-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, L16AFO7lzEF2OlEdvDppnOO6YFJvhlrJjm9OaulE06haYh2RGmOqB1nyGnmvo2xV 9mrw0ls1Q60LwopPoI/VaQ== 0000950123-95-000554.txt : 19950615 0000950123-95-000554.hdr.sgml : 19950615 ACCESSION NUMBER: 0000950123-95-000554 CONFORMED SUBMISSION TYPE: SC 13E4 PUBLIC DOCUMENT COUNT: 15 FILED AS OF DATE: 19950315 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HARCOURT GENERAL INC CENTRAL INDEX KEY: 0000040493 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DEPARTMENT STORES [5311] IRS NUMBER: 041619609 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: SC 13E4 SEC ACT: 1934 Act SEC FILE NUMBER: 005-12340 FILM NUMBER: 95520909 BUSINESS ADDRESS: STREET 1: 27 BOYLSTON ST / BOX 1000 CITY: CHESTNUT HILL STATE: MA ZIP: 02167 BUSINESS PHONE: 6172328200 MAIL ADDRESS: STREET 1: 27 BOYLSTON ST STREET 2: BOX 1000 CITY: CHESTNUT HILL STATE: MA ZIP: 02167 FORMER COMPANY: FORMER CONFORMED NAME: GENERAL CINEMA CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: MID WEST DRIVE IN THEATRES INC DATE OF NAME CHANGE: 19660907 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HARCOURT GENERAL INC CENTRAL INDEX KEY: 0000040493 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DEPARTMENT STORES [5311] IRS NUMBER: 041619609 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: SC 13E4 BUSINESS ADDRESS: STREET 1: 27 BOYLSTON ST / BOX 1000 CITY: CHESTNUT HILL STATE: MA ZIP: 02167 BUSINESS PHONE: 6172328200 MAIL ADDRESS: STREET 1: 27 BOYLSTON ST STREET 2: BOX 1000 CITY: CHESTNUT HILL STATE: MA ZIP: 02167 FORMER COMPANY: FORMER CONFORMED NAME: GENERAL CINEMA CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: MID WEST DRIVE IN THEATRES INC DATE OF NAME CHANGE: 19660907 SC 13E4 1 HARCOURT GENERAL INC. SCHEDULE 13E-4 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ SCHEDULE 13E-4 ISSUER TENDER OFFER STATEMENT (PURSUANT TO SECTION 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934) HARCOURT GENERAL, INC. (Name Of Issuer and Person Filing Statement) COMMON STOCK, PAR VALUE $1.00 PER SHARE (Title Of Class of Securities) 41163G101 (CUSIP Number Of Class Of Securities) ERIC P. GELLER, ESQ. SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY HARCOURT GENERAL, INC. 27 BOYLSTON STREET CHESTNUT HILL, MASSACHUSETTS 02167 (617) 232-8200 (Name, Address and Telephone Number of Person Authorized To Receive Notices and Communications On Behalf Of The Person Filing Statement) ------------------------ COPIES TO: Robert L. Friedman, Esq. John G. Finley, Esq. SIMPSON THACHER & BARTLETT 425 Lexington Avenue New York, New York 10017-3954 (212) 455-2000 ------------------------ MARCH 15, 1995 (Date Tender Offer First Published, Sent Or Given To Security Holders) ------------------------ CALCULATION OF FILING FEE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Transaction Valuation....................................................... $207,500,000* Amount of Filing Fee........................................................ $ 41,500
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- * Based upon purchase of 5,000,000 shares at $41.50 per share. / / 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: N/A Filing Party: N/A Form Or Registration No.: N/A Date Filed: N/A
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 ITEM 1. SECURITY AND ISSUER (a) The name of the Issuer is Harcourt General, Inc., a Delaware corporation (the "Company"), which has its principal executive offices at 27 Boylston Street, Chestnut Hill, Massachusetts 02167. (b) This Schedule 13E-4 relates to the offer by the Company to purchase 5,000,000 shares (or such lesser number of shares as are properly tendered and not withdrawn) of Common Stock, par value $1.00 per share, of the Company (the "Shares" or the "Common Stock") at a price, net to the seller in cash, not greater than $41.50 nor less than $36.00 per Share, to be selected by the Company, taking into account the number of Shares so tendered and the prices specified by tendering stockholders of the Shares, that will allow the Company to buy 5,000,000 Shares (or such lesser number as are properly tendered and not withdrawn) at prices not greater than $41.50 nor less than $36.00, upon the terms and subject to the conditions set forth in the Offer to Purchase dated March 15, 1995 (the "Offer to Purchase"), and in the related Letter of Transmittal (which together constitute the "Offer"), copies of which are attached hereto as Exhibits (a)(1) and (a)(2), respectively. The Offer is being made to all holders of Shares, including officers, directors, and affiliates of the Company. The information set forth in "Introduction," "Section 1. Number of Shares; Proration," "Section 11. Shares Outstanding and Significant Stockholders; Certain Effects of the Offer," "Section 13. Interest of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares" and "Section 16. Extension of the Offer; Termination; Amendments" of the Offer to Purchase is incorporated herein by reference. (c) The Shares are listed and principally traded on the New York Stock Exchange (the "NYSE"). The information set forth in the "Introduction" and "Section 8. Price Range of Shares; Dividends" of the Offer to Purchase is incorporated herein by reference. (d) This statement is being filed by the Issuer. ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a) - (b) The information set forth in "Section 10. Source and Amount of Funds" of the Offer to Purchase is incorporated herein by reference. ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE (a) - (j) The information set forth in the "Introduction," "Section 9. Purpose of the Offer," "Section 11. Shares Outstanding and Significant Stockholders; Certain Effects of the Offer," "Section 12. Certain Information Concerning the Company" and "Section 13. Interest of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares" of the Offer to Purchase is incorporated herein by reference. ITEM 4. INTEREST IN SECURITIES OF THE ISSUER. The information set forth in "Section 13. Interest of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares" of the Offer to Purchase is incorporated herein by reference. ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE ISSUER'S SECURITIES. The information set forth in the "Introduction," "Section 9. Purpose of the Offer," "Section 11. Shares Outstanding and Significant Stockholders; Certain Effects of the Offer" and "Section 13. Interest of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares" of the Offer to Purchase is incorporated herein by reference. ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED. The information set forth in "Section 17. Fees and Expenses" of the Offer to Purchase is incorporated herein by reference. 3 ITEM 7. FINANCIAL INFORMATION. (a) - (b) The financial information set forth in "Section 12. Certain Information Concerning the Company" of the Offer to Purchase is incorporated herein by reference. ITEM 8. ADDITIONAL INFORMATION (a) The information set forth in "Section 12. Certain Information Concerning the Company" of the Offer to Purchase is incorporated herein by reference. (b) The information set forth in "Section 14. Certain Legal Matters; Regulatory Approvals" of the Offer to Purchase is incorporated herein by reference. (c) The information set forth in "Section 11. Shares Outstanding and Significant Stockholders; Certain Effects of the Offer" of the Offer to Purchase is incorporated herein by reference. (d) Not applicable. (e) Reference is hereby made to the Offer to Purchase and the related Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2), respectively, and incorporated in their entirety herein by reference. ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
EXHIBIT NO. DESCRIPTION - ----------- ---------------------------------------------------------------------------------- (a)(1) Form of Offer to Purchase dated March 15, 1995. (a)(2) Form of Letter of Transmittal. (a)(3) Form of Notice of Guaranteed Delivery. (a)(4) Form of letter to brokers, dealers, commercial banks, trust companies and other nominees dated March 15, 1995. (a)(5) Form of letter to clients who are common stockholders for use by brokers, dealers, commercial banks, trust companies and other nominees dated March 15, 1995. (a)(6) Form of letter to clients who are Series A Cumulative Convertible stockholders for use by brokers, dealers, commercial banks, trust companies and other nominees dated March 15, 1995. (a)(7) Form of letter to stockholders from the President and Chief Executive Officer and the Chairman of the Company dated March 15, 1995. (a)(8) Form of letter to stockholders of Class B Stock from the President and Chief Executive Officer and the Chairman of the Company dated March 15, 1995. (a)(9) Form of letter to stockholders of Series A Cumulative Convertible Stock from the President and Chief Executive Officer and the Chairman of the Company dated March 15, 1995. (a)(10) Form of Summary Advertisement dated March 15, 1995. (a)(11) Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(12) Form of Press Release dated March 10, 1995. (a)(13) Form of Notice of Conversion to Accompany Shares of Class B Stock. (a)(14) Form of Notice of Conversion to Accompany Shares of Series A Cumulative Convertible Stock. (b) Not applicable. (c) Not applicable. (d) Not applicable. (e) Not applicable. (f) Not applicable.
2 4 SIGNATURES 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. HARCOURT GENERAL, INC. By: /s/ ERIC P. GELLER, ESQ. ------------------------------------ Eric P. Geller, Esq. Senior Vice President, General Counsel and Secretary Dated: March 15, 1995 5 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE NO. - ----------- ------------------------------------------------------------------------- -------- (a)(1) Form of Offer to Purchase dated March 15, 1995. (a)(2) Form of Letter of Transmittal. (a)(3) Form of Notice of Guaranteed Delivery. (a)(4) Form of letter to brokers, dealers, commercial banks, trust companies and other nominees dated March 15, 1995. (a)(5) Form of letter to clients who are common stockholders for use by brokers, dealers, commercial banks, trust companies and other nominees dated March 15, 1995. (a)(6) Form of letter to clients who are Series A Cumulative Convertible stockholders for use by brokers, dealers, commercial banks, trust companies and other nominees dated March 15, 1995. (a)(7) Form of letter to stockholders from the President and Chief Executive Officer and the Chairman of the Company dated March 15, 1995. (a)(8) Form of letter to stockholders of Class B Stock from the President and Chief Executive Officer and the Chairman of the Company dated March 15, 1995. (a)(9) Form of letter to stockholders of Series A Cumulative Convertible Stock from the President and Chief Executive Officer and the Chairman of the Company dated March 15, 1995. (a)(10) Form of Summary Advertisement dated March 15, 1995. (a)(11) Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(12) Form of Press Release dated March 10, 1995. (a)(13) Form of Notice of Conversion to Accompany Shares of Class B Stock. (a)(14) Form of Notice of Conversion to Accompany Shares of Series A Cumulative Convertible Stock. (b) Not applicable. (c) Not applicable. (d) Not applicable. (e) Not applicable. (f) Not applicable.
