Commission (the "Commission") or any amendment or supplement thereto, (b) any Schedule 13(D) or any amendment or supplement thereto filed by Seller, Purchaser, the Holding Company or Company, or any of its agents, representatives or affiliates, or (c) any other documents to be filed with the Commission, or any other regulatory agency in connection with the transactions contemplated hereby by Seller, Purchaser, the Holding Company or Company, or any of its agents, representatives or affiliates, will, insofar as such Schedule 13(D) and documents relate to Seller, its affiliates, agents and representatives, at the respective time such Schedule 13(D) and documents are filed, be false or misleading with respect to any material fact, or omit to state any material fact necessary in order to make the statements therein, at the time and in light of the circumstances under which they were made, not false or misleading. The Schedule 13(D) and any - 9 - related documents required in connection with the transactions contemplated hereunder, will comply as to form and all material respects with the requirements of law insofar as such Schedule 13(D) and documents relate to Seller, its affiliates, agents and representatives. 2.10 PERMITS. Seller has all franchises, permits, licenses and any similar authority necessary for the conduct of its business as now being conducted by it, the lack of which could materially and adversely effect Seller's ability to perform its obligations under this Agreement; and believes it can obtain, without undue burden or expense, any similar authority. Seller is not in default under in any material respect under any such franchises, permits, licenses or similar authority. 2.11 LITIGATION. There is no suit, action, proceeding or investigation pending or currently threatened against Seller or any of its affiliates, agents or representatives that questions the validity of this Agreement or any documents, instruments or ancillary agreements in connection therewith, or the right of Seller to sell and convey the Shares and enter into such agreements or to consummate the transactions contemplated hereby or thereby, or that might result, either individually or in the aggregate in any material adverse change in the assets, business or property, prospects or financial condition of Seller, or in any material change in the current equity ownership of Seller. Seller is not a party, or to the best of its knowledge, named in any order, writ, injunction, judgment, or decree of any court, government agency or instrumentality. There is no action, suit or proceeding by Seller currently pending or that Seller currently intends to initiate. 2.12 ACCURACY OF INFORMATION. Except to the extent of any subsequent correction or supplement with respect thereto prior to the date hereof, the written statements, certificates, schedules, lists or any other written information furnished by or on behalf of Seller to Purchaser in connection with this Agreement, when considered as a whole, do not contain and will not contain any untrue statement of any material fact; and do not omit or will not omit to state a material fact necessary in order to make the statements herein or therein in light of the circumstances in which they were made, not misleading. - 10 - Each document delivered by Seller to Purchaser is a true and complete copy of such document, unmodified except by another document delivered to Purchaser. Notwithstanding the foregoing, a mere inclusion on any particular items of information or statement of fact and any such written information furnished by or on behalf of Seller in connection with this Agreement, even if coupled with a representation or warranty to the effect that such written information is inclusive of all material information or statements of fact with respect to the subject matter thereof, shall not, without more, give rise to any implication or constitute any admission that such particular items or statements are material. Provided, however, Seller agrees to disclose to Purchaser any such material facts and information with respect to the foregoing within its knowledge. 2.13 INVESTMENT INTENT. With respect to the Note being given by Purchaser to Seller as [partial] consideration for the Purchase Price, Seller hereby acknowledges, confirms and represents that in accepting the Note as [partial] consideration for payment of the Purchase Price and for payment of the Reimbursement, the Note is being acquired for investment for Seller's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof and that Seller has no present intention of selling, assigning, transferring, conveying or granting any participation in or otherwise distributing the Note. Seller further acknowledges and confirms that it does not have any contract, undertaking, agreement or other arrangement with any person to sell, transfer, assign or grant participation to any such person or to any third party with respect to the Note. 2.14 RELIANCE UPON SELLER'S REPRESENTATIONS. Seller acknowledges and understands that the Note is not being registered under the Securities Act on the ground that the sale and transfer provided for in this Agreement with respect to the Note and the issuance of the Note hereunder is exempt from registration under the Securities Act pursuant to Section 4(2) thereof and that the Purchaser's reliance on such exemption is predicated on Seller's representations as set forth herein. 2.15 RECEIPT OF INFORMATION. Seller believes that it has received all of the information it considers necessary or appropriate for - 11 - deciding whether to accept the Note as partial consideration for the Purchase Price. Seller further represents that it has had an opportunity to ask questions, receive answers and information from the Purchaser regarding the business, assets and properties, prospects and financial condition of Purchaser and to obtain additional information (to the extent Purchaser possessed such information or could acquire it without unreasonable effort or expense) necessary to verify the accuracy of any information furnished to Seller or to which Seller had access. The foregoing, however, does not limit or modify the representations and warranties of Purchaser provided in SECTION 3 of this Agreement, nor the right of Seller to rely upon such representations and warranties. 2.16 RESTRICTED SECURITIES. Seller acknowledges and understands that in accepting the Note as [partial] consideration for the Purchase Price, the Note is characterized as "Restricted Securities" under applicable Federal securities laws, inasmuch as it is being acquired from Purchaser in a transaction not involving a public offering and that under such laws and applicable regulations, such securities may be sold without registration under the Securities Act, only in limited circumstances. In this connection, Seller represents that it is familiar with Securities Exchange Commission Rule 144, as promulgated by the Commission under the Securities Act as such Rule 144 may be amended from time to time or any similar successor rule that may be promulgated by the Commission, and understands the resale limitations imposed thereby and by the Securities Act. 2.17 INVESTMENT EXPERIENCE. Seller represents that it is experienced in evaluating and investing in securities of companies and acknowledges that it is able to fend for itself, can bear the economic risk of its investment and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the acceptance of the Note as partial consideration for the Purchase Price. Seller further represents that it has not been organized for the purpose of entering into this transaction or otherwise agreeing to the terms of the purchase and sale of the Shares pursuant to the terms, conditions and provisions of this Agreement, without limitation, accepting the Note as partial consideration for the Purchase - 12 - Price. 2.18 ACCREDITED INVESTOR. 2.18.1 The term "Accredited Investor" as defined in Rule 501(a) of Regulation D of the Securities Act means: (a) a person or entity who is a general partner, director or executive officer and/or executive officer, director or general partner of the general partner of Purchaser; (b) any bank as defined in Section 3(a)(2) of the Securities Act or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity, any broker or dealer register pursuant to Section 15 of the Exchange Act; any insurance company as defined in Section 2(13) of the Securities Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act; any Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958, any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of Five Million Dollars ($5,000,000); any employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company or registered investment advisor, or if the employee benefit plan has total assets in excess of Five Million Dollars ($5,000,000), or if a self-directed plan, with investment decisions made solely by persons that are Accredited Investors; (c) any private business development company as defined in Section 202(a)(22) of the Investment Advisors Act of 1940; (d) any organizations described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust or partnership not formed for the specific purposes of acquiring the securities - 13 - offered, with total assets in excess of Five Million Dollars ($5,000,000); (e) any natural person who individual net worth, or joint net worth with that persons spouse at the time of its purchase exceeds One Million Dollars ($1,000,000); (f) any natural person who had an individual income in excess of Two Hundred Thousand Dollars ($200,000) in each of the two most recent years or joint income with that person's spouse in excess of Three Hundred Thousand Dollars ($300,000) in each of those years and has a reasonable expectation of reaching the same income level in the current year; (g) any trust with total assets in excess of Five Million Dollars ($5,000,000), not formed for the specific purposes of acquiring the securities offered, whose purchase is directed by a person who has such knowledge and experience in such financial and business matters, that he/she is capable of evaluating the merits and risks of the prospective investment; or (h) any entity in which all the equity owners are Accredited Investors. As used in SECTION 2.18.1, the term "net worth" means the excess of total assets over total liabilities. For the purpose of determining the person's net worth, the principal residence owned by an individual should be valued at the fair market value, including the costs of improvements, net of current encumbrances. As used in this SECTION 2.18.1, "income" means actual economic income, which may differ from adjusted gross income for income tax purposes. Accordingly, Seller should consider whether it should add any or all of the following items to its adjusted gross income for income tax purposes in order to reflect more accurately its actual economic income: any amounts attributable to tax exempt income received, losses claimed as a limited partner in any limited partnership, deductions claimed for depletion, contributions to an IRA or Keogh Retirement Plan and alimony payments. 2.18.2 Seller further represents to Purchaser that it is an Accredited Investor. 2.19 LEGEND ON NOTE. It is acknowledged, understood and agreed that - 14 - the Note shall bear the following legends. (a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS PURCHASER HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, SATISFACTORY TO PURCHASER AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED, OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT"; and (b) Any legend required by the laws of the State of California or any other applicable state laws. 3. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby represents and warrants to Seller that each and every statement contained in this SECTION 3 is correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date. 3.1 ORGANIZATION/GOOD STANDING. Purchaser is a California limited partnership, duly organized, validly existing and in good standing under the laws of the State of California, has all requisite partnership power to own and operate its properties and assets and to carry on its business as it is now being conducted. Purchaser has the full power and authority and all partnership and related action has been taken as shall be necessary and required to consummate the transaction contemplated hereby. 3.2 AUTHORITY. Big O Tire Dealers of America, a California nonprofit mutual benefit corporation, as the general partner of Purchaser, has the full power, authority and capacity to sign and deliver this Agreement and to otherwise take all action on behalf of Purchaser as necessary and required to consummate the transactions contemplated hereby. 3.3 BINDING OBLIGATION OF PURCHASER. This Agreement constitutes the legally binding obligation of Purchaser in accordance with the terms and provisions hereof, subject as to its enforceability to limitations imposed by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or effecting creditors' rights, generally and to the general principals of equity. 3.4 COMPLIANCE. Neither the execution and delivery of this Agreement - 15 - by Purchaser nor the consummation of the transactions contemplated hereby, nor compliance by Purchaser with respect to any of the provisions hereof will: (1) violate, conflict with or result in the breach of any provision of, or constitute a default (or an event which with notice or lapse of time are both would constitute a default) under, or result in the termination of, or accelerate the performance by, or result in a right of termination or acceleration under, or result in a creation of any liens, security interest, charge or encumbrance upon any of the properties or assets of Purchaser, under any of the terms or provisions of (i) the partnership agreement of Purchaser or (ii) any material note, bond, mortgage, indenture, deed of trust, license, lease agreement, executory contract or arrangement or other instrument or obligation to which Purchaser is a party or to which it or any of its properties or assets may be otherwise subject or bound; or (2) subject to Purchaser's obligation to take all necessary steps to comply with the statutes or regulations referred to in the last sentence of this paragraph, violate any judgment, ruling, writ, injunction, decree, statute, rule or regulation applicable to Purchaser, or any of its respective properties or assets. Other than in connection with Purchaser's obligation to comply with the provisions of the Exchange Act, the Securities Act, the "take-over" or "blue sky" laws of the various states, the Hart-Scott-Rodino Act and any required foreign regulatory approvals, no notice to, filing with, or authorization, consent or approval of any domestic or foreign public body or authority is necessary for the consummation by Purchaser of the transactions contemplated by this Agreement. 3.5 SUBSIDIARIES. Purchaser does not own or control, directly or indirectly, any interest in any other corporation, association, or other business entity; except that some or all of the limited partners of Purchaser are members of the general partner of Purchaser which is a trade organization comprised of duly franchised retail Big O Tire Store Dealers and formed for the purpose of protecting and advancing their common business interests on a united basis. Purchaser is not a participant in any joint venture, partnership, or similar arrangement. 3.6 BROKERS AND FINDERS. Purchaser has not engaged any broker, finder - 16 - or investment banker in connection with this Agreement or the transactions contemplated hereby, except for the engagement of KPMG Peat Marwick LLP ("KPMG") pursuant to those certain letter agreements dated October 18, and 19, 1994, and May 11, 1995. 3.7 PROXY STATEMENT/SCHEDULE 13(D). None of the information supplied or to be supplied by Purchaser or any of its agents, representatives or affiliates for inclusion, or included or incorporated by reference in (a) any (if required) proxy statements filed by the Company with the Commission or any amendment or supplement thereto, (b) any Schedule 13(D) or any amendment or supplement thereto by Purchaser, Seller, the Holding Company or the Company, or any of its agents, representatives or affiliates, or (c) any other documents to be filed with the Commission, or any other regulatory agency in connection with the transactions contemplated hereby by Seller, Purchaser, the Holding Company or the Company, will, insofar as such Schedule 13(D) and documents relate to Purchaser, its affiliates agents and representatives, at the respective time such Schedule 13(D) and documents are filed, be false or misleading with respect to any material fact, or omit to state any material fact necessary in order to make the statements therein, at the time and in light of the circumstances under which they were made, not false or misleading. The Schedule 13(D) and any related documents required in connection with the transactions contemplated hereunder, will comply as to form and all material respects with the requirements of law insofar as such Schedule 13(D) and documents relate to Purchaser, its affiliates, agents and representatives. 3.8 PERMITS. Purchaser has all franchises, permits, licenses and any similar authority necessary for the conduct of its business as now being conducted by it, lack of which could materially and adversely effect Purchaser's ability to perform its obligations under this Agreement and believes it can, if required in order to perform its obligations hereunder, obtain, without undue burden or expense, any similar authority. Purchaser is not in default under in any material respect under any such franchises, permits, licenses or similar authority. 3.9 LITIGATION. There is no suit, action, proceeding or investigation - 17 - pending or currently threatened against Purchaser or any of its affiliates, agents or representatives that questions the validity of this Agreement or any documents, instruments or ancillary agreements in connection therewith, or the right of Purchaser to enter into such agreements or to consummate the transactions contemplated hereby or thereby, or that might result, either individually or in the aggregate in any material adverse change in the assets, business or properties, prospects or financial condition of Purchaser, or in any material change in the current equity ownership of Purchaser. Purchaser is not a party, or to the best of its knowledge, named in any order, writ, injunction, judgment, or decree of any court, government agency or instrumentality. There is no action, suit or proceeding by Purchaser currently pending or that Purchaser currently intends to initiate. 3.10 ACCURACY OF INFORMATION. Except to the extent of any subsequent correction or supplement with respect thereto prior to the date hereof, the written statements, certificates, schedules, lists or any other written information furnished by or on behalf of Purchaser to Seller in connection with this Agreement, when considered as a whole, do not contain and will not contain any untrue statement of any material fact; and do not omit or will not omit to state a material fact necessary in order to make the statements herein or therein in light of the circumstances in which they were made, not misleading. Each document delivered by Purchaser to Seller is a true and complete copy of such document, unmodified except by another document delivered to Seller. Notwithstanding the foregoing, a mere inclusion on any particular items of information or statement of fact and any such written information furnished by or on behalf of Purchaser in connection with this Agreement, even if coupled with a representation or warranty to the effect that such written information is inclusive of all material information or statements of fact with respect to the subject matter thereof, shall not, without more, give rise to any implication or constitute any admission that such particular items or statements are material. Provided, however, Purchaser agrees to disclose to Seller any such material facts and information with respect to the foregoing within its knowledge. 4. COVENANTS OF SELLER. Seller hereby covenants and agrees - 18 - as follows: 4.1 NEGATIVE COVENANTS. During the period commencing as of the date of this Agreement and ending on the Closing Date, except as otherwise expressly provided herein, Seller shall not (1) issue, grant, sell or enter into any options, warrants, agreements, conversion rights, rights of first refusal, preemptive rights, or other rights to subscribe for, purchase or otherwise acquire the Shares; (2) create any material lien, charge, security interest, claim or encumbrance upon any of the Shares; (3) deed, sell, transfer, assign, license or otherwise dispose of any of the Shares; or (4) otherwise take any action which would materially effect its ability to perform its obligations under this Agreement. 4.2 COMPLIANCE, CONSENTS AND APPROVALS. Seller shall (1) comply with and obtain all necessary consents, waivers, authorizations and approvals of all governmental and regulatory authorities (including, without limitation, such compliances, consents, waivers, authorizations and approvals as necessary or required under the Exchange Act, the Securities Act, the "take over" or "blue sky" laws of the various states and the Hart-Scott-Rodino Act) and of all other persons, firms, partnerships, or corporations required in connection with the execution, delivery and performance by Seller of each and every term, condition and provision of this Agreement; and (2) diligently assist and cooperate with Purchaser in preparing and filing all documents required to be submitted by Purchaser to any governmental or regulatory authority in connection with such transactions (which assistance and cooperation shall include, without limitation, timely furnishing to Purchaser all information concerning Seller which, in the reasonable opinion of counsel to Purchaser, is required to be included into the documents) and in obtaining any governmental and regulatory authorities, consents, waivers, authorizations or approvals which may be required to be obtained by Purchaser in connection with the transactions contemplated by this Agreement. 4.3 NEGOTIATIONS. Following the execution of this Agreement by all parties hereto, Seller nor any one acting on behalf of Seller, shall, directly or indirectly, encourage, solicit, engage in discussions or negotiations with, - 19 - or provide any information to any person, firm, or other entity or group (other than Purchaser or its representatives) concerning any sale, assignment or transfer of the Shares or other similar transaction involving the Shares. Seller agrees to promptly communicate to Purchaser any inquiries or communications concerning any transactions which it may receive or which it may become aware of. 5. COVENANTS OF PURCHASER. Purchaser covenants and agrees as follows: 5.1 NEGATIVE COVENANTS. During the period commencing as of the date of this Agreement and ending on the Closing Date, except as otherwise expressly provided herein, Purchaser shall take any action which would materially effect its ability to perform its obligations under this Agreement. 5.2 COMPLIANCE, CONSENTS AND APPROVALS. Purchaser shall (1) comply with and obtain all necessary consents, waivers, authorizations and approvals of all governmental and regulatory authorities (including, without limitation, such compliances, consents, waivers, authorizations and approvals as necessary or required under the Exchange Act, the Securities Act, the "take over" or "blue sky" laws of the various states and the Hart-Scott-Rodino Act) and of all other persons, firms, partnerships or corporations required in connection with the execution, delivery and performance by Purchaser of each and every term, condition and provision of this Agreement; and (2) diligently assist and cooperate with Seller in preparing and filing all documents required to be submitted by Seller to any governmental or regulatory authority in connection with such transactions (which assistance and cooperation shall include, without limitation, timely furnishing to Seller all information concerning Purchaser which, in the reasonable opinion of counsel to Seller, is required to be included into the documents) and in obtaining any governmental and regulatory authorities, consents, waivers, authorizations or approvals which may be required to be obtained by Seller in connection with the transactions contemplated by this Agreement. 6. CONFIDENTIALITY. Seller and Purchaser acknowledge the terms and provisions of the confidentiality letter agreement attached hereto as EXHIBIT D (the "Confidentiality Letter Agreement") entered into by and - 20 - between Seller and the general partner of Purchaser, reaffirm same, and agree to be fully bound thereby; and further agree that the terms and provisions of this Agreement shall be included within the meaning of "Information" as defined in the Confidentiality Letter Agreement. For purposes of this Agreement, the term "Party" under the Confidentiality Letter Agreement shall be deemed to include Seller and Purchaser. In connection with the foregoing, Seller and Purchaser covenant and agree to treat and hold all Information contained in this Agreement and in an exhibit, schedule, instrument, ancillary agreement or other document relating hereto, strictly confidential, except as expressly provided otherwise in the Confidentiality Letter Agreement; and further covenant and agree to consult and confer with each other and each of their respective counsel prior to issuing any public announcement or statement with respect to this Agreement and the Plan of Merger contemplated by the Merger Agreement and any other matter relating to this Agreement. 7. CONDITIONS OF CLOSE WITH RESPECT TO SELLER. All obligations of Seller under this Agreement are subject to fulfillment, at or prior to the Closing Date of the following conditions, part or all of which may be waived by Seller only by written notice to Purchaser on or before the Closing Date. 7.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER. All representations, warranties and covenants made by Purchaser in this Agreement shall be true, correct and complete on and as of the Closing Date, the same effect as those such representations, warranties and covenants had been made on and as of the Closing Date. 7.2 OBLIGATIONS AND CONDITIONS OF PURCHASER. Purchaser shall have performed and complied with all covenants and obligations required by it under this Agreement on or prior to the Closing Date. 7.3 CONSENTS AND APPROVALS/QUALIFICATIONS. All compliances, consents, waivers, authorizations, permits, approvals or qualifications of any governmental authority or regulatory body of the United States or of every state (including, without limitation, such Purchaser compliances, consents, waivers, authorizations, approvals and qualifications with respect to the Exchange Act, the Securities Act, the "take-over" or "blue sky" laws of the various states and - 21 - the Hart-Scott-Rodino Act as specified in SECTION 5.3 hereof) required in connection with the execution, delivery and performance of this Agreement, shall have been duly obtained and shall be in full force and effect on the Closing Date. 7.4 NO VIOLATION OF ORDERS, ETC. There shall not be in effect on the Closing Date any statute, rule or regulation to create executive order, preliminary or permanent injunction or other order issued, promulgated or enacted by any federal, state or local government, or regulatory authority or court which declares this Agreement invalid in any respect or prevents the consummation of the transactions contemplated hereby; and no action or proceeding before any federal, state or local court, or governmental or regulatory authority shall be instituted or threatened by any federal, state or local government or governmental or regulatory authority or by any other person, entity or organization which seeks to prevent or delay the consummation of the transactions contemplated by this Agreement (including without limitation, the consummation of the proposed plan of merger pursuant to the terms and provisions of the Merger Agreement) or which challenges the validity or enforceability of this Agreement or any term or provision hereof. 7.5 PURCHASE PRICE. Purchaser shall have delivered to Seller the Purchase Price, and all documents and instruments in connection therewith including, without limitation, the Note and the Security Agreement. 8. CONDITIONS OF CLOSE WITH RESPECT TO PURCHASER. All obligations of Purchaser under this Agreement are subject to fulfillment, at or prior to the Closing Date of the following conditions, part or all of which may be waived by Purchaser only by written notice to Seller on or before the Closing Date. 8.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER. All representations and warranties and covenants made by Seller in this Agreement shall be true, correct and complete on and as of the Closing Date, the same effect as those such representations, warranties and covenants had been made on and as of the Closing Date. 8.2 OBLIGATIONS AND CONDITIONS OF SELLER. Seller shall have performed - 22 - and complied with all covenants and obligations required by it under this Agreement on or prior to the Closing Date. 8.3 CONSENTS AND APPROVALS/QUALIFICATIONS. All compliances, consents, waivers, authorizations, permits, approvals or qualifications of any governmental authority or regulatory body of the United States or of every state (including, without limitation, such Seller compliances, consents, waivers, authorizations, approvals and qualifications with respect to the Exchange Act, the Securities Act, the "take-over" or "blue sky" laws of the various states and the Hart-Scott-Rodino Act as specified in SECTION 4.3 hereof) required in connection with the execution, delivery and performance of this Agreement, shall have been duly obtained and shall be in full force and effect on the Closing Date. 8.4 PROCEEDINGS AND DOCUMENTS. All corporate, partnership and other proceedings in connection with the transactions contemplated at the Closing (including without limitation, consummation of the proposed plan of merger pursuant to the terms of the Merger Agreement) and all documents incident thereto, shall be reasonably satisfactory in form and substance to Purchaser's counsel, which counsel shall have received all such counterpart original or certified or other copies of such documents as he/she may reasonably request or require. 8.5 NO VIOLATION OF ORDERS, ETC. There shall not be in effect on the Closing Date any statute, rule or regulation to create executive order, preliminary or permanent injunction or other order issued, promulgated or enacted by any federal, state or local government, or regulatory authority or court which declares this Agreement invalid in any respect or prevents the consummation of the transactions contemplated hereby; and no action or proceeding before any federal, state or local court, or governmental or regulatory authority shall be instituted or threatened by any federal, state or local government or governmental or regulatory authority or by any other person, entity or organization which seeks to prevent or delay the consummation of the transactions contemplated by this Agreement (including without limitation, the consummation of the proposed plan of merger pursuant to the terms and provisions - 23 - of the Merger Agreement) or which challenges the validity or enforceability of this Agreement or any term or provision hereof. 8.6 CONSUMMATION OF PLAN OF MERGER. The consummation of all transactions necessary to consummate the plan of merger pursuant to the terms and provisions of the Merger Agreement, as amended, including, without limitation, the satisfaction of each and every condition precedent set forth in Article VI of the Merger Agreement. 8.7 ELEMENTS OF FINANCING. The Holding Company having obtained commitments for the required elements of financing in connection with the merger transaction contemplated under the terms and provisions of the Merger Agreement on terms and conditions satisfactory to the Holding Company in its sole discretion, including by way of example the following: (i) obtaining a commitment from a lender for the senior facility in the approximate sum of Forty Million Dollars ($40,000,000); (ii) obtaining a commitment from a lender for a senior subdebt facility in the approximate sum of Ten Million Dollars ($10,000,000); (iii) Purchaser obtaining financing in the sum of Five Million Dollars ($5,000,000) and having arranged to purchase and acquire shares of common stock of Company from other existing shareholders on negotiated terms by way of promissory notes substantially similar to the Note contemplated herein and cash and other property which promissory notes and cash and other property (including the Note herein) total in the aggregate the sum of Five Million Dollars ($5,000,000) for a total of Ten Million Dollars ($10,000,000); and (iv) existing lenders, creditors and other obligees of the Company having agreed to the financial arrangements contemplated in connection with the proposed plan of merger pursuant to the terms and provisions of the Merger Agreement. 8.8 APPROVAL OF BIG O ESOP. The Big O ESOP shall have provided its approval as required by the terms of the governing documents of the Big O ESOP and applicable law of the proposed plan of merger contemplated under the terms and provisions of the Merger Agreement and the terms, provisions and conditions by which the Holding Company shall be formed, structured, operated and governed, including, without limitation, having obtained a fairness opinion and appropriate approval by the employees of the Company - 24 - participating in the Big O ESOP; and that pursuant to the foregoing, holdings of at least eighty percent (80%) of the shares of Common Stock of the Company owned and held by the Big O ESOP shall have elected to roll over their existing ESOP account into investment in the securities of Holding Company pursuant to the terms and provisions of the plan of merger contemplated under the Merger Agreement. 8.9 CERTIFICATE OF GOOD STANDING. Seller shall have delivered to Purchaser certificates of partnership and tax good standing and legal existence of Seller as of no more than thirty (30) days prior to the Closing Date from the Secretary of State of California. 8.10 APPROVAL BY BOARD OF DIRECTORS OF COMPANY. The Board of Directors shall have approved the Holding Company's proposed plan of merger on terms and conditions satisfactory to the Holding Company, in its sole discretion. 8.11 SHAREHOLDER APPROVAL. The plan of merger pursuant to the terms and conditions of the Merger Agreement shall have been approved and adopted by the shareholders of the Company. 9. INDEMNIFICATION. 9.1 INDEMNIFICATION BY SELLER. Seller agrees to and shall indemnify, protect, defend and hold harmless Purchaser from and against and in respect of any and all claims, losses, damages, costs, expenses, obligations, charges, recoveries, and deficiencies, including interest, penalties and reasonable attorneys' fees and other related expenses (collectively, the "Seller Claims") resulting from or arising out of or relating to any inaccuracy in or breach of any representation, warranty, covenant or agreement of Seller contained in this Agreement or in any schedule, certificate, exhibit, attachment or other instrument furnished or to be furnished by Seller pursuant to the terms and provisions of this Agreement. 9.2 INDEMNIFICATION BY PURCHASER. Purchaser agrees to and shall indemnify, protect, defend and hold harmless Seller from and against and in respect of any and all claims, losses, damages, costs, expenses, obligations, charges, recoveries, and deficiencies, including interest penalties and reasonable attorneys' fees and other related expenses (collectively, the - 25 - "Purchaser Claims") resulting from or arising out of or relating to any inaccuracy in or breach of any representation, warranty, covenant or agreement of Purchaser contained in this Agreement or in any schedule, certificate, exhibit, attachment or other instrument furnished or to be furnished by Purchaser pursuant to the terms and provisions of this Agreement. 9.3 NOTICE OF ASSERTED LIABILITY. Promptly after receipt by any party hereto ("Indemnitee") of notice of any assertion of any claim where the commencement of any action against it in respect of which Indemnitee or reimbursement may be sought hereunder (an "Assertion"), such Indemnitee shall promptly give written notice (the "Claims Notice") to the other party obligated to provide indemnification pursuant to this SECTION 9 (the "Indemnitor") of the Assertion, but failure to so notify the Indemnitor shall not relieve such Indemnitor of its liability to the Indemnitee hereunder. Indemnitor shall be obligated to assume the defense of such Assertion at its own expense with counsel chosen by the Indemnitor in reasonably satisfactory to the Indemnitee. Notwithstanding that the Indemnitor shall be obligated to assume the defense of any Assertion, Indemnitee shall have the right to participate in the investigation and defense thereof, with separate counsel chosen by such Indemnitee but in such event the fees and expenses of such counsel shall be paid by such Indemnitee unless (i) Indemnitor shall agree to pay such fees and expenses, (ii) the Indemnitor shall have failed to assume the defense of such Assertion and to employ counsel satisfactory to such Indemnitee or (iii) in the reasonable judgment of the Indemnitee, based upon the advice of its counsel, a potential conflict of interest may exist between the Indemnitor and the Indemnitee with respect to such Assertion (in which case, such Indemnitee notifies the Indemnitor that such Indemnitee elects to employ separate counsel at the Indemnitor's expense, the Indemnitor shall not have the right to assume the defense of such Assertion on behalf of such Indemnitee. Notwithstanding anything to the contrary in this SECTION 9.3, the Indemnitor shall not, without the prior written consent of such Indemnitee, (a) settle or compromise any action or consent to the entering of any judgment which does not include as an unconditional term thereof the delivery by the claimant or - 26 - plaintiff to such Indemnitee of a duly executed written release of such Indemnitee from all liability in respect of such Assertion, which release shall be satisfactory in form and substance to counsel to such Indemnitee, or (b) settle or compromise any action in a manner that, in the sole judgment of such Indemnitee or its counsel, may materially and adversely affect such Indemnitee other than as a result of money damages or other money judgments. 9.4 SURVIVAL. The indemnification, protection, defense and hold harmless obligations of the parties contained in this SECTION 9 shall survive the closing or other termination of this Agreement. 10. MISCELLANEOUS PROVISIONS. 10.1 SURVIVAL OF REPRESENTATIONS, COVENANTS AND WARRANTIES. The respective representations, covenants and warranties of each of the parties to this Agreement shall survive the execution and delivery of this Agreement, and the closing or other termination of this Agreement. 10.2 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties hereto. Provided, however, that nothing contained in this Agreement, whether express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 10.3 GOVERNING LAW. This Agreement shall be governed by and construed under the laws of the State of California as applied. 10.4 COUNTERPARTS. This Agreement may be executed in two or more counterparts each of which shall be deemed an original, but all of which together shall constitute one instrument. 10.5 EXPENSES. Each party shall bear its respective expenses incurred in connection with the preparation, execution and performance of this Agreement and the transactions contemplated hereby, including, without limitation, all fees and expenses of agents, representatives, counsel, accountants and other professional advisors. - 27 - 10.6 NOTICES. Unless otherwise provided, all notices and other communications required or permitted under this Agreement shall be in writing and shall be mailed by U.S. first-class mail, postage prepaid, sent by facsimile or delivered personally by hand or by a nationally recognized courier addressed to the party to be notified at the address or facsimile number as follows, or at such other address or facsimile number as such party may designate by ten (10) days advance notice to the other party: If to Purchaser: Big O Tire Dealers, L.P. c/o Richard P. Waxman, Esq. Wendel, Rosen, Black & Dean P.O. Box 2047 Oakland, CA 94604-2047 With copy to: WENDEL, ROSEN, BLACK & DEAN P.O. Box 2047 Oakland, CA 94604-2047 Attn: Richard P. Waxman, Esq. If to Seller: ______________________________ ______________________________ ______________________________ ______________________________ ______________________________ With copy to: ______________________________ ______________________________ ______________________________ ______________________________ All such notices and other written communication shall be effective on the date of mailing, facsimile transfer or delivery. 10.7 ENTIRE AGREEMENT. This Agreement together with all schedules, exhibits, attachments, instruments and documents referred to herein constitute the entire agreement among the parties and neither party shall be liable or bound to the other party in any manner by any warranties, representations or covenants except as specifically set forth herein or therein. 10.8 WAIVERS, AMENDMENTS AND REMEDIES. This Agreement may be amended to, preceded, cancelled, renewed or extended, and the terms hereof may be waived, only by a written instrument signed by Purchaser and Seller or, in the case of a waiver, by the party waiving compliance. No delay on the part of any party in exercise any right power or privilege hereunder shall operate as a waiver thereof; nor shall any waiver on the part of any party of any such right, power or privilege, or any single or partial exercise of any such right, power - 28 - or privilege preclude any further exercise thereof or the exercise of any other such right, power or privilege. The rights and remedies herein provided are cumulative and are not exclusive in any rights or remedies that any party may otherwise have at law or in equity. The rights and remedies of any party based upon, arising out of or otherwise in respect of any inaccuracy in or breach of any representation, warranty, covenant or agreement contained in this Agreement shall in no way be limited by the fact the act, omission, occurrence or other state of facts upon which any claim of any such inaccuracy or breach is based may also be the subject matter of any other representation, warranty, covenant or agreement contained in this Agreement (or in any other agreement among the parties herein as to which there is no inaccuracy or breach). 10.9 SEVERABILITY. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provisions shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be unenforceable in accordance with its terms. 10.10 HEADINGS/RECITALS/EXHIBITS. The section headings in this Agreement are solely for convenience of reference and do not affect the meaning or interpretation of this Agreement or any term or provision hereof. The recitals set forth in the introductory paragraphs hereof and each exhibit, schedule or other attachment referred to in this Agreement and attached hereto from an integral part of this Agreement are incorporated herein by this reference and made a part hereof. 10.11 KNOWLEDGE. Where any representation, warranty or statement contained in this Agreement or in any certificate or document delivered in connection with this Agreement is expressly qualified to the knowledge of the person making such representation, warranty or statement, it shall mean the knowledge of such person actually possesses by having made a reasonable inquiry as to the matters which are the subject thereof. 10.12 NECESSARY ACTION. Each of the parties will use its reasonable efforts to take all actions and to do all things as shall be necessary, proper or advisable to consummate and make effective the transactions contemplated by - 29 - this Agreement. 10.13 TIME. Time is of the essence of this Agreement. 10.14 ATTORNEYS' FEES. (a) If any action at law is necessary to enforce or interpret the terms of this Agreement and all exhibits, schedules, instruments and documents referred to herein, the prevailing party shall be entitled to reasonable attorneys' fees, costs and disbursements in addition to any other relief to which such party may be entitled. (b) Attorneys' fees incurred by any party to this Agreement in enforcing any judgment, order or action brought to resolve any controversy arising under this Agreement shall be recoverable by the prevailing party. Such rights to recover postjudgment attorneys' fees shall be separate and distinct from the right to recover attorneys' fees pursuant to subsection (a) above. The provisions of this paragraph 10.14(b) shall be severable from all provisions of this Agreement and shall survive any judgment and shall not be deemed merged into any judgment. 10.15 CALIFORNIA CORPORATE SECURITIES LAWS. SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL. UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT. IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to be executed as of the date first above written. "SELLER" "PURCHASER" ____________________________ BIG O DEALERS, L.P. By: BIG O TIRE DEALERS OF AMERICA By__________________________ Its: General Partner Name:_______________________ Title:______________________ By________________________________ - 30 - Wesley Stephenson Its: President By____________________________________ Name:_________________________________ Title:__________________________________ - 31 - "PURCHASER" BIG O DEALERS, L.P. By: BIG O TIRE DEALERS OF AMERICA Its: General Partner By____________________________________ Wesley Stephenson Its: President - 32 - EXHIBIT A MERGER AGREEMENT EXHIBIT B NOTE EXHIBIT C SECURITY AND PLEDGE AGREEMENT EXHIBIT D CONFIDENTIALITY LETTER STOCK PURCHASE AGREEMENT ______________, 1995 - 33 - EX-13 11 EXHIBIT (C)(3) EXHIBIT (c)(3) DRAFT OF SUBSCRIPTION AGREEMENT This Agreement for Subscription of Common Stock ("Agreement") is entered into as of the __ day of November, 1995, by and between BOTI Holdings, Inc., a Nevada corporation ("Issuer"), and Big O Dealers L.P., a California limited partnership ("Subscriber"). RECITALS: A. Issuer desires to issue to Subscriber, and Subscriber desires to subscribe to and purchase from Issuer a total of Five Hundred Sixty-Nine Thousand Eight Hundred One (569,801) shares (the "Shares") of the common stock, par value $0.01 of Issuer (the "Common Stock") pursuant to the terms contained in this Agreement. B. As payment for the Shares, Subscriber will transfer and convey to Issuer pursuant to the terms of this Agreement _______ shares of common stock, par value $0.10, of Big O Tires, Inc., a Nevada corporation, held by Subscriber ("Big O Common") valued at $16.50 per share, as well as cash in the amount of ___________, for an aggregate consideration of Ten Million Dollars ($10,000,000.00). AGREEMENT: NOW THEREFORE, in exchange for the mutual covenants and promises contained herein, and for other valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereby agree as follows: 1. PAYMENT OF SUBSCRIPTION PRICE. On the Closing Date (as defined in Section 3), Subscriber shall pay to Issuer in immediately available funds a total of ________________ ($ _________), and shall convey, transfer and assign all of Subscriber's rights, title and interest in and to _____ shares of Big O Common then held by Subscriber (collectively, the "Subscriber Payment"). 2. ISSUANCE OF SHARES. Upon receipt of the Subscriber Payment, Issuer shall issue, sell, transfer and convey to Subscriber the Shares. 3. CLOSING DATE. The Closing Date shall be the date which is one business day prior to the "Effective Date" of the Agreement and Plan of Merger by and between BOTI Holdings, Inc., BOTI Acquisition Corp., and Big O Tires, Inc., dated July 24, 1995, as amended. 4. SUBSCRIBER'S REPRESENTATIONS AND WARRANTIES. 4.1. The Shares are being acquired for the Subscriber's own account (and not for the account of others) for investment and not with a view to the distribution or resale thereof. 4.2. Subscriber understands that it may not sell or otherwise dispose of the Shares in the absence of either a registration statement under the Securities Act of 1933 and applicable state securities laws or an exemption from the registration provisions of the Securities Act of 1933 and applicable state securities laws. 4.3. The certificates representing the Shares may contain a legend to the effect of Section 4.2 above. 4.4. As of the Closing Date, the shares of Big O Common conveyed to Issuer from Subscriber pursuant to Section 1, will be owned beneficially and of record by Subscriber, free and clear of any liens, charges, pledges, security interests, prior assignments, encumbrances and claims of any kind and nature whatsoever. No such shares of Big O Common are subject to any restriction with respect to their transferability, other than restrictions on transfer imposed under applicable federal and state securities laws. 4.5. The execution and delivery of this Agreement, and the consummation of the transactions contemplated hereby, will not result in the breach of any of the terms and provisions of, or constitute a default under, or conflict with any agreement, indenture or other instrument to which Subscriber is bound. 5. ISSUER'S REPRESENTATIONS AND WARRANTIES. 5.1. Issuer represents that the Shares shall be validly issued, fully paid, and non-assessable. 5.2 The authorized capital stock of Issuer on the Closing Date will consist of ___________ shares of Common Stock, of which _______ will be issued and outstanding. 6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and warranties of Subscriber and Issuer contained in this Agreement shall survive until the Closing Date. 7. MISCELLANEOUS. 7.1. This Agreement constitutes the complete agreement between Issuer and Subscriber and shall supersede any prior or contemporaneous written or oral agreements relating to the purchase of the Shares. 7.2. This Agreement shall be governed by and interpreted under the internal laws, and not the choice of law provisions, of the State of Nevada. 7.3. This Agreement may be executed in one or more identical counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument, and shall become effective when one or more counterparts have been signed by each of the Parties. IN WITNESS WHEREOF, the parties have executed this Agreement as of the __ day of November, 1995. ISSUER: SUBSCRIBER: BIG O HOLDINGS, INC., BIG O DEALERS, L.P., a Nevada corporation a California limited partnership By: ______________________ By: ______________________ Name:_____________________ Its: Managing General Partner Title:____________________ By: ____________________ Name: __________________ Title:___________ S_____ - 2 - EX-14 12 EXHIBIT (C)(4) Draft of Form of Subscription Agreement This Agreement for Subscription of Common Stock ("Agreement") is entered into as of the __ day of November, 1995, by and between BOTI Holdings, Inc., a Nevada corporation ("Issuer"), and _______________ ("Subscriber"). RECITALS: A. Issuer desires to issue to Subscriber, and Subscriber desires to subscribe to and purchase from Issuer a total of ____________________ (________) shares (the "Shares") of the common stock, par value $0.01 of Issuer (the "Common Stock") pursuant to the terms contained in this Agreement. B. As payment for the Shares, Subscriber will transfer and convey to Issuer pursuant to the terms of this Agreement ___________ shares of common stock, par value $0.10, of Big O Tires, Inc., a Nevada corporation, held by Subscriber ("Big O Common") valued at $16.50 per share. AGREEMENT: NOW THEREFORE, in exchange for the mutual covenants and promises contained herein, and for other valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereby agree as follows: 1. PAYMENT OF SUBSCRIPTION PRICE. On the Closing Date (as defined in Section 3), Subscriber shall convey, transfer and assign all of Subscriber's rights, title and interest in and to _____ certificated shares of Big O Common then held by Subscriber, and _____ shares of Big O Common then held by Subscriber which are subject to [the Big O Tires, Inc. Restricted Stock Plan] (the "Subscriber Payment"). 2. ISSUANCE OF SHARES. Upon receipt of the Subscriber Payment, Issuer shall issue, sell, transfer and convey to Subscriber the Shares. 3. CLOSING DATE. The Closing Date shall be the date which is one business day prior to the "Effective Date" of the Agreement and Plan of Merger by and between BOTI Holdings, Inc., BOTI Acquisition Corp., and Big O Tires, Inc., dated July 24, 1995, as amended. 4. SUBSCRIBER'S REPRESENTATIONS AND WARRANTIES. 4.1. The Shares are being acquired for the Subscriber's own account (and not for the account of others) for investment and not with a view to the distribution or resale thereof. 4.2. Subscriber understands that it may not sell or otherwise dispose of the Shares in the absence of either a registration statement under the Securities Act of 1933 and applicable state securities laws or an exemption from the registration provisions of the Securities Act of 1933 and applicable state securities laws. 4.3. Subscriber acknowledges that ___ of the Shares are being issued to Subscriber subject to the restrictions and limitations imposed by the [Issuer's Restricted Stock Plan] . 4.4. The certificates representing the Shares may contain a legend to the effect of Section 4.2 and to the extent applicable, Section 4.3 above. 4.5. As of the Closing Date, the shares of Big O Common conveyed to Issuer from Subscriber pursuant to Section 1, will be owned beneficially and of record by Subscriber, free and clear of any liens, charges, pledges, security interests, prior assignments, encumbrances and claims of any kind and nature whatsoever. No such shares of Big O Common are subject to any restriction with respect to their transferability, other than restrictions on transfer imposed by the [Big O Restricted Stock Plan], or imposed under applicable federal and state securities laws. 4.6. The execution and delivery of this Agreement, and the consummation of the transactions contemplated hereby, will not result in the breach of any of the terms and provisions of, or constitute a default under, or conflict with any agreement, indenture or other instrument to which Subscriber is bound, including without limitation the [Big O Restricted Stock Plan]. 5. ISSUER'S REPRESENTATIONS AND WARRANTIES. 5.1. Issuer represents that the Shares shall be validly issued, fully paid, and non-assessable. 5.2. The authorized capital stock of Issuer on the Closing Dates will consist of ___________ shares of Common Stock, of which _______ will be issued and outstanding. 6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and warranties of Subscriber and Issuer contained in this Agreement shall survive until the Closing Date. 7. MISCELLANEOUS. 7.1. This Agreement constitutes the complete agreement between Issuer and Subscriber and shall supersede any prior or contemporaneous written or oral agreements relating to the purchase of the Shares. 7.2. This Agreement shall be governed by and interpreted under the internal laws, and not the choice of law provisions, of the State of Nevada. 7.3. This Agreement may be executed in one or more identical counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument, and shall become effective when one or more counterparts have been signed by each of the Parties. IN WITNESS WHEREOF, the parties have executed this Agreement as of the __ day of November, 1995. ISSUER: SUBSCRIBER: BIG O HOLDINGS, INC., ________________________ a Nevada corporation By: _______________________ Name: _____________________ Title: ____________________ EX-15 13 EXHIBIT (D)(1) BIG O TIRES, INC. SPECIAL MEETING SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 Filed by the Registrant [ ] FILED BY THE PARTY OTHER THAN THE REGISTRANT [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ]Confidential for use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [ ] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 BIG O TIRES, INC. (Name of Registrant as Specified in its Charter) Payment of Filing Fee (Check the appropriate box): [ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A. [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [X] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which the transaction applies: Common Stock, par value $0.10 per share. (2) Aggregate number of securities to which transaction applies: 3,317,840 shares plus options to purchase 216,308 shares of common stock, par value $0.10 per share. (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): $16.50 in cash. (4) Proposed maximum aggregate value of transaction: $56,699,686 (F1) (5) Total fee paid: $11,339.94 [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: (2) Form, Schedule or Registration Statement No.: (3) Filing Party: (4) Date Filed: (F1) For purposes of calculating the filing fee only. This amount is based upon the purchase of 3,317,840 shares of Common Stock of the Registrant at a price of $16.0 in cash per share and the cancellation of options to purchase an aggregate of 216,308 shares of Common Stock of the Registrant, which options have exercise prices ranging from $0.32 to $15.88, in consideration for a payment equal to the excess of $16.50 over the exercise prices multiplied by the number of shares subject to such options. The amount of the filing fee, calculated in accordance with Exchange Act Rule 0-11(c)(1), equals 1/50th of one percent of the proposed cash payment to the holders of the Common Stock and options. PRELIMINARY COPY BIG O TIRES, INC. 11755 East Peakview Avenue, Suite A Englewood, Colorado 80111 To Our Stockholders: You are invited to attend the Special Meeting of Stockholders of Big O Tires, Inc. (the "Company") to be held at _________________________________, on ___________, 1996, at ___:___ _.m., Mountain Standard Time. At the Special Meeting, you will be asked to consider and vote upon a proposal to approve the Agreement and Plan of Merger, dated as of July 24, 1995, as amended (the "Merger Agreement"), by and among the Company, BOTI Holdings, Inc., a Nevada corporation (the "Parent"), and BOTI Acquisition Corp., a Nevada corporation and a wholly- owned subsidiary of the Parent (the "Purchaser"), and the transactions contemplated thereby. The Parent and the Purchaser were formed by certain members of the Company's senior management and some of the Company's franchised dealers to acquire the Company. The Merger Agreement is included in the accompanying Proxy Statement as APPENDIX A. Pursuant to the terms of the Merger Agreement, Purchaser will merge with and into the Company, with the Company remaining as the surviving corporation (the "Merger"). The result of the Merger will be that the Company will become a wholly owned subsidiary of the Parent and each outstanding share (except for certain "Excluded Shares," as defined in the accompanying Proxy Statement) of the Company's common stock, par value $0.10 per share (the "Common Stock"), will be converted into the right to receive a cash payment of $16.50, without interest (the "Merger Consideration"). The Merger Consideration includes $0.01 per share for the redemption of rights issued pursuant to the Company's Rights Agreement dated as of August 26, 1994. Consummation of the Merger is subject to certain conditions, including, without limitation, the approval and adoption of the Merger Agreement by holders of at least a majority of the outstanding shares of Common Stock. The Board of Directors of the Company (the "Board"), based on the unanimous recommendation of the Investment Committee of the Board (the "Investment Committee"), which consisted only of directors who were neither employees of the Company nor franchised dealers participating in the acquisition, has determined that the Merger is fair to, and in the best interests of, the Company and its stockholders and has approved the Merger Agreement. The Board recommends that you vote "FOR" approval of the Merger Agreement. PaineWebber Incorporated ("PaineWebber"), the financial advisor to the Investment Committee in connection with the Merger, has rendered a written opinion to the Board to the effect that the Merger Consideration is fair from a financial point of view to the holders of the Common Stock (other than holders of Excluded Shares). You are urged to read the Proxy Statement in its entirety for important information regarding the Merger. IT IS VERY IMPORTANT THAT YOU BE REPRESENTED AT THE SPECIAL MEETING, EVEN IF YOU ARE NOT ABLE TO ATTEND IN PERSON. THE AFFIRMATIVE VOTE OF AT LEAST A MAJORITY OF THE OUTSTANDING SHARES OF COMMON STOCK IS REQUIRED TO APPROVE THE MERGER. CONSEQUENTLY, THE FAILURE TO RETURN A PROPERLY EXECUTED PROXY CARD OR TO VOTE IN PERSON AT THE SPECIAL MEETING WILL HAVE THE SAME EFFECT AS A VOTE AGAINST THE MERGER. IF INSTRUCTIONS ARE SPECIFIED ON A PROXY CARD, SUCH PROXY CARD WILL BE VOTED IN ACCORDANCE THEREWITH, AND IF NO SPECIFICATIONS ARE MADE, SUCH PROXY CARD WILL BE VOTED FOR THE MERGER AGREEMENT. PLEASE TAKE TIME TO CONSIDER AND VOTE UPON THIS SIGNIFICANT MATTER. Please mark, sign and date each proxy card you receive and return it promptly in the enclosed, postage-paid envelope even if you plan to attend the Special Meeting in person. Returning a marked proxy card will not prevent you from voting in person at the Special Meeting, but will assure that your vote is counted if you are unable to attend. If you wish to attend the Special Meeting in person, you will need to present proof of your ownership of shares of Common Stock. If you hold your shares through a bank, broker or other nominee, you must obtain evidence of ownership from such nominee prior to your attendance at the Special Meeting. DO NOT SEND IN YOUR STOCK CERTIFICATES AT THIS TIME. YOU WILL RECEIVE INSTRUCTIONS REGARDING EXCHANGING YOUR COMMON STOCK FOR THE MERGER CONSIDERATION AFTER THE SPECIAL MEETING. THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. Sincerely, John E. Siipola Chairman of the Board of Directors PRELIMINARY COPY BIG O TIRES, INC. 11755 East Peakview Avenue, Suite A Englewood, Colorado 80111 NOTICE OF SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON _______________, 1996 NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders (the "Special Meeting") of Big O Tires, Inc., a Nevada corporation (the "Company"), will be held at ___________________, on _____________, 1996, at __:__ _.m., Mountain Standard Time, for the purpose of considering and voting upon a proposal to approve the Agreement and Plan of Merger dated as of July 24, 1995, as amended (the "Merger Agreement"), by and among the Company, BOTI Holdings, Inc., a Nevada corporation (the "Parent"), and BOTI Acquisition Corp., a Nevada corporation and a wholly-owned subsidiary of the Parent (the "Purchaser"), and the transactions contemplated by the Merger Agreement and such other business as lawfully may come before the Special Meeting. As more fully described in the Proxy Statement, of which this notice forms a part, pursuant to the Merger Agreement, the Purchaser will merge with and into the Company, with the Company remaining as the surviving corporation (the "Merger"). The result of the Merger will be that the Company will become a wholly-owned subsidiary of the Parent and each issued and outstanding share (except for certain "Excluded Shares," as defined in the Proxy Statement) of the Company's Common Stock will be converted into the right to receive a cash payment of $16.50, without interest (the "Merger Consideration"). The Merger Consideration includes $0.01 per share for the redemption of rights issued pursuant to the Company's Rights Agreement dated as of August 26, 1994. Consummation of the Merger is subject to certain conditions, including, without limitation, the approval and adoption of the Merger Agreement by holders of at least a majority of the outstanding shares of the Company's Common Stock. If the Merger is consummated, stockholders will not have appraisal or dissenter's rights and consequently will be required to accept payment of the Merger Consideration. Only stockholders of record as of the close of business on ______________, 1995, will be entitled to notice of and to vote at the Special Meeting and at any adjournment or postponement thereof. THE AFFIRMATIVE VOTE OF THE HOLDERS OF AT LEAST A MAJORITY OF THE OUTSTANDING SHARES OF THE COMPANY'S COMMON STOCK IS REQUIRED TO APPROVE THE MERGER. IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THE SPECIAL MEETING REGARDLESS OF THE NUMBER OF SHARES YOU OWN. EVEN IF YOU PLAN TO ATTEND THE SPECIAL MEETING, YOU ARE URGED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENVELOPE PROVIDED AS PROMPTLY AS POSSIBLE. IF YOU ATTEND THE SPECIAL MEETING, YOU MAY VOTE EITHER IN PERSON OR BY PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU AT ANY TIME PRIOR TO THE EXERCISE THEREOF IN THE MANNER DESCRIBED IN THE PROXY STATEMENT. IF YOU WISH TO ATTEND THE SPECIAL MEETING IN PERSON, YOU WILL NEED TO PRESENT PROOF OF YOUR OWNERSHIP OF SHARES OF COMMON STOCK. PLEASE DO NOT SEND ANY STOCK CERTIFICATES AT THIS TIME. YOU WILL RECEIVE INSTRUCTIONS REGARDING EXCHANGING YOUR COMMON STOCK FOR THE MERGER CONSIDERATION AFTER THE SPECIAL MEETING. BY ORDER OF THE BOARD OF DIRECTORS Susan D. Hendee, Assistant Secretary ____________, 1995 PRELIMINARY COPY BIG O TIRES, INC. 11755 East Peakview Avenue, Suite A Englewood, Colorado 80111 PROXY STATEMENT ___________________________ INTRODUCTION This proxy statement is being furnished in connection with the solicitation of proxies by the Board of Directors ( the "Board") of Big O Tires, Inc. (the "Company") to be used at the Special Meeting of Stockholders (the "Special Meeting") to be held at __________________________________________, on ______________, 1996, at __:__.m., Mountain Standard Time, and at any adjournment or postponement thereof. The purpose of the Special Meeting is to consider and vote upon a proposal to approve an Agreement and Plan of Merger dated as of July 24, 1995, as amended, (the "Merger Agreement") by and among the Company, BOTI Holdings, Inc., a Nevada corporation (the "Parent"), and BOTI Acquisition Corp., a Nevada corporation and a wholly-owned subsidiary of the Parent (the "Purchaser"), and the transactions contemplated by the Merger Agreement and such other business as lawfully may come before the Special Meeting. Pursuant to the Merger Agreement, the Purchaser will merge into and with the Company (the "Merger"), with the Company remaining as the surviving corporation. As more fully described herein under "The Merger Agreement," the result of the Merger will be that the Company will become a wholly-owned subsidiary of the Parent and each issued and outstanding share of common stock of the Company, par value $0.10 per share (the "Common Stock"), except certain Excluded Shares described herein, will be converted into the right to receive a cash payment of $16.50, without interest (the "Merger Consideration"). The Merger Consideration includes $0.01 per share for the redemption of rights issued pursuant to the Company's Rights Agreement dated as of August 26, 1994 (the "Rights"). A group comprised of certain of the franchised dealers of the Company (the "Dealers") and certain members of senior management of the Company ("Senior Management") will utilize the Parent and the Purchaser for the purpose of effecting the Merger. Those Dealers who have indicated that they will participate in the acquisition and Senior Management are hereinafter sometimes collectively referred to as the "Dealer Management Group." See "Directors and Executive Officers of the Company" and "Information Pertaining to the Parent, the Purchaser and Related Persons." THE BOARD, AND THE INVESTMENT COMMITTEE OF THE BOARD (THE "INVESTMENT COMMITTEE"), BOTH RECOMMEND THAT STOCKHOLDERS VOTE "FOR" APPROVAL OF THE MERGER AGREEMENT. The Board believes that the Merger presents an opportunity to maximize shareholder value. The Merger will allow the Company's stockholders to receive a cash price representing a premium over the market prices of the Common Stock prevailing prior to the July 24, 1995, announcement of the signing of the Merger Agreement and over the approximately $11.20 per share book value of the Company on September 30, 1995. PaineWebber Incorporated ("PaineWebber"), the financial advisor to the Investment Committee in connection with the Merger, has rendered its opinion to the Board to the effect that, as of the date of such opinion, the Merger Consideration is fair, from a financial point of view, to the holders of the Common Stock (other than holders of Excluded Shares). The Board also considered the other matters discussed herein under "Special Factors." The affirmative vote of the holders of a majority of the Common Stock outstanding on ______________, 1995 (the "Record Date") is required for approval of the Merger Agreement. Only holders of record of shares of Common Stock on the Record Date are entitled to notice of, and to vote at, the Special Meeting and any adjournment or postponement thereof. You are requested to sign and date the accompanying proxy card and promptly return it to the Company in the enclosed postage-paid, addressed envelope, even if you plan to attend the Special Meeting. Failure to return a properly executed proxy card or to vote at the Special Meeting will have the same effect as a vote against the Merger. DO NOT FORWARD ANY STOCK CERTIFICATES AT THIS TIME. YOU WILL RECEIVE INSTRUCTIONS REGARDING EXCHANGING YOUR COMMON STOCK FOR THE MERGER CONSIDERATION AFTER THE SPECIAL MEETING. The enclosed proxy card, the accompanying Notice of Special Meeting of Stockholders and this Proxy Statement are being mailed to stockholders of the Company on or about __________________, 1995. TABLE OF CONTENTS INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 General Information . . . . . . . . . . . . . . . . . . . . . . . . 5 The Parties . . . . . .. . . . . . . . . . . . . . . . . . . . . . . 5 The Date and Place of the Special Meeting . . . . . . . . . . . . . 5 No Appraisal or Dissenter's Rights. . . . . . . . . . . . . . . . . 6 The Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Exchange of Certificates. . . . . . . . . . . . . . . . . . . . . . 7 Recommendations for the Merger. . . . . . . . . . . . . . . . . . . 7 Opinion of Financial Advisor. . . . . . . . . . . . . . . . . . . . 7 Opinion of Financial Advisor to the ESOP. . . . . . . . . . . . . . 7 Purposes and Reasons For the Merger . . . . . . . . . . . . . . . . 8 Plans for the Company After the Merger. . . . . . . . . . . . . . . 8 Interests of Certain Persons in the Merger. . . . . . . . . . . . . 9 Accounting Treatment of the Merger. . . . . . . . . . . . . . . . . 9 Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . 10 Price Range of Company Common Stock and DiviDend History.. . . . . . 10 THE SPECIAL MEETING. . . . . . . . . . . . . . . . . . . . . . . . . . . 11 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Record Date and Voting. . . . . . . . . . . . . . . . . . . . . . . 11 Vote Required to Approve the Merger . . . . . . . . . . . . . . . . 11 Proxy Information; Revocation . . . . . . . . . . . . . . . . . . . 11 Absence of Appraisal Rights and Right To Dissent.. . . . . . . . . . 12 Proxy Solicitation. . . . . . . . . . . . . . . .. . . . . . . . . . 12 SPECIAL FACTORS. . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 12 The Merger. . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 12 Background and Negotiations Regarding the Merger. . . . . . . . . . 12 Recommendation of the Board of Directors; the Company's Purpose and Reasons for and Belief as to the Fairness of the Merger . . . 23 The Parent's Purposes and Reasons for the Merger. . . . . . . . . . 25 Opinion of Financial Advisor. . . . . . . . . . . . . . . . . . . . 25 Plans for the Company After the Merger. . . . . . . . . . . . . . . 29 Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . 29 Accounting Treatment of the Merger. . . . . . . . . . . . . . . . . 31 Regulatory Approvals. . . . . . . . . . . . . . . . . . . . . . . . 31 Financing of the Merger . . . . . . . . . . . . . . . . . . . . . . 31 Expenses of the Merger. . . . . . . . . . . . . . . . . . . . . . . 32 PRINCIPAL STOCKHOLDERS OF THE COMPANY . . . . . . . . . . . . . . . . . . 33 SECURITY OWNERSHIP OF THE COMPANY'S MANAGEMENT . . . . . . . . . . . . . 33 PRICE RANGE OF COMPANY COMMON STOCK AND DIVIDEND HISTORY .. . . . . . . . 36 SELECTED CONSOLIDATED FINANCIAL DATA OF THE COMPANY . . .. . . . . . . . 37 THE MERGER AGREEMENT . . . .. . . . . . . . . . . . . . . . . . . . . . . 39 Parties to the Merger Agreement . . . . . . . . . . . . . . . . . . 39 Description of the Merger Agreement . . . . . . . . . . . . . . . . 39 Terms of the Merger . . . . . . . . . . . . . . . . . . . . . . . . 39 Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Conditions to the Merger. . . . . . . . . . . . . . . . . . . . . . 40 Representations and Warranties. . . . . . . . . . . . . . . . . . . 41 Conduct of Business Pending Merger. . . . . . . . . . . . . . . . . 41 Additional Agreements.. . . . . . . . . . . . . . . . . . . . . . . 43 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 43 Modification and Waiver . . . . . . . . . . . . . . . . . . . . . . 44 Termination of the Merger Agreement . . . . . . . . . . . . . . . . 44 Exchange of Certificates. . . . . . . . . . . . . . . . . . . . . . 45 DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY. . .. . . . . . . . . . . 46 INTEREST OF CERTAIN PERSONS IN THE MERGER . . . . . . . . . . . . . . . . 50 Indemnification by the Parent and the Company . . . . . . . . . . . 51 INFORMATION PERTAINING TO THE PARENT, THE PURCHASER AND RELATED PERSONS . . . . . . . . . . . . . . . . . . . . 52 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Certain Information Pertaining to BOTDA . . . . . . . . . . . . . . 53 Security Ownership of Management of BOTDA in Company.. . . . . . . . 55 Certain Past Contacts, Transactions or Negotiations with Company . . 56 RECENT TRANSACTIONS BY THE COMPANY IN THE COMMON STOCK . . . . . . . . . 57 DOCUMENTS INCORPORATED BY REFERENCE. .. . . . . . . . . . . . . . . . . . 57 STOCKHOLDER PROPOSALS.. . . . . . . . . . . . . . . . . . . . . . . . . . 58 APPENDIX A AGREEMENT AND PLAN OF MERGER DATED AS OF JULY 24, 1995, WITH AMENDMENTS, BY AND AMONG BOTI ACQUISITION CORP., BOTI HOLDINGS, INC. AND BIG O TIRES, INC. APPENDIX B PAINEWEBBER INCORPORATED -- FAIRNESS OPINION SUMMARY The following is a brief summary of information included elsewhere in this Proxy Statement. The summary is necessarily incomplete and is qualified in its entirety by the more detailed information in this Proxy Statement, its Appendices and the documents incorporated by reference and referred to in this Proxy Statement. Capitalized terms used and not defined in the summary have the meanings as defined elsewhere in this Proxy Statement. YOU SHOULD READ THE ENTIRE PROXY STATEMENT AND THE APPENDICES PRIOR TO TAKING ANY ACTION WITH RESPECT TO THE MERGER PROPOSAL. GENERAL INFORMATION This Proxy Statement relates to the proposed merger of the Purchaser with and into the Company pursuant to the Merger Agreement by and among the Company, the Parent and the Purchaser. The result of the Merger will be that each holder of Common Stock (other than Excluded Shares) will receive $16.50 per share in exchange for such Common Stock. THE PARTIES BIG O TIRES, INC., a Nevada corporation (the "Company"), is engaged primarily in the business of franchising Big O Tire retail stores (the "Retail Stores") and supplying Retail Stores with tires and related automotive products for sale. The Company also owns and operates Retail Stores and, on a limited basis, engages in site selection and real estate development for Retail Stores. The mailing address of the Company's principal executive offices and corporate headquarters is 11755 East Peakview Avenue, Suite A, Englewood, Colorado 80111 and its telephone number is (303) 790-2800. BOTI HOLDINGS, INC., a Nevada corporation (the "Parent"), is a holding company organized in January 1995 to participate in the Merger and to acquire all of the capital stock of the Company. See "Information Pertaining to the Parent, the Purchaser and Related Persons." The Parent has engaged in no other business activities since its inception other than those related to the acquisition of the Company. The mailing address of the principal executive offices of both the Parent and the Purchaser is the same as the Company's address, 11755 East Peakview Avenue, Suite A, Englewood, Colorado 80111, and their telephone number is (303) 790-2800. BOTI ACQUISITION CORP., a Nevada corporation (the "Purchaser"), has been organized as a wholly-owned subsidiary of the Parent for the purpose of effecting the Merger and has engaged in no other business activities other than those related to the acquisition of the Company. See "Information Pertaining to the Parent, the Purchaser and Related Persons." THE DATE AND PLACE OF THE SPECIAL MEETING The Special Meeting is to be held at ________________________________, on ______________, 1996, at __:__.m., Mountain Standard Time. At the Special Meeting and at any adjournment or postponement thereof, the stockholders of the Company will be asked to consider and vote upon the proposal to approve the Merger Agreement and the transactions contemplated thereby. RECORD DATE; REQUIRED VOTE. As of ____________, 1995, the Record Date, _________ shares of Common Stock were issued and outstanding, each of which is entitled to one vote on each matter to be acted upon at the Special Meeting. Only stockholders of record at the close of business on the Record Date will be entitled to notice of and to vote at the Meeting. The presence of a majority of the outstanding shares of Common Stock will constitute a quorum for purposes of the Special Meeting. The affirmative vote of the holders of a majority of the Common Stock outstanding on the Record Date is required for approval of the Merger Agreement. The failure to return a properly executed proxy card, to vote in person at the Special Meeting or, with respect to shares held of record by a broker or other nominee, to provide such broker or nominee with voting instructions (resulting in a broker non-vote) or abstaining from voting, will have the same effect as a vote against the Merger. Proxies may be revoked, subject to the procedures described herein, at any time up to and including the date of the Special Meeting. See "The Special Meeting -- Vote Required to Approve the Merger." NO APPRAISAL OR DISSENTER'S RIGHTS Stockholders do not have appraisal or dissenter's rights in connection with the Merger under Nevada law. Consequently, if the Merger is consummated, their shares of Common Stock will be canceled and they will be required to accept the Merger Consideration. See "The Special Meeting -- Absence of Appraisal Rights and Right to Dissent." THE MERGER The Company, the Parent and the Purchaser have entered into the Merger Agreement whereby the Purchaser will merge with and into the Company. The Company will remain as the surviving corporation. The result of the Merger will be that the Company will become a wholly-owned subsidiary of the Parent. With the exception of shares of Common Stock held by Senior Management, shares of Common Stock held by the Company's Employee Stock Ownership Plan (the "ESOP") that are converted into securities of the Parent, and any shares of Common Stock held by or under contract to be acquired by the Parent, the Purchaser or the Company or any direct or indirect subsidiary thereof or any stockholder of the Parent or the Purchaser (collectively the "Excluded Shares") which either shall be canceled or converted into common stock of the Parent as described below, each share of Common Stock will be canceled and converted into the right to receive the Merger Consideration. Each issued and outstanding share of the Purchaser will be converted into one share of Common Stock of the Company at the Effective Time (as defined below), the separate corporate existence of the Purchaser will cease and the name of the Company will remain "Big O Tires, Inc." At the Effective Time each option to purchase shares of Common Stock held by holders who are directors of the Company, except options held by Messrs. Steven P. Cloward and John B. Adams (see "Information Pertaining to the Parent, the Purchaser and Related Persons"), and, except as stated below, options held by current and former employees of the Company who are not members of Senior Management or directors of the Company, will be canceled. Each holder thereof will be entitled to receive, in lieu of each share which such holder otherwise would have received upon exercise of the option, cash equal to the extent (if any) by which $16.50 exceeds the exercise price per share payable pursuant to such option or such lower amount as is provided for in the plan pursuant to which the option was granted. However, if the holder has agreed to convert or exchange the options for securities of the Parent, no payment will be made upon cancellation of the options. All of the Company's stock option, stock appreciation or compensation plans or arrangements will be terminated as of the Effective Time. See "The Merger Agreement -- Stock Options." The effectiveness of the Merger is conditioned upon the satisfaction or waiver of certain conditions. The conditions that have not yet been satisfied or waived, include, without limitation, approval of the Merger by the holders of a majority of the outstanding Common Stock (which is being sought pursuant to this Proxy Statement) and the conversion of at least 80% of the shares of the Common Stock held by the ESOP into the common stock of the Parent. If the Merger is approved by the requisite vote of the Company's stockholders, and all remaining conditions are satisfied or waived, the Merger will become effective upon the filing of the Certificate of Merger with the Secretary of State of the State of Nevada (the "Effective Time"). If the Merger is approved, the Company expects to file the Certificate of Merger on or shortly after the date of the Special Meeting. See "The Merger Agreement -- Description of the Merger Agreement." EXCHANGE OF CERTIFICATES Upon consummation of the Merger, each share of Common Stock owned by the stockholders of the Company, other than Excluded Shares, will be canceled and converted into the right to receive the Merger Consideration. See "The Merger Agreement" and APPENDIX A. If the Merger is consummated, the stockholders of the Company will be required to surrender their stock certificates in proper form as a condition to receipt of payment. Stock certificates should not be surrendered with the proxies. Promptly after the Merger occurs, a transmittal letter with instructions will be sent to stockholders to be used by them to surrender their share certificates. See "The Merger Agreement -- Exchange of Certificates." RECOMMENDATIONS FOR THE MERGER THE BOARD AND THE INVESTMENT COMMITTEE RECOMMEND THAT THE STOCKHOLDERS VOTE FOR THE MERGER. The Board and the Investment Committee base their recommendation on the following factors: (a) the terms and conditions of the Merger Agreement that were determined by arms length negotiations between the parties; (b) the assets, obligations, operations, earnings and prospects of the Company and of the retail tire and automotive products industry generally; (c) recent market prices for the Common Stock, recent trading activity and the fact that the Merger Consideration to be paid to stockholders represents a premium over the $14.375 closing sale price of the Common Stock on July 20, 1995, the day prior to the Board's approval of the Merger Agreement, and over the $11.03 per share book value of the Company on June 30, 1995; (d) a comparison of the approximately $11.20 per share book value of the Company on September 30, 1995, to the Merger Consideration; (e) the results of their market testing to determine whether there were other buyers for the Company; (f) a review of possible alternatives to the sale of the Company, including continuing to operate the Company as a publicly-owned entity and the recent attempts to locate an alternate buyer; and (g) the written opinion of PaineWebber to the effect that, as of the date thereof, the Merger Consideration was fair, from a financial point of view, to the holders of Common Stock (other than holders of Excluded Shares). See "Special Factors." OPINION OF FINANCIAL ADVISOR PaineWebber has acted as financial advisor to the Company in connection with the Merger. PaineWebber assisted the Investment Committee in its negotiation of the terms of the Merger Agreement and assisted the Board in its examination of the fairness, from a financial point of view, to the holders of Common Stock (other than holders of Excluded Shares) of the Merger Consideration. PaineWebber has delivered a written opinion stating that, as of the date thereof, the Merger Consideration was fair, from a financial point of view, to the holders of Common Stock (other than holders of Excluded Shares). The full text of the written opinion of PaineWebber, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken, is attached as APPENDIX B to this Proxy Statement. STOCKHOLDERS OF THE COMPANY ARE URGED TO READ SUCH OPINION CAREFULLY IN ITS ENTIRETY. See "Special Factors -- Opinion of Financial Advisor." Opinion of Financial Advisor to the ESOP The Merger Agreement also requires that the financial advisor to the ESOP deliver an opinion that the consideration to be received by the participants in the ESOP who elect to convert the Common Stock allocated to their accounts in the ESOP into an investment in the common stock of the Parent, is fair from a financial point of view to such participants. On ________, George K. Baum & Company delivered its written opinion to the ESOP stating that the consideration to be provided pursuant to such conversion is fair to the ESOP participants from a financial point of view. See "Special Factors." PURPOSES AND REASONS FOR THE MERGER The Company's purpose and reason for the Merger are to allow the stockholders of the Company to sell their shares in the Company at a price that the Investment Committee and Board believe is fair to and in the best interest of such stockholders. After a stockholder proposal that recommended that the Board engage the services of a nationally recognized investment banker to explore all alternatives to enhance the values of the Company was approved in June 1994, the Company began immediately considering various alternatives to enhance stockholder value. The timing of the Merger has been determined based on the time required to review various alternatives to enhance stockholder value for the Company, to solicit indications from persons who might be interested in acquiring the Company, to negotiate the terms of the Merger Agreement, to allow the Dealer Management Group to obtain financing, and to obtain the requisite stockholder and other approvals. The Parent is engaging in the Merger in order to concentrate the ownership of the Company in those parties who will be actively engaged in its operation, will have a long-term perspective and will be highly motivated toward the building of a successful operation. The Parent's desire to effect the Merger is based upon the expected realization of the Merger benefits described in the following paragraph. Having identified those expected benefits of the Merger, the Parent believes that the achievement of those benefits should be pursued at the present time because the Company's Investment Committee has for approximately 18 months been exploring strategic alternatives which, if accomplished, would either make the acquisition of the Company by the Parent impossible or unattractive. The Parent believes that the Company, which will be a wholly-owned subsidiary of the Parent after the Merger, will benefit from the Merger because (i) the Company's management will be free to devote itself to building long-term values for the Company without concern that such efforts may adversely affect short-term results and the market price for the Common Stock; (ii) the Merger will eliminate the need for the Company to comply with the reporting requirements of the Securities Exchange Act of 1934 (the "Exchange Act"), to maintain its current listing on the NASDAQ National Market System, and to continue an investor relations program, the aggregate cost of which the Company estimates amounts to approximately $190,000 annually (primarily consisting of the preparation of the annual report to stockholders, accounting and legal fees and investor program costs); (iii) the Company will be able to pursue the common goals of the Dealers and the Company's employees; and (iv) the ownership of the Company will be concentrated in those parties who will be actively engaged in its operation, will have a long-term perspective and will be highly motivated toward the building of a successful operation. The form of the Merger was selected by the Parent to accomplish in a single step its acquisition of the outstanding shares of Common Stock not already owned by the Parent's stockholders. That structure was deemed preferable to a tender offer, which probably would have resulted in less than 100% ownership by the Parent unless followed by a subsequent merger. The Parent offered cash consideration in the Merger because this was the only method which would accomplish the goal of eliminating public ownership and establishing the desired unification of the owners and operators of the Company. PLANS FOR THE COMPANY AFTER THE MERGER The Parent expects to continue the business and operations of the Company substantially as they are currently being conducted by the Company and its subsidiaries. However, the Dealer Management Group will continue to evaluate the business and operations of the Company and will make such changes as are deemed appropriate. The Parent is exploring ways to raise cash for working capital and other general corporate purposes in addition to the financing sources discussed under the heading "Financing of the Merger". Although no agreement or arrangement has been entered into with respect to any transaction, the types of transactions under consideration by the Parent include the sale of certain parcels of undeveloped real property adjacent to certain of the Company's regional service center locations and certain Retail Store sites. There can be no assurance that an agreement with respect to any transaction will be reached or, if reached, that any such transaction will be consummated. It is anticipated that the Company will not pay any cash dividends on its securities after the Merger. Except for the possible merger or liquidation of several subsidiaries of the Company into the Company, the Parent does not have any present plans or proposals which relate to or would result in an extraordinary corporate transaction, such as a merger, reorganization, liquidation, relocation of any operations of the Company or any changes in the Company's present capitalization, corporate structure or business or, except as described above, the sale or transfer of a material amount of assets involving the Company or any of its subsidiaries or the composition of the Company's management. The Parent will from time to time be reviewing additional information and reviewing possible options with respect to the Company and may propose or develop additional or new plans or proposals or may propose the acquisition or disposition of assets or other changes in the Company's business, corporate structure, capitalization, management or dividend policy. It is also anticipated that the officers (other than Messrs. Siipola and Mehlfeldt) and most key employees of the Company will continue as employees of the Company after the Merger. Those officers who are shareholders of the Parent (other than solely as a result of their participation in the ESOP) will be compensated at substantially the levels of compensation they received in 1995, with the exception of Mr. Cloward, whose compensation will revert in 1996 to the level he was receiving as of January 1, 1995, and with the exception of Ms. O'Reilly, whose 1996 compensation will be based on her compensation level in 1995. It is expected that in most situations such persons will have substantially equivalent positions with the Company. In connection with the consummation of the Merger, Messrs. Siipola and Mehlfeldt will not continue as employees, officers, nor directors of the Company. The Merger Agreement provides that the board of directors of the Purchaser will become the board of directors of the Company at the Effective Time. INTERESTS OF CERTAIN PERSONS IN THE MERGER Certain members of Senior Management are stockholders, officers and/or directors of the Parent and, in conjunction with others in the Dealer Management Group, are expected to be involved in the management and operation of the Company following the Merger. Certain of these persons, by virtue of their roles as directors of the Company, will, along with all other current directors of the Company, be entitled to certain indemnification rights under the Merger Agreement. Consequently, as to such indemnification rights and their participation in the Parent, their interests may be deemed to be separate from or adverse to the interests of the remaining stockholders. As of the Record Date, Senior Management held of record ________ shares of Common Stock or ____% of the issued and outstanding Common Stock. It is expected that the shares of Common Stock owned by these members of Senior Management will be voted in favor of the Merger. See "Information Pertaining to the Parent, the Purchaser and Related Persons" and "The Merger Agreement." ACCOUNTING TREATMENT OF THE MERGER The Merger will be treated, for financial statement purposes, as a sale by the Company's stockholders to Parent for cash. Accordingly, no gain or loss will be recognized by the Company as a result of the Merger. The Merger will be accounted for by the Parent as a purchase. FEDERAL INCOME TAX CONSEQUENCES The receipt of cash by a stockholder of the Company pursuant to the Merger Agreement will be a taxable transaction to such stockholder for federal income tax purposes and may also be a taxable transaction under applicable state, local or other laws. Each stockholder is urged to consult his or her own tax advisor as to the particular tax consequences to such stockholder. See "Special Factors - -- Federal Income Tax Consequences." PRICE RANGE OF COMPANY COMMON STOCK AND DIVIDEND HISTORY The shares of Common Stock are traded on the NASDAQ National Market System under the symbol "BIGO." The following table sets forth the high and low prices, as reported by the NASDAQ National Market System, for each quarter commencing January 1, 1993. These quotations have been rounded to the nearest eighth, reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. Stockholders are urged to obtain current quotations. HIGH LOW 1993 First Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Third Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 1/4 16 3/8 17 1/4 16 1/2 11 1/8 10 7/8 13 1/4 13 1/2 1994 First Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Third Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 3/4 16 3/4 16 3/4 17 7/8 12 3/4 13 1/8 14 1/2 15 1/4 1995 First Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Third Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fourth Quarter (through ______, 1995). . . . . . . . . . . . . . . . . . . . . . 16 1/4 15 1/4 15 1/4 12 7/8 12 1/2 12 3/4