EX-99.A1 2 FORM OF OFFER TO PURCHASE DATED MARCH 15, 1995 1 HARCOURT GENERAL, INC. OFFER TO PURCHASE FOR CASH UP TO 5,000,000 SHARES OF ITS COMMON STOCK - ------------------------------------------------------------------------------- THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, APRIL 11, 1995, UNLESS THE OFFER IS EXTENDED. - ------------------------------------------------------------------------------- Harcourt General, Inc., a Delaware corporation (the "Company"), hereby invites its stockholders to tender shares of its Common Stock, par value $1.00 per share (the "Shares" or the "Common Stock"), to the Company at prices, net to the seller in cash, not greater than $41.50 nor less than $36.00 per Share, specified by such stockholders upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which together constitute the "Offer"). The Company will, upon the terms and subject to the conditions of the Offer, determine a single price per Share that it will pay for the Shares (the "Purchase Price") properly tendered and not withdrawn pursuant to the Offer, taking into account the number of Shares so tendered and the prices specified by tendering stockholders of the Shares that will allow it to buy 5,000,000 Shares (or such lesser number of Shares as are properly tendered and not withdrawn) at prices not greater than $41.50 nor less than $36.00 pursuant to the Offer. All Shares properly tendered at prices at or below the Purchase Price and not withdrawn will be purchased at the Purchase Price, net to the seller in cash, upon the terms and subject to the conditions of the Offer, including the proration terms hereof. THE OFFER IS NOT BEING MADE FOR (NOR WILL TENDERS BE ACCEPTED OF) EITHER THE COMPANY'S CLASS B STOCK, PAR VALUE $1.00 PER SHARE (THE "CLASS B STOCK"), OR THE COMPANY'S SERIES A CUMULATIVE CONVERTIBLE STOCK, PAR VALUE $1.00 PER SHARE (THE "SERIES A STOCK"). HOLDERS OF EITHER THE CLASS B STOCK OR THE SERIES A STOCK WHO WISH TO PARTICIPATE IN THE OFFER MUST CONVERT SUCH CLASS B STOCK OR SERIES A STOCK IN ACCORDANCE WITH THEIR RESPECTIVE TERMS AND PROVISIONS AND TENDER THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE OFFER PRIOR TO THE EXPIRATION THEREOF. SEE SECTION 4. Shares tendered and purchased by the Company will not receive or otherwise be entitled to the regular quarterly cash dividend of $.16 per Share to be paid by the Company on April 28, 1995 to holders of record on April 22, 1995, unless the Offer is extended beyond April 22, 1995 for any reason whatsoever. Shares which are tendered but not purchased as a result of proration or otherwise will remain entitled to receipt of the dividend to be paid on April 28, 1995. See Section 8. THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 7. The Shares are listed and principally traded on the New York Stock Exchange, Inc. (the "NYSE") under the symbol "H". On March 9, 1995, the last full trading day on the NYSE prior to the announcement of the Offer, the closing per Share sales price as reported on the NYSE Composite Tape was $37 3/4. On March 14, 1995, the last full trading day on the NYSE prior to the commencement of the Offer, the closing per Share sales price as reported on the NYSE Composite Tape was $39 7/8. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. SEE SECTION 8. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO STOCKHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. NO DIRECTOR OR EXECUTIVE OFFICER OF THE COMPANY, OR MEMBER OF THE SMITH FAMILY GROUP, INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER, EXCEPT THAT JEFFREY R. LURIE, A MEMBER OF THE SMITH FAMILY GROUP, HAS INFORMED THE COMPANY THAT HE MAY TENDER UP TO 510,640 SHARES PURSUANT TO THE OFFER. MR. LURIE MAY, HOWEVER, SELL ANY OR ALL OF THESE SHARES IN THE OPEN MARKET RATHER THAN PURSUANT TO THE OFFER. SEE SECTION 11. STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED. --------------------- THE DEALER MANAGER FOR THE OFFER IS: SALOMON BROTHERS INC --------------------- March 15, 1995. 2 IMPORTANT Any stockholder desiring to tender all or any portion of his or her Shares should either (1) complete and sign the Letter of Transmittal, or a facsimile thereof, in accordance with the instructions in the Letter of Transmittal and deliver it and all other required documents to The First National Bank of Boston (the "Depositary") and either mail or deliver the stock certificates for such Shares to the Depositary or follow the procedure for book-entry delivery set forth in Section 3, or (2) request his or her broker, dealer, commercial bank, trust company or other nominee to effect the transaction for him or her. Stockholders having Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee should contact such person or institution if they desire to tender such Shares. Stockholders desiring to tender Shares and whose certificates for such Shares are not immediately available or who cannot comply with the procedure for book-entry transfer by the expiration of the Offer must tender such Shares by following the procedures for guaranteed delivery set forth in Section 3. STOCKHOLDERS MUST PROPERLY COMPLETE THE LETTER OF TRANSMITTAL INCLUDING THE SECTION OF THE LETTER OF TRANSMITTAL RELATING TO THE PRICE AT WHICH THEY ARE TENDERING SHARES IN ORDER TO EFFECT A VALID TENDER OF THEIR SHARES. Questions and requests for assistance may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers set forth on the back cover of this Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery may be obtained from the Information Agent. --------------------- 2 3 THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON BEHALF OF THE COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING SHARES PURSUANT TO THE OFFER. THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE, ANY SUCH RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. --------------------- TABLE OF CONTENTS
SECTION PAGES - ------------------------------------------------------------------------------------ ----- INTRODUCTION........................................................................ 5 PURPOSE OF THE OFFER................................................................ 6 1. NUMBER OF SHARES; PRORATION................................................... 6 2. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES................................... 8 3. PROCEDURE FOR TENDERING SHARES................................................ 8 PROPER TENDER OF SHARES....................................................... 8 BOOK-ENTRY DELIVERY........................................................... 9 SIGNATURE GUARANTEES.......................................................... 9 METHOD OF DELIVERY............................................................ 9 FEDERAL INCOME TAX WITHHOLDING................................................ 9 GUARANTEED DELIVERY........................................................... 10 DIVIDEND REINVESTMENT PLAN.................................................... 10 DETERMINATION OF VALIDITY; REJECTION OF SHARES; WAIVER OF DEFECTS; NO OBLIGATION TO GIVE NOTICE OF DEFECTS.......................................... 10 TENDER CONSTITUTES AN AGREEMENT............................................... 11 4. CLASS B STOCK AND SERIES A STOCK -- PROVISIONS FOR CONVERSION................. 11 BOOK-ENTRY DELIVERY........................................................... 12 SIGNATURE GUARANTEES.......................................................... 12 METHOD OF DELIVERY............................................................ 13 5. WITHDRAWAL RIGHTS............................................................. 13 6. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES................................. 14 7. CERTAIN CONDITIONS OF THE OFFER............................................... 14 8. PRICE RANGE OF SHARES; DIVIDENDS.............................................. 16 9. PURPOSE OF THE OFFER.......................................................... 17 10. SOURCE AND AMOUNT OF FUNDS.................................................... 17 11. SHARES OUTSTANDING AND SIGNIFICANT STOCKHOLDERS; CERTAIN EFFECTS OF THE OFFER......................................................................... 17 12. CERTAIN INFORMATION CONCERNING THE COMPANY.................................... 19 GENERAL....................................................................... 19 PUBLISHING.................................................................... 19 SPECIALTY RETAILING........................................................... 19 PROFESSIONAL SERVICES......................................................... 20 DISCONTINUED OPERATIONS....................................................... 20 SUMMARY HISTORICAL FINANCIAL INFORMATION...................................... 21 UNAUDITED PRO FORMA FINANCIAL INFORMATION..................................... 22 ADDITIONAL INFORMATION........................................................ 23
3 4
SECTION PAGES - ------------------------------------------------------------------------------------ ----- 13. INTEREST OF DIRECTORS AND EXECUTIVE OFFICERS; TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES......................................................... 23 14. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS................................... 24 15. CERTAIN FEDERAL INCOME TAX CONSEQUENCES....................................... 24 IN GENERAL.................................................................... 24 CONVERSION.................................................................... 24 TREATMENT AS A SALE OR EXCHANGE............................................... 24 TREATMENT AS A DIVIDEND....................................................... 25 CONSTRUCTIVE OWNERSHIP OF STOCK............................................... 25 THE SECTION 302 TESTS......................................................... 25 SPECIAL RULES FOR CORPORATE STOCKHOLDERS...................................... 26 TAX RATES..................................................................... 26 BACKUP WITHHOLDING............................................................ 26 FOREIGN STOCKHOLDERS.......................................................... 26 16. EXTENSION OF THE OFFER; TERMINATION; AMENDMENTS............................... 27 17. FEES AND EXPENSES............................................................. 27 18. MISCELLANEOUS................................................................. 28
4 5 TO THE HOLDERS OF COMMON STOCK OF HARCOURT GENERAL, INC.: INTRODUCTION The Company hereby invites its stockholders to tender shares of its Common Stock, par value $1.00 per share (the "Shares"), to the Company at prices, net to the seller in cash, not greater than $41.50 nor less than $36.00 per Share, specified by such stockholders upon the terms and conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which together constitute the "Offer"). The Company will, upon the terms and subject to the conditions of the Offer, determine a single price per Share that it will pay for the Shares (the "Purchase Price") properly tendered and not withdrawn pursuant to the Offer, taking into account the number of Shares so tendered and the prices specified by tendering stockholders that will allow it to buy 5,000,000 Shares (or such lesser number of Shares as are properly tendered and not withdrawn) at prices not greater than $41.50 nor less than $36.00 pursuant to the Offer. All Shares properly tendered and not withdrawn at prices at or below the Purchase Price prior to the Expiration Date (as defined in Section 1) will be purchased at the Purchase Price, net to the seller in cash, upon the terms and subject to the conditions of the Offer, including the proration terms described below. See Section 1. THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 7. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO STOCKHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. NO DIRECTOR OR EXECUTIVE OFFICER OF THE COMPANY, OR MEMBER OF THE SMITH FAMILY GROUP, INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER, EXCEPT THAT JEFFREY R. LURIE, A MEMBER OF THE SMITH FAMILY GROUP, HAS INFORMED THE COMPANY THAT HE MAY TENDER UP TO 510,640 SHARES PURSUANT TO THE OFFER. MR. LURIE MAY, HOWEVER, SELL ANY OR ALL OF THESE SHARES IN THE OPEN MARKET RATHER THAN PURSUANT TO THE OFFER. SEE SECTION 11. STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED. Each stockholder who has properly tendered (and not withdrawn) Shares at or below the Purchase Price will receive the Purchase Price, net to the stockholder in cash, for all Shares purchased, upon the terms and subject to the conditions of the Offer, including the provisions relating to proration described herein. If, prior to the Expiration Date, more than 5,000,000 Shares (or such greater number of Shares as the Company may elect to purchase) are properly tendered and not withdrawn, the Company will, upon the terms and subject to the conditions of the Offer, accept Shares for purchase first from Odd Lot Owners (as defined in Section 2) who properly tender Shares at or below the Purchase Price and then on a pro rata basis from other stockholders whose Shares are properly tendered at or below the Purchase Price and not withdrawn. The Company will return all Shares not purchased, including Shares not purchased because of proration. Tendering stockholders will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 7 of the Letter of Transmittal, stock transfer taxes on the purchase of Shares by the Company pursuant to the Offer. The Company will pay all fees and expenses of the Depositary, MacKenzie Partners, Inc. (the "Information Agent") and Salomon Brothers Inc (the "Dealer Manager") in connection with the Offer. As of March 10, 1995, there were 56,634,663 Shares outstanding. The 5,000,000 Shares that the Company is offering to purchase represent approximately 6.3% of the Company's currently outstanding equity securities at March 10, 1995 and approximately 8.8% of the Shares outstanding as of such date. The Shares are listed and principally traded on the NYSE under the symbol "H". On March 9, 1995, the last full trading day on the NYSE prior to the announcement of the Offer, the closing per Share sales price as reported on the NYSE Composite Tape was $37 3/4. On March 14, 1995, the last full trading day on the NYSE prior to the commencement of the Offer, the closing per Share sales price as reported on the NYSE Composite Tape was $39 7/8. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. SEE SECTION 8. 