On May 31, 1995, June 6, 1995 and July 21, 1995, the last days the Common Stock traded prior to the public announcements that the Company had (i) received the Merger proposal at $16.50 per share of Common Stock from Senior Management and the Dealers (ii) the Investment Committee approved in principle the $16.50 per share Merger proposal, and (iii) the Company entered into the Merger Agreement providing for the Merger of Purchaser into the Company at consideration of $16.50 per share of Common Stock, the closing sale prices of the shares of Common Stock (as reported on the NASDAQ National Market System) were $13.75, $14.25, and $14.375, respectively. The closing sale price of the shares of Common Stock (as reported on the NASDAQ National Market System) was $____________ on _________________, 1995. The Company has never paid any cash dividends on its shares of Common Stock. See "Price Range of Company Common Stock and Dividend History" and "Special Factors -- Financing of the Merger." THE SPECIAL MEETING GENERAL This Proxy Statement is being furnished to holders of the Company's Common Stock in connection with the solicitation of proxies by the Company's Board of Directors for use at the Special Meeting to be held at _______________________________________________, on ______________, 1996, at _____ __.m., Mountain Standard Time, and at any adjournment or postponement thereof. At the Special Meeting, holders of the Company's Common Stock will consider and vote upon a proposal to merge the Purchaser with and into the Company pursuant to the Merger Agreement. The result of the Merger will be that each holder of Common Stock (other than the Excluded Shares) will receive $16.50 per share in exchange for such Common Stock. Information contained in this Proxy Statement with respect to the Parent, the Purchaser, and plans for the Company after the consummation of the Merger has been provided by the Parent. All other information contained herein has been provided by the Company. RECORD DATE AND VOTING The Record Date for determination of the Company's stockholders entitled to notice of and to vote at the Special Meeting has been fixed as the close of business on ________________, 1995. Accordingly, only holders of record of shares of Common Stock on the Record Date will be entitled to notice of and to vote at the Special Meeting. As of the Record Date, the outstanding voting securities of the Company consisted of _________ shares of Common Stock that were held of record by _____ holders. Each stockholder of record as of the Record Date is entitled to one vote on each matter for each share then held. The holders of a majority of the issued and outstanding shares of Common Stock attending the meeting in person or by proxy will constitute a quorum for the conduct of business at the Special Meeting, and all adjournments and postponements thereof, notwithstanding that less than a quorum may remain after commencement of the Special Meeting. VOTE REQUIRED TO APPROVE THE MERGER The affirmative vote of the holders of a majority of the Common Stock outstanding on the Record Date is required for approval of the Merger Agreement. Consequently, the failure to return a properly executed proxy card or to vote in person at the Special Meeting will have the same effect as a vote against the Merger. Similarly, abstentions and "broker non-votes" (referring to instances where a broker or other nominee physically indicates on the proxy that, because it has not received instructions from beneficial owners, it does not have discretionary authority as to certain shares of Common Stock to vote on the Merger) will have the same effect as a vote against the Merger. The proxies named in the enclosed proxy card may, at the direction of the Board, vote to adjourn or postpone the Special Meeting to another time or place for the purpose of soliciting additional proxies necessary for approval of the Merger. PROXY INFORMATION; REVOCATION Any stockholder has the power to revoke his or her proxy before its exercise at the Special Meeting or any adjournment or postponement by (1) giving written notice of such revocation to the Assistant Secretary of the Company, Susan D. Hendee, 11755 East Peakview Avenue, Suite A, Englewood, Colorado 80111, prior to the Special Meeting; (2) giving written notice of such revocation to the Assistant Secretary of the Company at the Special Meeting; or (3) signing and delivering a proxy bearing a later date. The dates contained on the forms of proxy presumptively determine the order of execution, regardless of the postmark dates on the envelopes in which they are mailed. The mere presence at the Special Meeting of a stockholder who has executed and delivered a valid proxy will not revoke such proxy. The powers of the proxyholders with respect to the shares of a particular stockholder will be suspended if the stockholder executing the proxy is present at the Special Meeting and elects to vote in person. Subject to such revocation or suspension, each properly executed proxy received by the proxyholders will be voted at the Special Meeting (whether or not instructions are specified thereon). If instructions are specified thereon, such proxy will be voted in accordance therewith, and if no specifications are made, such proxy will be voted for the Merger Agreement. ABSENCE OF APPRAISAL RIGHTS AND RIGHT TO DISSENT The Nevada General Corporation Law generally provides that a stockholder is entitled to dissent from a merger and obtain payment of the fair value of such stockholder's shares of stock in the event of merger to which the corporation, in which the stockholder holds shares, is a party. However, there is no right of dissent under the Nevada General Corporation Law with respect to a plan of merger of a corporation the shares of any class of stock of which on the record date were listed on a national securities exchange or designated as a national market system security on an interdealer quotation system operated by the National Association of Securities Dealers Inc. ("NASDAQ") unless the stockholders will receive anything except cash and/or shares of the surviving corporation in exchange for their shares. Because the Common Stock is quoted on the NASDAQ National Market System and because of the composition of the Merger Consideration, stockholders of the Company have no right to dissent upon consummation of the Merger. Accordingly, if the Merger is consummated, stockholders will have their rights as stockholders terminated and their shares will be canceled and, except for stockholders holding Excluded Shares, will have only the right to receive the Merger Consideration in exchange for such canceled shares. PROXY SOLICITATION The cost of soliciting proxies will be borne by the Company. The Company may request brokers, fiduciaries, custodians and nominees to send proxies, proxy statements and other material to their principals at the expense of the Company. In addition, directors, officers or other employees of the Company may, without additional compensation therefor, solicit proxies in person or by telephone. SPECIAL FACTORS THE MERGER The Company has entered into the Merger Agreement, a copy of which is attached as APPENDIX A to this Proxy Statement, with the Parent and the Purchaser. Pursuant to the terms of the Merger Agreement, the Purchaser will merge with and into the Company with the Company continuing as the surviving corporation. Upon consummation of the Merger, each outstanding share of Common Stock (other than Excluded Shares) will be converted into the right to receive, upon surrender of such share of Common Stock, the Merger Consideration. Stockholders do not have any appraisal or dissenters rights under Nevada law. See "The Special Meeting -- Absence of Appraisal Rights and Right to Dissent" and "The Merger Agreement." At the same time, each share of the outstanding common stock of the Purchaser, all of which is owned by the Parent, will be converted into one share of Common Stock of the Company. Thus, after the Merger, all of the then outstanding Common Stock of the Company will be owned by the Parent. BACKGROUND AND NEGOTIATIONS REGARDING THE MERGER PRELIMINARY NOTE. Because of the close working relationship among Senior Management, the Dealers and certain members of the Board, there were many incidental conversations between representatives of Purchaser and representatives of the Company relating to the Merger Agreement, often coincidental to other conversations on business matters unrelated to the Merger. The following discussion describes significant events during the negotiation of the Merger Agreement and material issues discussed during the negotiation of its terms. SHAREHOLDER PROPOSAL. By letter dated December 20, 1993, Kenneth W. Pavia, Sr., general partner of Balboa Investment Group, L.P. ("Balboa") which reported that it then owned approximately 9.6% of the outstanding Common Stock, advised the Company that he intended to introduce a proposal at the Company's 1994 Annual Shareholders' Meeting. The Company's management had several discussions with Mr. Pavia concerning various aspects of Company operations and membership of its Board during the several months before the Company received Mr. Pavia's proposal. At his request, the following resolution (the "Shareholder Proposal") and a supporting statement were included in the Company's proxy statement for its 1994 Annual Meeting of Shareholders ("Annual Meeting"). "RESOLVED: That the shareholders of the Company recommend and deem it desirable and in their best interest that the Board of Directors immediately engage the services of a nationally recognized investment banker to explore all alternatives to enhance the values of the Company. Those alternatives should include, but not be limited to, the possible sale, merger, or go- private transaction involving the Company, or the return to conducting business as a cooperative." The Company included in its proxy statement a statement in opposition to the Shareholder Proposal. At the Company's Annual Meeting held on June 8, 1994, the Shareholder Proposal received the approval of holders of approximately 46% of the then outstanding Common Stock. Approximately 38% of the then outstanding Common Stock was voted against the Shareholder Proposal. THE INVESTMENT COMMITTEE. Immediately following the Annual Meeting, the directors of the Company who were not then employees of the Company met to form the Investment Committee to begin the process of implementing the Shareholder Proposal, including engaging an investment banking firm as provided in the proposal. The Investment Committee consisted of Messrs. Carney, Johnston, Mehlfeldt, Siipola, Weiger, and Wernholm, all of whom currently are and at that time were directors of the Company and none of whom were employees of the Company or owners of interests in franchised Retail Stores. Mr. Asher, a director of the Company who owns an interest in a company that owns franchised Retail Stores, was invited to participate as a non-voting member of the Investment Committee. In the ensuing 12 days, the members of the Investment Committee contacted or were contacted by approximately 25 investment banking firms and merchant banking firms to discuss providing assistance to the Company in implementing the Shareholder Proposal. The Investment Committee met on June 20, 1994, to review informal proposals received from three investment banking firms. At the meeting, the Investment Committee determined to request formal presentations from three investment banking firms and to request one additional firm to submit information concerning its services. On June 29, 1994, the Investment Committee met and heard presentations from four investment banking firms, Donaldson, Lufkin & Jenrette Securities Corp., Kidder, Peabody & Co. Incorporated, PaineWebber, and Bear, Stearns & Co., Inc. The Investment Committee met again on July 1, 1994, and selected PaineWebber as the investment banker to advise the Investment Committee with respect to carrying out the Shareholder Proposal. On July 5, 1994, the Company issued a press release regarding the selection of PaineWebber and advised Mr. Pavia of the selection of PaineWebber. The Investment Committee met on July 13, 1994, with Steven P. Cloward, President and then Chief Executive Officer, John B. Adams, Executive Vice President and Chief Financial Officer, Philip J. Teigen, General Counsel and Secretary, and Susan D. Hendee, Assistant Counsel and Assistant Secretary of the Company, together with representatives of PaineWebber. At that meeting the Investment Committee discussed the process by which PaineWebber would work with the Investment Committee to analyze alternatives for enhancing the value of the Company, how PaineWebber would conduct due diligence with respect to the Company and other organizational matters relating to facilitating PaineWebber's preparation of a report to the Investment Committee. The Investment Committee, Mr. Adams, Mr. Cloward and Ms. Hendee met again on July 27, 1994, with representatives of PaineWebber to hear a progress report from PaineWebber with respect to its work. PaineWebber advised that it was preparing financial analyses and developing a list of alternatives that might enhance shareholder value. In addition, the Company retained M. Kane & Company, Inc. ("Kane & Co.") in May 1994 to assist in locating retail tire store chains that might be suitable for acquisition by the Company. Kane & Co. discussed several possible acquisitions with the Company, none of which resulted in substantive negotiations with prospective acquisition candidates. SHAREHOLDER RIGHTS PLAN. The Board had begun in early 1994 to consider adopting a shareholder rights plan and other mechanisms designed to prevent the acquisition of the Company under circumstances that would not result in its shareholders realizing fair value for their Common Stock. On April 14, 1994, the Board met with Holme Roberts & Owen LLC, Denver, Colorado ("Holme Roberts"), special counsel, and with PaineWebber to review such mechanisms and to consider adopting a shareholder rights plan which was intended to have the practical effect of ensuring that a fair price would be paid to Company shareholders for their shares in the event of an acquisition. At the April 14, 1994, Board meeting, PaineWebber delivered to the Company a presentation containing information about shareholder rights plans generally, certain publicly available information about the Company and certain other companies in similar or substantially similar businesses, and a range of implied stock prices for the Common Stock in the year 2004 (the "2004 Estimated Range"). The 2004 Estimated Range was made solely for use in determining the initial exercise price of the rights to be issued under a shareholder rights plan, and was not intended in any respect as an indicator of the Company's actual value. The analyses delivered at the April 14, 1994, Board meeting have been filed as exhibits to the Schedule 13E-3 relating to the Merger filed by the Parent and the Company with the Securities and Exchange Commission (the "Schedule 13E-3"). The Board met again on August 26, 1994, with representatives of Holme Roberts and PaineWebber and, after additional consideration, adopted a shareholder rights plan (the "Shareholder Rights Plan") and declared a dividend of one right for each share of Common Stock outstanding on September 12, 1994, and for each share of Common Stock issued thereafter. Under the Shareholder Rights Plan, on the tenth day following the public announcement of the acquisition of or an offer to acquire specified percentages of the Common Stock, the rights, if not redeemed, would become exercisable. Under certain circumstances, holders of the rights would be entitled to purchase, for half the then current market price, Common Stock of the Company or of an entity acquiring the Company. The Company also adopted changes to the Company Bylaws with respect to shareholder meetings and proposals and director nominations. The analyses delivered at the August 26, 1994, Board meeting have been filed as exhibits to the Schedule 13E-3. INITIAL PAINEWEBBER PRESENTATION. On September 12, 1994, the Investment Committee, together with Messrs. Cloward and Adams and Ms. Hendee, met with representatives of PaineWebber. PaineWebber provided a written presentation to the Investment Committee as to strategic alternatives for the Company. PaineWebber discussed the Company's operating plans and financial projections. PaineWebber reviewed with the Investment Committee a share repurchase program and an extraordinary dividend to shareholders which were not viewed as advantageous in view of the substantial borrowing required and the adverse effect of increased leverage on future operations of the Company. PaineWebber also discussed with the Investment Committee the possibility of a leveraged buyout by management and the acquisition of the Company by a strategic buyer or a financial buyer, including a preliminary report as to the relative advantages or disadvantages of such a combination given the Company's projections of future performance and possible prices that a buyer might offer. The Investment Committee discussed on a preliminary basis maintaining the Company as an independent entity, including implementing critical elements of the Company's business plan which were intended to enhance profitability. The PaineWebber presentation to the Investment Committee of alternatives to enhance shareholder value has been filed as an exhibit to the Schedule 13E-3. PaineWebber reported that it had received informal inquiries from persons expressing an interest in acquiring the Company. The Investment Committee directed PaineWebber to conduct further discussion with those which had expressed a preliminary interest so that the Investment Committee could select a list of qualified potential buyers. On September 13, 1994, the Investment Committee reported to the Board concerning its activities. The Board determined that, in view of the substantial activities of the Investment Committee, it would be advisable for Mr. Mehlfeldt, who has significant experience in the tire industry, to serve substantially full time assisting the Investment Committee in evaluating strategic alliances, mergers, sales and acquisitions. On September 22, 1994, Mr. Mehlfeldt entered into a consulting agreement with the Company reporting to the Investment Committee. Mr. Mehlfeldt was paid fees of $47,250 in 1994 and $3,750 in 1995. The amounts paid were based on the days for which Mr. Mehlfeldt provided consulting services. The arrangement was terminated on February 15, 1995, when Mr. Mehlfeldt became an employee of the Company. Also, at its September 13, 1994 meeting, the Board decided to invite Mr. Pavia to join the Board as a director. In the event that Mr. Pavia declined the invitation to join the Board, the Board authorized the Chairman of the Investment Committee to invite Mr. Pavia to attend Investment Committee meetings. Mr. Pavia did not join the Board, and on September 22, 1994, the Company announced that Mr. Pavia would assist the Investment Committee in its efforts to evaluate alternatives to enhance the Company's value. In September 1994, Mr. Pavia and Balboa signed a confidentiality agreement with the Company. The Investment Committee next met on October 11, 1994, with Messrs. Adams, Cloward, Teigen and Ms. Hendee, representatives of PaineWebber, and Mr. Pavia. PaineWebber reported that it had conversations with persons who had expressed an interest in acquiring the Company, including possible strategic buyers and financial buyers. PaineWebber advised that all persons who had expressed an interest had been supplied with confidentiality agreements as a condition to the Company providing due diligence information. THE AKH OFFER. On October 11, 1994, AKH Company, Inc. ("AKH"), which owns retail tire dealerships and is based in California, sent the Company a letter proposing a merger in which the Company would be acquired for a cash payment of $18 per share, subject to due diligence, financing and various other conditions. The AKH proposal also required a 90-day period of exclusivity during which the Company could not carry on discussions or negotiations with any third parties regarding a sale or combination of the Company. The Company had been approached by AKH earlier in 1994 to determine the interest in the possible acquisition of AKH by the Company. The Company had not pursued discussions with AKH at that time after determining that many of AKH's retail stores were within territories served by existing Company franchised Retail Stores. The Company asked AKH to enter into a confidentiality agreement with the Company, and, because of concerns about AKH's financial ability to acquire the Company, to demonstrate its financial capacity to conclude a transaction. The Company also advised AKH that it was unwilling to grant a period of exclusivity. In mid-November, 1994, AKH and the Company entered into confidentiality agreements. On November 1, 1994, AKH announced publicly that it had made a proposal to acquire the Company for an unspecified amount of cash. The Investment Committee met on October 24, 1994, with Mr. Adams, Ms. Hendee, Mr. Teigen and representatives of PaineWebber. The Investment Committee was advised that a group of Dealers had appointed a committee to review alternatives available to the Dealers in acquiring the Company and that the Dealers had retained KPMG Peat Marwick L.P. ("KPMG") to act as their financial advisor. Mr. Adams advised the Investment Committee that certain members of Senior Management were also investigating possible participation with certain of the Dealers in an offer to purchase the Company, and that certain representatives of Dealers and Senior Management had met to determine whether to make an offer to the Company. He advised that KPMG and a representative of the Dealers had signed confidentiality agreements and that Senior Management and the Dealers had retained Gibson, Dunn & Crutcher, Denver, Colorado, as their legal counsel. In view of the Dealers' interest in a possible transaction with the Company, Mr. Asher, who has interests in, and beneficially owns interests in, several Retail Stores, resigned from the Investment Committee. Soon thereafter, the Investment Committee determined to retain Holme Roberts as special counsel to the Investment Committee. Holme Roberts had previously represented ad hoc committees of the Board and had from time to time performed legal services for the Company, primarily in connection with adopting its Shareholder Rights Plan, but was not regularly retained as counsel for the Company. The Investment Committee met on November 4, 1994, with representatives of PaineWebber and Holme Roberts, and Mr. Pavia and Ms. Hendee. PaineWebber advised the Investment Committee of contacts that it had made and discussions that had occurred with ten possible strategic buyers and five financial buyers, several of whom had expressed no interest in continuing discussions with the Company. The Investment Committee met again on November 17, 1994, with representatives of PaineWebber, Holme Roberts, Mr. Pavia and Ms. Hendee. Mr. Mehlfeldt and PaineWebber provided the Investment Committee with an update as to discussions or contacts on the potential strategic and financial buyers lists. The Investment Committee requested PaineWebber and Mr. Mehlfeldt to intensify discussions with AKH and the Dealer Management Group and to follow-up with one other party who had expressed a preliminary interest in an attempt to bring the discussions to some form of resolution. DEALER MANAGEMENT GROUP'S FIRST OFFER. On December 2, 1994, the Company received a letter from the Dealer Management Group that proposed to commence negotiations to acquire the outstanding shares of the Company for $18.50 per share. The proposal was subject to various contingencies, including participation in the buying group by at least 90% of the Common Stock held in the ESOP and by the owners of 90% of franchised Retail Stores. The Dealer Management Group also requested a period of exclusivity of 120 days during which the Company would negotiate only with the Dealer Management Group. The Investment Committee met on December 5, 1994, with Mr. Pavia and representatives of PaineWebber and Holme Roberts to discuss the Dealer Management Group offer. At that meeting, the Investment Committee also discussed the status of the AKH offer and what implications, if any, acceptance of the AKH offer might have on the Big O franchised dealers as a group. During the meeting, PaineWebber and Mr. Mehlfeldt discussed with the Investment Committee the status of contacts made by PaineWebber on behalf of the Company with other prospective purchasers. Based upon this presentation, the Investment Committee determined that only AKH and the Dealer Management Group continued to evidence an active interest in a transaction to acquire the Company. At that meeting, the Investment Committee also considered a request by the Dealer Management Group for payment of its expenses in connection with pursuing an offer to buy the Company. The Investment Committee decided to agree to cover the Dealer Management Group's expenses up to $100,000 incurred to prepare, document and finance its acquisition proposal, including, without limitation, preparation of a definitive merger agreement. The Investment Committee directed Mr. Mehlfeldt and PaineWebber to request the Dealer Management Group to prepare a form of definitive merger agreement to determine if acceptable terms could be arranged. The Company did not agree to a period of exclusivity pending receipt of a satisfactory form of merger agreement. On December 6, 1994, two class-action lawsuits were filed in Nevada by shareholders of the Company seeking to enjoin a transaction with the Dealer Management Group, enjoin implementation of the Shareholders Rights Plan, and various other forms of relief. The two cases, which were consolidated, were dismissed by the plaintiffs without prejudice on March 31, 1995. During November and December 1994, the Company forwarded to the financial advisor for AKH certain requested information in connection with AKH's due diligence investigation, and representatives of AKH spent one day at the Company's headquarters conducting due diligence investigations. A due diligence meeting between the Company and representatives of AKH was scheduled for December 12 to 14, 1994, but was canceled by AKH through its financial advisor. On December 7, 1994, Mr. Mehlfeldt and representatives of PaineWebber met with Messrs. Adams and Cloward, representing Senior Management, Wesley E. Stephenson and William H. Spencer, representing the Dealers, and a representative of KPMG to discuss the terms of the Dealer Management Group's letter of intent to purchase the Company. Senior Management was authorized to contact the Company's lenders to discuss the proposal. On December 8, 1994, the Investment Committee met with representatives of PaineWebber and Holme Roberts. The Investment Committee decided to request that AKH and the Dealer Management Group evidence their continuing interest in acquiring the Company, by reaffirming their proposed prices, providing information as to their respective financing contingencies, and setting forth their due diligence requirements and a timetable for closing, by 12:00 Noon on Friday, December 16, 1994, at which time the Investment Committee would review the respective requests for a period of exclusive negotiations. The Investment Committee also agreed to reimburse the Dealer Management Group for up to an aggregate of $175,000 of reasonable expenses, provided that the Dealer Management Group agreed to withdraw a request to adjust the proposed purchase price by an amount equal to the transaction fee due PaineWebber and that it proceed immediately to prepare and submit a definitive merger agreement. During the next few days representatives of the Investment Committee discussed the terms of their offer with representatives of the Dealer Management Group. They also attempted to reach AKH through its financial advisor to discuss its offer. On December 13, 1994, the Company and the Dealer Management Group signed a letter agreement pursuant to which the Company agreed to reimburse the Dealer Management Group for up to $100,000 of costs incurred prior to December 8, 1994, in connection with its acquisition proposal and agreed to reimburse up to $75,000 of additional costs for a period beginning December 8, 1994, and ending on the earlier of execution of a definitive merger agreement, termination of the acquisition proposal, or December 31, 1994. On December 14, 1994, the Dealer Management Group sent a draft merger agreement to the Company. Thereafter, Mr. Mehlfeldt and representatives of PaineWebber and Holme Roberts discussed with Gibson, Dunn & Crutcher and KPMG the form of merger agreement and the terms of a proposed exclusivity agreement and agreement to reimburse certain expenses of the Dealer Management Group. The Company also received a letter from AKH to the effect that it would not proceed with its proposal until the Dealer Management Group proposal was no longer being considered. The Investment Committee met on December 16, 1994, with Mr. Pavia and representatives of PaineWebber and Holme Roberts. They were advised by Mr. Pavia that AKH had advised him that AKH had elected not to pursue a transaction with the Company because of the difficulty in competing with Company franchised dealers whose goodwill they would need if they were to acquire the Company, as well as its inability to conduct due diligence in a timely manner. The Investment Committee discussed the AKH response and discussed AKH's due diligence efforts with PaineWebber and members of the Investment Committee who had been dealing with AKH. The Investment Committee determined that there was not a serious interest on the part of AKH to continue to pursue its offer. The Investment Committee also reviewed with PaineWebber the status of discussions with other prospective purchasers and determined that there did not appear to be active interest in acquiring the Company on the part of any prospective purchaser except the Dealer Management Group. The Investment Committee then authorized Mr. Siipola and Mr. Mehlfeldt to negotiate with the Dealer Management Group with respect to an exclusive negotiation period until January 20, 1995, and to pay 80% of costs and expenses of the Dealer Management Group, except in cases where the transaction was terminated for reasons other than the group's unilateral decision not to proceed. Messrs. Mehlfeldt and Siipola and representatives of Holme Roberts and Gibson, Dunn & Crutcher negotiated the terms of an exclusivity agreement and modified arrangement regarding reimbursement of expenses during the ensuing week. On December 22, 1994, the Company signed a letter agreement with the Dealer Management Group pursuant to which the Company agreed that it would not solicit or initiate, or, subject to the fiduciary duties of its Board of Directors, participate in discussions with, any person concerning the acquisition of the Company. The period of exclusivity would terminate upon the later of execution of a definitive merger agreement, termination of negotiations and January 20, 1995. The December 22, 1994 letter amended the December 13, 1994 letter with respect to expenses and provided that the Company could terminate the arrangement upon 24-hours notice with respect to expenses not yet incurred. The Dealer Management Group agreed that if it did not consummate the proposed merger for any reason other than because (i) financing was unavailable, or (ii) the Investment Committee failed to recommend or withdraw the recommendation of the consummation of the transaction because of another transaction under certain circumstances, the Dealer Management Group would reimburse the Company for 20% of the expenses incurred. The Company also agreed to indemnify and hold harmless the Dealer Management Group for all costs and expenses arising out of claims relating to the proposed transaction. Thereafter, discussions occurred between Messrs. Siipola and Mehlfeldt on behalf of the Investment Committee and Messrs. Cloward and Adams on behalf of Senior Management and with Messrs. Stephenson, Spencer and Richard Miller on behalf of the Dealers with respect to terms of the definitive merger agreement. These discussions primarily related to topping fees, reimbursement of expenses and contingencies to the Dealer Management Group's obligations. Other discussions about the merger agreement were conducted by the respective parties through Gibson, Dunn & Crutcher and Holme Roberts. On January 19, 1995, Messrs. Spencer, Siipola and Mehlfeldt met with representatives of KPMG, Gibson, Dunn & Crutcher, Holme Roberts and PaineWebber to discuss the status of the negotiations. KPMG described the status of the group's efforts to obtain an equity participant from various tire manufacturers and the status of other negotiations with respect to financings. The representatives of the Company inquired as to progress in forming various entities to be owned by the Dealer Management Group and were advised that definitive agreements among the members of the Dealer Management Group had not been completed. On January 20, 1995, the Investment Committee met with Mr. Pavia and representatives of PaineWebber and Holme Roberts to review a draft merger agreement. Mr. Cloward and representatives of KPMG and Gibson, Dunn & Crutcher also met with the Investment Committee during a portion of the meeting to advise that certain negotiations with respect to equity participations in their group were continuing and that open issues remained between Senior Management and the Dealer Management Group with respect to their relative participation in the purchasing entity. The Investment Committee resolved to recommend to the Board that the form of merger agreement be signed. Subsequently, on January 20, 1995, Messrs. Cloward, Adams and Spencer and representatives of Gibson, Dunn & Crutcher met with Messrs. Mehlfeldt, Siipola and representatives of Holme Roberts and PaineWebber. The Dealer Management Group advised the Investment Committee that in view of the unresolved issues among them and the inability to obtain the necessary elements of financing, the Dealer Management Group was not prepared to sign a merger agreement. They requested an extension under the December 22, 1994 letter agreement until February 8, 1995, to sign the merger agreement, which the Company approved. At the close of business on January 20, 1995, Messrs. Cloward and Adams advised Holme Roberts that they had received a negative response to the proposed price of $18.50 per share from one of the possible equity participants with the Dealer Management Group and advised that the group would not hold the Company to the extension until February 8, 1995. Following discussions between Mr. Cloward and Mr. Siipola as to the status of negotiations, the Company reaffirmed its belief that the transaction should be financeable and determined to honor the extension agreement while the Dealer Management Group continued to seek financing. The Investment Committee met with Mr. Pavia and representatives of PaineWebber and Holme Roberts on February 8, 1995. It reviewed three letters dated February 7, 1995. The first letter was from the Dealer Management Group which advised that the group had elected not to continue negotiations at that time in light of the difficulties it had experienced in obtaining the elements of its financing necessary to consummate the acquisition and the resulting inability of the Dealer Management Group to reach agreement on certain issues relating to the acquisition. The second letter was from the Dealers and advised that the Dealers intended to form an association to be known as "Big O Tire Dealers of America" which was to be organized to deal cooperatively with respect to matters concern- ing Big O franchisees. The letter contained a copy of a Dealer's "Declaration of Interdependence" which set forth a four-part purpose of the association, including the protection and advancement of Dealers' common interests in preserving the continuity of operations as they currently existed, including distribution systems, product supply, and operational philosophy at the retail level. The third letter also dated February 7, 1995, from Messrs. Cloward and Adams, requested a period of exclusivity for negotiating a transaction on behalf of Senior Management and others who might provide financing. Representatives of Senior Management informed the Company that they continued to be interested in completing a purchase of the Company on mutually acceptable terms. The Investment Committee did not grant the period of exclusivity requested. The Investment Committee began to discuss a restructuring plan for the Company presented in very general terms by Messrs. Siipola and Mehlfeldt. On February 8, 1995, the Company publicly announced that the Dealer Management Group had elected not to pursue the proposed transaction due to the inability to secure financing. On February 9, 1995, Mr. Cloward requested that the Company continue to pay certain expenses of Senior Management in pursuing a possible acquisition. The Investment Committee declined the request. From February 11, 1995, to February 15, 1995, the Company's franchised dealers met for their annual convention in Las Vegas. Numerous informal conversations and meetings occurred among members of the Dealers, Senior Management and members of the Investment Committee, some of which concerned in general terms whether a transaction might be possible. At a Board meeting on February 15, 1995, the Board approved a revised management structure. The objective of the revised management structure was to allow Mr. Cloward time to continue working on a transaction to acquire the Company and to enable Messrs. Siipola and Mehlfeldt to manage the Company while exploring alternatives to enhance the value of the Company should a transaction with the Dealers and Senior Management not occur. Mr. Siipola remained as Chairman and Mr. Mehlfeldt was elected Vice Chairman of the Company. Messrs. Siipola and Mehlfeldt were retained to work for the Company substantially full time pursuant to salary and incentive arrangements. Mr. Cloward would continue as President of the Company. Messrs. Siipola, Mehlfeldt and Cloward became members of the Office of the Chief Executive. Because of the complexity of organizing the Dealer Management Group proposals, the Board advised Mr. Cloward that it would have no objection if he continued to devote substantially all of his business time to an attempt to organize a group of Dealers and Senior Management to acquire the Company. On February 7, 1995, Big O Tire Dealers of America ("BOTDA"), a California nonprofit mutual benefit corporation was incorporated. Thereafter, BOTDA took an active role in representing the Dealers' interests as a part of the Dealer Management Group. At a Board meeting on February 15, 1995, the Board considered adding a representative of the Dealers to the Board. At a Board meeting held on February 24, 1995, the Board approved amendments to the Company's Bylaws so as to accommodate the concept of a three-person Chief Executive Office and to also recognize the new office of Vice Chairman of the Board. Discussions continued periodically during February and March, 1995 with the Dealer Management Group and various members of the Investment Committee. These discussions related primarily to whether the Dealers and Senior Management would make another offer to purchase the Company and, if so, at what price such offer might be made. The Dealer Management Group's Second Offer. On April 6, 1995, the Company received a proposal from the Dealer Management Group to acquire the Company for a cash price of $16 per share and on substantially the same other terms as the December proposal, including contingencies of signing a definitive merger agreement, obtaining financing to complete the purchase, participation in the acquisition by holders of at least 80% of the shares held by the Company's ESOP, and participation in the purchasing group by franchise dealers having at least 85% of the Retail Stores. On April 12, 1995, the Investment Committee met with PaineWebber and Holme Roberts. The Investment Committee authorized reimbursement of expenses by the Dealer Management Group through February 8, 1995. The Investment Committee considered a request for certain reimbursement of expenses by Senior Management subsequent to February 8, 1995, and determined not to provide any additional reimbursements. The Investment Committee reviewed the details of the debt and equity financing that the Dealer Management Group had provided to the Company in connection with the offer to assess the likelihood that financing to complete the purchase would be available. The Investment Committee determined not to accept the $16 per share offer, decided not to reimburse additional expenses of the group in pursuing the proposal, and expressed the Investment Committee's concern about the contingency concerning the ESOP's participation in the transaction. The Investment Committee advised the Dealer Management Group of its determination, and also that the Investment Committee would be open to further negotiations at a more favorable price. The Investment Committee's response was announced publicly. On April 24, 1995, the Investment Committee met with representatives of the Dealers and Senior Management including Messrs. Stephenson and Spencer and others on behalf of the Dealers and Messrs. Cloward and Adams, and represen- tatives of KPMG, PaineWebber, Holme Roberts and Wendel Rosen Black & Dean ("Wendel Rosen"), which was now counsel for the Dealers. The Dealer Management Group discussed why they believed the $16 offer was adequate. After the meeting adjourned, various members of the Investment Committee met with representatives of the Dealers. In the ensuing days, members of the Investment Committee had conversations with members of the Dealer Management Group with respect to various matters relating to Company management as well as the status of the Dealer Management Group's offer. By notice dated May 5, 1995, the Dealer Management Group advised the Company of its desire to have two proposals brought before the Company's Annual Meeting of Stockholders scheduled for June 7, 1995. The first proposal was to recommend that the Company's Board of Directors take all actions necessary to eliminate the Stockholder Rights Plan. The second proposal was to recommend that the Company's Board of Directors begin the good faith reconsideration of, and, if appropriate, negotiation of, the previously rejected cash offer of $16 per share made on April 6, 1995, through a committee comprised exclusively of non-employee directors. Because the Dealers and Senior Management believed that adequate progress was being made in negotiations with the Investment Committee prior to the Annual Meeting of Stockholders, no attempt was made to solicit votes for the proposals and they were not presented at the Annual Meeting of Stockholders. Due to the fact that they had become employees of the Company, on May 10, 1995, Messrs. Siipola and Mehlfeldt resigned from the Investment Committee and thereafter did not participate in the Investment Committee's deliberations. Mr. Carney was elected Chair of the Investment Committee. On May 22, 1995, representatives of the Dealer Management Group and their advisors met with the Investment Committee, PaineWebber and Holme Roberts to discuss the price at which the Dealer Management Group believed a transaction could be accomplished. Although the Dealer Management Group did not raise its offer above $16.00, it explored with the Investment Committee, the Investment Committee's advisors and the advisors to the Dealer Management Group, the possibility of reducing certain costs associated with the transaction so that the offer price could be increased. The meeting ended with the Investment Committee indicating that although the Dealer Management Group would have to negotiate any such cost savings on its own, the Investment Committee would be receptive to an acquisition offer for the Company at a price of $16.50 per share. On June 5, 1995, the Company announced that it had received a letter from the Dealer Management Group proposing to acquire the Company at a price of $16.50 per share, subject to a number of conditions. In conjunction with the Company's Annual Meeting of Shareholders, the Investment Committee met on June 6, 1995, with PaineWebber and Holme Roberts to discuss the status of negotiations with the Dealer Management Group, including timing of a transaction and the terms of reimbursement of their expenses. The Investment Committee met the following morning with Holme Roberts and representatives from Senior Management, and the Dealers including Messrs. Cloward, Adams, Stephenson, Spencer, a representative of Wendel Rosen and other members of the Dealer Management Group to discuss terms of a definitive agreement. On June 7, 1995, the Investment Committee met with Holme Roberts and decided to recommend that the Company enter into a letter agreement with the Dealer Management Group with respect to an offer at $16.50 per share subject to obtaining financing, participation in the Purchaser of at least 80% of the shares held by the Company's ESOP, participation in the Purchaser of not less than 85% of the franchised Big O Dealers, and negotiation of a definitive merger agreement. The Company agreed to pay up to $750,000 of the Purchaser's expenses (including those previously reimbursed in connection with the December 1994 proposal), if 85% of the franchised stores owned by Dealers participating in the Dealer Group with franchises expiring before July 1, 1999, extended their franchise agreements at least through the earlier of (a) July 1, 2002, or (b) the date three years after such franchise agreements would expire. If they did not do so, the reimbursement would not exceed $500,000. The Investment Committee also agreed to reimburse up to $217,000 of financing fees and commitments. The Board met following that meeting and approved the letter agreement. The letter agreement was signed on June 7, 1995, by the Company and the Dealer Management Group, a press release announcing the signing of the letter agreement was released on June 7, 1995, and the signing of the letter agreement was announced at the Annual Meeting of Shareholders held on the evening of June 7, 1995. During the ensuing month the parties negotiated a definitive merger agreement. The Investment Committee met on July 18, 1995, with Holme Roberts to review the Merger Agreement and provided final, technical comments. On July 21, 1995, the Investment Committee met with PaineWebber and Holme Roberts and approved signing the Merger Agreement. Representatives of PaineWebber reviewed the terms of the transaction, including its work with the Company over the past year. The Investment Committee then reviewed language of the draft Merger Agreement and its representations concerning the Investment Committee's determination with respect to the fairness of the transaction and the likelihood of receiving a fairness opinion. The Investment Committee determined to recommend the Merger to the Board as being in the best interest of the Company and its shareholders for the reasons set forth below in "Recommendation of the Board; the Company's Purpose and Reasons for and Belief as to the Fairness of the Merger." The Investment Committee also determined, based upon its own analysis of the Merger Consideration and taking into consideration the presentation of PaineWebber at the meeting, that the transactions contemplated by the Merger Agreement, based on information presently known, are in the best interest of and, subject to the receipt of the fairness opinions as described in the Merger Agreement, fair to the disinterested shareholders of the Company. The Investment Committee also determined that it was unaware of any reason why the Company would not receive a fairness opinion as provided in the Merger Agreement. Thereafter, on July 21, 1995, the Board met with Hopper and Kanouff, Holme Roberts and PaineWebber and again approved signing the Merger Agreement and certain amendments to the Shareholder Rights Plan necessary to permit the signing of the Merger Agreement and the consummation of the Merger. Members of the Board who were participating in the transaction as Senior Management or Dealers abstained from voting because of such participation. All other directors voted to approve the Merger Agreement. The Merger Agreement was signed on July 24, 1995. On July 24, 1995, prior to executing the Merger Agreement, the Company changed the Shareholder Rights Plan by amending the Rights Agreement between the Company and Interwest Transfer Co., Inc., to specifically exclude from the definition of an "Acquiring Person," the following: (i) BOTI Holdings, Inc.; (ii) BOTI Acquisition Corp.; (iii) an entity to be formed directly or indirectly by persons who are currently franchisees of the Company; (iv) any other person who may be deemed to be the beneficial owner of the Common Stock because of the execution and delivery of the Merger Agreement; and (v) any group consisting of two or more of the foregoing, so long as such persons are not the beneficial owners of any capital stock of the Company other than (a) Common Stock acquired pursuant to the Merger Agreement; (b) Common Stock owned or subject to stock options held by such persons prior to the date of the Merger Agreement; (c) Common Stock acquired by any of such persons from any other of such persons; (d) Common Stock or other securities acquired by such persons in transactions or types of transactions that are approved in advance by the Investment Committee; and (e) any other person that beneficially owned Common Stock as of July 24, 1995, but does not thereafter become the beneficial owner of any additional Common Stock not exceeding 1% of the share of Common Stock then outstanding. On August 16, 1995, the Dealer Management Group presented to the Investment Committee evidence of financing commitments subject to various contingencies, the fulfillment of which would occur in the future. The Investment Committee reviewed and determined that the Dealer Management Group's financing commitments, in the aggregate, were for amounts sufficient to provide funds to pay the Merger Consideration. On August 31, 1995, the Company agreed to a request made by the Dealer Management Group to extend until October 2, 1995, the date on which the Company or the Dealer Management Group could terminate the Merger Agreement, if prior to October 2, 1995, the Dealer Management Group had not satisfied or waived the contingency in the Merger Agreement that required participation in the Dealer Management Group by the Company's dealers owning not less than 85% of the franchised Big O Retail Stores ("Dealer Participation Contingency"). As a part of the agreement, the Dealer Management Group agreed that the Company could delay incurring additional expenditures with respect to its proxy statement until the Company had been advised that the Dealer Participation Contingency had been satisfied or waived, and the Company was satisfied that a fairness opinion would be received by the participants in the Company ESOP in connection with the proposed Merger. See the Merger Agreement, as amended, attached to this Proxy Statement as APPENDIX A. On October 2, 1995, the Company agreed to a request made by the Dealer Management Group to extend until October 16, 1995, the date on which the Company or the Dealer Management Group could terminate the Merger Agreement, if prior to October 16, 1995, the Dealer Management Group had not satisfied or waived the Dealer Participation Contingency. As part of the agreement, the Dealer Management Group agreed that the Company would not further extend such deadline and that the Company could delay incurring additional expenditures with respect to its proxy statement until the Company had been advised that the Dealer Participation Contingency had been satisfied or waived. See the Merger Agreement, as amended, attached to this Proxy Statement as APPENDIX A. On October 15, 1995, the Company received notice from the Parent and the Purchaser that the Parent and the Purchaser elected to waive the Dealer Participation Contingency. The Parent and the Purchaser advised the Company that dealers owning 82% of the Company's franchised Retail Stores, as of the date of the Merger Agreement, had elected to participate indirectly in the acquisition of the Company. On November 14, 1995, the Board met with Hopper and Kanouff, Holme Roberts, PaineWebber and Lentz Evans and King, P.C., legal counsel to the ESOP. At the meeting, PaineWebber rendered its opinion to the effect that, as of such date, the Merger Consideration was fair, from a financial point of view, to the holders of Common Stock (other than holders of Excluded Shares). See "Special Factors -- Opinion of Financial Advisor." The analysis of PaineWebber delivered at the November 14, 1995, Board meeting has been filed as an exhibit to the Schedule 13E-3. At the meeting held on November 14, 1995, the Board approved various amendments to the ESOP most of which will only take effect after the consummation of the Merger. Included in such amendments is an amendment that sets forth the procedures as to how the Common Stock held by the ESOP is to be voted on the Merger. See "Principal Stockholders of the Company -- Note 1." Also, on November 14, 1995, the Board, upon the unanimous recommendation of the Investment Committee, approved amendments to the Merger Agreement to clarify the mechanics of how the conversion of the Common Stock held by the ESOP which is to be converted into shares of the Parent is to be accomplished. At the meeting held on November 14, 1995, the Board (other than those directors who are participating in the acquisition as members of Senior Management or the Dealers who abstained) voted to recommend that the stockholders vote for the Merger. RECOMMENDATION OF THE BOARD OF DIRECTORS; THE COMPANY'S PURPOSE AND REASONS FOR AND BELIEF AS TO THE FAIRNESS OF THE MERGER RECOMMENDATION. The Investment Committee and the Board (excluding the directors who will be stockholders of the Purchaser, all of whom abstained from voting) of the Company have considered the terms and structure of the Merger, have reviewed the financial and legal aspects of the Merger with financial and legal advisors, have considered the financial and operational considerations related to the Merger, believe that the Merger is fair to and in the best interest of the Company's stockholders who are not affiliated with Senior Management or the Dealers and recommend that stockholders vote for the proposal to approve the Merger Agreement. Included in the directors who voted for the recommendation were all of the directors who are not employees of the Company or Dealers. Each member of the Board of Directors has advised the Company that he intends to vote his shares in favor of the adoption of the Merger Agreement. On the Record Date those directors (including members of Senior Management) and members of their families owned an aggregate _______ outstanding shares (approximately ____% of the outstanding shares of the Common Stock). PURPOSE AND REASONS FOR THE MERGER AND FOR THE TIMING OF THE MERGER. The Company's purpose and reason for the Merger are to allow all stockholders of the Company to sell their shares in the Company at a price that the Investment Committee and Board believe is fair to and in the best interests of the stockholders. After the Stockholder Proposal was approved in June 1994 the Company began immediately considering various alternatives to fulfill the mandate to take action directed toward enhancing stockholder value. The timing of the Merger has been determined by the time required to review various alternatives to enhance stockholder value for the Company, to solicit indications from persons who might be interested in acquiring the Company, to negotiate the terms of the Merger Agreement, for the Dealer Management Group to obtain financing, and to obtain the requisite stockholder and other approvals. FAIRNESS. The Board and the Investment Committee began considering various alternatives in response to the Stockholder Proposal and after considering all of the factors described below, determined that the Merger was fair to and in the best interest of the Company's stockholders who would receive the Merger Consideration. MERGER PRICE. The Merger Consideration constitutes a 14.8% premium over the $14.375 last reported sale price of the Common Stock on July 20, 1995. MARKET TEST. After extensive testing of the market to determine whether there were buyers for the Company, the Board and the Investment Committee determined that the Merger Consideration represents the best transaction that would be available for the Company in the foreseeable future. The Board and Investment Committee believe the market test was conducted fairly and thoroughly. The marketplace was aware that the Company would be receptive to offers for more than 10 months prior to the execution of the Merger Agreement and the Company through PaineWebber contacted approximately 17 prospective purchasers of the Company. OTHER TRANSACTIONS. The Investment Committee and the Board did not believe, based upon the analysis of PaineWebber and its own determination of acceptable debt levels for the Company, that extraordinary dividends or share repurchases would enhance stockholder value. LIQUIDATION VALUE. The Board did not believe that the Company's stockholders would receive an amount per share exceeding the Merger Consideration if the Company were liquidated. The Board determined that liquidation would be less favorable to the Company's stockholders than the Merger Consideration because of taxes that would be payable at the Company level before distributions to stockholders could be paid and the fact that the Company's assets were not separately as valuable as the Company as a going concern. STATUS QUO. The Investment Committee considered continuing to operate the Company without any specific transaction and determined that a transaction for the Merger Consideration was advisable. The retail tire business is extremely competitive with relatively low margins. In addition, the Company depends upon continued strong purchases from Retail Stores that are free to buy their retail inventory elsewhere. The uncertainty of future successful performance by the Company was considered to be outweighed by the assurance of $16.50 per share. FAIRNESS OPINION. The Board considered the advice of PaineWebber with respect to various alternatives to enhance shareholder value, PaineWebber's presentation on July 21, 1995, and the opinion of PaineWebber delivered on November 14, 1995, to the effect that, as of the date of such opinion, the Merger Consideration is fair, from a financial point of view, to the holders of Common Stock (other than holders of Excluded Shares). CONTINUING RELATIONSHIP WITH DEALERS. The Company's primary customers are the Retail Stores. It became apparent during the course of reviewing alternatives for the Company that a sale of the Company or other action that the Dealers did not support could adversely affect the value of the Company and could seriously affect the price obtainable for the Company's shares in an alternative transaction. The most significant assets of the Company are its franchises and relationships with its group of franchised dealers and any proposed sale of the Company or other action that diminishes the value of those assets could seriously affect the value of the Company. The Investment Committee and the Board of Directors have not assigned relative weights to the factors described above. THE PARENT'S PURPOSES AND REASONS FOR THE MERGER The Parent is engaging in the Merger in order to concentrate the ownership of the Company in those parties who will be actively engaged in its operation, will have a long-term perspective and will be highly motivated toward the building of a successful operation. The Parent's desire to effect the Merger is based upon the expected realization of the Merger benefits described in the following paragraph. Having identified those expected benefits of the Merger, the Parent believes that the achievement of those benefits should be pursued at the present time because the Company's Investment Committee has for approximately 18 months been exploring strategic alternatives which, if accomplished, would either make the acquisition of the Company by the Parent impossible or unattractive. The Parent believes that the Company, which will be a wholly-owned subsidiary of the Parent after the Merger, will benefit from the Merger because (i) the Company's management will be free to devote itself to building long-term values for the Company without concern that such efforts may adversely affect short-term results and the market price for the Common Stock; (ii) the Merger will eliminate the need for the Company to comply with the reporting requirements of the Exchange Act, to maintain its current listing on the NASDAQ National Market System, and to continue an investor relations program, the aggregate cost of which the Company estimates amounts to approximately $190,000 annually (primarily consisting of the preparation of the annual report to stockholders, accounting and legal fees and investor program costs); (iii) the Company will be able to pursue the common goals of the Dealers and the Company's employees; and (iv) the ownership of the Company will be concentrated in the hands of those parties who will be actively engaged in its operation, will have a long-term perspective and will be highly motivated toward the building of a successful operation. The form of the Merger was selected by the Parent to accomplish in a single step its acquisition of the outstanding shares of Common Stock of the Company not already owned by the Parent's stockholders. That structure was deemed preferable to a tender offer, which probably would have resulted in less than 100% ownership by the Parent unless followed by a subsequent merger. The Parent offered cash consideration in the Merger because this was the only method which would accomplish the goal of eliminating public ownership and establishing the desired unification of the owners, substantial suppliers and employees of the Company. OPINION OF FINANCIAL ADVISOR The full text of the opinion of PaineWebber dated November 14, 1995, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken, is attached as APPENDIX B to this Proxy Statement. Stockholders of the Company are urged to read such opinion carefully in its entirety. The summary of the PaineWebber opinion set forth in this Proxy Statement is qualified in its entirety by reference to the full text of such opinion. The Company retained PaineWebber as financial advisor to the Investment Committee with respect to the Merger and to render an opinion as to whether or not the Merger Consideration is fair, from a financial point of view, to the holders of Common Stock (other than holders of Excluded Shares). PaineWebber has delivered to the Board its written opinion to the effect that, as of November 14, 1995, and based on its review and assumptions and subject to the limitations summarized below, the Merger Consideration is fair, from a financial point of view, to the holders of Common Stock (other than holders of Excluded Shares). PaineWebber's opinion does not constitute a recommendation to any stockholder of the Company as to how such stockholder should vote with respect to the Merger. In rendering its opinion, PaineWebber, among other things: (i) reviewed, among other public information, the Company's Annual Reports, Forms 10-K and related financial information for the five fiscal years ended December 31, 1994, and a draft of the Company's Form 10-Q and the related unaudited financial information for the nine months ended September 30, 1995; (ii) reviewed certain information, including financial forecasts, relating to the business, earnings, cash flow, assets and prospects of the Company, furnished to PaineWebber by the Company; (iii) conducted discussions with members of senior management of the Company concerning the Company's businesses and prospects; (iv) reviewed the historical market prices and trading activity for the Common Stock and compared such price and trading history with that of certain other publicly traded companies which PaineWebber deemed relevant; (v) compared the financial position and operating results of the Company with those of certain other publicly traded companies which PaineWebber deemed relevant; (vi) reviewed the proposed financial terms of the Merger and compared such terms with the financial terms of certain other mergers and acquisitions which PaineWebber deemed relevant; (vii) reviewed the Merger Agreement and a draft of this Proxy Statement as proposed to be filed with the Securities and Exchange Commission; and (viii) reviewed such other financial studies and analyses and performed such other investigations and took into account such other matters as PaineWebber deemed appropriate, including its assessment of general economic, market and monetary conditions. In preparing its opinion, PaineWebber relied on the accuracy and completeness of all information that was publicly available or supplied or otherwise communicated to it by or on behalf of the Company, and it has not independently verified such information. PaineWebber assumed that the financial forecasts examined by it were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of the Company as to the future performance or the Company. PaineWebber did not undertake, and was not provided with, an independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of the Company and assumed that all material liabilities (contingent or otherwise, known or unknown) of the Company are as set forth in the Company's consolidated financial statements. PaineWebber, at the request of the Company, solicited third party indications of interest with respect to the acquisition of the Company. PaineWebber's opinion is based on the regulatory, economic, monetary and market conditions existing on the date thereof. PaineWebber's opinion is directed to the Board of Directors of the Company and does not constitute a recommendation to any stockholder of the Company as to how any such stockholder should vote with respect to the Merger. PaineWebber's opinion does not address the relative merits of the Merger and any other potential transactions or business strategies discussed by the Board of Directors of the Company or the Investment Committee as alternatives to the Merger or the decision of the Board of Directors of the Company to proceed with the Merger. PaineWebber assumed that there had been no material changes in the Company's assets, financial condition, results of operations, business or prospects since the date of the last financial statements made available to PaineWebber. PaineWebber assumed no responsibility to revise or update its opinion if there is a change in the financial condition or prospects of the Company from that disclosed or projected in the information PaineWebber reviewed as set forth above or in general economic or market conditions. In rendering its opinion, PaineWebber was not engaged to act as an agent or fiduciary of, and the Company has expressly waived any duties or liabilities PaineWebber may otherwise be deemed to have had to, the Company's stockholders or any other third party. The preparation of a fairness opinion involves various determinations as to the most appropriate and relevant quantitative methods of financial analyses and application of those methods to the particular circumstances and, therefore, such an opinion is not readily susceptible to partial analysis or summary description. Furthermore, in arriving at its fairness opinion, PaineWebber did to attribute any particular weight to any analysis or factor considered by it. Accordingly, PaineWebber believes that its analysis must be considered as a whole and that considering any portion of such analysis and of the factors considered, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying its opinion. In its analyses, PaineWebber made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of the Company. Any estimates contained in these analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than as set forth therein, and neither the Company nor PaineWebber assumes any responsibility for their accuracy. In addition, analyses relating to the value of businesses do not purport to be appraisals or to reflect the price at which businesses may actually be sold. The following paragraphs summarize the significant analyses performed by PaineWebber in arriving at the opinion of PaineWebber, dated November 14, 1995, presented to the Board of Directors of the Company. STOCK TRADING HISTORY. PaineWebber reviewed the history of the trading prices and volume for the Common Stock, both separate and in relation to market indices and the comparative company index. The comparative company index comprised four companies which PaineWebber deemed relevant including Bandag Incorporated, Brad Ragan, Inc., Republic Automotive Parts, Inc. and TBC Corporation (the "Comparative Companies"). SELECTED COMPARATIVE PUBLIC COMPANY ANALYSIS. Using publicly available information, PaineWebber compared selected historical and projected financial, operating and stock market performance data of the Company to the corresponding data of the Comparative Companies. With respect to the Company and the Comparative Companies, PaineWebber compared multiples of latest 12 months revenues, EBITDA, EBIT, net income, book value, estimated (by International Brokers Estimate System or "IBES") 1995 earnings per share ("EPS") and estimated (by IBES) 1996 EPS. PaineWebber noted that, based on closing stock prices as of November 9, 1994, the Company's revenue multiple was 0.45x versus a median revenue multiple of 0.46x for the Comparative Companies; the Company's EBITDA multiple was 6.4x versus a median EBITDA multiple of 6.5x of the Comparative Companies; the Company's EBIT multiple was 7.7x versus a median EBIT multiple of 8.0x for the Comparative Companies; the Company's net income multiple was 12.5x versus a median net income multiple of 11.5x for the Comparative Companies; the Company's book value multiple was 1.32x versus a median book value multiple of 1.51x for the Comparative Companies; the Company's 1995 EPS multiple was 11.9x versus a median 1995 EPS multiple of 10.2x for the Comparative Companies; and the Company's 1996 EPS multiple was 10.5x versus a median 1996 EPSA multiple of 7.6x for the Comparative Companies. PaineWebber applied the multiples of revenues, EBITDA, EBIT, net income, book value, estimated 1995 EPS and estimated 1996 EPS calculated above to the respective results of the Company which resulted in a range of possible equity values for the Company based on the comparative company analysis of $11.87 to $16.32 per fully diluted share of Common Stock. PaineWebber then applied a control premium of 30%, based on the Retail Industry Transactions premium described in "Special Factors -- Opinion of Financial Advisor --Premiums Paid Analysis," to such valuation range to determine a range of possible equity values assuming a control premium. Based on this analysis, PaineWebber derived a range of possible equity values of $15.43 to $21.22 per fully diluted share of Common Stock. DISCOUNTED CASH FLOW ANALYSIS. A discounted cash flow analysis is a traditional valuation methodology used to derive a valuation of a corporate entity by capitalizing the estimated future earnings and calculating the estimated future free cash flows of such corporate entity and discounting such aggregated results back to the present. PaineWebber performed a discounted cash flow analysis of the Company based on the fiscal 1995 to 2000 financial forecast for the Company provided by the Company management (the "Financial Forecast"). Using the information set forth in the Financial Forecast, PaineWebber calculated the estimated "free cash flow" based on projected unleveraged net income adjusted for: (i) certain projected non-cash items (i.e., depreciation and amortization); (ii) projected capital expenditures; and (iii) projected non-cash working capital investment. PaineWebber analyzed the Financial Forecast and discounted the stream of free cash flows provided in such projections back to December 31, 1995 using discount rates of 13.0% to 17.0%. To estimate the residual value of the Company at the end of the Financial Forecast period, PaineWebber applied terminal multiples of 6.0x to 7.0x to the projected fiscal 2000 EBITDA and discounted such value estimates back to December 31, 1995, using discount rates of 13.0% to 17.0%. Based on this analysis, PaineWebber derived a range of possible equity values of $14.95 to $20.32 per fully diluted share of Common Stock. PREMIUMS PAID ANALYSIS. Using publicly available information, PaineWebber calculated the premiums represented by the Merger Consideration based on the Company's closing stock price one day, one week and four weeks prior to public announcement of : (i) the $18.50 per share offer from the Parent on December 5, 1994 (the "$18.50 Management Offer"); (ii) the Balboa shareholder proposal on December 31, 1993 (the "Balboa Shareholder Proposal"); and (iii) Balboa's initial 13-D filed on February 17, 1993, in which Balboa stated that it had discussions with management regarding methods of increasing sales, cash flow and profitability, and that it intended to continue such discussions with the intention of assisting the Company in enhancing shareholder value (the "Balboa 13-D Filing"). PaineWebber determined that: (i) the premiums of the Merger Consideration over the closing stock price one day, one week and four weeks prior to the $18.50 Management Offer (which was made after the October 1994 AKH offer of $18 per share) were 3.1%, 3.9% and a negative 0.8%, respectively; (ii) the premiums of the Merger Consideration over the closing stock price one day, one week and four weeks prior to the Balboa Shareholder Proposal were 18.9%, 15.8% and 14.8%, respectively; and (iii) the premiums of the Merger Consideration over the closing stock price one day, one week and four weeks prior to the Balboa 13-D Filing were 22.2%, 26.9% and 22.2%, respectively. PaineWebber noted that the premiums set forth in (i) above reflected the announcement of the $18.00 per share AKH offer and the premiums set forth in (ii) and (iii) above were based on stock prices that prevailed over 22 months prior to the date of its opinion. PaineWebber compared the premiums calculated above with the historical median premium paid in retail industry (as defined by Securities Data Corporation ("SDC")) transactions announced between January 1, 1990, and November 3, 1995 (the "Retail Industry Transactions"). PaineWebber determined, based on information obtained from SDC, that the median of the premium of offered price to closing stock price for the Retail Industry Transactions one day, one week and four weeks prior to announcement of such transactions was 25.7%, 28.7% and 33.7%, respectively. Pursuant to an engagement letter between the Company and PaineWebber, PaineWebber was paid a retainer fee of $50,000 at the commencement of its engagement, a monthly retainer fee of $25,000 from August 31, 1994, and a fee of $300,000 payable upon rendering its opinion on November 14, 1995, and will be paid a fee of $600,000 upon the closing of the Merger against which the $300,000 fairness opinion fee and $250,000 of monthly retainer fees will be credited. PaineWebber will also be reimbursed for its related expenses. The Company has also agreed to indemnify PaineWebber, its affiliates and each of their respective directors, officers, agents and employees, and each person, if any, controlling PaineWebber or any of its affiliates, against certain liabilities, including liabilities under federal securities laws. PaineWebber has previously provided investment banking services to the Company had may provide financial advisory or other investment banking services to the Company in the future. In the normal course of its business, PaineWebber may from time to time trade the debt or equity securities of the Company for its own account and for the accounts of its customers and, accordingly, may at any time hold a long or short position in such securities. PaineWebber is a prominent investment banking and financial advisory firm with experience in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of securities, private placements and valuations for corporate purposes. The Company retained PaineWebber primarily because of the experience of the PaineWebber personnel in evaluating businesses and seeking candidates to acquire companies and because of the Investment Committee's perception of such persons' overall understanding of the Shareholder Proposal. A COPY OF THE PAINEWEBBER FAIRNESS OPINION IS INCLUDED HEREIN AS APPENDIX B. STOCKHOLDERS ARE URGED TO READ CAREFULLY THE PAINEWEBBER FAIRNESS OPINION IN ITS ENTIRETY. PLANS FOR THE COMPANY AFTER THE MERGER The Parent expects to continue the business and operations of the Company substantially as they are currently being conducted by the Company and its subsidiaries. The Dealer Management Group of the Company, however, will continue to evaluate the business and operations of the Company and will make such changes as are deemed appropriate. The Parent is exploring ways to raise cash for working capital and other general corporate purposes in addition to the financing sources discussed under the heading "Financing of the Merger". Although no agreement or arrangement has been entered into with respect to any transaction, the types of transactions under consideration by the Parent include the sale of certain parcels of undeveloped real property adjacent to certain of the Company's regional service center locations and certain Retail Store sites. There can be no assurance that an agreement with respect to any transaction will be reached or, if reached, that any such transaction will be consummated. It is anticipated that the Company will not pay any cash dividends on its securities after the Merger. Except for the possible merger or liquidation of several subsidiaries of the Company into the Company, the Parent does not have any present plans or proposals which relate to or would result in an extraordinary corporate transaction, such as a merger, reorganization, liquidation, relocation of any operations of the Company or any changes in the Company's present capitalization, corporate structure or business or, except as described above, the sale or transfer of a material amount of assets involving the Company or any of its subsidiaries or the composition of the Company's management. The Parent will from time to time be reviewing additional information and reviewing possible options with respect to the Company and may propose or develop additional or new plans or proposals or may propose the acquisition or disposition of assets or other changes in the Company's business, corporate structure, capitalization, management or dividend policy. It is also anticipated that the officers (other than Messrs. Siipola and Mehlfeldt) and key employees of the Company will continue as employees of the Company after the Merger. Those officers who are shareholders of the Parent (other than solely as a result of their participation in the ESOP) will be compensated at substantially the levels of compensation they received in 1995, with the exception of Mr. Cloward, whose compensation will revert in 1996 to the level he was receiving as of January 1, 1995, and with the exception of Ms. O'Reilly, whose 1996 compensation will be based on her compensation level in 1995. It is expected that in most situations such persons will have substantially equivalent positions with the Company. In connection with the consummation of the Merger, Messrs. Siipola and Mehlfeldt will not continue as employees, officers, nor directors of the Company. The Merger Agreement provides that the board of directors of the Purchaser will become the board of directors of the Company at the Effective Time. Following the consummation of the Merger, the registration of the Common Stock under the Exchange Act will be terminated. FEDERAL INCOME TAX CONSEQUENCES The discussion of federal tax consequences set forth below is directed primarily toward individual taxpayers who are citizens or residents of the United States. However, because of the complexities of federal, state and local income tax laws it is recommended that the Company's stockholders consult their own tax advisors concerning the federal, state and local tax consequences of the Merger. Persons who are trusts, tax-exempt entities, corporations subject to specialized income tax rules (for example, insurance companies) or non-United States citizens or residents are particularly cautioned to consult their tax advisors in considering the tax consequences of the Merger. GENERAL. The following is a summary of the material federal income tax consequences of the Merger to the Company and its stockholders. This summary is based upon the Internal Revenue Code of 1986, as amended (the "Code"), the rules and regulations promulgated thereunder, current administrative interpretations and court decisions. No assurance can be given that future legislation, regulations, administrative interpretations or court decisions will not significantly change these authorities, possibly with A retroactive effect. No rulings have been requested or received from the Internal Revenue Service (the "IRS") as to the matters discussed herein and there is no intent to seek any such ruling. Accordingly, no assurance can be given that the IRS will not challenge the tax treatment of certain matters discussed in this summary or, if it does challenge the tax treatment, that it will not be successful. FEDERAL INCOME TAX CONSEQUENCES TO THE PARENT, THE PURCHASER AND THE COMPANY. The merger of the Purchaser into the Company, with the Company surviving and with the Company's stockholders receiving solely cash in the transaction, constitutes a taxable reverse subsidiary merger which will be treated for federal income tax purposes as a direct purchase by the Parent of the Common Stock from the Company's stockholders in exchange for cash and as such the transitory existence of the Purchaser as the wholly-owned subsidiary will be disregarded for federal income tax purposes. Because the Company will be treated as purchasing the Common Stock directly from the Company's stockholders, unless a Code Section 338 election is made to treat the purchase by the Parent of the Company's Common Stock as a purchase of the Company's assets resulting in a stepped up basis in the Company's assets, no gain or loss will be recognized by the Company as a result of the Merger. Further, no gain or loss will be recognized by Parent upon the receipt of the shares of the Company's Common Stock from the Company's stockholders in exchange for cash, or in the case of the ESOP and certain other of the Company's stockholders, in exchange for shares of the Parent's common stock. The payment by the Parent of the Merger Consideration, which will be transferred by the Company to the Company's stockholders upon surrender by them of their shares of Common Stock, will be treated as a contribution by the Parent to the Company's capital and as such the Parent's tax basis in the Common Stock will equal the amount of such capital contribution. FEDERAL INCOME TAX CONSEQUENCES TO THE COMPANY'S STOCKHOLDERS. Consistent with the analysis described in the preceding paragraph, a stockholder of the Company (other than a tax exempt trust or other tax exempt organization which owns shares of the Company's Common Stock) will recognize gain or loss as a result of the Merger, measured by the difference between such stockholder's amount realized and its basis in the Common Stock. To the extent that the ESOP receives shares of the Parent's common stock in exchange for the shares of the Common Stock currently held by the ESOP, the Company's management believes that the shares of the Parent's common stock received and subsequently held by the ESOP should constitute a "qualifying employer security" for federal income tax purposes which may be held by the ESOP. Even though the exchange of the shares of the Common Stock held by the ESOP for shares of the Parent may not constitute a tax free reorganization under the Code if integrated with the purchase for cash by the Parent of the Common Stock held by the Company's stockholders as contemplated under the Merger Agreement, the Company's management believes that because the ESOP, which will hold the shares of the Parent's common stock, is a qualified trust under Code Section 401(a), which is a tax exempt organization under Code Section 501(a), the ESOP will not be required under Code Section 512(b)(5) to recognize gain or loss as a result of such exchange transaction which would otherwise be taxable under the Code. For noncorporate stockholders of the Company who hold Common Stock as a capital asset, gain or loss recognized as a result of the Merger will be treated as a capital gain or loss, provided that the Company is not treated for federal income tax purposes as a "collapsible corporation." In the opinion of the Company's management, the Company is not a collapsible corporation for federal income tax purposes. Under the current provisions in effect as of the date hereof, net capital gains (i.e., the excess of net long-term capital gain for the taxable year over net short-term capital loss for such year) of an individual stockholder will be taxed at a maximum rate of 28% in contrast to items taxable as ordinary income which are subject to rates of up to 39.6%. The U. S. Congress is considering in connection with its proposed balanced budget legislation a provision which would reduce the maximum tax rate on net capital gains. President Clinton has declared his intention to veto such legislation. The legislation, if any, which ultimately is enacted with respect to the taxation of net capital gains and the effective date of any such legislation is uncertain at this time. In the case of a corporate stockholder, capital losses are allowed only to the extent of capital gains. In the case of a noncorporate stockholder, capital losses are allowed only to the extent of capital gains plus the lesser of (i) $3,000 ($1,500 in the case of a married individual filing a separate return) or (ii) the excess of losses over such gains. Generally, a corporation may carry its excess capital loss back three years or forward five years, subject to limitation in the Code. Generally, in the case of a noncorporate taxpayer, excess capital losses may be carried forward indefinitely and used each year, subject to the $3,000 limitation ($1,500 in the case of a married individual filing a separate return), until the loss is exhausted. ACCOUNTING TREATMENT OF THE MERGER The Merger will be treated, for financial statement purposes, as a sale by the Company's stockholders to the Parent for cash. Accordingly, no gain or loss will be recognized by the Company as a result of the Merger. The Merger will be accounted for by the Parent as a purchase. REGULATORY APPROVALS There are no federal or state regulatory requirements that must be complied with or approvals that must be obtained in connection with the Merger other than the approval of the Company's stockholders as required by the Nevada General Corporation Law. FINANCING OF THE MERGER The Purchaser's obligation to consummate the Merger is conditioned upon, among other things, the availability of sufficient funds to pay the Merger Consideration and to replace certain existing indebtedness of the Company. The total amount of funds required for such purposes is approximately $65.1 million. Of this amount, approximately $46.8 million will be used to pay the aggregate Merger Consideration. See "Information Pertaining to the Parent, the Purchaser and Related Persons" for a description of the equity contributions to be made to the Parent. Set forth below is a summary description of the financing for the Merger. Consummation of such financing is subject to, among other things, the negotiation and execution of definitive financing agreements on terms satisfactory to the parties thereto. Because definitive financing agreements relating to such financing have not been finalized, there can be no assurance that the terms set forth below will be contained in such agreements or that such financing will be obtained. The Purchaser has executed a commitment letter (the "Senior Commitment") pursuant to which The First National Bank of Chicago ("First Chicago") has committed to provide the Purchaser senior secured loans of up to $40,000,000 (the "Senior Loans"). The Senior Commitment will expire on November 30, 1995, unless definitive loan documents are executed on or before such date. The Purchaser has submitted a written request to First Chicago to extend the Senior Commitment expiration date. The Senior Loans will bear interest at a rate equal to, at the Purchaser's option, either: (1) First Chicago's Alternate Base Rate plus 1.75% per annum, or (2) the Eurodollar Rate plus 3.0% per annum. First Chicago's Alternate Base Rate is the higher of (i) First Chicago's corporate base rate, or (ii) the federal funds rate plus 1/2% per annum. The Eurodollar Rate is the rate offered by First Chicago in the London interbank market. The Senior Loans will be (a) secured by a first perfected security interest in, with certain exceptions, all of the Company's assets, (b) subject to mandatory prepayment upon a sale of equity or assets and upon the generation of cash exceeding certain targets to be set forth in the definitive credit agreement, and (c) subject to a number of conditions including, but not limited to, negotiation and execution of loan documents which will include representations, warranties and covenants which are satisfactory to First Chicago, completion of First Chicago's due diligence, First Chicago's satisfaction with other components of the Merger including the consideration to be paid, the equity contributions and the other debt arrangements. The Senior Loan consists of two facilities: (1) a $20,000,000 term loan (the "Term Loan"), and (2) a $20,000,000 revolving credit (the "Revolving Credit"). The Term Loan will (a) mature after six years, and (b) be repaid in quarterly installments which shall be $500,000 per quarter in the first year of the Term Loan, $750,000 per quarter in the second and third years of the Term Loan, and $1,000,000 per quarter in the fourth through sixth years of the Term Loan. The Revolving Credit will mature in six years. On September 8, 1995, the Purchaser executed a commitment letter (the "Mezzanine Commitment") pursuant to which BancBoston Capital Inc. ("BBC") committed to provide up to $10,000,000 of mezzanine financing (the "Mezzanine Loan"). The Mezzanine Loan will (a) bear interest at the rate of 12.5% per annum, (b) mature in eight years (with quarterly payments of principal in the amount of $833,333 commencing in the first quarter of the sixth year of the Mezzanine Loan), (c) provide BBC with the right to appoint a board member to the Board of the Parent, and (d) be subject to a number of conditions, including but not limited to, negotiation and execution of loan documents satisfactory to BBC, BBC's satisfaction with the other components of the Merger including the equity to be contributed, the terms of the other debt and the execution of a number of inter-creditor agreements. In addition, the Mezzanine Commitment requires the Purchaser to (a) provide a $50,000 non-refundable deposit, (b) pay a break-up fee of $500,000 if the Purchaser consummates the Merger without utilizing the Mezzanine Loan within one year of receiving the Mezzanine Commitment, (c) maintain certain restrictive covenants, (d) execute acceptable loan and inter- creditor agreements, (d) prepare an acceptable actuarial study of the Company's ESOP repurchase obligations, and (e) issue a warrant to BBC to purchase 12% of the equity in the Parent. The warrant will provide BBC with (a) the right to put the warrant to the Parent and (b) certain registration rights. The Company has also entered into agreements to refinance and extend some of its existing debt in connection with the Merger. Copies of the Senior Commitment and the Mezzanine Commitment have been filed as Exhibits to the Schedule 13E-3. The Company intends to repay all such borrowed funds with funds generated by the Company's operations. EXPENSES OF THE MERGER It is estimated that the expenses incurred by the Company in connection with the Merger will be approximately $1,400,000 in the aggregate, comprised of approximately $11,000 for filing fees, $890,000 for financial advisory fees in connection with the services of PaineWebber and $60,000 (one-third paid each by the Company, the Parent and the ESOP) in connection with the services of Baum, $350,000 for legal fees, $48,000 for solicitation expenses, $25,000 for directors' fees and expenses, and $16,000 for miscellaneous expenses including printing, mailing and other distribution costs. In addition to the foregoing, the Company has agreed to reimburse the Purchaser up to $750,000 for its costs and expenses in consummating the Merger and $217,000 for expenses incurred in arranging the financing of the Merger. See "The Merger Agreement -- Fees and Expenses." PRINCIPAL STOCKHOLDERS OF THE COMPANY The following persons are the only persons known to the Company who, on October 30, 1995, owned beneficially more than 5% of the outstanding shares of the Company's Common Stock: NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS Big O Tires, Inc. 537,588 (1) 16.20% Employee Stock Ownership Plan ("ESOP") 11755 East Peakview Avenue Englewood, Colorado 80111 Balboa Investment Group, L.P. 309,500 (2) 9.33% a California limited partnership and Mr. Kenneth W. Pavia, Sr., the sole general partner of this partnership 1101 East Balboa Boulevard Newport Beach, California 92661-1313 (1) Of the 537,588 shares of Common Stock in the ESOP, approximately 501,114.78 shares of Common Stock have been allocated to participants' accounts and approximately 36,473.22 shares of Common Stock have not been allocated to participant's accounts. Pursuant to the provisions of the ESOP, each participant has the right to direct the ESOP Trustee as to how to vote the shares of Common Stock allocated to the participant's account. The ESOP Trustee is required to vote all allocated shares, the voting instructions for which are not timely communicated to the Trustee, and all unallocated shares on the Merger Agreement in the same proportion as the allocated shares for which the Trustee receives timely voting instructions are voted. (2) In a Schedule 13D dated May 31, 1995, as amended, the Company was notified that these persons held these shares of Common Stock. SECURITY OWNERSHIP OF THE COMPANY'S MANAGEMENT The following table shows, as of October 30, 1995, the shares of the Company's outstanding Common Stock beneficially owned by each director of the Company and the shares of the Company's outstanding Common Stock beneficially owned by all executive officers and directors of the Company as a group: NAME OF AMOUNT AND NATURE OF PERCENT BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1)10) OF CLASS(10) John B. Adams 42,004(2)(8)(9) 1.26% Ronald D. Asher 16,109(3)(8) * Frank L. Carney 754(8) * Steven P. Cloward 103,969(4)(8)(9) 3.11% Everett H. Johnston 904(8) * Robert K. Lallatin 570(5) * Horst K. Mehlfeldt 3,154(8) * John E. Siipola 4,782(8) * Ralph J. Weiger 3,003(8) * C. Thomas Wernholm 20,914(6) * All Current Directors and Executive Officers as a Group (18 persons) 292,824(2)(3)(4)(5)(6)(7)(8)(9) 8.54% ___________________ * Percent of shares of Common Stock beneficially owned by this director does not exceed 1% of the Company's outstanding Common Stock. (1) Unless otherwise indicated, the shares are held directly in the names of the beneficial owners and each person has sole voting and sole investment power with respect to the shares. (2) Includes 1,311 shares of Common Stock owned jointly by Mr. Adams and his wife, over which shares Mr. Adams may be deemed to have shared voting and investment power, and includes 17,165 shares of Common Stock that have been allocated to Mr. Adams in the ESOP, over which shares Mr. Adams has sole voting power. (3) Includes beneficial ownership by R&A Asher, Inc., a California corporation ("R&A"), of 156 shares of Common Stock. Mr. Asher and his wife each own 50% of the issued and outstanding capital stock of R&A, and Mr. Asher may be deemed to have shared voting and investment power over the 156 shares. Includes approximately 470 shares owned by a retirement trust in which Mr. Asher and his wife are co-trustees. (4) Includes 25,110 shares owned directly by Mr. Cloward's wife, over which shares Mr. Cloward may be deemed to have shared voting and investment power, and includes 38,250 shares that have been allocated to Mr. Cloward in the ESOP, over which shares Mr. Cloward has sole voting power. (5) Includes 410 shares owned by B & G Tire, Inc. of which Mr. Lallatin is the President and 51% owner. (6) Includes 4,688 shares of Common Stock owned jointly by Mr. Wernholm and his wife and over which shares Mr. Wernholm may be deemed to have shared voting and investment power over such shares. (7) Includes the following shares of Common Stock that have been allocated or are to be allocated to the following executive officers not named above who participate in the ESOP, over which shares these executive officers will have sole voting power: NAME NO. OF SHARES* Dennis J. Fryer 6,963 Allen E. Jones 6,620 Ronald H. Lautzenheiser 10,369 Kelley A. O'Reilly 3,487 Gregory L. Roquet 5,600 Thomas L. Staker 6,177 Philip J. Teigen 5,415 Bruce H. Ware 7,694 ___________________ * The share numbers have been rounded up or down to the nearest whole share. (8) Included in the above are shares of Common Stock underlying presently exercisable options granted under the Big O Tires, Inc. Director and Employee Stock Option Plan owned by the following directors and executive officers: NO. OF SHARES UNDERLYING PRESENTLY NAME EXERCISABLE OPTIONS John B. Adams 4,922 Ronald D. Asher 15,483 Frank L. Carney 754 Steven P. Cloward 12,284 Everett H. Johnston 904 Allen E. Jones 632 Horst K. Mehlfeldt 3,154 John E. Siipola 3,782 Philip J. Teigen 833 Bruce H. Ware 302 Ralph J. Weiger 1,356 C. Thomas Wernholm 16,226 (9) Included in the above share figures are shares of restricted Common Stock granted under the Big O Tires, Inc. Long Term Incentive Plan, over which shares the following executive officers have sole voting power, and includes shares of Common Stock underlying presently exercisable options granted under the Long Term Incentive Plan: NAME NO. OF SHARES NO. OF OPTIONS John B. Adams 7,552 11,054 Steven P. Cloward 11,370 16,955 Dennis J. Fryer 1,716 0 Allen E. Jones 1,716 4,684 Ronald H. Lautzenheiser 3,495 3,804 Kelley A. O'Reilly 2,065 0 Gregory L. Roquet 1,907 4,684 Thomas L. Staker 4,479 3,681 Philip J. Teigen 1,634 1,841 Bruce H. Ware 1,764 4,684 (10) The beneficial ownership and percentages for each person and the group have been reported and calculated as if the presently exercisable options owned by each person or the group referred to in the preceding footnotes had been exercised. PRICE RANGE OF COMPANY COMMON STOCK AND DIVIDEND HISTORY The shares of Common Stock are traded on the NASDAQ National Market System under the symbol "BIGO." The following table sets forth the high and low prices, as reported by the NASDAQ National Market System, for each quarter commencing January 1, 1993. These quotations have been rounded to the nearest eighth, reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. Stockholders are urged to obtain current quotations. HIGH LOW 1993 First Quarter 14 1/4 11 1/8 Second Quarter 16 3/8 10 7/8 Third Quarter 17 1/4 13 1/4 Fourth Quarter 16 1/2 13 1/2 1994 First Quarter 16 3/4 12 3/4 Second Quarter 16 3/4 13 1/8 Third Quarter 16 3/4 14 1/2 Fourth Quarter 17 7/8 15 1/4 1995 First Quarter 16 1/4 12 7/8 Second Quarter 15 1/4 12 1/2 Third Quarter 15 1/4 12 3/4 Fourth Quarter (through ____, 1995) On May 31, 1995, June 6, 1995 and July 21, 1995, the last days the Common Stock traded prior to the public announcements that the Company had (i) received the Merger proposal at $16.50 per share of Common Stock from Senior Management and the Dealers (ii) the Investment Committee approved in principle the $16.50 per share Merger proposal and (iii) the Company entered into the Merger Agreement providing for the Merger of Purchaser into the Company for the Merger Consideration, the closing sale prices of the shares of Common Stock (as reported on the NASDAQ National Market System) were $13.75, $14.25 and $14.375 per share, respectively. The closing sale price of the shares of Common Stock (as represented on the NASDAQ National Market System) was $_______________ on __________________, 1995. The Company has never paid any cash dividends on its shares of Common Stock. Currently, the Company is subject to various covenants and restrictions under loan agreements with First Chicago, AT&T Capital Corporation, The Kelly- Springfield Tire Company ("Kelly") and other lenders and holders of long term notes previously issued by the Company. These restrictions limit or prohibit the Company from, among other things, paying cash dividends on its capital stock. One or more of these loan or credit facilities will be refinanced or restructured in connection with the financing of the Merger, but it is unknown whether the restrictions on payment of dividends will be modified. See "Special Factors -- Financing of the Merger." SELECTED CONSOLIDATED FINANCIAL DATA OF THE COMPANY The following table sets forth consolidated financial data for, and as of the end of each of the nine (9) month periods ended September 30, 1995, and 1994, and for, and as of the end of, each of the years in the five-year period ended December 31, 1994, and are derived from the consolidated financial statements of the Company and its subsidiaries. The consolidated financial statements of the Company as of December 31, 1994 and 1993, and for each of the three years in the period ended December 31, 1994, appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 1994, which accompanies this Proxy Statement, have been audited by Deloitte & Touche LLP, independent auditors, as set forth in their report thereon appearing therein. The Company does not expect Deloitte & Touche LLP to be present at the Special Meeting.