5 6 THE OFFER IS NOT BEING MADE FOR (NOR WILL TENDERS BE ACCEPTED OF) EITHER THE COMPANY'S CLASS B STOCK, PAR VALUE $1.00 PER SHARE (THE "CLASS B STOCK"), OR THE COMPANY'S SERIES A CUMULATIVE CONVERTIBLE STOCK, PAR VALUE $1.00 PER SHARE (THE "SERIES A STOCK"). EACH SHARE OF CLASS B STOCK IS CONVERTIBLE AT ANY TIME INTO ONE SHARE OF COMMON STOCK, AND EACH SHARE OF SERIES A STOCK IS CONVERTIBLE AT ANY TIME INTO 1.1 SHARES OF COMMON STOCK, SUBJECT TO ADJUSTMENT IN CERTAIN EVENTS. SEE SECTION 4. HOLDERS OF EITHER THE CLASS B STOCK OR THE SERIES A STOCK WHO WISH TO PARTICIPATE IN THE OFFER MUST CONVERT SUCH CLASS B STOCK OR SERIES A STOCK IN ACCORDANCE WITH THEIR RESPECTIVE TERMS AND PROVISIONS AND TENDER THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE OFFER PRIOR TO THE EXPIRATION THEREOF. TO THE EXTENT THAT EITHER CLASS B STOCK OR SERIES A STOCK IS CONVERTED INTO SHARES OF COMMON STOCK, BUT THE RESULTING SHARES OF COMMON STOCK ARE NOT PURCHASED PURSUANT TO THE OFFER (WHETHER BECAUSE THE OFFER IS TERMINATED OR WITHDRAWN, OR BY REASON OF PRORATION OR OTHERWISE), HOLDERS OF CLASS B STOCK OR SERIES A STOCK SO CONVERTED WILL HAVE LOST ALL PREFERENTIAL RIGHTS AS HOLDERS OF CLASS B STOCK OR SERIES A STOCK, RESPECTIVELY, AS COMPARED TO SHARES OF COMMON STOCK AND ALL RIGHTS TO DIVIDENDS IN RESPECT OF THE SHARES OF CLASS B STOCK OR SERIES A STOCK, RESPECTIVELY. A CONVERSION OF EITHER THE CLASS B STOCK OR THE SERIES A STOCK INTO SHARES OF COMMON STOCK CANNOT BE REVOKED UNDER ANY CIRCUMSTANCES, INCLUDING A WITHDRAWAL OF SHARES OF COMMON STOCK TENDERED PURSUANT TO THE OFFER OR THE EXPIRATION OR TERMINATION OF THE OFFER WITHOUT THE PURCHASE OF ANY OF THE SHARES OF COMMON STOCK PURSUANT THERETO. ANY HOLDER OF CLASS B STOCK OR SERIES A STOCK WHO WISHES TO CONVERT HIS OR HER SHARES AND PARTICIPATE IN THE OFFER MAY TAKE ADVANTAGE OF THE PROCEDURES THAT ARE AVAILABLE FOR A HOLDER TO CONVERT THE CLASS B STOCK OR THE SERIES A STOCK AND CONCURRENTLY TENDER THE UNDERLYING SHARES OF COMMON STOCK AS SET FORTH IN SECTION 4. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO STOCKHOLDERS AS TO WHETHER TO CONVERT ANY OR ALL SUCH CLASS B STOCK OR SERIES A STOCK AND TENDER ALL SHARES OF COMMON STOCK ISSUABLE UPON SUCH CONVERSION. PURPOSE OF THE OFFER Over the past several years, the Company's operations have generated substantial cash, resulting in a strong balance sheet with substantial borrowing capacity. In addition, the Company sold its insurance businesses on October 31, 1994, realizing after-tax cash proceeds of approximately $375 million. The Company continues to consider potential acquisitions as a use of its cash balances, but major acquisitions have not been available at prices the Company believes would result in attractive returns for its stockholders. Even after this share repurchase is completed, the Company will have adequate cash balances as well as ready access to other sources of capital sufficient to pursue attractive acquisition opportunities that might become available. Therefore, the Board of Directors believes that the purchase of Shares is an attractive use of a portion of the Company's available cash on behalf of its stockholders, and is consistent with the Company's long-term corporate goal of increasing stockholder value. 1. NUMBER OF SHARES; PRORATION Upon the terms and subject to the conditions of the Offer, the Company will accept for payment and purchase 5,000,000 Shares or such lesser number of Shares as are properly tendered on or prior to the Expiration Date (and not withdrawn in accordance with Section 5) at a price (determined in the manner set forth below) not greater than $41.50 nor less than $36.00 per Share. The term "Expiration Date" means 12:00 6 7 Midnight, New York City time, on Tuesday, April 11, 1995, unless the Company, in its sole discretion, shall have extended the period of time during which the Offer is open, in which event the term "Expiration Date" shall refer to the latest time and date at which the Offer, as so extended by the Company, shall expire. For a description of the Company's right to extend the period of time during which the Offer is open, and to delay, terminate or amend the Offer, see Section 16. If the Offer is oversubscribed, Shares tendered prior to the Expiration Date will be subject to proration. The proration period also expires on the Expiration Date. The Company will, upon the terms and subject to the conditions of the Offer, determine a single Purchase Price, taking into account the number of Shares so tendered and the prices specified by tendering stockholders that will allow it to buy 5,000,000 Shares (or such lesser number as are properly tendered and not withdrawn) at prices not greater than $41.50 nor less than $36.00 per Share pursuant to the Offer. All Shares purchased pursuant to the Offer will be purchased at the Purchase Price. All Shares not purchased pursuant to the Offer, including Shares tendered at prices greater than the Purchase Price and Shares not purchased because of proration or otherwise, will be returned to the tendering stockholders at the Company's expense as promptly as practicable. If the number of Shares properly tendered prior to the Expiration Date (and not withdrawn in accordance with Section 5) at prices not greater than $41.50 nor less than $36.00 per Share is less than or equal to 5,000,000 Shares (or such greater number of Shares as the Company may elect to purchase pursuant to the Offer), the Company will, upon the terms and subject to the conditions of the Offer, purchase at the Purchase Price all Shares so tendered. Upon the terms and subject to the conditions of the Offer, in the event that prior to the Expiration Date more than 5,000,000 Shares (or such greater number of Shares as the Company elects to purchase) are properly tendered and not withdrawn at or below the Purchase Price, the Company will accept Shares for purchase in the following order of priority: (a) first, all Shares properly tendered at or below the Purchase Price prior to the Expiration Date (and not withdrawn) by any Odd Lot Owner (as defined in Section 2), including any Shares held by such Odd Lot Owner in the Company's Dividend Reinvestment Plan referred to in Section 3, who: (1) tenders all Shares beneficially owned by such Odd Lot Owner at or below the Purchase Price (partial tenders will not qualify for this preference); and (2) completes the section entitled "Odd Lots" on the Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery; and (b) then, after purchase of all of the foregoing Shares, all other Shares properly tendered at or below the Purchase Price, before the Expiration Date (and not withdrawn), on a pro rata basis, if necessary (with adjustments to avoid purchases of fractional Shares). In the event that proration of tendered Shares is required, the Company will determine the final proration factor as promptly as practicable after the Expiration Date. Proration for each stockholder tendering Shares other than Odd Lot Owners shall be based on the ratio of the number of Shares tendered by such stockholder to the total number of Shares tendered by all stockholders other than Odd Lot Owners at or below the Purchase Price. Although the Company does not expect to be able to announce the final results of such proration until approximately seven NYSE trading days after the Expiration Date, it will announce preliminary results of proration by press release as promptly as practicable after the Expiration Date. Stockholders may obtain such preliminary information from the Information Agent and may be able to obtain such information from their brokers. As described in Section 15, the number of Shares that the Company will purchase from a stockholder may affect the federal income tax consequences to the stockholder of such purchase and therefore may be relevant to a stockholder's decision whether to tender Shares. Each stockholder will be afforded the opportunity to designate in the Letter of Transmittal the order of priority in which Shares owned are to be purchased. 7 8 THE COMPANY RESERVES THE RIGHT, IN ITS SOLE DISCRETION, TO PURCHASE ADDITIONAL SHARES PURSUANT TO THE OFFER. If (i) the Company increases or decreases the price to be paid for Shares, increases the number of Shares being sought and such increase in the number of Shares being sought exceeds 2% of the outstanding Shares or decreases the number of Shares being sought and (ii) the Offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that notice of such increase or decrease is first published, sent or given in the manner described in Section 16, the Offer will be extended until the expiration of ten business days from the date of publication of such notice. For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or federal holiday and consists of the time period from 12:01 A.M. through 12:00 Midnight, New York City time. 2. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES For purposes of the Offer, the term "Odd Lots" means all Shares properly tendered, in accordance with the procedures set forth in Section 3, by the Expiration Date and not withdrawn, by or on behalf of stockholders ("Odd Lot Owners") who beneficially hold, as of the close of business on the Expiration Date, fewer than 100 Shares (after giving effect to the conversion of Class B Stock or Series A Stock into Shares and including any Shares held by such Odd Lot Owners in the Company's Dividend Reinvestment Plan referred to in Section 3). As set forth above, Odd Lots will be accepted for purchase before any proration. IN ORDER TO QUALIFY FOR THIS PREFERENCE, AN ODD LOT OWNER MUST PROPERLY TENDER ALL SHARES BENEFICIALLY OWNED BY HIM OR HER. PARTIAL TENDERS WILL NOT QUALIFY FOR THIS PREFERENCE. The preference is not available to holders of 100 or more Shares, even if holders have separate stock certificates for fewer than 100 Shares. ANY ODD LOT OWNER WISHING TO TENDER ALL SHARES BENEFICIALLY OWNED FREE OF PRORATION MUST COMPLETE THE SECTION ENTITLED "ODD LOTS" IN THE LETTER OF TRANSMITTAL AND, IF APPLICABLE, ON THE NOTICE OF GUARANTEED DELIVERY. Stockholders owning an aggregate of less than 100 Shares whose Shares are purchased pursuant to the Offer not only will avoid the payment of brokerage commissions, but also will avoid any applicable odd-lot discounts payable on a sale of their Shares in an NYSE transaction. 3. PROCEDURE FOR TENDERING SHARES PROPER TENDER OF SHARES. To tender Shares pursuant to the Offer, (i) a properly completed and duly executed Letter of Transmittal (or manually executed facsimile thereof) with any required signature guarantees and any other documents required by the Letter of Transmittal must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase, and either certificates for the Shares to be tendered must be transmitted to and received by the Depositary at one of such addresses or such Shares must be tendered pursuant to the procedures for book-entry transfer described below (and a confirmation of such tender received by the Depositary), in each case by the Expiration Date, or (ii) the guaranteed delivery procedure described below must be followed. As specified in Instruction 5 of the Letter of Transmittal, each stockholder desiring to tender Shares pursuant to the Offer must properly indicate in the section captioned "Price (In Dollars) Per Share of Common Stock At Which Shares of Common Stock Are Being Tendered" on the Letter of Transmittal the price (in multiples of $.125) at which his or her Shares are being tendered; provided, however, that an Odd Lot Owner may check the box in the section entitled "Odd Lots" indicating that he or she is tendering all of his or her Shares at the Purchase Price. STOCKHOLDERS DESIRING TO TENDER SHARES AT MORE THAN ONE PRICE MUST COMPLETE SEPARATE LETTERS OF TRANSMITTAL FOR EACH PRICE AT WHICH SHARES ARE BEING TENDERED, EXCEPT THAT THE SAME SHARES CANNOT BE TENDERED (UNLESS PROPERLY WITHDRAWN PREVIOUSLY IN ACCORDANCE WITH THE TERMS OF THE OFFER) AT MORE THAN ONE PRICE. IN ORDER TO PROPERLY TENDER SHARES, ONE AND ONLY ONE PRICE BOX MUST BE CHECKED IN THE APPROPRIATE SECTION ON EACH LETTER OF TRANSMITTAL. In addition, Odd Lot Owners who tender all their Shares must complete the section entitled "Odd Lots" in the Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery in order to qualify for the preferential treatment available to Odd Lot Owners as set forth in Section 1. 8 9 Notwithstanding any other provision hereof, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of certificates for such Shares (or a timely confirmation of a book-entry transfer of such Shares into the Depositary's account at one of the Book-Entry Transfer Facilities, as defined below), a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantees and any other documents required by the Letter of Transmittal. Shares tendered and purchased by the Company will not receive or otherwise be entitled to the regular quarterly cash dividend of $.16 per Share to be paid by the Company on April 28, 1995 to holders of record on April 22, 1995, unless the Offer is extended beyond April 22, 1995 for any reason whatsoever. Shares which are tendered but not purchased as a result of proration or otherwise will remain entitled to receipt of the dividend to be paid on April 28, 1995. See Section 8. BOOK-ENTRY DELIVERY. The Depositary will establish accounts with respect to the Shares at The Depository Trust Company, the Midwest Securities Trust Company and the Philadelphia Depository Trust Company (collectively referred to as "Book-Entry Transfer Facilities") for purposes of the Offer within two business days after the date of this Offer to Purchase, and any financial institution that is a participant in the system of any Book-Entry Transfer Facility may make delivery of Shares into the Depositary's account in accordance with the procedures of such Book-Entry Transfer Facility. However, although delivery of Shares may be effected through book-entry transfer into the Depositary's account at a Book-Entry Transfer Facility, a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof) with any required signature guarantees and any other required documents must, in any case, be transmitted to and received by the Depositary at one of the addresses set forth on the back cover of this Offer to Purchase by the Expiration Date, or the guaranteed delivery procedure described below must be complied with. Delivery of the Letter of Transmittal and any other required documents to a Book-Entry Transfer Facility does not constitute delivery to the Depositary. SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of Transmittal if the Letter of Transmittal is signed by the registered holder of the Shares exactly as the name of the registered holder appears on the certificate (which term, for purposes of this Section 3 includes any participant in a Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) tendered therewith, and payment is to be made directly to such registered holder, or if Shares are tendered for the account of a member firm of a registered national securities exchange, a member of the Stock Transfer Association's approved medallion program (such as STAMP, SEMP or MSP) or a commercial bank or trust company having an office, branch or agency in the United States (each such entity, an "Eligible Institution"). In all other cases, all signatures on the Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 1 of the Letter of Transmittal. If a certificate representing Shares is registered in the name of a person other than the signer of a Letter of Transmittal, or if