NINE MONTHS ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31, ----------------- -------------------------------------------- 1995 1994 1994 1993 1992 1991 1990 (in thousands except share information) STATEMENT OF OPERATIONS DATA: Operating Revenues, net $107,672 $94,132 $127,678 $122,960 $119,799 $113,836 $106,902 Income before income taxes and cumulative effective of change in accounting principle 2,492 2,506 4,641 3,280 4,766 3,139 1,264 Provision for income tax 1,047 1,052 1,950 1,400 1,983 1,388 557 Income before cumulative effect of change in accounting principle 1,445 1,454 2,691 1,880 2,783 1,751 707 Cumulative effect of change in accounting principle --- --- --- 285 --- --- --- Net income 1,445 1,454 2,691 1,595 2,783 1,751 707 PER SHARE DATA Income before cumulative effect of change in accounting principle $ .43 $ .44 $ .80 $ .55 $ .80 $ .50 $ .20 Net income $ .43 $ .44 $ .80 $ .47 $ .80 $ .50 $ .20 Weighted average shares outstanding (1) 3,777,083 3,337,539 3,347,892 3,409,962 3,497,044 3,506,024 3,502,924 AS OF SEPTEMBER 30, AS OF DECEMBER 31, ----------------- -------------------------------------------- 1995 1994 1994 1993 1992 1991 1990 (in thousands) BALANCE SHEET DATA Current assets(2) $ 35,564 $36,351 $ 33,718 $ 24,136 $ 29,494 $ 29,684 $ 36,202 Total assets(2) 69,846 70,195 61,968 56,607 57,679 57,111 63,176 Current liabilities(2) 13,808 14,426 9,051 12,251 12,161 9,023 19,707 Long-term debt and capital lease obliga- tions, net of current portion 17,376 20,307 15,906 11,037 9,359 14,648 11,883 Other long-term liabilities 1,311 1,449 1,433 856 692 852 951 ESOP obligations 188 449 449 975 1,277 1,656 --- Stockholders' equity 37,163 33,574 35,129 31,488 34,190 30,932 30,635 _______________________
(1) Adjusted to reflect the 1-for-5 reverse split of the Company's Common Stock that was effective June 15, 1992. (2) Amounts for years prior to 1992 have been restated to reflect the reclassification of vendor receivables to accounts payable. (3) The per share book values of the Common Stock on September 30, 1995, and December 31, 1994, were $11.20 and $10.62, respectively. (4) The ratios of earnings to fixed charges for the nine month periods ended September 30, 1995 and 1994, and for the years ended December 31, 1994 and 1993, were _____, _____, _____ and _____, respectively. THE MERGER AGREEMENT PARTIES TO THE MERGER AGREEMENT BIG O TIRES, INC., a Nevada corporation (the "Company"), is engaged primarily in the business of franchising Big O Tire retail stores (the "Retail Stores") and supplying Retail Stores with tires and related automotive products for sale. The Company also owns and operates Retail Stores and, on a limited basis, engages in site selection and real estate development for Retail Stores. The mailing address of the Company's principal executive offices and corporate headquarters is 11755 East Peakview Avenue, Suite A, Englewood, Colorado 80111 and its telephone number is (303) 790-2800. BOTI HOLDINGS, INC., a Nevada corporation (the "Parent"), is a holding company organized in January 1995 to participate in the Merger and to acquire all of the capital stock of the Company. See "Information Pertaining to the Parent, the Purchaser and Related Persons." The Parent has engaged in no other business activities since its inception other than those related to the acquisition of the Company. The mailing address of the principal executive offices of both the Parent and the Purchaser is the same as the Company's address, 11755 East Peakview Avenue, Englewood, Colorado 80111, and their telephone number is (303) 790-2800. BOTI ACQUISITION CORP., a Nevada corporation (the "Purchaser"), has been organized as a wholly-owned subsidiary of the Parent for the purpose of effecting the Merger and has engaged in no other business activities other than those related to the acquisition of the Company. See "Information Pertaining to the Parent, the Purchaser and Related Persons." DESCRIPTION OF THE MERGER AGREEMENT THE FOLLOWING IS A SUMMARY OF THE MERGER AGREEMENT, THE FULL TEXT OF WHICH IS INCLUDED HEREIN AS APPENDIX A. THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MERGER AGREEMENT. STOCKHOLDERS ARE URGED TO READ THE MERGER AGREEMENT IN ITS ENTIRETY FOR A MORE COMPLETE DESCRIPTION OF THE MERGER. THE FOLLOWING DESCRIPTION ALSO CONTAINS OTHER INFORMATION ABOUT THE MERGER. TERMS OF THE MERGER. Pursuant to the Merger Agreement, the Purchaser will merge into and with the Company, with the Company continuing as the surviving corporation. The Merger will occur immediately upon the filing of the Certificate of Merger with the Secretary of State of the State of Nevada (the date and time of such filing referred to herein as "Effective Time"). The name of the Company will remain "Big O Tires, Inc." At the Effective Time, the Articles of Incorporation and Bylaws of the Company as in effect immediately prior to the Effective Time until thereafter amended, will be the Articles of Incorporation and Bylaws of the Purchaser. The officers and directors of the Purchaser immediately prior to the Effective Time will be the initial officers and directors of the Company until their successors are elected and qualified, as the case may be. At the Effective Time, all issued and outstanding shares of Common Stock owned by the stockholders of the Company other than the Excluded Shares will be canceled and extinguished, and will be converted into the right to receive the Merger Consideration. Payments of cash to stockholders of the Company and to option holders will be made as soon as possible after the Effective Time upon surrender by holders of their certificates (in the case of stockholders), together with the appropriate transmittal form, to the Exchange Agent referred to below. See "The Merger Agreement -- Exchange of Certificates." Each Excluded Share owned will be exchanged for one share of the Parent's common stock. In the Merger, each share of $.01 par value common stock of the Purchaser which is issued and outstanding immediately prior to the Effective Time will be converted into and become one share of Common Stock of the Surviving Corporation. As a result of the Merger, the separate corporate existence of the Purchaser will cease and the Company will continue to operate as a wholly-owned subsidiary of the Parent. All properties and assets of every kind held by the Company and the Purchaser at the Effective Time will become property and assets of the Company, and the Company will continue to be liable for all of its obligations, debts and other liabilities, as well as those, if any, of the Purchaser. The Company expects the Effective Time to occur before ________________, 1996. The Effective Time cannot occur until all conditions to the Merger have been satisfied or waived. See "The Merger Agreement -- Conditions to the Merger." The Merger Agreement provides for the exercise of appraisal or other rights as may be available under Nevada law. However, no appraisal rights or right to dissent are available for the Merger under Nevada law. See "The Special Meeting - -- Absence of Appraisal Rights and Right to Dissent." Consequently, if the Merger is consummated, holders of all shares of Common Stock (other than holders of Excluded Shares) will be required to accept the Merger Consideration. STOCK OPTIONS. The Company is required by the Merger Agreement to make all reasonable efforts to cancel and settle immediately prior to the Effective Time each option to purchase shares of Common Stock or stock appreciation rights (collectively, the "Options") which have been granted under any Company stock or compensation plan or arrangements to all current or former employees of the Company who are not directors, unless the holder has agreed to convert or exchange without receipt of payment therefor, the Options for options or shares of the stock of the Parent, the Purchaser or the Company. Holders who are directors of the Company, except Messrs. Steven P. Cloward and John B. Adams, will have their Options canceled and will be entitled to receive only a cash payment. Each holder of an Option will be entitled to receive, in lieu of each share which such holder otherwise would have received upon exercise of the Option, cash equal to the amount (if any) by which $16.50 exceeds the exercise price per share payable pursuant to such Option ("Option Settlement Amount") provided that the Company is required to cancel for a lesser amount any Option issued under a plan which allows the Option to be canceled for less than the Option Settlement Amount. Taxes and other required withholdings will be deducted from the cash payments. Messrs. Cloward and Adams, as stockholders of the Parent and part of Senior Management, will convert their Options into options to purchase the common stock of the Parent. See "Information Pertaining to the Parent, the Purchaser and Related Persons." The Company is not permitted to grant any additional Options except certain options that the Company may grant on January 1, 1996, pursuant to the Company's Director and Employee Stock Option Plan. On or before the Effective Time, the Company will cause all of its stock option, stock appreciation and compensation plans to be terminated. CONDITIONS TO THE MERGER. The obligations of the Parent, the Purchaser and the Company to effect the Merger are conditioned on, among other things (i) the Merger Agreement receiving the requisite approval of the Company's stockholders (see "The Special Meeting -- Vote Required to Approve the Merger"); (ii) there being no preliminary or permanent injunction or other order, decree, ruling or law or regulation which would prevent the consummation of the Merger; and (iii) and receipt by the Company of all material consents or authorizations from governmental authorities or parties to contracts. The obligations of the Company to effect the Merger additionally are conditioned on (i) the performance in all material respects by the Parent and the Purchaser of the obligations to be performed by them at or prior to the Effective Time; and (ii) the truth and correctness in all material respects of the representations and warranties of the Parent and the Purchaser contained in the Merger Agreement. The obligations of the Parent and the Purchaser to effect the Merger additionally are conditioned on (i) the performance in all material respects by the Company of the obligations to be performed by it under the Merger Agreement; (ii) the truth and correctness in all material respects of the representations and warranties of the Company contained in the Merger Agreement; (iii) the Purchaser having received financing sufficient to consummate the Merger; (iv) cancellation and settlement of all stock options except Senior Management Options; (v) redemption of the Rights; (vi) compliance with applicable Nevada law; and (vii) at least 80% of the shares of the Common Stock held by the ESOP being converted into the common stock of the Parent. The terms of the Merger Agreement may be modified or waived, subject to certain restrictions. See "The Merger Agreement -- Modification and Waiver." The Merger Agreement also requires that the financial advisor to the ESOP deliver an opinion that the consideration to be received by the participants in the ESOP who elect to convert the Common Stock allocated to their accounts in the ESOP into an investment in the common stock of the Parent, is fair from a financial point of view to such participants. On ________, George K. Baum & Company delivered its written opinion to the ESOP stating that the consideration to be provided pursuant to such conversion is fair to the ESOP participants from a financial point of view. See "Special Factors." REPRESENTATIONS AND WARRANTIES. The Company, the Parent and the Purchaser have made certain representations and warranties to each other in the Merger Agreement, including, among other things, representations and warranties relating to their respective organizations, qualifications and capitalizations, authorizations to enter into the Merger Agreement, that the Merger and Merger Agreement do not conflict or fail to comply with any other agreements, instruments, their organizational documents, the consents and approvals that must be obtained in connection with the Merger, and the absence of brokers or finders. The Company has made certain additional representations and warranties (which representations and warranties are subject, in certain cases, to specified exceptions), including representations and warranties as to the following: (a) the accuracy of the Company's filings with the United States Securities and Exchange Commission and the financial statements of the Company; (b) the absence of any material adverse change to the Company before the Effective Time; (c) the absence of undisclosed material liabilities or litigation; (d) fairness of the transaction to disinterested stockholders; (e) existence and status of employee benefit plans; and (f) the payment of taxes. CONDUCT OF BUSINESS PENDING MERGER. The Merger Agreement provides that neither the Purchaser nor the Parent will have any claim against the Company for any breach of the covenants regarding the conduct of the Company's business pending the Merger unless the action which resulted in the breach was approved by the Board or Investment Committee and no attempt was made at a later date by the body approving such action to prevent its occurrence, or was known of by a member of the Investment Committee or the Chairman or Vice Chairman of the Board and no attempt was made by the Investment Committee to prevent its occurrence. In the Merger Agreement, the Company covenants and agrees that, prior to the Effective Time, unless the Purchaser otherwise agrees in writing, or except as disclosed in the Disclosure Certificate to the Merger Agreement or as otherwise expressly contemplated by the Merger Agreement, neither the Company nor any of its subsidiaries will take any action except in the ordinary course of business and consistent with past practices, and the Company will use its best efforts to maintain and preserve its business organization, assets, prospects, employees and advantageous business relationships. Even if the action proposed to be taken would not violate the provisions described in the preceding sentence, but would involve possible expenditures, contingent liabilities or the acquisition or disposition of assets exceeding $100,000, any member of a committee consisting of Messrs. John B. Adams, Steven P. Cloward, Horst K. Mehlfeldt and John E. Siipola (the "Management Committee") has the right to object in writing to the taking of such action prior to the time the Company is legally bound to the taking thereof. Any notice of objection must be delivered to all members of the Management Committee and the contemplated action is not to be taken unless the members of the Management Committee unanimously approve the taking of such action. If the action proposed to be taken would violate the provisions described in the second sentence of this paragraph and would involve expenditures or the acquisition or disposition of assets exceeding $100,000 in value, the Management Committee is to be given advance written notice of all such actions. If any member of the Management Committee objects in writing within five (5) days after written notice of such action is given to any such noticed action, such action only is to be taken if the members of the Management Committee unanimously approve the taking of such action or, failing such approval, the Parent and the Company approve in writing the taking of such action. The Company has also agreed that neither the Company nor any of its subsidiaries will, directly or indirectly, do any of the following: (i) incur any expenses in contemplation of a reorganization or restructuring of the Company; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; (iii) split, combine or reclassify any shares of its capital stock or declare, set aside or pay any dividend or make any distribution, payable in cash, stock, property or otherwise with respect to its capital stock; (iv) transfer the stock of any subsidiary to any other subsidiary or any assets or liabilities to any new subsidiary or, except in the ordinary course of business and consistent with past practice, to any existing subsidiary; (v) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company except the Merger; (vi) amend, modify, change or replace the engagement letter of PaineWebber; or (vii) authorize or propose any of the foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing. In addition, the Company has agreed that neither the Company nor any of its subsidiaries will, directly or indirectly: (i) issue, sell, pledge, encumber or dispose of, or authorize, propose or agree to the issuance, sale, pledge, encumbrance or disposition of, any shares of, or any options, warrants or rights of any kind to acquire any shares of, or any securities convertible into or exchangeable for any shares of, its capital stock or any other equity securities, or any other securities in respect of, in lieu of, or in substitution for shares of Common Stock outstanding on the date of the Merger Agreement except for shares of Common Stock issuable upon exercise of Options outstanding on that date and which by their terms are or become exercisable at or prior to the Effective Time; (ii) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or make any material investment either by purchase of stock or securities, contributions to capital, property transfer or purchase of any material amount of property or assets, in any other individual or entity; (iii) other than indebtedness incurred from borrowings made pursuant to existing lending arrangements and other than as set forth in the Disclosure Schedule to the Merger Agreement, incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee, endorse (other than to a Company account) or otherwise as an accommodation become responsible for, the obligations of any other individual or entity, or make any loans or advances, except for advances to dealers and guarantees of leases made in the ordinary course of business and consistent with past practice; (iv) release or relinquish any material contract right; (v) settle or compromise any pending or threatened suit, action or claim by or against the Company involving a payment by the Company exceeding $100,000; or (vi) authorize or propose any of the foregoing, or enter into or modify any contract, agreement, commitment or arrangement to do any of the foregoing. The Company has also agreed that the Company and its subsidiaries will use their best efforts to keep in place their current insurance policies, including but not limited to director and officer liability insurance, which are material (either individually or in the aggregate), and notwithstanding such efforts, if any such policy is canceled, the Company will use its best efforts to replace such policy or policies. The Company has agreed that neither the Company nor any of its subsidiaries will, and the Company will use its best efforts to cause its affiliates, officers, directors, employees, representatives and agents not to, directly or indirectly, solicit, initiate or participate in discussions or negotiations with, or provide any information to, any corporation, partnership, person or other entity or group (other than the Purchaser or an affiliate or an associate of the Purchaser) concerning, or enter into any agreement providing for, any merger, sale of all or substantially all assets, sale of shares of capital stock or similar transactions involving the Company or any subsidiary or division of the Company, provided that the Investment Committee on behalf of the Company may furnish or cause to be furnished information and may participate in such discussions or negotiations and enter into such agreement if it believes in good faith, after consultation with its financial adviser and the receipt of written advice of counsel as to the legal considerations involved, that the failure to provide such information or participate in such discussions or negotiations or enter into such agreement would be likely to involve the members of the Investment Committee in a breach of their fiduciary duties. The Purchaser and the Company have each agreed to take all such reasonable and lawful action as may be necessary or appropriate in order to effectuate the Merger as promptly as possible. ADDITIONAL AGREEMENTS. In the Merger Agreement, the Company, the Purchaser and the Parent have agreed to certain other matters, including the preparation of all documents required to be submitted under federal and state law to stockholders and federal or state agencies; to submit the proposed Merger to a vote of the stockholders of the Company, subject to the right of the Investment Committee and the Board of Directors to withdraw their recommendations based on the written advice of legal counsel or in accordance with the exercise of their fiduciary responsibilities; the cancellation, settlement, conversion or exchange of all outstanding Options as well as termination of all plans pursuant to which such options are granted or issued; the payment of certain fees as set forth below and to provide indemnification to certain directors and officers of the Company and any of its subsidiaries. See "Directors and Executive Officers of the Company." FEES AND EXPENSES. All costs and expenses, except as described below, incurred in connection with the Merger are to be paid by the party incurring such expenses. If (i) the Merger Agreement is terminated for any reason (ii) prior to such termination (x) any Person (as defined below) (A) makes a written proposal to engage in any transaction described in clauses (u) (v) or (w) of clause (iii) of this paragraph (an "Acquisition Proposal") to the Company or any authorized director, officer or agent or (B) publicly announces an Acquisition Proposal, or (y) the Company or any authorized director, officer or agent of the Company participates in discussions or negotiations with, or provides confidential information to, any Person concerning an Acquisition Proposal, and (iii) within one (1) year from the date of the Merger Agreement (u) any corporation, partnership, person, entity or "group" (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934), including the Company or any of its subsidiaries but excluding the Parent, the Purchaser or any of their affiliates and excluding any group of which Parent, the Purchaser or any of their affiliates is a member (a "Person"), shall have acquired all or a substantial portion of the assets of the Company or consummated a merger or consolidation with, or other acquisition of, the Company (v) any Person shall have acquired beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of 35% or more of the shares of Common Stock then outstanding, or (w) a "change in control" of the Company involving a Person within the meaning of Item 1 of Form 8-K under the Securities Exchange Act of 1934 shall have occurred, the Company must promptly, but in no event later than five (5) business days after consummation of any transaction referred to in clauses (u) (v) or (w) above, pay to the Purchaser (by transfer of same-day funds to an account designated by the Purchaser for such purpose) an amount equal to (i) $1,000,000, less (ii) any funds paid by the Company to the Purchaser pursuant to the provisions described in the second following paragraph; provided such amount shall be payable by the Company with respect to any such transaction referred to in clauses (u) (v) and (w) above only if (a) the transaction provides for the Company or the holders of any shares of Common Stock being purchased in such transaction to receive consideration per share having an indicated value in excess of $16.50 per share, or (b) the amount of consideration received in such transaction is not readily determinable on a per share basis and the Investment Committee or another committee of one or more disinterested members of the Board of Directors of the Company fails to make a good faith determination that such transaction is less favorable to the stockholders of the Company from a financial point of view than the Merger ((a) or (b) being a "Higher Offer"). Prior to the execution of the Merger Agreement, the Company agreed to advance up to $175,000 to the organizers of the Purchaser to cover their expenses related to the formation of the Purchaser, the formulation of a proposal to acquire the shares of Common Stock and the preparation and negotiation of the Merger Agreement. The Company also has agreed that it will within five (5) business days after receipt of each notice of the incurrence thereof by the Purchaser to the Company, advance to the Purchaser all Reimbursable Expenses (as defined in the next paragraph); provided that the Company is not obligated to pay under this paragraph in excess of an aggregate amount of $750,000 (including the $175,000 referred to above, but excluding all funds advanced or reimbursed with respect to Financing Fees (as defined in the next paragraph), which expenses are not subject to such limit, but shall not exceed $217,000; provided further, that the Company is not obligated to pay under this paragraph in excess of an aggregate of $500,000 (including any amounts advanced or reimbursed under the provisions described in this paragraph, but excluding all funds advanced or reimbursed with respect to Financing Fees which expenses are not subject to such limit, but shall not exceed $217,000) unless 85% of the stores owned by the franchised dealers of the Company who directly or indirectly are stockholders of the Purchaser and whose franchise agreements expire prior to July 1, 1999 have extended the term of their franchise agreements at least through the earlier of (x) July 1, 2002, or (y) the date three (3) years after such franchise agreement would have expired; provided that such franchised dealers will not be required to pay any fees in connection with such extension. Any franchised dealer of the Company who directly or indirectly is a stockholder of the Purchaser and whose franchise agreement expires on or after July 1, 1999, has the right to extend such agreement for up to three (3) additional years without the payment of any fee in connection with such extension. If the Merger Agreement is terminated or the Merger is not consummated for any reason, the Company will, within five (5) business days after notice by the Purchaser to the Company, reimburse the Purchaser for all reasonable out-of- pocket costs and expenses (including, without limitation, reasonable commitment fees, reasonable termination fees, reasonable attorney fees and expenses incurred by potential lenders which the Purchaser is obligated to reimburse, and other fees and expenses incurred in connection with arranging financing for the Merger (collectively "Financing Fees"), legal fees and expenses, appraisal fees, fees and expenses of financial advisors and fees and expenses for accountants) incurred by the Purchaser, the Parent, or on their behalf in connection with the preparation or negotiation of the Merger Agreement or of the transactions contemplated hereby or otherwise incurred in contemplation of the Merger Agreement, the Merger or the other transactions contemplated by the Merger Agreement which have not otherwise been reimbursed by the Company ("Reimbursable Expenses"), provided that (i) the Company is not obligated to pay under this paragraph in excess of an aggregate of $750,000 (including any amounts advanced or reimbursed under the above paragraph, but excluding all funds advanced or reimbursed with respect to Financing Fees which expenses are not subject to such limit but shall not exceed $217,000) (ii) except for the reimbursement or advance of expenses related to Financing Fees, the Company is not obligated to pay any additional amount under this paragraph if the Purchaser has been paid the amount provided in the second paragraph above (iii) the Company has the right to review all expense receipts (other than receipts which contain privileged or confidential information), and (iv) the Company is not obligated to pay under this paragraph in excess of an aggregate of $500,000 (including any amounts advanced or reimbursed under the above paragraph, but excluding all funds advanced or reimbursed with respect to Financing Fees which expenses are not subject to such limit, but shall not exceed $217,000) unless 85% of the franchised dealers of the Company who directly or indirectly are stockholders of the Purchaser and whose franchise agreements expire prior to July 1, 1999, have extended the term of their franchise agreements at least through the earlier of (x) July 1, 2002, or (y) the date three years after such franchise agreement would have expired; provided that such franchised dealers will not be required to pay any fees in connection with such extension. MODIFICATION AND WAIVER. The Merger Agreement may be amended by a written instrument executed by each of the Boards of Directors of the Company (including the Investment Committee), the Purchaser and the Parent, or the time for performance of any obligation or act or compliance with any agreement or condition may be extended or waived by a party, provided that no amendment which would materially adversely affect the stockholders of the Company may be made without further approval of the stockholders after approval of the Merger by the stockholders has been obtained. Termination of the Merger Agreement. The Merger Agreement may be terminated at any time prior to the Effective Time, notwithstanding approval of the Merger by the stockholders of the Company, by mutual written consent of the Boards of Directors of the Purchaser and the Company (including the Investment Committee in the case of the Company). The Company or the Purchaser may terminate the Merger Agreement if: (i) the Effective Time has not occurred by February 28, 1996; (ii) a condition of the Merger has not been satisfied by the Effective Time, provided that the right to terminate is not available to a party whose failure to fulfill any obligation under the Merger Agreement has caused or resulted in the failure of the Effective Time to occur; or (iii) the Company has received a bona fide Higher Offer which is not matched or exceeded by the Purchaser within five business days and the Investment Committee withdraws or changes in a manner adverse to the Purchaser its recommendation of the Merger. The Company may terminate the Merger Agreement for failure by the Purchaser to perform its obligations under the Merger Agreement in any material way or if the representations and warranties of the Purchaser are not true in any material respect. The Purchaser may terminate the Merger Agreement if the Company enters into or announces its intention to enter into another acquisition proposal which would not qualify as a Higher Offer or anyone publicly announces or commences a tender exchange or offer for the Company's Common Stock; or if certain conditions of the Merger Agreement are unfulfilled by Company. If the Merger Agreement is terminated it will become void and have no effect except with respect to obligations of the parties to maintain confidentiality of information and with respect to payment of certain expenses. See "The Merger Agreement -- Fees and Expenses." However, a party will remain liable for willful default of its obligations under the Merger Agreement. Exchange of Certificates. As soon as practicable after the Effective Time, Interwest Transfer Co., Inc. (the "Exchange Agent") will mail to each record holder of certificates representing shares of Common Stock ("Certificates") that were converted into the right to receive cash, a letter of transmittal advising the holders of the procedure for surrendering Certificates for payment of the applicable Merger Consideration. Until surrendered, the Certificates will represent only the right to receive the amount of Merger Consideration, without interest, applicable to those shares represented by the Certificates. If payment of the Merger Consideration is to be made to a person other than the person in whose name the Certificate surrendered for payment is registered, that person will be responsible for paying, or establishing the payment or non- applicability of any transfer or other taxes required. After 180 days following the Effective Date, a holder of Certificates may surrender the Certificates for payment of the Merger Consideration only to the Company, but will have no greater rights to payment than a general unsecured creditor of the Company. After the Effective Time, no transfers of Common Stock on the transfer books of the Company will be made. Certificates presented after the Effective Time will be canceled and exchanged only for the applicable Merger Consideration. From and after the Effective Time, holders of Certificates will cease to have any other rights with respect to the Common Stock, including rights to dividends or voting rights. Upon surrender and exchange of a Certificate, the holder will be paid, without interest, the applicable Merger Consideration, less any amounts required to be withheld under applicable federal income tax backup withholding regulations. A holder who is a United States citizen and resident (other than a corporation) may be able to avoid backup withholding by providing the Exchange Agent with a correct taxpayer identification number in accordance with instructions in the letter of transmittal. Certificates should not be surrendered until the letter of transmittal is received. No interest will accrue or be paid on the Merger Consideration upon surrender of the Certificates. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY The following is certain information pertaining to the current directors of the Company: PRESENT PRINCIPAL OCCUPATION RESIDENCE OR AND MATERIAL OCCUPATIONS NAME BUSINESS ADDRESS DURING LAST FIVE YEARS John B. Adams 11755 East Peakview Avenue Englewood, Colorado 80111 Executive Vice President of the Company since April 1990; also a part owner of CAPS Tire Limited Liability Company, 8151 E. Arapahoe Road, Englewood, Colorado 80112, a limited liability company that has owned a franchised Big O Tires retail store in Colorado since November 1993; Chief Financial Officer of the Company since November 1988; Vice President -- Finance of the Company from November 1988 until April 1990; Secretary of the Company from November 1989 until December 1990; Treasurer of the Company since April 1987; Assistant Secretary of the Company since December 1990; Treasurer and a Director of the Parent and the Purchaser since July 1995 and January 1995, respectively. Ronald D. Asher 729 Red Arrow Trail Palm Desert, California 92211 Owner of interests in approximately 28 franchised Big O Tires retail stores in California and Arizona that are owned by C.S.B. Partnership ("C.S.B.") 27131 Calle Arroyo, Suite 1703, San Juan Capistrano, California 92675, and by a joint venture consisting of the Company and S.A.N.D.S. Partnership 27131 Calle Arroyo, Suite 1703, San Juan Capistrano, California 92675. Frank L. Carney 4849 1960 West Houston, Texas 77066 President of Papa Johns, 4849 1960 West, Houston, Texas 77066, a limited liability company since February 1994; Vice Chairman, Secretary and Director of TurboChef, Inc., 10500 Metric Drive, #128, Dallas, Texas 75243, a corporation engaged in the design, development, assembly and marketing of commercial ovens, since January 1994; Chairman of the Board of WesterN SizzliN Inc., 17090 Dallas Parkway, Dallas, Texas 75248, from November 1988 to December 1993 and served as its President and Chief Executive Officer from November 1990 to December 1993; Director of Intrust Bank, N.A. P.O. Box 1, Wichita, Kansas 67201, a bank, since December 1973, and Intrust Financial Corporation P.O. Box 1, Wichita, Kansas 67201, a bank, since August 1982. Steven P. Cloward 11755 East Peakview Avenue Englewood, Colorado 80111 Member of the Office of the Chief Executive of the Company since February 1995 and President of the Company since 1986; Chief Executive Officer of the Company from 1986 to February 1995; also a part owner of OK Tires, Inc., 2830 West 3500 South, West Valley City, Utah 84119, a Utah corporation that has owned a franchised Big O Tires retail store in Utah since October, 1994; President and a Director of the Parent and the Purchaser, since July 1995 and January 1995, respectively. Everett H. Johnston P.O. Box 1954 45275 Mar Vista Mendocino, California 95460 Real estate investor since 1989; Chief Financial Officer, Secretary, Treasurer and a Director of Simpson Manufacturing Co., Inc. 4637 Chabot, #200, Pleasanton, California 94588, a manufacturer of structural building products, from 1983 to 1989, at which time Mr. Johnson retired. Robert K. Lallatin Box 7373 Jackson, Wyoming Member of the Big O Tires, Inc. Dealer Planning Board 11755 East Peakview Avenue, Englewood, Colorado 80111, representing franchisees of the Company in Idaho, Montana, western Wyoming and northern Nevada since March 1990; Chairman of the Personnel Training Committee of the Dealer Planning Board since July 1993; part owner of B & G Tire, Inc., 265 Northgate Mile, Idaho Falls, Idaho 83401, an Idaho corporation, that has owned a franchised Big O Tires retail store in Idaho since November 1981 and acquired a second franchised Big O Tires retail store in Idaho in August 1989; B & G Tire, Inc., also owned two Big O Tires retail stores in Montana, one of which was sold in March 1990 and the other was closed in December 1993; also a part owner of B & G Jackson Partnership 530 S. Highway 89, Jackson, Wyoming 83001, an Idaho general partnership, that has owned a franchised Big O Tires retail store in Wyoming since February 1992 as a partner with one of the Company's subsidiaries. This store was purchased by B & G Jackson Partnership effective December 31, 1994. Horst K. Mehlfeldt 11755 East Peakview Avenue Englewood, Colorado 80111 Vice Chairman and Member of the Office of the Chief Executive of the Company since February 1995; Consultant to the Company providing investment advisory services from September 1994 to February 1995; Senior Vice President and Chief Financial Officer of Continental General Tire, Inc., 1800 Continental Blvd., Charlotte, North Carolina 28273, a tire manufacturer and marketer, from January 1992 to February 1994; Vice President and Treasurer of Continental General Tire, Inc. from January 1989 until December 1991. John E. Siipola 11755 East Peakview Avenue Englewood, Colorado 80111 Member of the Office of the Chief Executive of the Company since February 1995; Chairman of the Board of the Company since December 1991; President and owner of Barrett Publishing, Inc., a publishing company, 2533 North Carson Street, Suite 1147, Carson City, Nevada 89706, since January 1993; consultant and investor since May 1991; President of the Barrett Group, 110 Sutter Street, Suite 909, San Francisco, California 94104, a personnel consulting firm, from November 1988 until May 1991. Ralph J. Weiger 79 North French Place Prescott, Arizona 86303 Chairman and owner of the Moneco Group, 7E East Hanover Avenue, Morristown, New Jersey 07962-1518, an advisor to franchise business clients, international marketing companies and investment and commercial banking clients, from March 1982 to July 1995; Chairman of the Board of America's Carpet Gallery, 4395 Electric Road, S.W., Roanoke, Virginia 24018, a franchised upscale carpet store, from 1991 to October 1993. Chairman, President and Chief Executive Officer of Midas International Corp., 225 N. Michigan Avenue, Chicago, Illinois 60601, a franchisor of exhaust, brake and suspension services for vehicles, from 1971 until 1978 and Vice Chairman and President of Jiffy Lube International, Inc., P.O. Box 2967, Houston, Texas 77252- 2967, a franchisor of fast oil change systems for vehicles, from 1983 until 1985. A director of the International Franchise Association from 1976 until 1979 and President in 1979. C. Thomas Wernholm 435 Reflections Circle #22 San Ramon, California 94583 President and Chief Executive Officer for D. Wernholm & Sons, Industrial Contractors, an industrial painting contractor; Chairman of the Board of Loomis Industries, a company owned primarily by the Wernholm family that manufactures paraline instruments. The address of both companies is 927 A 40th Avenue, Oakland, California 94601. The following is certain information pertaining to the current executive officers of the Company who are not also directors of the Company: PRESENT PRINCIPAL OCCUPATION RESIDENCE OR AND MATERIAL OCCUPATIONS NAME BUSINESS ADDRESS DURING LAST FIVE YEARS Dennis J. Fryer 11755 East Peakview Avenue Englewood, Colorado 80111 Regional Vice President - Central Region of the Company Since October 1992; New Store Opening Specialist of the Company from January 1990 to October 1992. Allen E. Jones 640 Park East Boulevard New Albany, Indiana 47151 Regional Vice President - Southeast Region of the Company since December 1990. Ronald H. Lautzenheiser 11755 East Peakview Avenue Englewood, Colorado 80111 Vice President - Business Development of the Company since November 1993; Vice President - Marketing of the Company from March 1990 to November 1993, and employee of the Company since December 1989. Kelley A. O'Reilly 11755 East Peakview Avenue Englewood, Colorado 80111 Vice President - Marketing of the Company since November 1993; Director, President and Treasurer of Impact Advertising, Inc., 11755 East Peakview Avenue, Englewood, Colorado 80111, an advertising agency for the Company's franchised dealers, since August 1994; Marketing Director of the Company from July 1991 to October 1993; Advertising Director for Western Washington Advertising Trust, 1901 Auburn Way North, Suite A, Auburn, Washington 98002, an advertising trust, from March 1990 to June 1991. Gregory L. Roquet 3333 Vaca Valley Parkway Suite 100 Vacaville, California 95688 Regional Vice President - West Central Region of the Company since May 1993 and Regional Vice President - Southwest Region of the Company since July 1991; Regional Director of Operations - Southwest Region of the Company from December 1990 to July 1991. Thomas L. Staker 11755 East Peakview Avenue Englewood, Colorado 80111 Senior Vice President - Operations of the Company since January 1993; also a part owner in OK Tires, Inc., 2830 West 3500 South, West Valley City, Utah 84119, a Utah corporation, that owns a franchised Big O Tires retail store in Utah since October 1994; Vice President - Operations of the Company from December 1991 to December 1992; President and Director of Staker Management, Inc., 6043 West 10930 North, Highland, Utah 84004, a provider of consulting services to the Company's franchisees, from March 1991 to December 1991; President and Director of Willow Investments, Inc., 954 Westfield Road, Alpine, Utah 84003, a wholesaler and manufacturer of clothing, from October 1988 to November 1991; 25% stockholder, Secretary and Director of Tad Tire, Inc., 3000 Valmont, Boulder, Colorado 80301, a franchisee of the Company, from August 1982 to the present. Philip J. Teigen 11755 East Peakview Avenue Englewood, Colorado 80111 Secretary of the Company since December 1990; General Counsel of the Company since August 1990; Secretary of the Parent and the Purchaser since July 1995. Bruce H. Ware 3511 South T.K. Avenue Boise, Idaho 83706 Regional Vice President - Northwest Region of the Company since December 1990 and Acting Corporate Manager of Purchasing of the Company since December 1995. All of the directors and executive officers of the Company are citizens of the United States except for Horst K. Mehlfeldt who is a citizen of the Federal Republic of Germany. INTEREST OF CERTAIN PERSONS IN THE MERGER As described below under the heading "Information Pertaining to the Parent, the Purchaser and Related Persons," Steven P. Cloward and John B. Adams, both of whom are directors and officers of the Company, will be shareholders, officers and directors of the Parent. In addition, Ronald D. Asher and Robert K. Lallatin, directors of the Company, will be indirect shareholders of the Parent. Finally, Ms. O'Reilly and Messrs. Findlay, Fryer, Jones, Lautzenheiser, Roquet, Staker, Teigen and Ware, who are officers of the Company, will be shareholders or shareholders and officers of the Parent. The Company has entered into Stock Appreciation Rights Agreements (the "SAR Agreements") with John E. Siipola, Horst K. Mehlfeldt and Steven P. Cloward effective February 15, 1995. Each SAR Agreement grants each person 100,000 share equivalent units. Each unit entitles each person to receive, in cash only, the difference between $13.875 per share and the market value of a share of common stock on the exercise date. The right to exercise any units does not vest until August 16, 1995. Thereafter, each individual's right to exercise any units vests at a rate of 16,662 units on August 16, 1995, and at a rate of 2,777 units on the 16th day of each month thereafter until the 16th day of January, 1998, at which time the 2,805 unvested units vest. Such vesting shall occur only if the person is in the full-time employ of the Company or any subsidiary of the Company on each vesting date. By letters dated March 24, 1995, the Company confirmed to John E. Siipola and Horst K. Mehlfeldt that, if a change in control of the Company took place between February 15, 1995 and August 16, 1995, the Company would pay each a lump sum payment of $150,000 if their positions with the Company terminated as a result of such change in control. The Company also confirmed to Steven P. Cloward that any severance will be determined in accordance with the Company's severance pay guidelines in effect on February 12, 1995 as it applied to his 1995 compensation (salary and bonus) program in effect as of February 12, 1995, if his employment terminated before August 16, 1995. The Company has now entered into letter agreements with Messrs. Siipola and Mehlfeldt that provide that Messrs. Siipola and Mehlfeldt each will receive a severance package consisting solely of a lump sum payment of $150,000 minus any amounts they may realize from the exercise of rights granted to them in the SAR Agreements if the Merger is consummated and if their employment with the Company terminates within 285 days after the date of the Merger is effective or if during that period their salary is reduced from the salary in effect on the date the Merger is consummated. Messrs. Siipola and Mehlfeldt have agreed that on the effective date of the Merger, their SAR Agreements will terminate. The Company also entered into a letter with Mr. Cloward that provides that his severance arrangement will continue through the effective date of the Merger provided he agrees upon the effective date of the Merger that his SAR Agreement will terminate. The Board of Directors of the Company has authorized the extension to a future date that will coincide with the Effective Time, as such time is defined in the Merger Agreement, of temporary living and travel arrangements for John E. Siipola. Steven P. Cloward and John B. Adams are participants in the Company's Supplemental Executive Retirement Plan (the "Plan"). Pursuant to the Plan, upon a change in control of the Company such as will occur as a result of the Merger, each participant will be entitled to receive all amounts credited to the participant's account. Messrs. Cloward and Adams have elected to take their distributions in lump sum payments rather than in monthly installments over 5 to 10 years. The aggregate distributions to them will be $11,632.50 plus any amount credited in 1996 for 1995. INDEMNIFICATION BY THE PARENT AND THE COMPANY. The Merger Agreement provides that Parent and the Company will enter into indemnification agreements with each present director of the Company as of the Effective Time. Regardless of whether the Merger becomes effective, the Company will indemnify and hold harmless each present and former director and officer of the Company and its subsidiaries, including the members of the Investment Committee, from all expenses, judgments, fines, penalties and penalties incurred in connection with the defense or settlement, or successful disposition, of a proceeding in which the indemnitee was involved by reason of being a director of the Company or serving at the request of the Company as a principal of another entity. Indemnification is conditioned upon the indemnitee providing notice to the Company. Expenses may be advanced with the agreement of the indemnitee to repay the advances if it is later determined that the indemnitee was not entitled to such indemnification. The Company is required to purchase an insurance policy to be in effect for three years in order to provide coverage for the indemnitee similar to that provided by for the Company's directors. INFORMATION PERTAINING TO THE PARENT, THE PURCHASER AND RELATED PERSONS GENERAL Pursuant to the Merger, the Purchaser will merge with and into the Company and the Company will remain as the surviving corporation. The result of the Merger will be that the Company will become a wholly-owned subsidiary of the Parent. The Merger Agreement provides that the Board of Directors of Purchaser will become the Board of Directors of the Company at the Effective Time. As of the date hereof, Steven P. Cloward and John B. Adams, both of whom are officers and directors of the Company, and Scott E. Klossner, Michael E. Lyons and Wesley E. Stephenson are the directors of the Purchaser and of the Parent. In addition, Messrs. Cloward and Adams and Philip J. Teigen, who is also an officer of the Company, are the only officers of the Purchaser and of the Parent. For information pertaining to Messrs. Cloward, Adams and Teigen see "Directors and Executive Officers of the Company." Upon consummation of the Merger, it is currently contemplated that the equity ownership of the Parent will be as follows: Big O Dealers, L.P. (the "Dealer LP"), a California limited partnership, 50%; the ESOP, 35%; and Senior Management, 15% (excluding the Management Restricted Stock [as defined below], the shares "issuable" pursuant to the Dealer Warrant [as defined below], the Sub-Debt Warrant, the ESOP Contributions [as defined below], and the Dealer Purchase Bonus [as defined below] and assuming that the Management Options are exercised as described below). The Dealer LP will be formed prior to the Effective Time, and its address will be 1111 Broadway, 24th Floor, Oakland, California 94607. Big O Tire Dealers of America ("BOTDA"), a California corporation with its principal office at 1111 Broadway, 24th Floor, Oakland, California 94607, is the general partner of the Partnership. The Dealer LP (i) will contribute to the Parent an aggregate of $10,000,000 consisting of cash and shares of Common Stock (valued at $16.50 per share), (ii) has encouraged certain of its members to extend their franchise agreements with the Company, and (iii) has committed (on behalf of its members) to certain minimum tire purchases the attainment of which will entitle the Dealer LP to additional shares of stock ("Dealer Purchase Bonus"). Providing and conditional upon the dealers attaining certain minimum tire purchases, Parent will issue to the Dealer LP, bonus shares of the common stock of Parent ("Parent Common Stock") in an amount equal to the number of shares issuable to the ESOP for the years 1996, 1997, 1998, 1999, and 2000. The number of shares shall be determined based on the ESOP contribution for such year divided by the most recent appraisal price for the stock if the stock is not traded on an exchange or the bid price if publicly traded ("Appraised Price"). At the Effective Time, the Dealer LP will own 569,801 shares (50.00% assuming the Management Options are exercised) of Parent Common Stock. In addition, the Dealer LP will be provided warrants to purchase an additional 120,000 shares of Parent Common Stock exercisable five (5) years after consummation of the Merger at the Appraised Price. Pursuant to a Confidential Private Placement Memorandum ("Memorandum"), qualified franchised Dealers have been given the opportunity to subscribe to invest in the Dealer LP, and thus, the opportunity to participate in the acquisition of the Company pursuant to the terms of the Merger Agreement. On August 10, 1995, Steven P. Cloward and Wesley E. Stephenson received a commitment letter from Kelly to loan the Dealer LP $5,000,000 (the "Dealer Loan"). The Dealer Loan is subject to a number of contingencies including, but not limited to, the completion of Kelly's due diligence, contribution of at least $1,300,000 in equity by the Dealers to the Dealer LP, the participation of 80% of the Dealers in the Dealer LP and, execution of an agreement requiring the Dealers to cause the Company to meet certain minimum tire purchases. It is anticipated that the Dealer LP will purchase the Common Stock it will contribute to the Parent in a series of private transactions, as follows: As part of its required equity contribution to Parent, and in addition to the Dealer Loan, BOTDA has, on behalf of the Dealer LP, made a proposal to Balboa and Mr. Pavia to purchase the approximately 309,500 shares of Common Stock owned and held by Balboa (the "Balboa Shares") at a price of $16.00 per share. In addition, the Dealer LP has proposed to reimburse Balboa for expenses incurred by Balboa in putting together proposals for certain stockholder actions and resolutions to the stockholders of the Company in 1993 and 1994 by way of proxy solicitations and related actions, which actions included proposals that the Company explore all alternatives to enhance the value of the Company (the "Reimbursement"); provided that the Dealer LP's Reimbursement obligation to Balboa shall not exceed the sum of $619,000. Part of the purchase price for the Balboa Shares and the Reimbursement will be paid in cash with the remainder payable by way of a secured promissory note with interest of ___% per annum, fully amortized over a six-year period. A copy of a draft stock purchase agreement with respect to the Balboa shares is attached as an exhibit to the Schedule 13E-3. In addition to the Dealer Loan and the proposal made to Balboa, and also as part of its required equity contribution to Parent, BOTDA has, on behalf of the Dealer LP, made proposals to certain current stockholders of the Company, thereby offering to purchase such stockholders' Common Stock at the price of $16.50 per share, payable partly in cash or equivalent with the remainder payable by way of a secured promissory note fully amortized over a six-year period. A copy of a draft form of stock purchase agreement is attached as an exhibit to the Schedule 13E-3. The participants in the ESOP will also be offered the opportunity to become shareholders of the Parent. The Company has been advised that at or about the same time the Company mails this Proxy Statement to the Company's stockholders, the Parent will offer participants in the ESOP the opportunity to exchange, at the Effective Time, the shares allocated to the participants' respective accounts for shares of Parent Common Stock. The ESOP shares will be exchanged on the basis of one share of Parent Common Stock for one share of Common Stock. Unless waived by the Purchaser, one of the conditions to the Merger is that at least 80% of the shares of Common Stock held by the ESOP be exchanged for shares of the Parent Common Stock. If such minimum exchange level is achieved, the ESOP will own approximately _____% of the outstanding Parent Common Stock. The Company has amended the ESOP to provide for mandatory contributions to the ESOP by the Company of at least 5% of the qualified earnings. These contributions will be made in the form of cash or Parent Common Stock (the "ESOP Contributions"). Senior Management will contribute 64,094 shares of Common Stock to the Parent. At the Effective Time, Senior Management will own an aggregate of 100,477 shares (9.39%) of Parent Common Stock. In addition, members of Senior Management currently hold Options to purchase 163,678 shares of Common Stock which at the Effective Time will be converted into options to purchase the same number of shares of Parent Common Stock which will allow the optionee to pay for the exercise of an option by forfeiting other options (the "Management Options"). If Senior Management were to exercise all such options immediately after the Effective Time and pay the exercise price of such options through the cancellation of other options, Senior Management would own approximately 14.0% of the outstanding Parent Common Stock. This would reduce the percentage holdings in the Parent of the Dealer LP and the ESOP to 50.0% and 35.1%, respectively. As part of their employment compensation, Senior Management will receive 120,000 shares of restricted Parent Common Stock (the "Management Restricted Stock"). The Management Restricted Stock will vest over a period of five years. As described above, it is also anticipated that the Parent will issue the Sub-Debt Warrant to BBC. The Sub-Debt Warrant will provide BBC the right to purchase 12% of the equity in Parent. CERTAIN INFORMATION PERTAINING TO BOTDA The following is certain information pertaining to the current directors and executive officers of BOTDA: PRESENT PRINCIPAL OCCUPATION RESIDENCE OR AND MATERIAL OCCUPATIONS NAME BUSINESS ADDRESS DURING LAST FIVE YEARS Guide Bertoli 420 Mowry Avenue Fremont, CA 94536 Owner of three franchised Big O Tire retail stores in Fairfield, Fremont and Santa Cruz, California since 1991 (two stores) and 1994; member of Company's Dealer Planing Board since 1994; Director of BOTDA since 1995. Bryan K. Edwards 377 East Cypress Redding, CA 96002 Owner of a franchised Big O Tire retail store in Redding, California since 1987; member of the Company's Dealer Planning Board from 1989-1991; Chief Financial Officer/Treasurer and Director of BOTDA since 1995. Scott E. Klossner 3120 South Highland Drive Salt Lake City, UT 84106 President and 100% owner of K&B Corp., which has owned a franchised Big O Tire retail store in Utah since 1990; Director of BOTDA since 1995; member of the Company's Dealer Planning Board in 1993, 1994 and 1995. O. Kenneth Little 1625 Countryshire Avenue Lake Havasu City, AZ 86403 Owner of franchised Big O Tire retail store in Lake Havasu City, Arizona since 1993; from 1987 to 1992, president and owner of CLLBP, Inc., which owned two Big O Tire retail stores in California; member of Company's Dealer Planning Board since 1994. Michael E. Lyons 1205 S. Main Longmont, CO 80234 Sole owner of Myklyn Tires, Inc., which has owned a franchised Big O Retail store in Longmont, Colorado since 1982; since 1995, 14.286% owner of Brighton Automotive Services, L.L.C., which owns a franchised Big O Retail store in Brighton, Colorado; since 1995, 100% owner of Lyons Enterprises which owned a Big O Retail Store in Louisville, Colorado from 1992 to 1993; member of Company's Dealer Planning Board since 1985; Vice President and director of BOTDA since August 1995; Director of Silverheels Southwest Grill since 1995. Louis Martinez 5200 Central SE Albuquerque, NM 87108 Owner and manager of three franchised Big O Retail stores in New Mexico (since 1972, 1978 and 1991, respectively); Director of BOTDA since 1995; member of the Company's Dealer Planning Board from 1972-1975, 1978-1981, and from 1993- present. Kenneth A. Roetto 216 E. Fairview Avenue Meridian, ID 83680 Since 1986, owner and president of Ken's Tire, Inc., which owns a franchised Big O Tire retail in Meridian, Idaho; Secretary and Director of BOTDA since 1995; member of the Company's Dealer Planning Board from 1986-1995. P. Thomas Staker 215 Clifty Drive Madison, IN 47250 Since 1993, co-owner (50%) and since 1990, manager, of T.M.S, Inc., which owns a franchised Big O Tire retail store in Madison, Indiana; member of Company's Dealer Planning Board since 1994; Assistant Vice President and Director or BOTDA since 1995. Wesley E. Stephenson 4520 N. Rancho Road Las Vegas, NV 89130 Since 1980, vice president of operations and since 1978, 50% owner of Spring Valley Tires, Inc., which owns four franchised Big O Tires retail stores in Nevada; since 1991, 35% owner and vice president of operations of Rancho Sierra Tires, L.L.C., which owns one franchised Big O Tires retail store in Nevada; since 1994, 50% owner and vice president of operations of Pahrump Valley Tires, Inc., which owns one franchised Big O Tires retail store in Nevada; President and Director of BOTDA since 1995; member of the Company's Dealer Planning Board since 1992. All of the directors and executive officers of the Parent, the Purchaser and BOTDA are citizens of the United States. SECURITY OWNERSHIP OF MANAGEMENT OF BOTDA IN COMPANY The following table shows, as of October 30, 1995, the shares of the Company's outstanding stock owned by each director or executive director of BOTDA, and the shares of the Company's common stock owned by all the directors and executive officers of BOTDA as a group. AMOUNT AND NATURE OF NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS Guido A. Bertoli 3,000 * Bryan K. Edwards 102 * Scott E. Klossner 82 * O. Kenneth Little 1,000 * Michael E. Lyons 308 * Louis Martinez 761 * Kenneth A. Roetto 230 * P. Thomas Staker 87 * Wesley E. Stephenson 50(2) * _________________ * Percent of shares of Common Stock beneficially owned by this person does not exceed 1% of the outstanding Common Stock. (1) Unless otherwise indicated, the shares are held directly in the names of the beneficial owners and each person has sole voting and sole investment power with respect to such shares. (2) Shares are held in the name of Rancho Sierra Tires, L.L.C., of which this person is a 20% equity owner. CERTAIN PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH COMPANY. Since January 1, 1993, no transactions involving more than 1% of the Company's consolidated revenues for the Company's fiscal years ended December 31, 1993 or 1994, or for the nine months ended September 30, 1995, have occurred or been entered into between the Company and any director or executive officer of BOTDA, any director or executive officer of the Parent or any director or executive officer of the Purchaser, except as follows: 1. Each director and executive officer of BOTDA is expected to become a limited partner of Dealer LP. Dealer LP will acquire an interest in Parent, a party to the Merger Agreement. The interest in Dealer LP to be owned by each such person cannot be determined at this time. 2. Pursuant to the terms of the franchise agreements between the Company and those entities of which Mr. Stephenson has an ownership interest, the following amounts were paid to the Company in the form of franchise fees, royalties and product purchases: YEAR AMOUNT 1993 $3,335,048 1994 $3,680,324 1995 (1/1-9/30) $3,667,215 3. Pursuant to the terms of the franchise agreement between the Company and Mr. Martinez, the following amounts were paid to the Company in the form of franchise fees, royalties and product purchases: YEAR AMOUNT 1993 $ 951,886 1994 $1,107,612 1995 (1/1-9/30) $ 887,718 4. In June 1995, the Company loaned $75,000 to Brighton Automotive Services, L.L.C., a limited liability company, that owns a franchised Big O Retail Store in Brighton, Colorado, and in which Michael E. Lyons is a 14.286% owner. The loan bears interest at prime plus 2% and is payable in monthly installments of principal and interest through June 20, 1998. 5. In August 1995, the Company loaned $59,160 to K & B Corp., of which Scott E. Klossner is the 100% owner. The loan bears interest at prime plus 2% and is payable in equal monthly installments of interest only until April 1, 1996, at which time monthly installments of principal and interest are payable through August 1, 1998. RECENT TRANSACTIONS BY THE COMPANY IN THE COMMON STOCK In May 1993, the Company consummated agreements with Continental General Tire, Inc. ("General") resulting in the Company's repurchase of 400,000 shares of the Company's Common Stock owned by General. The agreements also resulted in the repurchase and cancellation of warrants held by General to purchase up to 1,000,000 shares of the Company's Common Stock. The repurchase price for the Common Stock and warrants was $6,100,000. General previously held 11.27% of the Company's outstanding Common Stock and no longer has any ownership interest in the Company. The agreement between General and the Company also resulted in the repayment of revolving financing supplied by General in the amount of $1,764,000, the termination of the existing supply agreement between the Company and General and the termination of other related agreements. Concurrent with the termination of the supply and related agreements, the Company and General entered into a marketing agreement whereby General agreed to continue to supply Big O branded tires to the Company. In January 1994, the Company and General agreed to terminate the marketing agreement. In June 1993, the Company sold 93,333 shares of the Company's Common Stock to an unaffiliated person at a price of $12.75 per share. After deducting the concession paid to the broker-dealer that placed the shares and after deducting the expenses of the offering, the Company realized approximately $1,100,000 from the sale of the shares. The Company used approximately $788,000 of such proceeds to satisfy obligations related to the Company's 1988 acquisition of Big O Tires of Louisville, Inc. The balance of the net proceeds of approximately $312,000 was used by the Company for general corporate purposes. DOCUMENTS INCORPORATED BY REFERENCE The following documents previously filed by the Company with the Securities and Exchange Commission are incorporated herein by reference: (i) the Company's Annual Report on Form 10-K for the year ended December 31, 1994 and the amendment thereto; (ii) the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995, June 30, 1995 and September 30, 1995; and (iii) the Company's Current Reports on Form 8-K and Form 8-K/A dated April 6, 1995, April 13, 1995, June 5, 1995, June 9, 1995, July 25, 1995, July 27, 1995, August 17, 1995, September 5, 1995, October 4, 1995, October 18, 1995, and November 17, 1995. All documents filed by the Company pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 after the date of this Proxy Statement and prior to the Special Meeting (or any adjournments or postponements thereof) shall be deemed to be incorporated into this Proxy Statement by reference and to be a part hereof from the date of filing of such documents. This proxy statement is accompanied by a copy of the Company's Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 1994. The Company will provide without charge to each person to whom a copy of this Proxy Statement has been delivered, on the written or oral request of such person, by first class mail or equally prompt means, within one business day of the receipt of such request, copies of the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1995, that has been incorporated herein by reference and copies of any document filed as an exhibit to the Schedule 13E-3 and not included in this Proxy Statement. Requests for such copies should be directed to Beth Hayne, Director, Investor Relations, at the Company at its principal offices, 11755 East Peakview Avenue, Englewood, Colorado 80011, or by telephone at (303) 790-2800. Such requests should be made by _________________ to ensure delivery prior to the Special Meeting. STOCKHOLDER PROPOSALS It is currently anticipated that the Company's next annual meeting of stockholders will occur after the Effective Time and accordingly the Company's existing stockholders will not be entitled to participate in such meeting unless the Merger is not consummated. If the Merger is not consummated, proposals of stockholders intended to be presented at the next annual meeting of the Company's stockholders must be received by the Company within a reasonable time prior to the mailing of the proxy statement for such meeting but no later than ___________________, 1995. By Order of the Board of Directors Susan D. Hendee, Assistant Secretary Englewood, Colorado __________, 1995 PRELIMINARY COPY PROXY BIG O TIRES, INC. PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE SPECIAL MEETING OF STOCKHOLDERS TO BE HELD __________, 1996 The undersigned hereby constitutes and appoints John E. Siipola, Horst K. Mehlfeldt, Steven P. Cloward, and each of them, the true and lawful attorneys and proxies of the undersigned with full power of substitution and appointment, for and in the name, place and stead of the undersigned, to act for and to vote all of the undersigned's shares of common stock of Big O Tires, Inc. ("Company") at the Special Meeting of Stockholders to be held at _________________ _________________________ Colorado __________ on _____________, 1996, at ______: __.m., Mountain Standard Time, and at all adjournments thereof for the following purposes: 1. Approval of the Plan of Merger dated July 24, 1995, as amended, by and among the Company, BOTI Holdings, Inc. and BOTI Acquisition Corp. and the Merger of BOTI Acquisition Corp. into the Company, all as described in the accompanying Proxy Statement. [ ] FOR [ ] AGAINST [ ] ABSTAIN FROM VOTING 2. In their discretion, the Proxies are authorized to vote upon such other business as lawfully may come before the meeting. The undersigned hereby revokes any proxies as to said shares heretofore given by the undersigned and ratifies and confirms all that said attorneys and proxies lawfully may do by virtue hereof. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THEN THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING FOR APPROVAL OF THE MERGER. It is understood that this proxy confers discretionary authority in respect to matters not known or determined at the time of the mailing of the Notice of Special Meeting of Stockholders to the undersigned. The proxies and attorneys intend to vote the shares represented by this proxy on such matters, if any, as determined by the Board of Directors. The undersigned hereby acknowledges receipt of the Notice of Special Meeting of Shareholders and the Proxy Statement furnished therewith. Dated and Signed: __________________________________________, 1996 ___________________________________________ ___________________________________________ Signature(s) should agree with the name(s) stenciled hereon. Executors, administrators, trustee, guardians and attorneys should so indicate when signing. Attorneys should submit powers of attorney EX-16 14 EXHIBIT (D)(2) UNITED STATES Securities and Exchange Commission Washington, D.C. 20549 FORM 10-K/A [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended December 31, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from ________ to _________. Commission File Number: 1-8833 BIG O TIRES, INC. (Exact name of registrant as specified in its charter) Nevada 87-0392481 - -------------------------------- ------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) Number) 11755 East Peakview Avenue Englewood, Colorado 80111 (Address of Principal Executive Offices and Zip Code) Registrant's Telephone Number, Including Area Code: (303) 790-2800 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: $0.10 Par Value Common Stock ---------------------------- (Title of Class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes __X__ No _____ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of the registrant's voting stock held as of March 24, 1995, by nonaffiliates of the registrant was $35,473,244.50. As of March 24, 1995, the registrant had 3,311,766 shares of its $0.10 par value common stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE The definitive Proxy Statement for the 1995 Annual Meeting of Shareholders is incorporated by reference in lieu of the information required by Part III hereof. Total Pages 23. Exhibit Index Page 13. PART IV Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) (1) LIST OF FINANCIAL STATEMENTS The following is a list of financial statements which, along with the auditors' report, accompany this Form 10-K: - Independent Auditors' Report - Deloitte & Touche LLP - Consolidated Balance Sheets December 31, 1994 and 1993 - Consolidated Statements of Income Years Ended December 31, 1994, 1993, and 1992 - Consolidated Statements of Shareholders' Equity Years ended December 31, 1994, 1993, and 1992 - Consolidated Statements of Cash Flows Years ended December 31, 1994, 1993, and 1992 - Notes to Consolidated Financial Statements (a) (2) LIST OF SCHEDULES REQUIRED BY ITEM 8 AND ITEM 14 (d) None. (a) (3) LIST OF EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K EXHIBIT NUMBER (3.1) Certificate of Amendment to Restated Articles of Incorporation of Big O Tires, Inc. dated June 10, 1992 and Restated Articles of Incorporation of Big O Tires, Inc. dated August 17, 1987 (incorporated by reference to Exhibit 3 to Quarterly Report on Form 10-Q for quarter ended June 30, 1992). (3.2) Amended and Restated Bylaws of Big O Tires, Inc., a Nevada corporation, as amended, August 26, 1994 (incorporated by reference to Exhibit 2 to Current Report on Form 8-K dated August 26, 1994). (4.1) Rights Agreement dated as of August 26, 1994, between Big O Tires, Inc. and Interwest Co., Inc., as Rights Agent (incorporated by reference to Exhibit 1 to Current Report on Form 8-K dated August 26, 1994). (10.1) 1994 Restatement of Employee Stock Ownership Plan and Trust Agreement of Big O Tires, Inc. (incorporated by reference to Exhibit 10.3 to Big O Tires, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 1994). (10.2) Big O Tires, Inc. Director and Employee Stock Option Plan (incorporated by reference to Exhibit 10.11 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1988). (10.3) First Amendment to the Big O Tires, Inc. Director and Employee Stock Option Plan (incorporated by reference to Exhibit 10.10 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1989). (10.4) Amendment No. 2 to the Big O Tires, Inc. Director and Employee Stock Option Plan (incorporated by reference to Exhibit 10.16 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1992). (10.5) Ultimate Net Loss Agreement between Big O Tires, Inc. and FBS Business Finance Corporation dated January 13, 1989 (incorporated by reference to Exhibit 10.34 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1988). (10.6) Purchase Agreement effective June 30, 1987, and related documents including Promissory Notes, Modification Agreements, Security Agreements, Guaranty Agreement, and Subleases in connection with a purchase by C.S.B. Partnership and three individuals including Ronald D. Asher, of three Big O Franchise Retail Tire Stores in California from Security/Cal, Inc., a wholly-owned subsidiary of the Company, and H.R.I., Inc., a wholly-owned subsidiary of Security/Cal, Inc. (incorporated by reference to Exhibit 10.63 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1987). (10.7) Purchase Agreement effective November 1, 1987, and related documents including Promissory Notes, Security Agreements, Guaranty Agreements, Subleases, and Franchise Agreements in connection with a purchase by C.S.B. Partnership and its three general partners, including Ronald D. Asher, of two Big O Franchise Retail Tire Stores in California from Security/Cal, Inc. and H.R.I., Inc. (Seller) (incorporated by reference to Exhibit 10.45 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1988). (10.8) Purchase Agreements effective July 5, 1988, October 1, 1988, and November 14, 1988, and related documents including Promissory Notes, Security Agreements, Guaranty Agreements, and Subleases in connection with a purchase by C.S.B. Partnership and three individuals including Ronald D. Asher of three Big O Franchise Retail Tire Stores in California from Big O Tires, Inc., Security/Cal, Inc., a wholly-owned subsidiary of the Company, and H.R.I., Inc., a wholly-owned subsidiary of Security/Cal, Inc. (incorporated by reference to Exhibit 10.46 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1988). (10.9) Agreement and Release dated October 31, 1989, and related documents including Promissory Note, related Subleases, Assignment of Lease Rights, and Performance Guarantee in connection with the purchase by C.S.B. Partnership and its general partners, including Ronald D. Asher, of two (2) Big O franchise retail tire stores in California, owned by GEM Tire, Inc. from the Company (incorporated by reference to Exhibit 10.57 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1989). (10.10) Ultimate Net Loss Agreement, dated as of December 1, 1990, by and between Big O Tires, Inc. and Northcross Financial Services, Inc., ICON Capital Corp., in its individual capacity and on behalf of ICON Cash Flow Partners, L.P., Series A, ICON Cash Flow Partners, L.P., Series B and any future partnerships on which it may be the general partner and/or manager (incorporated by reference to Exhibit 10.70 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1990). (10.11) Loan and Security Agreement dated October 15, 1991, with its former lender together with exhibits and appendices (incorporated by reference to Exhibit 10.57 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1991). (10.12) Assignment for Security (Trademarks and Trademark Licenses), dated October 15, 1991, providing collateral assignment of Big O Tires, Inc.'s and its subsidiaries' trademark and trademark licenses to its former lender (incorporated by reference to Exhibit 10.58 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1991). (10.13) Stock Pledge Agreement dated October 15, 1991, whereunder Big O Tires, Inc. pledged stock holdings of its subsidiary companies to its former lender (incorporated by reference to Exhibit 10.59 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1991). (10.14) Continuing Guaranty Agreement dated October, 15, 1991, providing the guarantee by certain of Big O Tires, Inc.'s subsidiary companies for the obligations of Big O Tires, Inc. under the Loan and Security Agreement with its former lender (incorporated by reference to Exhibit 10.60 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1991). (10.15) First Amendment to Loan and Security Agreement, dated as of November 18, 1991, with its former lender (incorporated by reference to Exhibit 10.62 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1991). (10.16) Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated as of November 19, 1991, for the benefit of its former lender which now enjoys a first lien position on Big O Tires, Inc.'s Vacaville, California Regional Sales and Service Center (incorporated by reference to Exhibit 10.65 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1991). (10.17) Secured Promissory Note dated April 3, 1992, in the original principal amount of $3,000,000, payable to the order of its former lender which evidences Big O Tires, Inc.'s $3,000,000 term loan facility (incorporated by reference to Exhibit 10.67 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1991). (10.18) 1994 Incentive Bonus Plans (incorporated by reference to Exhibit 10.43 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1993). (10.19) Agreement of Joint Venture of Big O/C.S.B. Joint Venture dated as of June 1, 1992, by and between Big O Retail Enterprises, Inc., a wholly-owned subsidiary of Big O Tires, Inc., and C.S.B. Partnership, a California general partnership (incorporated by reference to Exhibit 10.70 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1991). (10.20) Amendment No. 1 to Agreement of Joint Venture of Big O/C.S.B. Joint Venture dated as of May 15, 1993 (incorporated by reference to Exhibit 10.27 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1993). (10.21) Purchase Agreement for Private Brand Name Tires between Big O Tires, Inc. and The Kelly-Springfield Tire Co., dated August 16, 1992 (incorporated by reference to Exhibit 10.71 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1991). (10.22) Big O Tires, Inc. Long Term Incentive Plan (incorporated by reference to Exhibit 55 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1992). (10.23) Amendment No. 1 to Big O Tires, Inc. Long Term Incentive Plan (incorporated by reference to Exhibit 56 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1992). (10.24) Amendment No. 2 to Big O Tires, Inc. Long Term Incentive Plan (incorporated by reference to Exhibit 57 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1992). (10.25) Agreement of Joint Venture of Big O/S.A.N.D.S. Joint Venture (incorporated by reference to Exhibit 58 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1992). (10.26) Commitment Letters dated July 22, 1992, from AT&T Capital Corporation (incorporated by reference to Exhibit 64 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1992). (10.27) Agreement dated as of November 15, 1992, among Peerless Trading Company, Limited, Delaware Liquidators, Inc. dba Trade Center Imports, and Big O Tires, Inc.; Purchase Money Non-Negotiable Promissory Note dated as of November 15, 1992, from Peerless Trading Company, Limited to Big O Tires, Inc.; and amendment dated January 19, 1993 to the Agreement dated November 15, 1992 (incorporated by reference to Exhibit 66 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1992). (10.28) Marketing Agreement for Private Brand Tires between Big O Tires, Inc. and General Tire, Inc., dated May 14, 1993 (incorporated by reference to Exhibit 10.1 to Big O Tires, Inc.'s Current Report on Form 8-K dated April 30, 1993). (10.29) Closing Agreement between General Tire, Inc. and Big O Tires, Inc., dated May 14, 1993 (incorporated by reference to Exhibit 10.2 to Big O Tires, Inc.'s Current Report on Form 8-K dated April 30, 1993). (10.30) Second Amendment to Loan and Security Agreement by and among its former lender and Big O Tires, Inc., Big O Retail Enterprises, Inc. and Big O Tire of Idaho, Inc., dated May 14, 1993 (incorporated by reference to Exhibit 10.3 to Big O Tires, Inc.'s Current Report on Form 8-K dated April 30, 1993). (10.31) Inventory Financing Agreement between The Kelly-Springfield Tire Company and Big O Tires, Inc. and/or Big O Tire of Idaho, Inc. and/or Big O Retail Enterprises, Inc., dated May 14, 1993 (incorporated by reference to Exhibit 10.4 to Big O Tires, Inc.'s Current Report on Form 8-K dated April 30, 1993). (10.32) Demand Note in the original principal amount of $6,000,338.67 with The Kelly-Springfield Tire Co. as Holder and Big O Tires, Inc., Big O Retail Enterprises, Inc. and Big O Tire of Idaho, Inc., as Maker (incorporated by reference to Exhibit 10.50 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1993). (10.33) Purchase Agreement by and among Tire Brands, Inc. and Big O Tires, Inc., dated as of April 30, 1993 (incorporated by reference to Exhibit 10.5 to Big O Tires, Inc.'s Current Report on Form 8-K dated April 30, 1993). (10.34) Consolidation and Modification Agreement among Big O Tires (successor in interest to H.R.I., Inc. and Security/Cal, Inc.) and Big O Retail Enterprises, Inc. and C.S.B. Partnership (incorporated by reference to Exhibit 10.51 to Big O Tires, Inc.'s Registration Statement No. 33-65852). (10.35) Modification of Consolidation and Modification Agreement by and between C.S.B. Partnership and Big O Tires, Inc. (incorporated by reference to Big O Tires, Inc.'s Form 10-K for the year ended December 31, 1993). (10.36) Registration Rights Agreement dated June 28, 1993, between the Selling Shareholder and Big O Tires, Inc. (incorporated by reference to Exhibit 10.52 to Big O Tires, Inc.'s Registration Statement No. 33-65852). (10.37) Loan Agreement and Promissory Note in the original principal amount of $155,000.00 with C.S.B. Partnership as Maker (incorporated by reference to Exhibit 10.44 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). (10.38) Loan Agreement and Promissory Note in the original principal amount of $70,000.00 with Big O/C.S.B Joint Venture as Maker (incorporated by reference to Exhibit 10.45 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). (10.39) Loan Agreement and Promissory Note in the original principal amount of $75,000.00 with Big O/S.A.N.D.S. Joint Venture as Maker (incorporated by reference to Exhibit 10.46 