payment is to be made, or Shares not purchased or tendered are to be issued, to a person other than the registered holder, the certificate must be endorsed or accompanied by an appropriate stock power, in either case signed exactly as the name of the registered holder appears on the certificate with the signature on the certificate or stock power guaranteed by an Eligible Institution. METHOD OF DELIVERY. THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF CERTIFICATES FOR SHARES ARE TO BE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. FEDERAL INCOME TAX WITHHOLDING. To prevent federal income tax backup withholding equal to 31% of the gross payments made pursuant to the Offer, each stockholder who does not otherwise establish an exemption from such withholding must notify the Depositary of such stockholder's correct taxpayer identification number (or certify that such taxpayer is awaiting a taxpayer identification number) and provide certain other information by completing a Substitute Form W-9 included in the Letter of Transmittal. Foreign stockholders may be required to submit Form W-8, certifying non-United States status, in order to avoid backup withholding. In addition, the Depositary will withhold 30% of the gross proceeds paid to a 9 10 foreign stockholder to satisfy certain withholding requirements unless the stockholder proves entitlement to an exemption from withholding or a reduced treaty rate of withholding. See Instructions 13 and 14 of the Letter of Transmittal. GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to the Offer and cannot deliver certificates for such Shares (or the procedures for book-entry transfer cannot be completed on a timely basis) or time will not permit all required documents to reach the Depositary by the Expiration Date, such Shares may nevertheless be tendered if all of the following conditions are met: (i) such tender is made by or through an Eligible Institution; (ii) the Notice of Guaranteed Delivery properly completed and duly executed, substantially in the form provided by the Company, is received by the Depositary by the Expiration Date; and (iii) the certificates for all tendered Shares in proper form for transfer (or a confirmation of a book-entry transfer of Shares into the Depositary's account at one of the Book-Entry Transfer Facilities), together with a properly completed and duly executed Letter of Transmittal (or manually executed facsimile thereof) and any other documents required by the Letter of Transmittal, are received by the Depositary within five NYSE trading days after the date the Depositary received such Notice of Guaranteed Delivery. The Notice of Guaranteed Delivery may be delivered by hand or transmitted by telegram, facsimile transmission or mail to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in such Notice. DIVIDEND REINVESTMENT PLAN. Any tender of Dividend Reinvestment Plan Shares held in the account of a participant must be for all Dividend Reinvestment Plan Shares in such account and must be made at a single price. Participants in the Dividend Reinvestment Plan who wish to tender all, but not less than all, of the Dividend Reinvestment Plan Shares held in their accounts at a single price pursuant to the Offer should so indicate by checking the box captioned "Tender of Dividend Reinvestment Plan Shares" in the Letter of Transmittal and returning to the Depositary the properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantees and any other documents required by the Letter of Transmittal. If a participant authorizes the tender of his or her Dividend Reinvestment Plan Shares at a single price, all such Shares beneficially owned by him or her in the Dividend Reinvestment Plan, including any fractional Share, will be tendered at that price. Fractional Shares will not, however, be accepted for payment pursuant to the Offer or otherwise sold to the Company, unless a participant is deemed to have withdrawn from the Dividend Reinvestment Plan pursuant to the following paragraph. Any Dividend Reinvestment Plan Shares tendered but not purchased will be returned to the participant's Dividend Reinvestment Plan account. If a participant tenders all of his or her Dividend Reinvestment Plan Shares at or below the Purchase Price and all such Dividend Reinvestment Plan Shares (other than fractional Shares) are purchased by the Company under the terms of the Offer, such tender will be deemed to be authorization and written notice to the Company of such participant's withdrawal from the Dividend Reinvestment Plan (a "Withdrawing Participant"), unless otherwise indicated by such participant. Such authorization will also be deemed to constitute authorization by such Withdrawing Participant to sell to the Company at the Purchase Price any fractional Dividend Reinvestment Plan Share remaining in his or her account after the purchase of his or her Dividend Reinvestment Plan Shares by the Company pursuant to the Offer. The proceeds of any such sale will be forwarded directly to the Withdrawing Participant. If, however, all Shares of a participant in the Dividend Reinvestment Plan are not purchased, such participant will not be deemed to have withdrawn from the Dividend Reinvestment Plan, and any Dividend Reinvestment Plan Shares tendered but not purchased (including fractional Shares) will be returned to such participant's Dividend Reinvestment Plan account. DETERMINATION OF VALIDITY; REJECTION OF SHARES; WAIVER OF DEFECTS; NO OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the number of Shares to be accepted, the form of documents and the validity, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Company, in its sole discretion, which determination shall be final and binding on all parties. The Company reserves the absolute right to reject any 10 11 or all tenders of Shares determined by it not to be in proper form or the acceptance for payment of or payment for which may be unlawful. The Company also reserves the absolute right to waive any of the conditions of the Offer or any defect or irregularity in any tender of Shares. No tender of Shares will be deemed to be properly made until all defects and irregularities have been cured or waived. None of the Company, the Dealer Manager, the Information Agent, the Depositary, or any other person will be under any duty to give notification of any defect or irregularity in tenders or incur any liability for failure to give any such notice. TENDER CONSTITUTES AN AGREEMENT. The tender of Shares pursuant to any one of the procedures described above will constitute a binding agreement between the tendering stockholder and the Company upon the terms and subject to the conditions of the Offer. It is a violation of Rule 14c-4 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), for a person, directly or indirectly, to tender shares for his or her own account unless, at the time of the tender and at the end of the proration period, the person so tendering (i) has a net long position equal to or greater than the amount of (x) shares tendered or (y) other securities immediately convertible into, exercisable, or exchangeable for the amount of shares tendered and will acquire such shares for tender by conversion, exercise or exchange of such other securities and (ii) will cause such shares to be delivered in accordance with the terms of the Offer. Rule 14e-4 promulgated under the Exchange Act provides a similar restriction applicable to the tender or guarantee of a tender on behalf of another person. The tender of Shares pursuant to any one of the procedures described above will constitute the tendering stockholder's acceptance of the terms and conditions of the Offer as well as the tendering stockholder's representation and warranty that (i) such stockholder has a net long position in the Shares being tendered within the meaning of Rule 14e-4 and (ii) the tender of such Shares complies with Rule 14e-4. 4. CLASS B STOCK AND SERIES A STOCK -- PROVISIONS FOR CONVERSION THE OFFER IS NOT BEING MADE FOR (NOR WILL TENDERS BE ACCEPTED OF) THE CLASS B STOCK OR THE SERIES A STOCK. As of March 10, 1995, there were 21,316,009 shares of Class B Stock outstanding and 1,422,315 shares of Series A Stock outstanding. Each share of Class B Stock is presently convertible into one Share and is entitled to a quarterly dividend which is 10% lower per share than the quarterly dividend paid on each Share. The Class B Stock and the Shares are each entitled to vote separately as a class on charter amendments, mergers, consolidations and certain extraordinary transactions which are required to be approved by stockholders under Delaware law. Under certain circumstances, the holders of Class B Stock have the right to cast 10 votes per share for the election of directors. Each share of Series A Stock is presently convertible into 1.1 Shares, subject to adjustment in certain events, and is entitled to a quarterly dividend equal to the quarterly dividend payable on each Share multiplied by 1.1, plus $.0075. Each share of Series A Stock is entitled to a liquidation preference of $5.00 plus any accrued but unpaid dividends. The Series A Stock is not a voting security of the Company, except in limited circumstances. Holders of Class B Stock or Series A Stock who wish to participate in the Offer must convert such Class B Stock or Series A Stock in accordance with their respective terms and provisions and tender the Shares issuable upon conversion in accordance with the terms and conditions of the Offer prior to the expiration thereof. To the extent either Class B Stock or Series A Stock is converted into Shares, but the resulting Shares are not purchased pursuant to the Offer (whether because the Offer is terminated or withdrawn, or by reason of proration or otherwise), holders of Class B Stock or Series A Stock so converted will have lost all preferential rights as holders of either Class B Stock or Series A Stock, respectively, as compared to Shares and all rights to dividends in respect of the shares of Class B Stock or Series A Stock, respectively. Shares of Class B Stock or Series A Stock so converted will not receive or otherwise be entitled to the quarterly cash dividend of $.144 per share of Class B Stock or the quarterly cash dividend of $.1835 per share of Series A Stock, each such dividend to be paid by the Company on April 28, 1995 to holders of record on April 22, 1995. For information regarding the payment of dividends on Shares tendered pursuant to the Offer, see Section 8. A CONVERSION OF CLASS B STOCK OR SERIES A STOCK INTO SHARES CANNOT BE REVOKED UNDER ANY CIRCUMSTANCES, INCLUDING A WITHDRAWAL OF SHARES TENDERED PURSUANT TO THE OFFER OR THE EXPIRATION OR TERMINATION OF THE OFFER WITHOUT THE PURCHASE OF ANY OF THE SHARES PURSUANT THERETO. NEITHER THE COMPANY 11 12 NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO STOCKHOLDERS AS TO WHETHER TO CONVERT ANY OR ALL SUCH CLASS B STOCK OR SERIES A STOCK AND TENDER ALL SHARES ISSUABLE UPON SUCH CONVERSION. Any holder of Class B Stock or Series A Stock who wishes to convert his or her shares and participate in the Offer may take advantage of the procedures set forth below that are available for a holder to convert the Class B Stock or Series A Stock and concurrently tender the Shares. In order for a holder of shares of Class B Stock or Series A Stock to convert all or any portion of his or her shares of Class B Stock or Series A Stock and concurrently tender all of the Shares issuable upon conversion of such shares of Class B Stock or Series A Stock, (i) a properly completed and duly executed applicable Notice of Conversion (Blue with respect to the Class B Stock and Green with respect to the Series A Stock), or manually executed facsimile thereof, with any required signature guarantees and any other documents required by such Notice of Conversion must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase, and certificates for the shares of Class B Stock or Series A Stock to be converted must be transmitted to and received by the Depositary at one of such addresses or, with respect to Series A Stock, shares of Series A Stock must be delivered pursuant to the procedures for book-entry transfer described below (and a confirmation of such delivery received by the Depositary), in each case by the Expiration Date and (ii) a properly completed and duly executed Letter of Transmittal (or manually executed facsimile thereof) with any required signature guarantees and any other documents required by the Letter of Transmittal with respect to the Shares issued upon conversion of either the Class B Stock or Series A Stock must be delivered to the Depositary in accordance with the procedures for tendering Shares and completing the Letter of Transmittal as set forth in this Offer to Purchase and in the instructions to the Letter of Transmittal. HOLDERS OF CLASS B STOCK OR SERIES A STOCK WHO DESIRE TO CONVERT THEIR SHARES OF CLASS B STOCK OR SERIES A STOCK AND PARTICIPATE IN THE OFFER ARE URGED TO CAREFULLY READ THIS OFFER TO PURCHASE IN ITS ENTIRETY IN CONNECTION WITH THEIR TENDER OF THE SHARES ISSUABLE UPON CONVERSION. By properly completing and duly executing the enclosed applicable Notice of Conversion and Letter of Transmittal, a holder of shares of Class B Stock or Series A Stock will be deemed to have tendered all of such holder's Shares issuable upon conversion of such holder's shares of Class B Stock or Series A Stock. Partial tenders of such Shares issued pursuant to the applicable Notice of Conversion will not be accepted. If the applicable Notice of Conversion and the Letter of Transmittal are properly completed and duly executed, a holder of Class B Stock or Series A Stock who desires to convert his or her shares and participate in the Offer need not obtain stock certificates for the Shares or follow the procedure for book-entry delivery to tender Shares pursuant to the Offer. Stockholders who execute and deliver the applicable Notice of Conversion must, however, properly complete the Letter of Transmittal, including the section of the Letter of Transmittal relating to the price at which they are tendering Shares in order to effect a valid tender of such Shares. Questions and requests for assistance with the conversion of shares of Class B Stock or Series A Stock and concurrent tender of Shares issuable upon conversion may be directed to the Information Agent at (800) 322-2885. BOOK-ENTRY DELIVERY. The Depositary will establish accounts with respect to the shares of Series A Stock (but not the Class B Stock) at the Book-Entry Transfer Facilities for purposes of accepting delivery of the Series A Stock in connection with the conversion of the Series A Stock within two business days after the date of this Offer to Purchase, and any financial institution that is a participant in the system of any Book-Entry Transfer Facility may make delivery of shares of Series A Stock into the Depositary's account in accordance with the procedures of such Book-Entry Transfer Facility. However, although delivery of shares of Series A Stock may be effected