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). (10.40) Commercial Note and Loan Agreement, Commercial Mortgage and Environmental Certificate between Big O Development, Inc. and National City Bank, Kentucky, and Guaranty Agreement of Big O Tires, Inc. guaranteeing the obligations of Big O Development, Inc. to National City Bank, Kentucky in connection with the borrowing of $1,500,000 for construction of the Company's Regional Sales and Service Center in New Albany, Indiana (incorporated by reference to Exhibit 10.47 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). (10.41) Construction Agreement between Big O Development, Inc. and Koetter Construction, Inc. to construct the Regional Sales and Service Center in Floyd County, Indiana (incorporated by reference to Exhibit 10.48 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). (10.42) Purchase and Sale Agreement and Joint Escrow Instructions by and between Western Realco and Big O Tires, Inc. for the purchase of the Company's Regional Sales and Service Center in Clark County, Nevada (incorporated by reference to Exhibit 10.49 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). (10.43) Lease between Big O Tires, Inc. and Simpson Dura-Vent Company, Inc., dated January 24, 1994 for property located at 877 Cotting Court, Vacaville, California and related election of option to accelerate occupation (incorporated by reference to Exhibit 10.51 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). (10.44) Letter dated January 26, 1994 from General Tire, Inc. to the Company terminating the Marketing Agreement for Private Brand Name Tires between Big O Tires, Inc. and General Tire, Inc. dated May 14, 1993 (incorporated by reference to Exhibit 10.52 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). (10.45) Purchase Agreement by and between Caps Tire Limited Liability Company and Intermountain Big O Realty for the Big O Tires Retail Store located at 8151 East Arapahoe Road, Englewood, Colorado (incorporated by reference to Exhibit 10.53 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). (10.46) Third and Fourth Amendments to Loan and Security Agreement by and between Big O Tires, Inc. and its primary lender (incorporated by reference to Exhibit 10.54 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). (10.47) Limited Partnership Agreement by and between Donald J. Horton, General Partner, Thomas L. Staker, General Partner, and Big O Tires, Inc., Limited Partner, dated as of December 31, 1993 (incorporated by reference to Exhibit 10.56 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). (10.48) Loan Agreement and Guaranty, Promissory Note and Security Agreement with Big O Tires, Inc. Employee Stock Ownership Plan ("ESOP") as Borrower, Big O Tires, Inc., as Guarantor, and Key Bank of Wyoming, as Lender, in connection with the refinancing of the ESOP debt in the amount of $960,000 (incorporated by reference to Exhibit 10.57 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). (10.49) Amendment to Partnership Agreement dated August 25, 1994, by and between Big O Development, Inc., a Colorado corporation, a wholly-owned subsidiary of Big O Tires, Inc. and Mill Creek Associates, Ltd., a Colorado limited partnership (incorporated by reference to Exhibit 10.2 to Big O Tires, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 1994). (10.50) Agreement dated July 1, 1994, by and between General Tire, Inc., an Ohio corporation and Big O Tires, Inc. (incorporated by reference to Exhibit 10.4 to Big O Tires, Inc.'s Quarterly Report on Form 10-Q dated September 30, 1994). (10.51) Consulting Agreement by and between Big O Tires, Inc., and Horst K. Mehlfeldt (incorporated by reference to Exhibit 10.5 to Big O Tires, Inc.'s Quarterly Report on Form 10-Q dated September 30, 1994). (10.52) Letter Agreement dated January 10, 1995, amending the Consulting Agreement by and between Big O Tires, Inc. and Horst K. Mehlfeldt (incorporated by reference to Exhibit 10.3 to Big O Tires, Inc.'s Current Report on Form 8-K dated January 10, 1995). (10.53) Letter Agreement dated July 12, 1994, by and between Big O Tires, Inc. and PaineWebber Incorporated (incorporated by reference to Exhibit 10.6 to Big O Tires, Inc.'s Quarterly Report on Form 10-Q dated September 30, 1994). (10.54) Letter Agreement dated March 23, 1994, by and between Big O Tires, Inc. and The CIT Group/Equipment Financing, Inc., a New York corporation (incorporated by reference to Exhibit 10.7 to Big O Tires, Inc.'s Quarterly Report on Form 10-Q dated September 30, 1994). (10.55) Ultimate Net Loss Agreement dated October 21, 1994, by and between Big O Tires, Inc. and The CIT Group/Equipment Financing, Inc., a New York corporation (incorporated by reference to Exhibit 10.8 to Big O Tires, Inc.'s Quarterly Report on Form 10-Q dated September 30, 1994). (10.56) Fifth Amendment to Loan and Security Agreement by and between Big O Tires, Inc. and its former lender dated April 29, 1994 (incorporated by reference to Exhibit 10.1 to Big O Tires, Inc.'s Quarterly Report on Form 10-Q dated September 30, 1994). (10.57) Agreement by the Investment Committee of the Board of Directors and the Management/Dealer participants dated December 22, 1994 (incorporated by reference to Exhibit 10.1 to Big O Tires, Inc.'s Current Report on Form 8-K dated December 6, 1994). (10.58) Letter dated December 13, 1994, to the Investment Committee of Big O Tires, Inc. and the Management participants and Dealer representatives (incorporated by reference to Exhibit 10.2 to Big O Tires, Inc.'s Current Report on Form 8-K dated December 6, 1994). (10.59) Letter dated February 7, 1995, from the Dealer-Management Group to the Company's Board Chairman (incorporated by reference to Exhibit 10.1 to Big O Tires, Inc.'s Current Report on Form 8-K dated January 10, 1995). (10.60) Agreement between the Company and the Management/Dealer participants dated January 20, 1995 (incorporated by reference to Exhibit 10.2 to Big O Tires, Inc.'s Current Report on Form 8-K dated January 10, 1995). (10.61) Form of Franchise Agreement currently in use (incorporated by reference to Exhibit 10.61 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.62) Multi-Tenant Lease NNN dated December 1, 1994 between Botac VI Leasing L.L.C., a Utah Limited Liability Company and Big O Development, Inc (incorporated by reference to Exhibit 10.62 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.63) Assignment and Assumption Agreement dated December 2, 1994 by Big O Development, Inc., Big O Tires, Inc. and Botac VI Leasing, L.L.C. and Allstate Life Insurance Company (incorporated by reference to Exhibit 10.63 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.64) Guarantee Agreement dated December 2, 1994 by Big O Tires, Inc., Big O Development, Inc. and Allstate Life Insurance Company (incorporated by reference to Exhibit 10.64 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.65) Closing Agreement dated December 2, 1994 by Big O Development, Inc., Big O Tires, Inc., Botac VI Leasing, L.L.C., and Allstate Life Insurance Company (incorporated by reference to Exhibit 10.65 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.66) Commercial contract to Buy and Sell Real Estate dated March 17, 1994 between Bailey's Moving and Storage and Big O Tires, Inc. (incorporated by reference to Exhibit 10.66 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.67) Confidentiality Agreement dated September, 1994 between Big O Tires, Inc. and Kenneth W. Pavia, Sr. (incorporated by reference to Exhibit 10.67 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.68) Amendment No. 1 to the Big O Tires, Inc. Employee Stock Ownership Plan and Trust Agreement dated September 12, 1994 (incorporated by reference to Exhibit 10.68 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.69) Development Management Agreement dated September, 1994 between Ross Development Management Group, Inc. and Big O Development, Inc. and Big O Tires, Inc. (incorporated by reference to Exhibit 10.69 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.70) Letter Agreement dated February 20, 1995 terminating the Consulting Agreement between Big O Tires, Inc. and Horst K. Mehlfeldt (incorporated by reference to Exhibit 10.70 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.71) 1995 Incentive Bonus Plans (incorporated by reference to Exhibit 10.71 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.72) Commitment Letter dated February 16, 1994 between Big O Tires, Inc. and AT&T Commercial Finance Corporation for real estate financing (incorporated by reference to Exhibit 10.72 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.73) Commitment Letter dated February 16, 1994 between Big O Tires, Inc. and AT&T Commercial Finance Corporation for equipment financing (incorporated by reference to Exhibit 10.73 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.74) Extension letter dated December 9, 1994 between Big O Tires, Inc. and AT&T Commercial Finance Corporation to extend existing lines of credit through December 31, 1995 (incorporated by reference to Exhibit 10.74 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.75) Resignation letter dated February 27, 1995 from Robert L. Puckett (incorporated by reference to Exhibit 10.75 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.76) Resignation letter dated February 24, 1995 from David W. Dwyer (incorporated by reference to Exhibit 10.76 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.77) Revolving Credit Agreement dated January 23, 1995 between Big O Tires, Inc. and The First National Bank of Chicago (incorporated by reference to Exhibit 10.77 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.78) Consent, Acknowledgement and Access Agreement dated January 23, 1995 between The Bank of Cherry Creek, N.A., Kenneth B. Buckius and The First National Bank of Chicago (incorporated by reference to Exhibit 10.78 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.79) Note Purchase Agreement dated April 27, 1994 between Big O Tires, Inc. and USG Annuity & Life Company and Republic Western Insurance Company (incorporated by reference to Exhibit 10.79 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.80) Franchise Agreement dated October 7, 1994 between Big O Tires, Inc. and OK Tires, Inc. for the Retail Store located at 2830 West 3500 South, West Valley City, Utah 84119 (incorporated by reference to Exhibit 10.80 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.81) Franchise Agreement dated November 26, 1993 between Big O Tires, Inc. and CAPS Tire Limited Liability Company for the Retail Store located at 8151 East Arapahoe Road, Englewood, Colorado 80112 (incorporated by reference to Exhibit 10.81 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.82) Form of Confidentiality Agreement signed by dealers dated October 19, 1994 (incorporated by reference to Exhibit 10.82 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.83) Ultimate Net Loss Agreement dated November 30, 1994, by and between Big O Tires, Inc. and The CIT Group/Equipment Financing, Inc., a New York corporation (incorporated by reference to Exhibit 10.83 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.84) Inventory Financing Agreement together with a Demand Note dated September 30, 1994, by and between The Kelly-Springfield Tire Company and Big O Tires, Inc., Big O Retail Enterprises, Inc. and Big O Tire of Idaho, Inc. (incorporated by reference to Exhibit 10.84 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.85) Supplemental Executive Retirement Plan dated December 7, 1994, by Big O Tires, Inc., effective January 1, 1994 (incorporated by reference to Exhibit 10.85 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.86) Forms of Stock Appreciation Rights Agreement dated February 15, 1995, between Big O Tires, Inc. and the Members of the Chief Executive Office (incorporated by reference to Exhibit 10.86 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.87) Letter Agreement dated March 24, 1995, regarding severance package, between Big O Tires, Inc., and John E. Siipola (incorporated by reference to Exhibit 10.87 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (10.88) Letter Agreement dated March 24, 1995, regarding severance package, between Big O Tires, Inc., and Horst K. Mehlfeldt (incorporated by reference to Exhibit 10.88 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (21.1) Big O Tires, Inc. Subsidiaries (incorporated by reference to Exhibit 21.1 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (23.1) Consent of Deloitte & Touche. (24.1) Powers of Attorney executed by each of the Directors of Big O Tires, Inc. (incorporated by reference to Exhibit 25.1 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (27.1) Big O Tires, Inc.'s Financial Data Schedule (incorporated by reference to Exhibit 27.1 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). (99.1) October 31, 1994 press release issued by AKH Company, Inc., a California based retail tire chain, doing business as "Discount Tire Centers" and "Evans Tire and Service Centers" (incorporated by reference to Exhibit 99.1 to Big O Tires, Inc.'s Quarterly Report on Form 10-Q dated September 30, 1994). (99.2) November 1, 1994 press release issued by Big O Tires, Inc. (incorporated by reference to Exhibit 99.2 to Big O Tires, Inc.'s Quarterly Report on Form 10-Q dated September 30, 1994). __________ * All executive compensation plans and arrangements required to be filed as exhibits to the Form 10-K pursuant to Item 601. (b) REPORTS ON FORM 8-K 1. In a Current Report on Form 8-K, dated December 2, 1994, the Companyreported on twoproposals with contingencies to acquire the outstanding shares ofthe Company. No assuranceswere given that either of the proposals would be consummated. 2. In a Current Report on Form 8-K, dated December 6,1994, the Companyreported that theInvestment Committee of the Board of Directors agreed to enterinto a periodof exclusivenegotiations with a group of officers, managers and franchiseddealers("Dealer-ManagementGroup") that recently made an offer to acquire the outstandingshares of theCompany and thatAKH Company, Inc., who had made a previous offer to acquire theCompany hadadvised theInvestment Committee it was contemplating deferring any furtherproposal aslong as the Dealer-Management Group's bid remains under activeconsideration. The Company also reported that twoseparate class action lawsuits had been filed against the Companyand its ninedirectorssimilarly requesting, among other things, the court to enjoin thesale of theCompany to theDealer-Management Group. (c) EXHIBITS Exhibits required by Item 601 of Regulation S-K are listed aboveunder (a) (3)of this Item 14. (d) FINANCIAL STATEMENT SCHEDULES Financial Statement Schedules are listed above under (a) (2) of this Item 14. SIGNATURES Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: September 22, 1995 BIG O TIRES, INC., a Nevada corporation By: /s/ JOHN E. SIIPOLA John E. Siipola Member of the Office of the Chief Executive and Chairman By: /s/ HORST K. MEHLFELDT Horst K. Mehlfeldt Member of the Office of the Chief Executive and Vice-Chairman By: /s/ STEVEN P. CLOWARD Steven P. Cloward Member of the Office of the Chief Executive and President By: /s/ JOHN B. ADAMS John B. Adams Principal Accounting Officer By: /s/ JOHN B. ADAMS John B. Adams Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date Name and Title Signature - ---- -------------- --------- September 22, 1995 John E. Siipola JOHN E. SIIPOLA Director, Member of the Office of the Chief Executive and Chairman of the Board Horst K. Mehlfeldt HORST K. MEHLFELDT Director, Member of the Office of the Chief Executive and Vice-Chairman of the Board Steven P. Cloward STEVEN P. CLOWARD Director, Member of the Office of the Chief Executive and President John B. Adams JOHN B. ADAMS Director and Principal Financial Officer Ronald D. Asher RONALD D. ASHER Director Frank L. Carney FRANK L. CARNEY Director Everett H. Johnston EVERETT H. JOHNSTON Director Ralph J. Weiger RALPH J. WEIGER Director C. Thomas Wernholm C. THOMAS WERNHOLM Director September 22, 1995 By: /s/ PHILIP J. TEIGEN Philip J. Teigen Attorney-in-Fact September __, 1995 Robert K. Lallatin ________________________ Robert K. Lallatin EXHIBIT INDEX EXHIBIT DESCRIPTION (3.1) Certificate of Amendment to Restated Articles of Incorporation of Big O Tires, Inc.dated June 10, 1992 and Restated Articles of Incorporation of Big O Tires,Inc. dated August 17,1987 (incorporated by reference to Exhibit 3 to Quarterly Report on Form 10-Q for quarter ended June 30, 1992). PAGE NO. - N/A (3.2) Amended and Restated Bylaws of Big O Tires, Inc., a Nevada corporation, as amended, August 26, 1994 (incorporated by reference to Exhibit 2 to Current Report on Form 8-K dated August 26, 1994). PAGE NO. - N/A (4.1) Rights Agreement dated as of August 26, 1994, between Big O Tires, Inc. and Interwest Co., Inc., as Rights Agent (incorporated by reference to Exhibit 1 to Current Report on Form 8-K dated August 26, 1994). PAGE NO. - N/A (10.1) 1994 Restatement of Employee Stock Ownership Plan and Trust Agreement of Big O Tires, Inc. (incorporated by reference to Exhibit 10.3 to Big O Tires, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 1994). PAGE NO. - N/A (10.2) Big O Tires, Inc. Director and Employee Stock Option Plan (incorporated by reference to Exhibit 10.11 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1988). PAGE NO. - N/A (10.3) First Amendment to the Big O Tires, Inc. Director and Employee Stock Option Plan (incorporated by reference to Exhibit 10.10 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1989). PAGE NO. - N/A (10.4) Amendment No. 2 to the Big O Tires, Inc. Director and Employee Stock Option Plan (incorporated by reference to Exhibit 10.16 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1992). PAGE NO. - N/A (10.5) Ultimate Net Loss Agreement between Big O Tires, Inc. and FBS Business Finance Corporation dated January 13, 1989 (incorporated by reference to Exhibit 10.34 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1988). PAGE NO. - N/A (10.6) Purchase Agreement effective June 30, 1987, and related documents including Promissory Notes, Modification Agreements, Security Agreements, Guaranty Agreement, and Subleases in connection with a purchase by C.S.B. Partnership and three individuals including Ronald D. Asher, of three Big O Franchise Retail Stores in California from Security/Cal, Inc., a wholly-owned subsidiary of the Company, and H.R.I., Inc., a wholly-owned subsidiary of Security/Cal, Inc. (incorporated by reference to Exhibit 10.63 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1987). PAGE NO. - N/A (10.7) Purchase Agreement effective November 1, 1987, and related documents including Promissory Notes, Security Agreements, Guaranty Agreements, Subleases, and Franchise Agreements in connection with a purchase by C.S.B. Partnership and its three general partners, including Ronald D. Asher, of two Big O Franchise Retail Stores in California from Security/Cal, Inc. and H.R.I., Inc. (Seller) (incorporated by reference to Exhibit 10.45 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1988). PAGE NO. - N/A (10.8) Purchase Agreements effective July 5, 1988, October 1, 1988, and November 14, 1988, and related documents including Promissory Notes, Security Agreements, Guaranty Agreements, and Subleases in connection with a purchase by C.S.B. Partnership and three individuals including Ronald D. Asher of three Big O Franchise Retail Stores in California from Big O Tires, Inc., Security/Cal, Inc., a wholly-owned subsidiary of the Company, and H.R.I., Inc., a wholly-owned subsidiary of Security/Cal, Inc. (incorporated by reference to Exhibit 10.46 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1988). PAGE NO. - N/A (10.9) Agreement and Release dated October 31, 1989, and related documents including Promissory Note, related Subleases, Assignment of Lease Rights, and Performance Guarantee in connection with the purchase by C.S.B. Partnership and its general partners, including Ronald D. Asher, of two (2) Big O franchise Retail Stores in California, owned by GEM Tire, Inc. from the Company (incorporated by reference to Exhibit 10.57 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1989). PAGE NO. - N/A (10.10) Ultimate Net Loss Agreement, dated as of December 1, 1990, by and between Big O Tires, Inc. and Northcross Financial Services, Inc., ICON Capital Corp., in its individual capacity and on behalf of ICON Cash Flow Partners, L.P., Series A, ICON Cash Flow Partners, L.P., Series B and any future partnerships on which it may be the general partner and/or manager (incorporated by reference to Exhibit 10.70 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1990). PAGE NO. - N/A (10.11) Loan and Security Agreement dated October 15, 1991, with its primary lender together with exhibits and appendices (incorporated by reference to Exhibit 10.57 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1991). PAGE NO. - N/A (10.12) Assignment for Security (Trademarks and Trademark Licenses), dated October 15, 1991, providing collateral assignment of Big O Tires, Inc.'s and its subsidiaries' trademark and trademark licenses to its primary lender (incorporated by reference to Exhibit 10.58 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1991). PAGE NO. - N/A (10.13) Stock Pledge Agreement dated October 15, 1991, whereunder Big O Tires, Inc. pledged stock holdings of its subsidiary companies to its primary lender (incorporated by reference to Exhibit 10.59 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1991). PAGE NO. - N/A (10.14) Continuing Guaranty Agreement dated October, 15, 1991, providing the guarantee by certain of Big O Tires, Inc.'s subsidiary companies for the obligations of Big O Tires, Inc. under the Loan and Security Agreement with its primary lender (incorporated by reference to Exhibit 10.60 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1991). PAGE NO. - N/A (10.15) First Amendment to Loan and Security Agreement, dated as of November 18, 1991, with its primary lender (incorporated by reference to Exhibit 10.62 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1991). PAGE NO. - N/A (10.16) Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated as of November 19, 1991, for the benefit of its primary lender, which now enjoys a first lien position on Big O Tires, Inc.'s Vacaville, California Regional Sales and Service Center (incorporated by reference to Exhibit 10.65 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1991). PAGE NO. - N/A (10.17) Secured Promissory Note dated April 3, 1992, in the original principal amount of $3,000,000, payable to the order of its primary lender, which evidences Big O Tires, Inc.'s $3,000,000 term loan facility (incorporated by reference to Exhibit 10.67 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1991). PAGE NO. - N/A (10.18) 1994 Incentive Bonus Plans (incorporated by reference to Exhibit 10.43 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1993). PAGE NO. - N/A (10.19) Agreement of Joint Venture of Big O/C.S.B. Joint Venture dated as of June 1, 1992, by and between Big O Retail Enterprises, Inc., a wholly-owned subsidiary of Big O Tires, Inc., and C.S.B. Partnership, a California general partnership (incorporated by reference to Exhibit 10.70 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1991). PAGE NO. - N/A (10.20) Amendment No. 1 to Agreement of Joint Venture of Big O/C.S.B. Joint Venture dated as of May 15, 1993 (incorporated by reference to Exhibit 10.27 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1993). PAGE NO. - N/A (10.21) Purchase Agreement for Private Brand Name Tires between Big O Tires, Inc. and The Kelly-Springfield Tire Co., dated August 16, 1992 (incorporated by reference to Exhibit 10.71 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1991). PAGE NO. - N/A (10.22) Big O Tires, Inc. Long Term Incentive Plan (incorporated by reference to Exhibit 55 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1992). PAGE NO. - N/A (10.23) Amendment No. 1 to Big O Tires, Inc. Long Term Incentive Plan (incorporated by reference to Exhibit 56 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1992). PAGE NO. - N/A (10.24) Amendment No. 2 to Big O Tires, Inc. Long Term Incentive Plan (incorporated by reference to Exhibit 57 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1992). PAGE NO. - N/A (10.25) Agreement of Joint Venture of Big O/S.A.N.D.S. Joint Venture (incorporated by reference to Exhibit 58 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1992). PAGE NO. - N/A (10.26) Commitment Letters dated July 22, 1992, from AT&T Capital Corporation (incorporated by reference to Exhibit 64 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1992). PAGE NO. - N/A (10.27) Agreement dated as of November 15, 1992, among Peerless Trading Company, Limited, Delaware Liquidators, Inc. dba Trade Center Imports, and Big O Tires, Inc.; Purchase Money Non-Negotiable Promissory Note dated as of November 15, 1992, from Peerless Trading Company, Limited to Big O Tires, Inc.; and amendment dated January 19, 1993 to the Agreement dated November 15, 1992 (incorporated by reference to Exhibit 66 to Big O Tires, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 1992). PAGE NO. - N/A (10.28) Marketing Agreement for Private Brand Tires between Big O Tires, Inc. and General Tire, Inc., dated May 14, 1993 (incorporated by reference to Exhibit 10.1 to Big O Tires, Inc.'s Current Report on Form 8-K dated April 30, 1993). PAGE NO. - N/A (10.29) Closing Agreement between General Tire, Inc. and Big O Tires, Inc., dated May 14, 1993 (incorporated by reference to Exhibit 10.2 to Big O Tires, Inc.'s Current Report on Form 8-K dated April 30, 1993). PAGE NO. - N/A (10.30) Second Amendment to Loan and Security Agreement by and among its primary lender and Big O Tires, Inc., Big O Retail Enterprises, Inc. and Big O Tire of Idaho, Inc., dated May 14, 1993 (incorporated by reference to Exhibit 10.3 to Big O Tires, Inc.'s Current Report on Form 8-K dated April 30, 1993). PAGE NO. - N/A (10.31) Inventory Financing Agreement between The Kelly-Springfield Tire Company and Big O Tires, Inc. and/or Big O Tire of Idaho, Inc. and/or Big O Retail Enterprises, Inc., dated May 14, 1993 (incorporated by reference to Exhibit 10.4 to Big O Tires, Inc.'s Current Report on Form 8-K dated April 30, 1993). PAGE NO. - N/A (10.32) Demand Note in the original principal amount of $6,000,338.67 with The Kelly-Springfield Tire Col. as Holder and Big O Tires, Inc., Big O Retail Enterprises, Inc. and Big O Tire of Idaho, Inc. as Maker (incorporated by reference to Exhibit 10.50 to Big O Tires, Inc.'s Annual Report on Form 10-K dated April 30, 1993). PAGE NO. - N/A (10.33) Purchase Agreement by and among Tire Brands, Inc. and Big O Tires, Inc., dated as of April 30, 1993 (incorporated by reference to Exhibit 10.5 to Big O Tires, Inc.'s Current Report on Form 8-K dated April 30, 1993). PAGE NO. - N/A (10.34) Consolidation and Modification Agreement among Big O Tires (successor in interest to H.R.I., Inc. and Security/Cal, Inc.) and Big O Retail Enterprises, Inc. and C.S.B. Partnership (incorporated by reference to Exhibit 10.51 to Big O Tires, Inc.'s Registration Statement No. 33-65852). PAGE NO. - - N/A (10.35) Modification of Consolidation and Modification Agreement by and between C.S.B. Partnership and Big O Tires, Inc. (incorporated by reference to Big O Tires, Inc.'s Form 10-K for the year ended December 31, 1993). PAGE NO. - N/A (10.36) Registration Rights Agreement dated June 28, 1993, between the Selling Shareholder and Big O Tires, Inc. (incorporated by reference to Exhibit 10.52 to Big O Tires, Inc.'s Registration Statement No. 33-65852). PAGE NO. - - N/A (10.37) Loan Agreement and Promissory Note in the original principal amount of $155,000.00 with C.S.B. Partnership as Maker (incorporated by reference to Exhibit 10.44 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). PAGE NO. - N/A (10.38) Loan Agreement and Promissory Note in the original principal amount of $70,000.00 with Big O/C.S.B Joint Venture as Maker (incorporated by reference to Exhibit 10.45 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). PAGE NO. - N/A (10.39) Loan Agreement and Promissory Note in the original principal amount of $75,000.00 with Big O/S.A.N.D.S. Joint Venture as Maker (incorporated by reference to Exhibit 10.46 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). PAGE NO. - N/A (10.40) Commercial Note and Loan Agreement, Commercial Mortgage and Environmental Certificate between Big O Development, Inc. and National City Bank, Kentucky, and Guaranty Agreement of Big O Tires, Inc. guaranteeing the obligations of Big O Development, Inc. to National City Bank, Kentucky in connection with the borrowing of $1,500,000 for construction of the Company's Regional Sales and Service Center in New Albany, Indiana (incorporated by reference to Exhibit 10.47 to Big O Tires, Inc.s Form 10-K for the fiscal year ended December 31, 1993). PAGE NO. - N/A (10.41) Construction Agreement between Big O Development, Inc. and Koetter Construction, Inc. to construct the Regional Sales and Service Center in Floyd, County, Indiana (incorporated by reference to Exhibit 10.48 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). PAGE NO. - N/A (10.42) Purchase and Sale Agreement and Joint Escrow Instructions by and between Western Realco and Big O Tires, Inc. for the purchase of the Company's Regional Sales and Service Center in Clark County, Nevada (incorporated by reference to Exhibit 10.49 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). PAGE NO. - N/A (10.43) Lease between Big O Tires, Inc. and Simpson Dura-Vent Company, Inc. dated January 24, 1994, for property located at 877 Cotting Court, Vacaville, California and related election of option to accelerate occupation (incorporated by reference to Exhibit 10.51 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). PAGE NO. - N/A (10.44) Letter dated January 26, 1994 from General Tire, Inc. to the Company terminating the Marketing Agreement for Private Brand Name Tires between Big O Tires, Inc. and General Tire, Inc. dated May 14, 1993 (incorporated by reference to Exhibit 10.52 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). PAGE NO. -N/A (10.45) Purchase Agreement by and between Caps Tire Limited Liability Company and Intermountain Big O Realty for the Big O Tires Retail Store located at 8151 East Arapahoe Road, Englewood, Colorado incorporated by reference to Exhibit 10.53 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). PAGE NO. - N/A (10.46) Third and Fourth Amendments to Loan and Security Agreement by and between Big O Tires, Inc. and its primary lender (incorporated by reference to Exhibit 10.54 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). PAGE NO. - N/A (10.47) Limited Partnership Agreement by and between Donald J. Horton, General Partner, Thomas L. Staker, General Partner, and Big O Tires, Inc., Limited Partner, dated as of December 31, 1993 (incorporated by reference to Exhibit 10.56 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). PAGE NO. - N/A (10.48) Loan Agreement and Guaranty, Promissory Note and Security Agreement with Big O Tires, Inc. Employee Stock Ownership Plan ("ESOP") as Borrower, Big O Tires, Inc., as Guarantor, and Key Bank of Wyoming, as Lender, in connection with the refinancing of the ESOP debt in the amount of $960,000 (incorporated by reference to Exhibit 10.57 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1993). PAGE NO. - N/A (10.49) Amendment to Partnership Agreement dated August 25, 1994, by and between Big O Development, Inc., a Colorado corporation, a wholly-owned subsidiary of Big O Tires, Inc. and Mill Creek Associates, Ltd., a Colorado limited partnership (incorporated by reference to Exhibit 10.2 to Big O Tires, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 1994). PAGE NO. - N/A (10.50) Agreement dated July 1, 1994, by and between General Tire, Inc., an Ohio corporation and Big O Tires, Inc. (incorporated by reference to Exhibit 10.4 to Big O Tires, Inc.'s Quarterly Report on Form 10-Q dated September 30, 1994). PAGE NO. - N/A (10.51) Consulting Agreement by and between Big O Tires, Inc., and Horst K. Mehlfeldt (incorporated by reference to Exhibit 10.5 to Big O Tires, Inc.'s Quarterly on Form 10-Q dated September 30, 1994). PAGE NO. - N/A (10.52) Letter Agreement dated January 10, 1995, amending the Consulting Agreement by and between Big O Tires, Inc. and Horst K. Mehlfeldt (incorporated by reference to Exhibit 10.3 to Big O Tires, Inc.'s Current Report on Form 8-K dated January 10, 1995). PAGE NO. - N/A (10.53) Letter Agreement dated July 12, 1994, by and between Big O Tires, Inc. and PaineWebber Incorporated (incorporated by reference to Exhibit 10.6 to Big O Tires, Inc.'s Quarterly Report on Form 10-Q dated September 30, 1994). PAGE NO. - N/A (10.54) Letter Agreement dated March 23, 1994, by and between Big O Tires, Inc. and The CIT Group/Equipment Financing, Inc., a New York corporation (incorporated by reference to Exhibit 10.7 to Big O Tires, Inc.'s Quarterly Report on Form 10-Q dated September 30, 1994). PAGE NO. - N/A (10.55) Ultimate Net Loss Agreement dated October 21, 1994, by and between Big O Tires, Inc. and The CIT Group/Equipment Financing, Inc., a New York corporation (incorporated by reference to Exhibit 10.8 to Big O Tires, Inc.'s Quarterly Report on Form 10-Q dated September 30, 1994). PAGE NO. - N/A (10.56) Fifth Amendment to Loan and Security Agreement by and between Big O Tires, Inc. and its former lender dated April 29, 1994 (incorporated by reference to Exhibit 10.1 to Big O Tires, Inc.'s Quarterly Report on Form 10-Q dated September 30, 1994). PAGE NO. - N/A (10.57) Agreement by the Investment Committee of the Board of Directors and the Management/Dealer participants dated December 22, 1994 (incorporated by reference to Exhibit 10.1 to Big O Tires, Inc.'s Current Report on Form 8-K dated December 6, 1994). PAGE NO. - N/A (10.58) Letter dated December 13, 1994, to the Investment Committee of Big O Tires, Inc. and the Management participants and Dealer representatives (incorporated by reference to Exhibit 10.2 to Big O Tires, Inc.'s Current Report on Form 8-K dated December 6, 1994). PAGE NO. - N/A (10.59) Letter dated February 7, 1995, from the Dealer/Management Group to the Company's Board Chairman (incorporated by reference to Exhibit 10.1 to Big O Tires, Inc.'s Current Report on Form 8-K dated January 10, 1995). PAGE NO. - N/A (10.60) Agreement between the Company and the Management/Dealer participants dated January 20, 1995 (incorporated by reference to Exhibit 10.2 to Big O Tires, Inc.'s Current Report on Form 8-K PAGE NO. - N/A (10.61) Form of Franchise Agreement currently in use (incorporated by reference to Exhibit 10.61 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.62) Multi-Tenant Lease NNN dated December 1, 1994 between Botac VI Leasing L.L.C., a Utah Limited Liability Company and Big O Development, Inc. (incorporated by reference to Exhibit 10.62 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.63) Assignment and Assumption Agreement dated December 2, 1994 by Big O Development, Inc., Big O Tires, Inc. and Botac VI Leasing, L.L.C. and Allstate Life Insurance Company (incorporated by reference to Exhibit 10.63 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.64) Guarantee Agreement dated December 2, 1994 by Big O Tires, Inc., Big O Development, Inc. and Allstate Life Insurance Company (incorporated by reference to Exhibit 10.64 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.65) Closing Agreement dated December 2, 1994 by Big O Development, Inc., Big O Tires, Inc., Botac VI Leasing, L.L.C., and Allstate Life Insurance Company (incorporated by reference to Exhibit 10.65 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.66) Commercial Contract to Buy and Sell Real Estate dated March 17, 1994 between Bailey's Moving and Storage and Big O Tires, Inc. (incorporated by reference to Exhibit 10.66 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.67) Confidentiality Agreement dated September, 1994 between Big O Tires, Inc. and Kenneth W. Pavia, Sr. (incorporated by reference to Exhibit 10.67 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.68) Amendment No. 1 to the Big O Tires, Inc. Employee Stock Ownership Plan and Trust Agreement dated September 12, 1994 (incorporated by reference to Exhibit 10.68 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.69) Development Management Agreement dated September, 1994 between Ross Development Management Group, Inc. and Big O Development, Inc. and Big O Tires, Inc. (incorporated by reference to Exhibit 10.69 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.70) Letter Agreement dated February 20, 1995 terminating the Consulting Agreement between Big O Tires, Inc. and Horst K. Mehlfeldt (incorporated by reference to Exhibit 10.70 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.71) 1995 Incentive Bonus Plans (incorporated by reference to Exhibit 10.71 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.72) Commitment Letter dated February 16, 1994 between Big O Tires, Inc. and AT&T Commercial Finance Corporation for real estate financing (incorporated by reference to Exhibit 10.72 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.73) Commitment Letter dated February 16, 1994 between Big O Tires, Inc. and AT&T Commercial Finance Corporation for equipment financing (incorporated by reference to Exhibit 10.73 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.74) Extension letter dated December 9, 1994 between Big O Tires, Inc. and AT&T Commercial Finance Corporation to extend existing lines of credit through December 31, 1995 (incorporated by reference to Exhibit 10.74 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.75) Resignation letter dated February 27, 1995 from Robert L. Puckett (incorporated by reference to Exhibit 10.75 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.76) Resignation letter dated February 24, 1995 from David W. Dwyer (incorporated by reference to Exhibit 10.76 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.77) Revolving Credit Agreement dated January 23, 1995 between Big O Tires, Inc. and The First National Bank of Chicago (incorporated by reference to Exhibit 10.77 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.78) Consent, Acknowledgement and Access Agreement dated January 23, 1995 between The Bank of Cherry Creek, N.A., Kenneth B. Buckius and The First National Bank of Chicago (incorporated by reference to Exhibit 10.78 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.79) Note Purchase Agreement dated April 27, 1994 between Big O Tires, Inc. and USG Annuity & Life Company and Republic Western Insurance Company (incorporated by reference to Exhibit 10.79 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.80) Franchise Agreement dated October 7, 1994 between Big O Tires, Inc. and OK Tires, Inc. for the Retail Store located at 2830 West 3500 South, West Valley City, Utah 84119 (incorporated by reference to Exhibit 10.80 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.81) Franchise Agreement dated November 26, 1993 between Big O Tires, Inc and CAPS Tire Limited Liability Company for the Retail Store located at 8151 East Arapahoe Road, Englewood, Colorado 80112 (incorporated by reference to Exhibit 10.81 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.82) Form of Confidentiality Agreement signed by dealers dated October 19, 1994 (incorporated by reference to Exhibit 10.82 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.83) Ultimate Net Loss Agreement dated November 30, 1994, by and between Big O Tires, Inc. and The CIT Group/Equipment Financing, Inc., a New York corporation (incorporated by reference to Exhibit 10.83 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.84) Inventory Financing Agreement together with a Demand Note dated September 30, 1994, by and between The Kelly-Springfield Tire Company and Big O Tires, Inc., Big O Retail Enterprises, Inc. and Big O Tire of Idaho, Inc. (incorporated by reference to Exhibit 10.84 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.85) Supplemental Executive Retirement Plan dated December 7, 1994, by Big O Tires, Inc., effective January 1, 1994 (incorporated by reference to Exhibit 10.85 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.86) Forms of Stock Appreciation Rights Agreement dated February 15, 1995, between Big O Tires, Inc. and the Members of the Chief Executive Office (incorporated by reference to Exhibit 10.86 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.87) Letter Agreement dated March 24, 1995, regarding severance package, between Big O Tires, Inc. and John E. Siipola (incorporated by reference to Exhibit 10.87 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (10.88) Letter Agreement dated March 24, 1995, regarding severance package, between Big O Tires, Inc. and Horst K. Mehlfeldt (incorporated by reference to Exhibit 10.88 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (21.1) Big O Tires, Inc. Subsidiaries (incorporated by reference to Exhibit 21.1 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (23.1) Consent of Deloitte & Touche. PAGE NO - 23 (24.1) Powers of Attorney executed by each of the Directors of Big O Tires, Inc.(incorporated by reference to Exhibit 25.1 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO - N/A (27.1) Big O Tires, Inc.'s Financial Data Schedule (incorporated by reference to Exhibit 27.1 to Big O Tires, Inc.'s Form 10-K for the fiscal year ended December 31, 1994 as originally filed). PAGE NO. - N/A (99.1) October 31, 1994 press release issued by AKH Company, Inc., a California based retail tire chain, doing business as "Discount Tire Centers" and "Evans Tire Service Centers" (incorporated by reference to Exhibit 99.1 to Big O Tires, Inc.'s Quarterly Report on Form 10-Q dated September 30, 1994). PAGE NO. - N/A (99.2) November 1, 1994 press release issued by Big O Tires,Inc.(incorporated by reference to Exhibit 99.2 to Big O Tires, Inc.'s Quarterly Report on Form 10-Q dated September 30, 1994). PAGE NO. - N/A Exhibit 23.1 INDEPENDENT AUDITOR'S CONSENT We consent to the incorporation by reference in Registration Statement No. 33-36802, Registration Statement No. 33-41875, and Registration Statement No. 33-42021 of Big O Tires, Inc. on Forms S-8 of our report dated March 13, 1995, appearing in this Annual Report on Form 10-K of Big O Tires, Inc. for the year ended December 31, 1994. /s/ Deloitte & Touche LLP DELOITTE & TOUCHE LLP Denver, Colorado March 29, 1995 EX-17 15 EXHIBIT (D)(3) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ____________. Commission File Number: 1-8833 BIG O TIRES, INC. (Exact name of registrant as specified in its charter) NEVADA 87-0392481 (State or other juris- (I.R.S. Employer diction of incorporation) Identification No.) 11755 EAST PEAKVIEW AVENUE, ENGLEWOOD, COLORADO 80111 (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code: (303) 790-2800 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] The number of shares of registrant's common stock outstanding on November 10, 1995 was 3,317,840. The total number of pages is 69. BIG O TIRES, INC. CONSOLIDATED BALANCE SHEETS --------------------------- (000s)