through book-entry transfer into the Depositary's account at a Book-Entry Transfer Facility, a properly completed and duly executed Green Notice of Conversion (or manually signed facsimile thereof) with any required signature guarantees and any other required documents must, in any case, be transmitted to and received by the Depositary at one of the addresses set forth on the back cover of this Offer to Purchase by the Expiration Date. Delivery of such Notice of Conversion and any other required documents to a Book-Entry Transfer Facility does not constitute delivery to the Depositary. SIGNATURE GUARANTEES. No signature guarantee is required on the applicable Notice of Conversion if such Notice of Conversion is signed by the registered holder of the shares of Class B Stock or Series A Stock (which term, for purposes of this Section 4 includes any participant in a Book-Entry Transfer 12 13 Facility whose name appears on a security position listing as the owner of shares of Series A Stock) exactly as the name of the registered holder appears on the certificate delivered therewith, and any Shares issuable upon conversion that are not purchased are to be returned directly to such registered holder, or if shares of Class B Stock or Series A Stock are delivered for the account of a member firm of a registered national securities exchange, a member of the Stock Transfer Association's approved medallion program (such as STAMP, SEMP or MSP) or a commercial bank or trust company having an office, branch or agency in the United States (each such entity, an "Eligible Institution"). In all other cases, all signatures on such Notice of Conversion must be guaranteed by an Eligible Institution. See Instruction 1 of the Notices of Conversion. If a certificate representing shares of Class B Stock or Series A Stock is registered in the name of a person other than the signer of a Notice of Conversion, or Shares issuable upon conversion that are not purchased are to be returned to a person other than the registered holder, the certificate must be endorsed or accompanied by an appropriate stock power, in either case signed exactly as the name of the registered holder appears on the certificate with the signature on the certificate or stock power guaranteed by an Eligible Institution. METHOD OF DELIVERY. THE METHOD OF DELIVERY OF SHARES OF CLASS B STOCK OR SERIES A STOCK AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF CERTIFICATES FOR SHARES OF CLASS B STOCK OR SERIES A STOCK ARE TO BE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. 5. WITHDRAWAL RIGHTS Except as otherwise provided in this Section 5, tenders of Shares pursuant to the Offer will be irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date and, unless theretofore accepted for payment by the Company as provided in this Offer to Purchase, may also be withdrawn after 12:00 Midnight, New York City time, on May 9, 1995. For a withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder, if different from that of the person who tendered such Shares. If the certificates have been delivered or otherwise identified to the Depositary, then, prior to the release of such certificates, the tendering stockholder must submit the serial numbers shown on the particular certificates evidencing the Shares to be withdrawn and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution, except in the case of Shares tendered by an Eligible Institution. If Shares have been tendered pursuant to the procedure for book-entry transfer set forth in Section 3, the notice of withdrawal must specify the name and the number of the account at the applicable Book-Entry Transfer Facility to be credited with the withdrawn Shares and otherwise comply with the procedures of such facility. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Company, in its sole discretion, which determination shall be final and binding. None of the Company, the Dealer Manager, the Depositary, the Information Agent or any other person shall be obligated to give any notice of any defects or irregularities in any notice of withdrawal and none of them shall incur any liability for failure to give any such notice. Any Shares properly withdrawn will thereafter be deemed not tendered for purposes of the Offer. However, withdrawn Shares may be retendered by the Expiration Date by again following any of the procedures described in Section 3. If the Company extends the Offer, is delayed in its purchase of Shares or is unable to purchase Shares pursuant to the Offer for any reason, then, without prejudice to the Company's rights under the Offer, the Depositary may, subject to applicable law, retain on behalf of the Company all tendered Shares, and the Shares may not be withdrawn except to the extent tendering stockholders are entitled to withdrawal rights as described in this Section 5. 13 14 6. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES Upon the terms and subject to the conditions of the offer (including proration), the Company will accept for payment as soon as practicable after the Expiration Date 5,000,000 Shares, (or such lesser number of Shares as are properly tendered and not withdrawn) at prices not greater than $41.50 nor less than $36.00 per Share. For purposes of the Offer, the Company will be deemed to have accepted for payment, subject to proration, Shares tendered at or below the Purchase Price and not withdrawn if, as and when the Company gives oral or written notice to the Depositary of its acceptance of such Shares for payment pursuant to the Offer. Payment for Shares accepted for payment pursuant to the Offer will be made by depositing the aggregate Purchase Price for such Shares with the Depositary, which will act as agent for the tendering stockholders for the purpose of receiving payment from the Company and transmitting such payments to tendering stockholders. In the event of proration, the Company will determine the proration factor and pay for those tendered Shares accepted for payment as soon as practicable after the Expiration Date; however, the Company does not expect to be able to announce the final results of any such proration until approximately seven NYSE trading days after the Expiration Date. Certificates for all Shares not purchased, including Shares not purchased due to proration, will be returned (or, in the case of Shares tendered by book-entry transfer, such Shares will be credited to the account maintained within such Book-Entry Transfer Facility by the participant therein who so delivered such Shares) as soon as practicable after the Expiration Date or termination of the Offer without expense to the tendering stockholder. Under no circumstances will interest be paid by the Company by reason of any delay in paying for any Shares or otherwise. In addition, if certain events occur, the Company may not be obligated to purchase Shares pursuant to the Offer. See Section 7. The Company will pay all stock transfer taxes, if any, payable on the transfer to it of Shares purchased pursuant to the Offer, except if (i) payment of the Purchase Price is to be made to, or (ii) (in the circumstances permitted by the Offer) Shares not tendered or not accepted for purchase are to be registered in the name of, any person other than the registered holder, or if tendered certificates are registered in the name of any person other than the person signing the Letter of Transmittal. In such circumstances, the amount of all stock transfer taxes, if any (whether imposed on the registered holder or such other person), payable on account of the transfer to such person will be deducted from the Purchase Price unless evidence satisfactory to the Company of the payment of such taxes or exemption therefrom is submitted. See Instruction 7 of the Letter of Transmittal. ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY AND SIGN THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL MAY BE SUBJECT TO REQUIRED FEDERAL INCOME TAX WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAID TO SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. SEE SECTION 3. 7. CERTAIN CONDITIONS OF THE OFFER Notwithstanding any other provision of the Offer, the Company shall not be required to accept for payment, purchase or pay for any Shares tendered and may terminate or amend the Offer or may postpone the acceptance for payment of, or the payment for, Shares tendered, if at any time on or after March 15, 1995 and at or before the payment for any such Shares, any of the following events shall have occurred (or shall have been determined by the Company to have occurred) which, in the Company's sole judgment in any such case and regardless of the circumstances (including any action or omission to act by the Company), makes it inadvisable to proceed with the Offer or with such acceptance for purchase or payment: (a) there shall have been threatened, instituted or pending any action or proceeding by any government or governmental authority or regulatory or administrative agency, domestic or foreign, or by any other person, domestic or foreign, before any court or governmental authority or regulatory or administrative agency, domestic or foreign, (i) that challenges or seeks to make illegal, or delay or 14 15 otherwise directly or indirectly restrain or prohibit the making of the Offer, the acceptance for payment of or payment for some or all of the Shares by the Company or otherwise directly or indirectly relating in any manner to or affecting the Offer, or (ii) that otherwise, in the sole judgment of the Company, has or may have a material adverse effect on the business, financial condition, income, operations or prospects of the Company and its subsidiaries taken as a whole or has or may materially impair the contemplated benefits of the Offer to the Company; or (b) any action shall have been threatened, instituted, pending or taken or approval withheld or any statute, rule, regulation, judgment or order or injunction proposed, sought, enacted, enforced, promulgated, amended, issued or deemed applicable to the Offer or the Company or any of its subsidiaries by any court, government or governmental authority or regulatory or administrative agency, domestic or foreign, that, in the sole judgment of the Company might, directly or indirectly, result in any of the consequences referred to in clauses (i) or (ii) of paragraph (a) above; or (c) there shall have occurred (i) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market, (ii) the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iii) the commencement of a war, armed hostilities or other international or national calamity directly or indirectly involving the United States, (iv) any limitation by any governmental, regulatory or administrative authority or agency or any other event that, in the sole judgment of the Company, might affect the extension of credit by banks or other lending institutions, (v) any significant decrease in the market price of the Shares or any change in the general political, market, economic or financial conditions in the United States or abroad that has or may have material adverse effects with respect to the Company's business, operations or prospects or the trading in the Shares, (vi) in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof, or (vii) any decline in either the Dow Jones Industrial Average (4048.75 at the close of business on March 14, 1995) or the Standard and Poor's Index of 500 Industrial Companies (585.71 at the close of business on March 14, 1995) by an amount in excess of 10%, measured from the close of business on March 14, 1995; or (d) a tender or exchange offer for some or all of the Shares (other than the Offer) or a proposal with respect to a merger, consolidation or other business combination with or involving the Company or any subsidiary shall have been proposed to be made or shall have been made by another person; or (e) (1) any entity, group (as that term is used in Section 13(d)(3) of the Exchange Act), or person (other than entities, groups or persons, if any, who have filed with the Securities and Exchange Commission (the "Commission") on or before March 14, 1995 a Schedule 13G or a Schedule 13D with respect to any of the Shares) shall have acquired or proposed to acquire beneficial ownership of more than 5% of the outstanding Shares; or (2) such entity, group or person that has publicly disclosed any such beneficial ownership of more than 5% of the Shares prior to such date shall have acquired, or proposed to acquire, beneficial ownership of additional Shares constituting more than 2% of the outstanding Shares or shall have been granted any option or right to acquire beneficial ownership of more than 2% of the outstanding Shares; or (3) any person or group shall have filed a Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 reflecting an intent to acquire the Company or any of its Shares; or (f) any change or changes have occurred (or any development shall have occurred involving any prospective change or changes) in the business, assets, liabilities, condition (financial or otherwise), operations, results of operations or prospects of the Company or any of its subsidiaries that, in the sole judgment of the Company, have or may have a material effect with respect to the Company and its subsidiaries taken as a whole. 15 16 The foregoing conditions are for the sole benefit of the Company and may be asserted by the Company in its sole discretion regardless of the circumstances (including any action or inaction by the Company) giving rise to any such conditions, or may be waived by the Company in its sole discretion, in whole or in part at any time. The failure by the Company at any time to exercise its rights under any of the foregoing conditions shall not be deemed a waiver of any such right; the waiver of any such right with respect to particular facts and other circumstances shall not be deemed a waiver with respect to any other facts and circumstances; and each such right shall be deemed an ongoing right which may be asserted at any time or from time to time. Any determination by the Company concerning the events described in this Section 7 shall be final and binding on all parties. 8. PRICE RANGE OF SHARES; DIVIDENDS The Shares are listed and principally traded on the NYSE under the symbol "H". The following table sets forth for the periods indicated the high and low sales prices per Share on the NYSE Composite Tape as compiled from published financial sources and the cash dividends paid per Share in each such fiscal quarter. The prices for fiscal 1993 and the "high" price for the first quarter of fiscal 1994 are prior to the spinoff of GC Companies, Inc. ("GCC") to the holders of the Shares and Class B Stock on December 15, 1993. UNDER THE TERMS OF THE SPINOFF, EACH HOLDER OF SHARES AND CLASS B STOCK OF THE COMPANY RECEIVED ONE SHARE OF GCC FOR EVERY 10 SHARES OF COMMON STOCK OR CLASS B STOCK. Subsequent to December 15, 1993, the high and low sales prices per Share on the NYSE Composite Tape for the quarter ended January 31, 1994 were $38 1/4 and $32 1/2, respectively.
COMMON STOCK --------------------------- HIGH LOW DIVIDENDS ---- ---- --------- Fiscal 1993: Quarter ended January 31, 1993.................................. $38 1/8 $28 1/2 $ .14 Quarter ended April 30, 1993.................................... 37 1/2 31 1/4 .14 Quarter ended July 31, 1993..................................... 40 32 5/8 .14 Quarter ended October 31, 1993.................................. 46 1/8 37 1/2 .15 Fiscal 1994: Quarter ended January 31, 1994.................................. $44 $ 32 $ .15 Quarter ended April 30, 1994.................................... 37 7/8 30 1/4 .15 Quarter ended July 31, 1994..................................... 39 1/2 32 1/4 .15 Quarter ended October 31, 1994.................................. 38 31 1/4 .16 Fiscal 1995: Quarter ended January 31, 1995.................................. $36 3/8 $32 1/8 $ .16 Quarter ended April 30, 1995 (through March 14, 1995)........... 40 1/4 32 7/8 .16
On March 9, 1995, the last full trading day on the NYSE prior to the announcement of the Offer, the closing per Share sales price on the NYSE Composite Tape was $37 3/4. On March 14, 1995, the last full trading day on the NYSE prior to the commencement of the Offer, the closing per Share sales price on the NYSE Composite Tape was $39 7/8. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES The amount of dividends payable in the future will depend on circumstances existing at that time. Shares tendered and purchased by the Company will not receive or otherwise be entitled to the regular quarterly cash dividend of $.16 per Share to be paid by the Company on April 28, 1995 to holders of record on April 22, 1995, unless the Offer is extended beyond April 22, 1995 for any reason whatsoever. Shares which are tendered but not purchased as a result of proration or otherwise will remain entitled to receipt of the dividend to be paid on April 28, 1995. 16 17 9. PURPOSE OF THE OFFER Over the past several years, the Company's operations have generated substantial cash, resulting in a strong balance sheet with substantial borrowing capacity. In addition, the Company sold its insurance businesses on October 31, 1994, realizing after-tax cash proceeds of approximately $375 million. The Company continues to consider potential acquisitions as a use of its cash balances, but major acquisitions have not been available at prices the Company believes would result in attractive returns for its stockholders. Even after this share repurchase is completed, the Company will have adequate cash balances as well as ready access to other sources of capital sufficient to pursue attractive acquisition opportunities that might become available. Therefore, the Board of Directors believes that the purchase of Shares is an attractive use of a portion of the Company's available cash on behalf of its stockholders, and is consistent with the Company's long-term corporate goal of increasing stockholder value. Accordingly, the Company is providing stockholders with the opportunity to determine the price or prices (not greater than $41.50 nor less than $36.00 per Share at which they are willing to sell their Shares), subject to the terms and conditions of the Offer, and without the usual transaction costs associated with market sales. The Offer also allows stockholders to sell a portion of their Shares while retaining a continuing equity interest in the Company if they so desire. In addition, stockholders owing fewer than 100 Shares whose Shares are purchased pursuant to the Offer not only will avoid the payment of brokerage commissions but also will avoid any applicable odd-lot discounts payable on a sale of their Shares in an NYSE transaction. The Smith Family Group (as defined below) is a significant stockholder of the Company, and its proportionate ownership in the Company may increase as a result of the Offer. See Section 11. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ANY OR ALL OF SUCH STOCKHOLDER'S SHARES AND NEITHER HAS AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION. STOCKHOLDERS ARE URGED TO EVALUATE FULLY ALL INFORMATION IN THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX ADVISORS AND MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH TO TENDER. The Company may in the future purchase Shares on the open market, in private transactions, through tender offers or otherwise. Any such purchases may be on the same terms as, or on terms which are more or less favorable to stockholders than, the terms of the Offer. However, Rule 13e-4(f)(6) under the Exchange Act generally prohibits the Company and its affiliates from purchasing any Shares, other than pursuant to the Offer, until at least ten business days after the expiration or termination of the Offer. Any possible future purchases by the Company will depend on many factors, including the market price of the Shares, the results of the Offer, the Company's business and financial position and general economic and market conditions. 10. SOURCE AND AMOUNT OF FUNDS If the Company were to purchase 5,000,000 Shares pursuant to the Offer at a Purchase Price of $41.50 per Share (the highest price in the range of possible purchase prices), the maximum aggregate cost of the Offer would be $207.5 million, which would be paid from cash and cash equivalents of the Company. At January 31, 1995, the Company had cash and short-term investments of approximately $859.9 million. The fees and expenses associated with the Offer are estimated by the Company to be $500,000. 11. SHARES OUTSTANDING AND SIGNIFICANT STOCKHOLDERS; CERTAIN EFFECTS OF THE OFFER As of March 9, 1995, the Company had issued and outstanding 56,634,663 Shares. The 5,000,000 Shares that the Company is offering to purchase pursuant to the Offer represent approximately 8.8% of the Shares then outstanding and approximately 6.3% of the outstanding equity securities as of such date. 17 18 As of March 9, 1995, Richard A. Smith, Nancy L. Marks and members of their families (the "Smith Family Group") owned 828,319 Shares, representing approximately 1.5% of the Company's outstanding Shares and 21,277,038 shares of Class B Stock, representing approximately 99.8% of the Company's outstanding Class B Stock. The Smith Family Group includes Richard A. Smith, Chairman of the Board of the Company; Nancy L. Marks, Mr. Smith's sister; Robert A. Smith, Group Vice President and a director of the Company, who is the son of Richard A. Smith; Brian J. Knez, Vice President and a director of the Company, who is the son-in-law of Richard A. Smith; Jeffrey R. Lurie, who is the son of Nancy L. Marks; other members of their families and various Smith family corporations, trusts and charitable foundations. Certain members of the Smith Family Group have filed a Schedule 13D, as amended, with the Commission. The Schedule 13D discloses that certain members of the Smith Family Group have executed the Smith-Lurie/Marks Stockholders' Agreement dated December 29, 1986, as supplemented (the "Stockholders' Agreement"). The Stockholders' Agreement imposes certain restrictions on the ability of the parties thereto to convert their Class B Stock into Shares without permitting the other parties to acquire the shares of Class B Stock proposed to be so converted. No member of the Smith Family Group intends to tender any Shares pursuant to the Offer, except that Mr. Lurie has informed the Company that he may tender up to 510,640 Shares pursuant to the Offer. Mr. Lurie may, however, sell any or all of these Shares in the open market rather than pursuant to the Offer. Under any circumstances, the Company understands that to the extent Mr. Lurie tenders Shares pursuant to the Offer or sells Shares in the open market, such Shares will have been converted from an equivalent number of shares of Class B Stock. Assuming that Mr. Lurie does tender Shares pursuant to the Offer, all of the Shares tendered by Mr. Lurie are accepted by the Company and the Company purchases the maximum number of Shares being sought pursuant to the Offer, the Smith Family Group will own 828,319 Shares and 20,766,398 shares of Class B Stock or 1.6% of the outstanding Shares and 99.8% of the outstanding shares of Class B Stock, respectively, after the Offer. As of March 9, 1995, the total number of Shares and Class B Stock owned by the Smith Family Group constituted 27.9% of the outstanding equity securities of the Company, and will constitute, assuming all of the Shares that Mr. Lurie has indicated he may tender are accepted by the Company and the Company purchases the maximum number of Shares being sought pursuant to the Offer, 29.3% of the outstanding equity securities of the Company. Each share of Class B Stock entitles the holder thereof to ten votes per share on the election of directors under certain circumstances. With respect to elections in which the Class B Stock would carry ten votes per share, the Smith Family Group had, as of March 9, 1995, 79.2% of the combined voting power of the Shares and Class B Stock, and will have, upon consummation of the Offer assuming all of the Shares which may be tendered by Mr. Lurie are accepted by the Company and the Company purchases the maximum number of Shares being sought pursuant to the Offer, 77.3% of the combined voting power of the Shares and Class B Stock. The effect of this significant voting power is to permit the Smith Family Group to exert decisive control over the results of elections for the Board of Directors in the event of a substantial accumulation of the Shares by persons unrelated to the Smith Family Group. The purchase of Shares pursuant to the Offer will reduce the number of Shares that otherwise might trade publicly and may reduce the number of stockholders. Nonetheless, there will be a sufficient number of Shares outstanding and publicly traded following the Offer and such purchase to ensure a continued trading market in the Shares. The Shares are registered under the Exchange Act which requires, among other things, that the Company furnish certain information to its stockholders and to the Commission and comply with the Commission's proxy rules in connection with meetings of the Company's stockholders. The Company has no reason to believe that the purchase of Shares pursuant to the Offer will result in the Shares becoming eligible for deregistration under the Exchange Act. The Shares are currently "margin securities" under the rule of the Federal Reserve Board. This has the effect, among other things, of allowing brokers to extend credit to their customers using the Shares as 18 19 collateral. Following the repurchase of Shares pursuant to the Offer, the Shares will continue to be margin securities for purposes of the Federal Reserve Board's margin regulations. Shares acquired by the Company pursuant to the Offer will be held in the Company's treasury and will be available for future issuance by the Company or may be retired by the Company in the future. 12. CERTAIN INFORMATION CONCERNING THE COMPANY GENERAL The principal businesses of the Company, a Delaware corporation formed in 1950, are publishing and specialty retailing. The Company also has significant operations in career transition and human resources consulting. In December 1993, the Company completed the spinoff of its motion picture exhibition business to the holders of the Shares and Class B Stock. In October 1994, the Company completed the sale of its insurance business. See "Discontinued Operations" below for additional information about the theatre and insurance operations. PUBLISHING Harcourt Brace & Company ("Harcourt Brace") is among the world's largest publishing houses, publishing books and scholarly journals for the educational, scientific, technical, medical, professional and trade markets. Most of the operations of Harcourt Brace are in the United States, but Harcourt Brace also has international publishing operations in London, Tokyo, Sydney, Toronto and Montreal, as well as an export business headquartered in Orlando, Florida. Educational Publishing. The educational publishing group includes the operations of Harcourt Brace School; Holt, Rinehart and Winston; Harcourt Brace College and The Psychological Corporation. Harcourt Brace School publishes textbooks and related instructional materials for the elementary grades. Holt, Rinehart and Winston publishes instructional materials for grades 7 through 12. Harcourt Brace College publishes books for the college and university market under the Harcourt Brace, Saunders and Dryden Press imprints. The Psychological Corporation provides aptitude, diagnostic, achievement and performance tests and related products for educational, psychological, clinical and professional assessment. Scientific, Technical, Medical and Professional Publishing. The scientific, technical, medical and professional publishing group includes the operations of Academic Press, W.B. Saunders, Harcourt Brace Professional Publishing and Harcourt Brace Legal and Professional Publishing. Academic Press publishes scholarly books and journals in the life, physical and social sciences, which are sold in the United States and abroad. W.B. Saunders publishes books and periodicals in the health sciences, which are sold in the United States and abroad. Harcourt Brace Professional Publishing publishes reference guides and newsletters for certified public accountants and tax professionals. Harcourt Brace Legal and Professional Publishing conducts review courses for individuals preparing for bar examinations under the BAR/BRI name, as well as review courses for CPA accreditation and graduate school entrance examinations. Trade Publishing. The Harcourt Brace trade division publishes children's books, general adult fiction and nonfiction hardcover books, and trade paperbacks under the Harvest imprint. SPECIALTY RETAILING The Company owns approximately 65% of the outstanding equity, on a fully-converted basis, of The Neiman Marcus Group, Inc. ("NMG"), which operates Neiman Marcus, Bergdorf Goodman and Contempo Casuals. NMG is a separate public company which is listed on the NYSE and is subject to the reporting requirements of the Exchange Act. Such reports and other documents filed by NMG with the Commission may be obtained from the Commission in the manner specified in "Additional Information" below or from the Information Agent. 19 20 Neiman Marcus. Neiman Marcus is a high fashion, specialty retailer which offers high quality women's and men's apparel, fashion accessories, precious jewelry, decorative home accessories, fine china, crystal, silver and epicurean products. Neiman Marcus operates 27 stores in 24 cities. The average Neiman Marcus store size is 142,000 gross square feet and the stores range in size from 90,000 gross square feet to 269,000 gross square feet. Neiman Marcus plans to open a new store in Short Hills, New Jersey, in calendar 1995 and new stores in King of Prussia, Pennsylvania, and Paramus, New Jersey, in calendar 1996. In addition, through NM Direct, Neiman Marcus operates a state-of-the-art direct marketing business, including the catalogues of Neiman Marcus and Horchow. Bergdorf Goodman. Bergdorf Goodman is a high fashion exclusive retailer of high quality women's and men's apparel, fashion accessories, precious jewelry, decorative home accessories, fine china, crystal and silver. It operates two leased stores on Fifth Avenue and 58th Street in New York City. The original store, consisting of 250,000 gross square feet, is dedicated to women's apparel and accessories, home furnishings and gifts. Bergdorf Goodman Men, which opened in August 1990, consists of 66,000 gross square feet and is dedicated to men's apparel and accessories. Bergdorf Goodman also operates a significant direct marketing business through NM Direct. Contempo Casuals. Contempo Casuals, based in Los Angeles, operates a chain of retail stores which sells contemporary fashion apparel and accessories primarily for young women between the ages of 15 and 21 at moderate prices. The Contempo Casuals chain includes approximately 245 stores in 33 states and Puerto Rico with an average store size of approximately 4,000 gross square feet. All of the stores are leased facilities, primarily located in regional shopping malls. PROFESSIONAL SERVICES Drake Beam Morin ("DBM") is one of the world's leading organizational and individual transition consulting firms. DBM assists organizations and individuals worldwide in outplacement, employee selection, performance evaluation, career management and transition management. DBM has expanded its services in recent years to include employee training and consulting for organizations in the process of change. DISCONTINUED OPERATIONS Insurance. On October 31, 1994, the Company completed the sale of its insurance operations to GNA Corporation, an affiliate of General Electric Capital Corporation, for $410.4 million in cash. For additional information with respect to this transaction, reference may be made to the Report on Form 8-K filed by the Company with the Commission on November 14, 1994. Such report and other documents may be obtained from the Commission in the manner specified in "Additional Information" below or from the Information Agent. Motion Picture Exhibition. On December 15, 1993, the Company completed the spinoff of GC Companies, Inc. ("GCC") to the holders of the Shares and the Class B Stock. GCC is an independent public company which operates the "General Cinema Theatres" motion picture exhibition business formerly operated by the Company and which manages a pool of capital that is utilized to make investments in a variety of industries. GCC is listed on the NYSE and is subject to the reporting requirements of the Exchange Act. 20 21 SUMMARY HISTORICAL FINANCIAL INFORMATION The following summary financial information for each of the three months ended January 31, 1995 and January 31, 1994 are derived from the unaudited condensed consolidated financial statements of the Company and its subsidiaries set forth in the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 1995 (the "1995 First Quarter 10-Q"). In the opinion of management, these statements contain all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation of the results for the interim periods presented. Results for the three months have historically not been indicative of the results for the entire year. The following summary financial information for each of the fiscal years ended October 31, 1994 and October 31, 1993 were derived from the audited consolidated financial statements of the Company and its subsidiaries incorporated by reference in the Company's Annual Report on Form 10-K for the year ended October 31, 1994 (the "1994 10-K"). The information should be read in conjunction with, and is qualified in its entirety by reference to, such audited consolidated financial statements and their related notes. The foregoing reports may be obtained from the Commission in the manner specified in "Additional Information" below or from the Information Agent. SUMMARY HISTORICAL FINANCIAL INFORMATION (IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