September 30, December 31, 1995 1994 ------------- ------------ Unaudited ------------- ASSETS - ------------------------------------- CURRENT ASSETS: Cash and cash equivalents $ 854 $ 4,882 Trade accounts receivable, net of allowance for doubtful accounts 12,533 8,165 Other receivables 1,015 2,905 Current portion of notes receivable 631 733 Inventories 17,751 14,219 Deferred income taxes 2,300 2,126 Other current assets 480 688 ------- -------- Total current assets 35,564 33,718 ------- -------- NOTES RECEIVABLE, net of current portion 2,769 3,193 ------- -------- PROPERTY, PLANT and EQUIPMENT 23,969 17,177 Less accumulated depreciation and amortization (4,874) (5,146) ------- -------- 19,095 12,031 ------- -------- INTANGIBLE AND OTHER ASSETS: Distribution rights 8,869 9,077 Equity in joint ventures and unconsolidated subsidiaries 887 1,129 Other 2,662 2,820 ------- -------- 12,418 13,026 ------- -------- TOTAL ASSETS $ 69,846 $ 61,968 ------- -------- ------- --------
-See notes to consolidated financial statements- BIG O TIRES, INC. CONSOLIDATED BALANCE SHEETS --------------------------- (000s)
September 30, December 31, 1995 1994 ------------- ------------ Unaudited ------------- CURRENT LIABILITIES: Accounts payable $ 5,418 $ 650 Accrued expenses 2,525 2,485 Warranty reserve 4,225 3,850 Current portion of long-term debt and capital lease obligations 1,643 2,066 ------- -------- Total current liabilities 13,811 9,051 ------- -------- LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, net of current portion 17,376 15,906 ------- -------- OTHER LONG-TERM LIABILITIES 1,311 1,433 ------- -------- EMPLOYEE STOCK OWNERSHIP PLAN OBLIGATIONS 188 449 ------- -------- SHAREHOLDERS' EQUITY: Common stock 335 334 Capital contributed in excess of par 15,445 15,418 Retained earnings 21,864 20,419 ------- -------- 37,644 36,171 Less: Employee stock ownership plan obligations (188) (449) Deferred stock grant compensation (175) (472) Treasury stock (121) (121) ------- -------- 37,160 35,129 ------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 69,846 $ 61,968 ------- -------- ------- --------
-See notes to consolidated financial statements- BIG O TIRES, INC. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (000s except for share and per share amounts)
For the three months For the nine months ended September 30, ended September 30, --------------------- ---------------------- 1995 1994 1995 1994 ------------ ----------- ------------- ------------ NET SALES: Product and franchising $ 39,551 $ 36,652 $ 103,142 $ 94,132 Real estate 1,191 -- 4,530 -- ------------ ----------- ------------- ------------ 40,742 36,652 107,672 94,132 ------------ ----------- ------------- ------------ COST OF SALES: Product and franchising 31,662 29,091 80,412 72,203 Real estate 1,128 -- 4,325 -- ------------ ----------- ------------- ------------ 32,790 29,091 84,737 72,203 ------------ ----------- ------------- ------------ GROSS PROFIT: Product and franchising 7,889 7,561 22,730 21,929 Real estate 63 -- 205 -- 7,952 7,561 22,935 21,929 ------------ ----------- ------------- ------------ EXPENSES, net: Selling & administrative 5,035 4,668 14,672 14,772 Product delivery expense 1,032 908 2,973 2,218 Interest expense 366 510 1,199 1,177 Shareholder proposal expense 419 246 967 345 Loss on sale or closure of retail stores 217 209 312 911 Warehouse consolidation costs -- -- 320 -- ------------ ----------- ------------- ------------ 7,069 6,541 20,443 19,423 ------------ ----------- ------------- ------------ INCOME BEFORE INCOME TAXES 883 1,020 2,492 2,506 ------------ ----------- ------------- ------------ PROVISION FOR INCOME TAXES: Current 433 537 1,221 1,429 Deferred (61) (116) (174) (377) ------------ ----------- ------------- ------------ 372 421 1,047 1,052 ------------ ----------- ------------- ------------ NET INCOME $ 511 $ 599 $ 1,445 $ 1,454 ------------ ----------- ------------- ------------ ------------ ----------- ------------- ------------ EARNINGS PER SHARE $ .15 $ .18 $ .43 $ .44 ------------ ----------- ------------- ------------ ------------ ----------- ------------- ------------ WEIGHTED AVERAGE SHARES AND COMMON STOCK EQUIVALENTS OUTSTANDING 3,380,116 3,358,696 3,377,083 3,337,539 ------------ ----------- ------------- ------------ ------------ ----------- ------------- ------------
-See notes to consolidated financial statements- BIG O TIRES, INC. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (000s)
For the nine months ended September 30, -------------------------- 1995 1994 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 1,445 $ 1,454 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 945 913 Amortization of intangibles 302 350 Cash flows from changes in working capital (1,031) (6,058) Other (209) 848 ---------- ---------- Total adjustments 7 (3,947) ---------- ---------- NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 1,452 (2,493) ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Increase in notes receivable (139) (509) Payments received on notes receivable 1,198 937 Proceeds from sales of property and equipment 2,999 1,186 Equity investments in affiliates (111) (160) Purchase of property and equipment (9,376) (3,419) Purchase of Company-owned retail stores (141) 410 Increase in retail store construction in progress (1,034) -- Sale of Company-owned retail stores -- 51 Acquisition of property held for resale -- (84) ---------- ---------- NET CASH USED BY INVESTING ACTIVITIES (6,604) (2,408) ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of long-term debt 3,009 14,548 Principal payments on long-term debt and capital lease obligations (1,993) (5,807) Proceeds from sale of common stock and stock options exercised 108 96 ---------- ---------- NET CASH PROVIDED BY FINANCING ACTIVITIES 1,124 8,837 ---------- ---------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (4,028) 3,936 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 4,882 1,113 ---------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 854 $ 5,049 ---------- ---------- ---------- ----------
-See notes to consolidated financial statements- BIG O TIRES, INC. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (000s)
For the nine months ended September 30, ---------------------- 1995 1994 --------- -------- SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 1,312 $ 1,100 Income taxes 1,186 1,392 SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Accounts receivable transferred to long-term notes receivable 533 203 Equity investments in affiliates -- 55 Inventories received in satisfaction of long-term notes receivable -- 454 Common stock issued as unearned compensation -- 520 Decrease in employee stock ownership plan obligations 261 536 Restricted stock grants canceled 80 --
-See notes to consolidated financial statements. BIG O TIRES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994 UNAUDITED NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES: REFERENCE TO ANNUAL REPORT: These financial statements should be read in conjunction with the Annual Report on Form 10-K for the year ended December 31, 1994, since certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC"). These interim financial statements reflect all adjustments which are, in the opinion of Management, necessary for a fair presentation of the financial position, results of operations and cash flows of the Company for the interim periods. Such adjustments are of a normal recurring nature. Operating results for the three and nine months ended September 30, 1995, are not necessarily indicative of the results that may be expected for the year ending December 31, 1995. STOCK OPTION PLAN: On January 1, 1995, the Company granted options for 4,943 shares of the Company's $.10 par value common stock ("Common Stock") to certain directors and employees who elected to participate in the Company's Director and Employee Stock Option Plan ("Plan"). As of September 30, 1995, the liability for the options granted on January 1, 1995 pursuant to the Plan was approximately $58,000. STOCK APPRECIATION RIGHTS: In February 1995, the Company's Board of Directors granted Stock Appreciation Rights ("SAR") to each of the three members of the Office of the Chief Executive. Each SAR agreement grants 100,000 share equivalent units, each of which represents an equal undivided interest in the future appreciation in the value of a share of the Company's Common Stock on the exercise date. As of September 30, 1995, no liability exists as a result of the SARs because the value of the Common Stock was less than the base value, as defined in the agreement. In July 1995, the three members of the Office of the Chief Executive signed a letter agreement stating, among other things, that the SAR agreements would terminate and they would forfeit the unexercised SAR's as to all units, vested and non-vested, if and when the proposed merger, described below, takes place, subject to certain other conditions. CREDIT FACILITY: On January 23, 1995, the Company replaced its previously existing credit facility with a $20 million Revolving Credit Agreement which expires January 22, 1998. Borrowings under the agreement (limited to a portion of eligible collateral) were $5,725,000 at September 30, 1995. The agreement contains various covenants and restrictions (including a restriction which precludes the payment of cash dividends or the return of capital to shareholders) with which the Company was in compliance at September 30, 1995. SENIOR SECURED NOTES: In April 1994, the Company sold 8.71% Senior Secured Notes in the aggregate principal amount of $8,000,000, at par, which will mature in 1998 - 2004. The notes are collateralized by a deed of trust on land and buildings located in Nevada and Idaho. UNEARNED STOCK COMPENSATION: On August 5, 1994, the Company made restricted stock grants for 28,478 shares (net of subsequent cancellation of 5,188 shares) of the Company's Common Stock and granted options for an additional 41,942 shares of the Company's common stock to certain officers in accordance with the Company's Long Term Incentive Plan ("LTI Plan"). In connection with the restricted stock grants, compensation expense is being recognized over a vesting period of three to five years in accordance with the provisions of the LTI Plan. Compensation expense recognized for the three and nine months ended September 30, 1995, was approximately $56,000 and $216,000, respectively. FRANCHISE AND ROYALTY FEES: The Company receives initial franchise fees and continuing royalty fees from its franchised Big O dealers. The initial franchise fees and continuing royalty fees were $1,924,000 and $5,317,000 for the three and nine months ended September 30, 1995, respectively, and $1,867,000 and $4,952,000 for the three and nine months ended September 30, 1994, respectively. SHAREHOLDER PROPOSAL EXPENSE: At the Annual Meeting of Shareholders held in June 1994, the shareholders adopted a resolution calling for the Company to engage an investment banker to evaluate all alternatives for enhancing the values of the Company. Action pursuant to this proposal led to the Company entering into a merger agreement with a group of the Company's franchised dealers and senior managers of the Company on July 24, 1995. The cost associated with the implementation of the shareholder proposal for the three and nine months ended September 30, 1995 was $419,000 and $967,000, respectively. EARNINGS PER SHARE: Earnings per share is computed using the weighted-average number of outstanding shares during each period presented. Common stock equivalents are included but did not have a material effect on the computation. LITIGATION: As a franchisor and wholesale distributor, the Company licenses the use of its trade names, service marks and trademarks to the Company's franchisees and other licensees and distributes tire products manufactured by the Company's suppliers ("Suppliers") under the Company's trade names and trademarks. As a result, the Company has been named as a defendant in a number of lawsuits alleging negligent acts and/or omissions by the Company's franchisees of alleged defective workmanship and/or materials of the products produced by the Suppliers. As of September 30, 1995, there were 35 such lawsuits pending in which the Company was named as a defendant. Of those 35 lawsuits, only two directly involve the Company. The other 33 involve franchisees of the Company or alleged tire failures of its Suppliers. In most of the 35 lawsuits in which the Company is named as a defendant, the claims for damages are not specific. It is possible that a judgment may be rendered against the Company in one or more of these lawsuits but the Company is unable to estimate the amount of any such possible judgments. Over the past five years, the judgments that have been rendered against the Company and settlements made by the Company in lawsuits similar to the 35 lawsuits have not resulted in material losses to the Company. Therefore, based upon such history, the Company does not believe that the Company will suffer any material loss as a result of the 35 lawsuits pending against the Company on September 30, 1995. The Company requires that both the Company's franchisees and Suppliers indemnify and protect the Company against claims resulting from the alleged negligent acts and/or omissions of the franchisees and the alleged defects in workmanship and/or materials of its Suppliers. In addition, the Company carries its own insurance. The 33 lawsuits referred to above are being defended by attorneys who have been retained by the applicable insurance companies and the Company is not actively involved in the defense thereof. Historically, the Company has been able to rely upon its franchisees and Suppliers and their insurance carriers to defend, protect and indemnify the Company against such types of lawsuits. Accordingly, even if a judgment is rendered against the Company in any of these lawsuits, because of the insurance and indemnities described above, management does not believe that the Company would incur any loss as a result of any such judgment. The Company is also a defendant in eight additional lawsuits which are incidental to the Company's business and for which the Company does not believe it is liable, but which are not covered by insurance. Thus, the Company is directly and actively involved in its own defense and has sufficient information to form a judgment on the likely outcome and exposure of such cases. Based on this analysis, the Company believes that the ultimate outcome of these cases will not have a material adverse effect on the Company's financial statements. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS: LIQUIDITY AND CAPITAL RESOURCES: SHAREHOLDER PROPOSAL In June 1994, the shareholders adopted a proposal requesting the Company to engage an investment banker to evaluate all alternatives to enhance the values of the Company. In implementing this shareholder proposal, the Board of Directors established the Investment Committee of the Board which retained PaineWebber Incorporated ("PaineWebber") to fulfill this shareholder proposal. In June 1995, the Company's Board of Directors approved in principle a proposal to recommend to the Company's shareholders that the shareholders sell at a price of $16.50 per share to a group consisting of a group of the Company's franchised dealers and senior managers (the "Acquisition Group"). In July 1995, the Company entered into an Agreement and Plan of Merger ("Merger Agreement") with BOTI Holdings, Inc. and BOTI Acquisition Corp., (collectively "Purchaser"), companies formed by the Acquisition Group to accomplish the merger. The Merger Agreement is subject to approval of the Company's stockholders. Among other conditions, the consummation of the merger was also subject to the receipt of fairness opinions, the Acquisition Group obtaining acceptable financing, participation in the acquisition by not less than 80% of the shares held by the Company's ESOP and participation in the acquisition by not less than 85% of the franchised Big O Tire stores as of the date of the Merger Agreement. In August 1995, the Purchaser presented to the Investment Committee of the Board of Directors evidence of financing commitments subject to various contingencies, the fulfillment of which would occur in the future. The Investment Committee reviewed the financing commitments obtained by the Purchaser and determined that financing commitments existed, in the aggregate, for amounts sufficient to provide funds to pay the merger consideration at that time. However, the financing contingency was not removed. In October 1995, the Company received notice that the Purchaser advised the Company that dealers owning 82% of the Company's franchised tire stores, as of the date of the Merger Agreement, elected to participate indirectly in the acquisition of the Company. The Purchaser advised the Company that while 82% is less than the percentage specified in the Merger Agreement, such percentage was sufficient to enable the Purchaser to proceed with satisfying certain financing contingencies and other conditions of closing in the Merger Agreement and the Purchaser waived the 85% contingency. The Merger Agreement remains subject to approval by the Company's stockholders and to the contingency that at least 80% of the shares held by the ESOP participate in the acquisition. By its terms, the Merger Agreement puts certain constraints on the Company's conduct of business pending the merger. These constraints provide that neither the Company nor any of its subsidiaries shall take any action except in the ordinary course of business and consistent with past practices. The Merger Agreement also provides that any one member of a management committee, consisting of the Chairman and Vice Chairman, and representatives of the Purchaser, the President and the Executive Vice President of the Company, has the right to object to expenditures, contingent liabilities or the acquisition or disposition of assets which exceed $100,000 prior to the Company entering into such transaction. If the management committee cannot then unanimously agree to such expenditures or asset disposition or acquisition, the Merger Agreement provides that approval may be obtained in writing from the Company and from BOTI Holdings, Inc. It is estimated that the expenses incurred by the Company in connection with the merger will be approximately $1,400,000 in the aggregate, comprised of approximately $11,000 for filing fees, $950,000 for financial advisory fees, $350,000 for legal fees, $48,000 for solicitation expenses, $25,000 for directors' fees and expenses, and $16,000 for miscellaneous expenses. In addition, the Company has agreed to reimburse the Purchaser up to $750,000 for its costs and expenses in structuring the merger and $217,000 for expenses incurred in arranging the financing of the merger. Costs incurred for the three and nine months ended September 30, 1995, were $419,000 and $967,000, respectively. Should the merger be approved, the Company anticipates that the surviving corporation will require additional cash, including approximately $1.2 million to retire the current senior notes and replace them with other financing, approximately $2.0 million for fees associated with new debt financing, $300,000 for severance fees payable to two current officers who are not participating in the acquisition, $750,000 for investment banker fees for the Purchaser, and $250,000 in shareholder costs. Additionally, approximately $750,000 will be required to cancel stock options held by current directors and employees. WORKING CAPITAL At September 30, 1995, the Company had $21,756,000 in working capital (defined as current assets less current liabilities), which represented a net decrease of $2,911,000 from December 31, 1994. Primary uses of working capital included the purchase of the Las Vegas distribution facility for $7,972,000, purchase of equipment of $1,404,000, and principal payments on long-term debt and capital lease obligations of $1,992,000. These uses were partially offset by working capital derived from borrowings on the Company's line of credit and other long-term debt of $3,009,000, proceeds from sales of property and equipment of $2,999,000 and working capital provided by operations of $1,452,000. The Company's net trade receivables at September 30, 1995, increased by $4,368,000 as compared to December 31, 1994. This increase resulted from the effect of opening nine new stores (net of closures) during the first nine months of 1995, normal seasonal increases, and continued success of the Company's Cost-U-Less -TM- marketing program. Inventories at September 30, 1995, increased by $3,532,000 as compared to inventories at December 31, 1994. This increase resulted primarily from higher inventory levels needed to support the increased sales due to the impact of the nine additional stores opened during the first nine months of 1995 and the normal seasonal increase in stocking levels to provide an adequate supply of products to meet anticipated higher sales volumes which normally occur during the fourth quarter of each year. Accounts payable at September 30, 1995, increased $4,768,000 from December 31, 1994, as a result of the increased inventory levels and extended payment terms on snow tires offered by the Company's primary supplier. LAS VEGAS RSC CONVERSION In May 1994, the Company closed its Regional Service Center ("RSC") in Vacaville, California, and consolidated its operations into the Ontario RSC. The Vacaville warehouse was leased to an unrelated third party. In July 1995, the Company sold this warehouse facility. The cash proceeds from the sale were used to reduce the outstanding loan balance with First National Bank of Chicago ("First Chicago"). In March 1995, the Company closed its RSC in Denver, Colorado, and consolidated its operations into the newly opened Las Vegas RSC. The Denver RSC was sold to an unrelated third party in December 1994. (See discussion under "Financial Commitments" below.) Ontario RSC operations were fully converted to the new Las Vegas RSC in May 1995. While the Company is obligated under the lease for the Ontario warehouse through May 1998, it sublet this property to an unrelated third party for the remainder of the lease term starting June 1995. The results for the nine months ended September 30, 1995, include a $320,000 charge associated with the conclusion of this warehouse consolidation. This charge resulted primarily from the sale of the Vacaville RSC facility at a price less than previously anticipated as well as certain other costs that exceeded expectations. REAL ESTATE DEVELOPMENT The Company's real estate development program involves Big O retail store site selection and development by one of the Company's subsidiaries, and the subsequent sale of these developed store sites to Franchisees that qualify for Small Business Administration ("SBA") guaranteed loans. Significant financing is required by the Company, which is planned to be repaid as the SBA guaranteed financing is obtained by the prospective Franchisee. As of July 1995, permanent financing had been approved for ten development projects through AT&T Capital Corporation ("AT&T"). Due to the merger as described above, the agreement with AT&T was terminated in August 1995. While the Company plans on continuing this real estate development program, the extent of this development has been reduced significantly. In connection with this reduction, $125,000 of costs relating to terminated projects was expensed during the third quarter, 1995. The Company anticipates funding future projects through its revolving line of credit, joint ventures or directly with developers. The Company completed the sales of eight real estate holdings during the first nine months of 1995, including two during the third quarter of 1995. Five of these real estate sales involved projects developed under the Company's real estate development program, one related to a land sale for a site the Company elected not to develop, and two sales related to retail properties previously held as investments that the Company elected to sell. CAPITAL EXPENDITURES At September 30, 1995, the Company's subsidiary that is implementing the real estate development program had approximately $3.1 million invested in construction in progress for Big O retail store sites, an increase of $1.1 million since December 31, 1994. Additional capital expenditures are anticipated in connection with these real estate development activities, which are anticipated to be funded through the Company's revolving line of credit, joint ventures or directly with developers. In February 1995, the Company acquired the Las Vegas RSC at a total cost of approximately $7,972,000. New equipment, including computer hardware and software to operate this facility, will require approximately $1,400,000 in 1995 capital expenditures of which approximately $880,000 has been incurred as of September 30, 1995. The Company is financing this equipment through its existing revolving line of credit. FINANCIAL COMMITMENTS The Company's current operations are primarily funded through its revolving line of credit with First Chicago which has a 1995 sub-limit of $6 million for construction and permanent financing pursuant to the Company's real estate development program. Limited financing for the Company's real estate development was previously provided by AT&T through an $11.75 million revolving credit line. In August 1995 the Company and AT&T mutually agreed to terminate this credit line for all projects unfunded at that time. In the fourth quarter of 1994 the Company sold approximately $3 million of long term notes receivable. The Company successfully negotiated the sale of an additional $.8 million of long term notes receivable in July 1995 and approximately $.2 million in October 1995. Management's discretion with respect to certain business matters is limited by financial and other covenants contained in loan agreements with First Chicago, the senior note holders, Kelly-Springfield Tire Company (a division of The Goodyear Tire & Rubber Company) and other lenders. These covenants, among other things, limit or prohibit the Company from (i) paying dividends on its capital stock, (ii) incurring additional indebtedness, (iii) creating liens on or selling certain assets, (iv) making certain loans, investments, or guarantees, (v) violating certain financial ratios, (vi) repurchasing shares of its common stock, (vii) making certain capital expenditures, and (viii) merging or selling substantially all of its assets. At September 30, 1995, the Company was in compliance with all of these covenants. The Company has received notice from the senior note holders that the consummation of the proposed merger will be an event of default, thus creating a covenant violation. It is the Company's understanding that the Acquisition Group is seeking replacement financing at this time. In compliance with the terms of the Merger Agreement, the Company is contacting its other current lenders and lessors where necessary in order to obtain the consents necessary for the consummation of the merger. The Company's continuing guarantees at September 30, 1995 were comprised principally of the following: Retail store financing $4.1 million Notes receivable guarantees 1.6 million Real estate lease guarantees 6.0 million Employee Stock Ownership Plan .2 million Denver RSC mortgage loan 2.8 million SEASONALITY The franchised and Company-owned retail stores experience some seasonal variation in product sales because the sale of tires, wheels, and related automotive products are generally greater during the summer months than in the winter months. The Company generally experiences some seasonality, although not to the same extent as the retail stores, since the Company maintains sales to certain retail stores on a regional basis (e.g., snow tires and chains) that offset the trend on a national basis. ENVIRONMENTAL ISSUES The Company and its franchisees are subject to federal and state environmental regulations regarding the disposal of tires and used oil, and the handling and storage of certain other substances. Such regulations have not previously had a material effect on the Company's operations, and management does not believe that they will have a material effect in the future since the Company has adopted a policy of requiring Phase I environmental studies for any new projects or the acquisition of any existing locations before such transactions are consummated. ACCOUNTING STANDARDS The Company adopted Statement of Financial Accounting Standard (FAS) No. 114, ACCOUNTING BY CREDITORS FOR IMPAIRMENT OF A LOAN, effective January 1, 1995. The adoption of this FAS did not have a material effect on the Company's financial position nor results of operations for the nine months ended September 30, 1995. The Financial Accounting Standards Board (FASB) has issued Statement of Financial Accounting Standard No. 121, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF, which is required to be implemented for the Company's fiscal year ending December 31, 1996. The earlier adoption of this FAS would not have materially affected the Company's financial position nor results of operations for the nine months ended September 30, 1995. RESULTS OF OPERATIONS: REVENUES Net sales for the third quarter, 1995 increased by $4,090,000 as compared to the third quarter, 1994 and net sales for the first nine months 1995 increased by $13,540,000 over the first nine months of 1994. The sale of Big O brand units increased by approximately 177,000 units (an increase of 17.5%) during the first nine months of 1995 as compared to the corresponding period for 1994, and the sale of other new tires decreased by approximately 46,000 units (a decrease of 12.5%) during the same period. The average selling price of Big O brand units increased by $0.15 per unit (an increase of 0.3%) for the first nine months of 1995 as compared to the first nine months of 1994. The average selling price of other new tires decreased by $0.57 (a decrease of 1.5%) during the first nine months of 1995 as compared to the corresponding period in 1994. This decrease was in response to increased competition in the industry and came in spite of announced industry price increases. Net sales for the third quarter of 1995 increased $4,090,000 as compared to the third quarter of 1994, of which $1,191,000 related to the sale of two Company developed real estate projects during the third quarter 1995. Other increases included an increase of $1,123,000 in sales to existing dealers, sales to new franchisees of $1,840,000 and an increase in royalty revenues of $57,000. These increases were partially offset by a decrease of $487,000 which resulted from the closing of franchisee retail stores which were operating during the third quarter of 1994 but not 1995. The increase in sales of $13,540,000 for the first nine months of 1995 included an increase of $4,530,000 related to real estate sales, an increase of $4,683,000 in sales to existing dealers, sales to new franchisees of $4,862,000 and an increase of $366,000 in royalty revenues. These increases were partially offset by decreases in sales of $1,132,000 related to the closing of franchised and Company-owned retail stores and $330,000 related to the sale of Company-owned retail stores. GROSS PROFIT Gross profit for the third quarter 1995 increased by $391,000 as compared to the third quarter of 1994, including an increase of $63,000 related to real estate sales in 1995. The Company's product and franchising gross margin was 20.0% for the third quarter of 1995 which represented a .6% decrease as compared to the third quarter of 1994. This decrease in gross margin generated a decrease in gross profit of $270,000, which was offset by an increase in gross profit of $598,000 attributable to the higher product and franchising sales volumes. The decrease in gross margin was primarily due to increased warranty and freight expenses during the third quarter of 1995 over the third quarter of 1994. Gross profit for the first nine months of 1995 increased by $1,006,000 as compared to the first nine months of 1994, including an increase related to real estate sales in 1995. The Company's product and franchising gross margin was 22.0% for the first nine months of 1995, a decrease of 1.3% from the first nine months of 1994. An increase in gross profits of $2,099,000 was attributable to the higher product and franchising sales volumes during the first nine months of 1995 as compared to the same period in 1994. This increase was partially offset by the decrease of $1,298,000 due to the decrease in the gross margin which was primarily related to the Company's Cost-U-Less -TM- marketing program. NET EXPENSES Selling and administrative expenses increased $367,000 for the third quarter of 1995 from the third quarter of 1994. This increase consisted primarily of an increase in the provision for bad debts of $282,000, an increase of $125,000 related to costs associated with terminated real estate development projects and an increase of $100,000 related to the writedown in value of one real estate parcel. These increases were partially offset by a decrease in payroll and related expenses of approximately $126,000. Selling and administrative expenses decreased $100,000 for the first nine months of 1995 as compared to the first nine months of 1994. This decrease was primarily due to decreases related to the sale or closure of Company-owned retail stores and decreases in the Company's proportionate share of joint venture losses. These decreases were offset by increases related to the provision for bad debts, additional costs associated with terminated real estate development projects and writedowns in value for certain real estate projects. Increases in selling and administrative expenses were also associated with closing the Denver and Ontario RSC's and starting up of the new Las Vegas RSC during 1995. Interest expense decreased by $144,000 for the third quarter of 1995 as compared to the same period for 1994. This decrease was primarily due to interest concessions offered by a subordinated lender which was recorded in the third quarter 1995 and also the assumption by the buyer of the Denver RSC mortgage loan in December 1994. Interest expense for the nine months ended September 30, 1995 decreased by $22,000. This decrease resulted primarily from the elimination of the Denver RSC mortgage loan which was offset somewhat by increased borrowings under the Company's line of credit during the first half of 1995 for increased financing needs for the consolidation of three of the Company's RSC's into the new Las Vegas RSC. PART II OTHER INFORMATION Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None Item 5. OTHER INFORMATION. None Item 6. EXHIBITS AND REPORTS ON FORM 8-K. a. Exhibits The following Exhibits are filed as part of this report and are attached hereto: (10.1) Agreement for Purchase and Sale of Joint Interest; Dissolution of Joint Venture; and Continuation of Businesses by Acquiring Joint Ventures dated effective October 1, 1994, by and between Big O Retail Enterprises, Inc., a Colorado corporation ("Seller") and C.S.B. Partnership, a California general partnership ("Purchaser"). (27.1) Financial Data Schedule for Third Quarter, 1995. b. Reports on Form 8-K On July 25, 1995, as amended on July 27, 1995, the Company filed a Current Report on Form 8-K/A announcing under Item 5 that on July 24, 1995, the Company entered into an Agreement and Plan of Merger ("Merger Agreement") with BOTI Holdings, Inc. and BOTI Acquisition Corp. The Merger Agreement provides that BOTI Holdings, Inc., through its subsidiary BOTI Acquisition Corp., will acquire the Company in a merger in which the Company's shareholders will receive a cash price of $16.50 per share. The merger is subject to the approval of the Company's stockholders. The Company also reported that it amended the Rights Agreement dated August 26, 1994 between the Company and Interwest Co., Inc. to specifically exclude from the definition of an "Acquiring Person", BOTI Holdings, Inc., BOTI Acquisition Corp., an entity to be formed directly or indirectly by persons who are currently franchisees of the Company, any other person who may be deemed to be the beneficial owner of the Company's Common Stock because of the execution and delivery of the Merger Agreement and any group consisting of two or more of the foregoing. The Company also filed under Item 7 of Form 8-K/A the Agreement and Plan of Merger dated July 24, 1995 and the Amendment to Rights Agreement dated as of July 24, 1995. On August 17, 1995, the Company filed a Current Report on Form 8-K dated August 17, 1995, announcing under Item 5 that on August 16, 1995, BOTI Holdings, Inc. and BOTI Acquisition Corp. ("Purchaser") presented to the Investment Committee of the Board of Directors evidence of financing commitments subject to various contingencies, the fulfillment of which would occur in the future. The Investment Committee reviewed and determined that the Acquisition Group's financing commitments, in the aggregate, were for amounts sufficient to provide funds to pay the merger consideration. On September 5, 1995, the Company filed a Current Report on Form 8-K, dated September 5, 1995, announcing that on August 31, 1995, the Company agreed to a request made by the Purchaser to extend until October 2, 1995, the date on which the Company or the Purchaser would be able to terminate the Merger Agreement if prior to October 2, 1995, the Purchaser had not satisfied or waived the contingency in the Merger Agreement that required participation in the acquisition by the Company's dealers owning not less than 85% of the franchised Big O Tire stores ("Dealer Participation Contingency"). As a part of the agreement, the Purchaser agreed that the Company could delay incurring additional expenditures with respect to its proxy statement until the Company had been advised that the Dealer Participation Contingency had been satisfied or waived, and the Company was satisfied that a fairness opinion would be received by the participants in the Company's Employee Stock Ownership Plan in connection with the proposed merger. The Company also filed under Item 7 of Form 8-K the Letter Agreement dated August 31, 1995, by and among the Company, BOTI Acquisition Corp., and BOTI Holdings, Inc. On October 4, 1995, the Company filed a Current Report on Form 8-K dated October 4, 1995, announcing under Item 5 that on October 2, 1995, the Company agreed to a request made by the Purchaser to extend until October 16, 1995, the date on which the Company or the Purchaser would be able to terminate the Merger Agreement, if prior to October 16, 1995 the Purchaser Group had not satisfied or waived the Dealer Participation Contingency. As part of the agreement, the Purchaser agreed that the Company would agree to no further changes to Section 7.1(f) of the Merger Agreement and the Company could delay incurring additional expenditures with respect to its proxy statement until the Company has been advised that the Dealer Participation Contingency had been satisfied or waived. The Company also filed under Item 7 of Form 8-K the Letter Agreement dated October 2, 1995, by and among the Company, BOTI Acquisition Corp., and BOTI Holdings, Inc. On October 18, 1995, the Company filed a Current Report on Form 8-K dated October 18, 1995, announcing that on October 15, 1995, the Company received notice from the Purchaser that the Purchaser elected to waive the Dealer Participation Contingency. The Purchaser advised the Company that dealers owning 82% of the Company's franchised tire stores, as of the date of the Merger Agreement, had elected to participate indirectly in the acquisition of the Company. The Purchaser advised the Company that while 82% is less than the percentage specified in the Merger Agreement, such percentage is sufficient to enable the Purchaser to proceed with satisfying other conditions of closing in the Merger Agreement. The Company also filed under Item 7 of Form 8-K the Letter dated October 15, 1995, from BOTI Acquisition Corp. and BOTI Holdings, Inc. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: November 13, 1995 BIG O TIRES, INC. By: /s/ John B. Adams John B. Adams Executive Vice President, Principal Financial Officer and Principal Accounting Officer EXHIBIT INDEX EXHIBIT PAGE NO. (10.1) Agreement for Purchase and Sale of Joint Interest; Dissolution of Joint Venture; and Continuation of Businesses by Acquiring Joint Ventures dated effective October 1, 1994, by and between Big O Retail Enterprises, Inc., a Colorado corporation ("Seller") and C.S.B. Partnership, a California general partnership ("Purchaser"). 18 (27.1) Financial Data Schedule for Third Quarter, 1995. 69 -----END PRIVACY-ENHANCED MESSAGE-----