THREE MONTHS ENDED YEARS ENDED JANUARY 31, OCTOBER 31, --------------------- ------------------------- EARNINGS STATEMENT DATA (UNAUDITED): 1995 1994 1994 1993 - ------------------------------------------------------------------ -------- -------- ---------- ---------- Revenues.......................................................... $720,656 $703,751 $3,154,222 $3,107,711 ======== ======== ========= ========= OPERATING EARNINGS.............................................. $ 29,551 $ 26,434 $ 224,355 $ 243,456 Investment income................................................. 11,124 4,062 14,239 14,072 Interest expense.................................................. (22,802) (21,241) (86,219) (84,585) Other income, net................................................. -- -- -- 18,303 -------- -------- ---------- ---------- EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES......... 17,873 9,255 152,375 191,246 Income tax expense................................................ (6,077) (3,332) (54,855) (71,792) -------- -------- ---------- ---------- EARNINGS FROM CONTINUING OPERATIONS............................. 11,796 5,923 97,520 119,454 EARNINGS FROM DISCONTINUED OPERATIONS, NET...................... -- 14,039 80,012 51,879 -------- -------- ---------- ---------- NET EARNINGS.................................................... $ 11,796 $ 19,962 $ 177,532 $ 171,333 ======== ======== ========= ========= AMOUNTS PER SHARE OF COMMON STOCK Earnings from continuing operations............................. $ .15 $ .07 $ 1.22 $ 1.50 Earnings from discontinued operations........................... -- .18 1.00 .65 -------- -------- ---------- ---------- NET EARNINGS.................................................... $ .15 $ .25 $ 2.22 $ 2.15 ======== ======== ========= ========= WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING.............. 79,802 79,855 79,809 79,625
JANUARY 31, OCTOBER 31, ------------------------ ------------------------- BALANCE SHEET DATA (UNAUDITED): 1995 1994 1994 1993 - ------------------------------------------------------------------ ---------- ---------- ---------- ---------- ASSETS TOTAL CURRENT ASSETS.......................................... $2,130,183 $1,691,137 $2,021,008 $1,503,945 TOTAL ASSETS.................................................. 3,351,952 3,196,629 3,242,364 3,131,407 LIABILITIES CURRENT LIABILITIES Notes payable and current maturities of long-term liabilities................................................. 200,870 71,863 119,529 64,904 TOTAL CURRENT LIABILITIES..................................... 985,175 885,466 875,004 772,370 TOTAL LONG-TERM LIABILITIES................................... 1,124,830 1,179,618 1,123,341 1,107,371 SHAREHOLDERS' EQUITY PREFERRED STOCK Series A Cumulative Convertible -- $1 par value............... 1,451 1,504 1,453 1,996 COMMON STOCKS Class B Stock -- $1 par value................................. 21,316 21,906 21,444 21,934 Common Stock -- $1 par value.................................. 56,605 55,913 56,443 55,373 TOTAL SHAREHOLDERS' EQUITY.................................... 1,045,283 921,796 1,047,355 1,051,578 BOOK VALUE PER COMMON SHARE(1):................................... $ 13.15 $ 11.60 $ 13.18 $ 13.23
- --------------- (1) Assumes conversion of Series A Stock at 1.1 Share for each share of Series A Stock and one Share for each share of Class B Stock. 21 22 UNAUDITED PRO FORMA FINANCIAL INFORMATION The following unaudited pro forma financial information sets forth historical information as adjusted to give effect to the purchase of 5,000,000 Shares at a Purchase Price of $36.00 per Share and at a Purchase Price of $41.50 per Share, the minimum and maximum possible Purchase Prices. Expenses directly related to the Offer are estimated to be $500,000 and are reflected in the pro forma financial information set forth below. The pro forma adjustments assume that the transaction occurred, for the purpose of the statement of earnings, as of the first day of the period presented, and for purposes of the balance sheet, as of the balance sheet date. The pro forma information does not purport to be indicative of the results that may be obtained in the future or that would actually have been obtained had the transaction occurred during the periods indicated. The pro forma information should be read in conjunction with the Company's consolidated financial statements and related notes set forth in the 1994 10-K and the 1995 First Quarter 10-Q. UNAUDITED PRO FORMA FINANCIAL INFORMATION (IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS AND RATIOS)
THREE MONTHS ENDED YEAR ENDED JANUARY 31, 1995 OCTOBER 31, 1994 ---------------------------------------- ---------------------------------------- AT $36.00 AT $41.50 AT $36.00 AT $41.50 PURCHASE PURCHASE PURCHASE PURCHASE EARNINGS STATEMENT DATA: HISTORICAL PRICE PRICE HISTORICAL PRICE PRICE - ------------------------------------------ ---------- ---------- ---------- ---------- ---------- ---------- Revenues.................................. $ 720,656 $ 720,656 $ 720,656 $3,154,222 $3,154,222 $3,154,222 ========= ========= ========= ========= ========= ========= OPERATING EARNINGS...................... $ 29,551 $ 29,551 $ 29,551 $ 224,355 $ 224,355 $ 224,355 Investment income......................... 11,124 8,868 8,524 14,239 7,019 5,919 Interest expense.......................... (22,802) (22,802) (22,802) (86,219) (86,219) (86,219) ---------- ---------- ---------- ---------- ---------- ---------- EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES................... 17,873 15,617 15,273 152,375 145,155 144,055 Income tax expense........................ (6,077) (5,310) (5,193) (54,855) (52,256) (51,860) ---------- ---------- ---------- ---------- ---------- ---------- EARNINGS FROM CONTINUING OPERATIONS..... 11,796 10,307 10,080 97,520 92,899 92,195 EARNINGS FROM DISCONTINUED OPERATIONS... -- -- -- 80,012 80,012 80,012 ---------- ---------- ---------- ---------- ---------- ---------- NET EARNINGS............................ $ 11,796 $ 10,307 $ 10,080 $ 177,532 $ 172,911 $ 172,207 ========= ========= ========= ========= ========= ========= AMOUNTS PER SHARE OF COMMON STOCK Earnings from continuing operations..... $ .15 $ .14 $ .13 $ 1.22 $ 1.24 $ 1.23 Earnings from discontinued operations... -- -- -- 1.00 1.07 1.07 ---------- ---------- ---------- ---------- ---------- ---------- NET EARNINGS............................ $ .15 $ .14 $ .13 $ 2.22 $ 2.31 $ 2.30 ========= ========= ========= ========= ========= ========= WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING............................. 79,802 74,802 74,802 79,809 74,809 74,809 RATIO OF EARNINGS FROM CONTINUING OPERATIONS TO FIXED CHARGES(1).......... 1.56 1.49 1.48 2.23 2.17 2.16
JANUARY 31, 1995 OCTOBER 31, 1994 ---------------------------------------- ---------------------------------------- AT $36.00 AT $41.50 AT $36.00 AT $41.50 PURCHASE PURCHASE PURCHASE PURCHASE BALANCE SHEET DATA: HISTORICAL PRICE PRICE HISTORICAL PRICE PRICE - ------------------------------------------ ---------- ---------- ---------- ---------- ---------- ---------- ASSETS TOTAL CURRENT ASSETS.................... $2,130,183 $1,949,683 $1,922,183 $2,021,008 $1,840,508 $1,813,008 TOTAL ASSETS............................ 3,351,952 3,171,452 3,143,952 3,242,364 3,061,864 3,034,364 LIABILITIES CURRENT LIABILITIES Notes payable and current maturities of long-term liabilities............ 200,870 200,870 200,870 119,529 119,529 119,529 TOTAL CURRENT LIABILITIES............. 985,175 985,175 985,175 875,004 875,004 875,004 TOTAL LONG-TERM LIABILITIES........... 1,124,830 1,124,830 1,124,830 1,123,341 1,123,341 1,123,341 SHAREHOLDERS' EQUITY PREFERRED STOCK Series A Cumulative Convertible -- $1 par value........................... 1,451 1,451 1,451 1,453 1,453 1,453 COMMON STOCKS Class B Stock -- $1 par value......... 21,316 21,316 21,316 21,444 21,444 21,444 Common Stock -- $1 par value.......... 56,605 51,605 51,605 56,443 51,443 51,443 TOTAL SHAREHOLDERS' EQUITY.............. 1,045,283 864,783 837,283 1,047,355 866,855 839,355 BOOK VALUE PER COMMON SHARE(2):........... $ 13.15 $ 11.61 $ 11.24 $ 13.18 $ 11.64 $ 11.27
- --------------- (1) The ratios of earnings from continuing operations to fixed charges were computed by dividing earnings from continuing operations before fixed charges and income taxes by the fixed charges. "Earnings" consists of pre-tax earnings from continuing operations plus fixed charges. "Fixed charges" consists of interest plus the interest portion of rent expense. (2) Assumes conversion of Series A Stock at 1.1 Share for each share of Series A Stock and one Share for each share of Class B Stock. 22 23 ADDITIONAL INFORMATION The Company is subject to the information requirements of the Exchange Act, and in accordance therewith files periodic reports, proxy statements and other information with the Commission relating to its business, financial condition and other matters. The Company is required to disclose in such proxy statements certain information, as of particular dates, concerning the Company's directors and officers, their compensation, stock options granted to them, the principal holders of the Company's securities and any material interest of such persons in transactions with the Company. The Company has also filed an Issuer Tender Offer Statement on Schedule 13E-4 with the Commission. Such material and other information may be inspected at the public reference facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W. Washington, D.C. 20549; and (except for the Issuer Tender Offer Statement) are also available for inspection and copying at the following regional offices of the Commission: Seven World Trade Center, New York, New York 10048; and Northwestern Atrium Center, 500 West Madison, Suite 1400, Chicago, Illinois 60661. Copies of such material can also be obtained by mail, upon payment of the Commission's customary charges, by writing to the Public Reference Section at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. Such material (except for the Issuer Tender Offer Statement) is also available for inspection at the NYSE, 20 Broad Street, New York, New York 10005. 13. INTEREST OF DIRECTORS AND EXECUTIVE OFFICERS; TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES Except as follows, neither the Company, nor any executive officer or director of the Company, any person controlling the Company, any executive officer and director of any person controlling the Company or any associate or subsidiary of any such person (including any executive officer or director of any such subsidiary), has engaged in any transaction involving Shares during the period of forty business days prior to the date hereof. Eric P. Geller, the Senior Vice President, General Counsel and Secretary, exercised 5,505 options with respect to the Shares on January 18, 1995 at a price of $13.34 per Share. On February 2, 1995, Robert Smith, Group Vice President and a director, transferred 555 shares of Class B Stock to a trust for his daughter; Debra Smith Knez, a member of the Smith Family Group and the wife of Brian J. Knez, Vice President and a director, transferred 1,110 shares of Class B Stock to a trust for her two children; and Amy Smith Berylson, a member of the Smith Family Group, transferred 1,665 shares of Class B Stock to a trust for her three children. Jeffrey R. Lurie, a member of the Smith Family Group, sold 15,000 Shares at $40.00 per Share and 5,000 Shares at $40 1/4 per Share on March 13, 1995. Subsequently, on March 14, 1995, Mr. Lurie sold 2,500 Shares at $39 3/4 per Share and 2,900 Shares at $40.00 per Share. All Shares sold by Mr. Lurie were converted from an equivalent number of shares of Class B Stock and all such transactions were effected on the NYSE. See Section 11 for a discussion relating to the possible tender of Shares by Jeffrey R. Lurie, a member of the Smith Family Group, pursuant to this Offer. Except as described above, neither the Company nor, to the Company's knowledge, any of its executive officers, directors or affiliates is a party to any contract, arrangement, understanding or relationship relating, directly or indirectly, to the Offer with any other person with respect to Shares. Except for the Offer, none of the Company or its executive officers or directors has current plans or proposals which relate to or would result in any extraordinary corporate transaction involving the Company, such as a merger, reorganization, sale or transfer of a material amount of its assets or the assets of any of its subsidiaries, any change in its present Board of Directors or management, any material change in its present dividend policy or indebtedness or capitalization, any other material change in its business or corporate structure, any material change in its Restated Certificate of Incorporation or Bylaws, or any actions causing a class of its equity securities to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act, or the suspension of the Company's obligation to file reports pursuant to Section 15(d) of the Exchange Act, or any actions similar to any of the foregoing. 23 24 14. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS The Company is not aware of any license or regulatory permit that it believes is material to the Company's business that might be adversely affected by the Company's acquisition of Shares as contemplated herein or of any approval or other action by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for the acquisition or ownership of Shares by the Company as contemplated herein. Should any such approval or other action be required, the Company will make a good faith effort to obtain such approval or other action. The Company is unable to predict whether it will be required to delay the acceptance for payment of, or payment for, Shares tendered pursuant to the Offer pending the outcome of any such matter. There can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial consideration or that the failure to obtain any such approval or other action might not result in adverse consequences to the Company's business. The Company's obligations under the Offer to accept for payment and pay for Shares are subject to certain conditions. See Section 7. 15. CERTAIN FEDERAL INCOME TAX CONSEQUENCES The following is a general summary under currently applicable law of certain federal income tax considerations generally applicable to the Offer. The discussion set forth below is for general information only and the tax treatment described herein may vary depending upon each stockholder's particular circumstances and tax position. Certain stockholders (including insurance companies, tax-exempt organizations, financial institutions or broker-dealers, foreign corporations, persons who are not citizens or residents of the United States, stockholders who do not hold their Shares as capital assets and stockholders who have acquired their Shares upon the exercise of options or otherwise as compensation) may be subject to special rules not discussed below. No ruling from the Internal Revenue Service ("IRS") will be applied for with respect to the federal income tax consequences discussed herein and, accordingly, there can be no assurance that the IRS will agree with the conclusions stated. The discussion does not consider the effect of any applicable foreign, state, local or other tax laws. EACH STOCKHOLDER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO HIM OR HER OF THE OFFER, INCLUDING THE APPLICABILITY AND EFFECT OF ANY FOREIGN, STATE, LOCAL OR OTHER TAX LAWS, ANY RECENT CHANGES IN APPLICABLE TAX LAWS AND ANY PROPOSED LEGISLATION. IN GENERAL. A stockholder's exchange of Shares for cash pursuant to the Offer will be a taxable transaction for federal income tax purposes, and may also be a taxable transaction under applicable state, local, foreign or other tax laws. The federal income tax consequences to a stockholder may vary depending upon the stockholder's particular facts and circumstances. CONVERSION. The conversion of Class B Stock or Series A Stock into Common Stock generally will not be a taxable transaction for federal income tax purposes. Dividend income may be realized to the extent of dividends in arrears. Cash received in lieu of fractional shares will be treated as received in exchange for the fractional shares in a transaction to which Section 302 of the Internal Revenue Code of 1986, as amended (the "Code") applies with the consequences described below. TREATMENT AS A SALE OR EXCHANGE. Under Section 302 of the Code, a transfer of Shares to the Company pursuant to the Offer will, as a general rule, be treated as a sale or exchange of the Shares if the receipt of cash upon the sale (a) is "substantially disproportionate" with respect to the stockholder, (b) results in a "complete redemption" of the stockholder's interest in the Company or (c) is "not essentially equivalent to a dividend" with respect to the stockholder. These tests (the "Section 302 tests") are explained more fully below. If any of the Section 302 tests is satisfied, a tendering stockholder will recognize gain or loss equal to the difference between the amount of cash received by the stockholder pursuant to the Offer (less any portion thereof attributable to accrued but unpaid dividends which is taxable as a dividend) and the stockholder's basis in the Shares sold pursuant to the Offer. If the Shares are held as capital assets, the gain or loss will be capital gain or loss, which will be long-term capital gain or loss if the Shares have been held for more than one year. 24 25 TREATMENT AS A DIVIDEND. If none of the Section 302 tests is satisfied and, as anticipated, the Company has sufficient earnings and profits, a tendering stockholder will be treated as having received a dividend taxable as ordinary income in an amount equal to the entire amount of cash received by the stockholder pursuant to the Offer. This amount will not be reduced by the stockholder's basis in the Shares sold pursuant to the Offer, and (except as described below for corporate stockholders eligible for the dividends-received deduction) the stockholder's basis in those Shares will be added to the stockholder's basis in his or her remaining Shares. No assurance can be given that any of the Section 302 tests will be satisfied as to any particular stockholder, and thus no assurance can be given that any particular stockholder will not be treated as having received a dividend taxable as ordinary income. CONSTRUCTIVE OWNERSHIP OF STOCK. In determining whether any of the Section 302 tests is satisfied, a stockholder must take into account not only stock of the Company actually owned by the stockholder, but also stock of the Company that is constructively owned within the meaning of Section 318 of the Code. Under Section 318, a stockholder may constructively own stock of the Company actually owned, and in some cases constructively owned, by certain related individuals and certain entities in which the stockholder has an interest, as well as any stock of the Company the stockholder has a right to acquire by exercise of an option or by the conversion or exchange of a security. THE SECTION 302 TESTS. One of the following tests must be satisfied in order for the sale of Shares pursuant to the Offer to be treated as a sale or exchange rather than as a dividend distribution. (a) Substantially Disproportionate Test. The receipt of cash by a stockholder will be substantially disproportionate with respect to the stockholder if the percentage of the outstanding voting stock of the Company actually and constructively owned by the stockholder immediately following the sale of Shares pursuant to the Offer (treating Shares purchased pursuant to the Offer as not outstanding) is less than 80% of the percentage of the outstanding voting stock of the Company actually and constructively owned by the stockholder immediately before the exchange (treating Shares purchased pursuant to the Offer as outstanding). Stockholders should consult their tax advisors concerning the application of the substantially disproportionate test to their particular circumstances. (b) Complete Redemption Test. The receipt of cash by a stockholder will be a complete redemption of the stockholder's interest if either (i) all of the stock of the Company actually and constructively owned by the stockholder is sold pursuant to the Offer or (ii) all of the stock of the Company actually owned by the stockholder is sold pursuant to the Offer and the stockholder is eligible to waive, and effectively waives, the attribution of all stock of the Company constructively owned by the stockholder in accordance with the procedures described in Section 302(c)(2) of the Code. (c) Not Essentially Equivalent To A Dividend Test. The receipt of cash by a stockholder will not be essentially equivalent to a dividend if the stockholder's exchange of Shares pursuant to the Offer results in a meaningful reduction of the stockholder's proportionate interest in the Company. Whether the receipt of cash by a stockholder will not be essentially equivalent to a dividend will depend on the stockholder's particular facts and circumstances. However, in certain circumstances, in the case of a small minority stockholder, even a small reduction may satisfy this test. For example, the IRS has indicated in a published ruling that in the case of a small minority stockholder of a publicly held corporation who exercises no control over corporate affairs, a reduction in the stockholder's proportionate interest in the corporation from .0001118% to .0001081% (which represented only a 3.3% reduction in the stockholder's percentage ownership of outstanding shares for purposes of the substantially disproportionate test) would constitute a meaningful reduction. Stockholders expecting to rely on the "not essentially equivalent to a dividend test" should consult their own tax advisors regarding its application in their particular circumstances. Under certain circumstances, it may be possible for a tendering stockholder to satisfy one of the Section 302 tests by contemporaneously selling or otherwise disposing of all or some of the stock of the Company that is actually or constructively owned by the stockholder but that is not purchased pursuant to the Offer. Correspondingly, a stockholder may not be able to satisfy any of the Section 302 tests because of contemporaneous acquisitions of stock of the Company by the stockholder or by a related party whose stock is 25 26 constructively owned by the stockholder. Stockholders should consult their tax advisors regarding the consequences of such sales or acquisitions in their particular circumstances. In the event that the Offer is oversubscribed, the Company's purchase of Shares pursuant to the Offer will be prorated. Thus, even if all the Shares actually and constructively owned by a stockholder are tendered pursuant to the Offer, it is possible that not all of the Shares will be purchased by the Company, which in turn may affect the stockholder's ability to satisfy one of the Section 302 tests described above. SPECIAL RULES FOR CORPORATE STOCKHOLDERS. If the exchange of Shares by a corporate stockholder does not satisfy any of the Section 302 tests and is therefore treated as a dividend, the stockholder may be entitled to a dividends-received deduction equal to 70% of the dividend. There are a number of limitations on the availability of the deduction, however, and the dividends-received deduction may not be available or could be limited if, for example, the corporation does not satisfy certain holding period requirements with respect to the Shares or the Shares are treated as "debt financed portfolio stock." Finally, it is expected that if a dividends-received deduction is available, the dividend will generally constitute an extraordinary dividend under Section 1059 of the Code. As a result, a corporate stockholder will be required to reduce its tax basis in its Shares (but not below zero) by the non-taxed portion of the dividend (that is, the portion of the dividend equal to the dividends-received deduction). If the non-taxed portion of the dividend exceeds the corporate stockholder's tax basis in its Shares, the excess must be treated as gain from the sale of the Shares for the taxable year in which a sale or disposition of the Shares occurs. TAX RATES. Proposals have recently been introduced in the House of Representatives and the Senate to allow a deduction for 50% of a taxpayer's net capital gains (i.e., the excess of net long-term capital gains over net short-term capital losses). Under these proposals the effective tax rates applicable to net long-term capital gains would be reduced to 50% of rates applicable to ordinary income. Additionally, the proposals would limit the deduction for net long-term capital losses to 50% of the excess of net long-term capital losses over net short-term capital gains. These proposals would apply generally to transactions effected after December 31, 1994. Therefore, if these proposals were enacted into law in their current form, gains from sales of Shares pursuant to the Offer which constituted long-term capital gains under any of the three tests outlined above would generally be taxed at reduced effective tax rates. However, there can be no assurance that these proposals will be enacted and, if enacted, the effective date of the proposals or the particular type of transactions or assets to which the proposals apply could be modified. If the proposals were enacted with an effective date subsequent to the Expiration Date of the Offer, sales of Shares pursuant to the Offer which constituted long-term capital gains would be taxed at the higher rates currently in effect. Stockholders should consult their tax advisors about the impact of this proposed legislation. BACKUP WITHHOLDING. See Section 3 concerning the potential application of federal backup withholding. FOREIGN STOCKHOLDERS. The Company generally will assume that a foreign stockholder will be treated as having received a dividend and will therefore withhold federal income tax at a rate equal to 30% of the gross proceeds paid to a foreign stockholder or his or her agent pursuant to the Offer, unless the foreign stockholder proves in a manner satisfactory to the Company and the Depositary that the sale of its Shares pursuant to the Offer will qualify as a sale or exchange rather than a dividend for Federal income tax purposes, in which case no withholding will be required, that a reduced rate of withholding is available pursuant to a tax treaty or that an exemption from withholding is applicable because the gross proceeds are effectively connected with the conduct of a trade or business by the foreign stockholder within the United States. A foreign stockholder with respect to whom tax has been withheld may be eligible to obtain a refund from the IRS of all or a portion of the withheld tax if the stockholder satisfies one of the Section 302 tests for capital gain treatment or is otherwise able to establish that no tax or a reduced amount of tax was due. Foreign stockholders are urged to consult their own tax advisers regarding the particular tax consequences to such stockholder of the disposition of Shares pursuant to the Offer and the application of federal income tax withholding, including eligibility for a withholding tax reduction or exemption and the refund procedure. 26 27 16. EXTENSION OF THE OFFER; TERMINATION; AMENDMENTS The Company expressly reserves the right, in its sole discretion, and regardless of whether or not any of the conditions specified in Section 7 shall have occurred, at any time or from time to time, to extend the period of time during which the Offer for the Shares is open by giving oral or written notice of such extension to the Depositary, followed by a public announcement thereof no later than 9:00 a.m. New York City time, on the next business day after the previously scheduled Expiration Date. There can be no assurance that the Company will exercise its right to extend the Offer for the Shares. During any such extension, all Shares previously tendered and not withdrawn will remain subject to the Offer. The Company also expressly reserves the right, in its sole discretion, (i) to delay payment for any Shares not theretofore paid for or to terminate the Offer and not to accept for payment any Shares not theretofore accepted for payment, upon the occurrence of any of the conditions specified in Section 7, or (ii) at any time or from time to time to amend the Offer for the Shares in any respect, including increasing or decreasing the number of Shares the Company may purchase or the range of prices it may pay pursuant to the Offer. Any such extension, delay, termination or amendment will be followed as promptly as practicable by a public announcement thereof. Without limiting the manner in which the Company may choose to make any public announcement, except as provided by applicable law (including Rule 13e-4(e)(2) under the Exchange Act), the Company shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by making a release to the Dow Jones News Service. If the Company makes a material change in the terms of the Offer for the Shares or the information concerning the Offer for the Shares, or if it waives a material condition of the Offer for the Shares, the Company will extend the Offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(2) under the Exchange Act, which require that the minimum period during which an offer must remain open following material changes in the terms of the Offer or information concerning the Offer (other than a change in price or a change in percentage of securities sought) will depend upon the facts and circumstances, including the relative materiality of such terms or information. The Company confirms that its reservation of the right to delay payment for Shares which it has accepted for payment is limited by Rule 13e-4(f)(5) under the Exchange Act, which requires that an issuer pay the consideration offered or return the tendered securities promptly after the termination or withdrawal of a tender offer. If (i) the Company increases or decreases the price to be paid for the Shares, or the Company increases the number of Shares being sought and such increase in the number of Shares being sought exceeds 2% of the outstanding Shares or the Company decreases the number of Shares being sought and (ii) the Offer for the Shares is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that notice of such increase or decrease is first published, sent or given, the Offer for the Shares will be extended until the expiration of such period of ten business days. 17. FEES AND EXPENSES Salomon Brothers Inc has been retained by the Company to act as Dealer Manager and financial advisor in connection with the Offer. Salomon Brothers Inc will receive a fee of $250,000 for its services as Dealer Manager and financial advisor. The Company has also agreed to reimburse Salomon Brothers Inc for certain reasonable out-of-pocket expenses incurred in connection with the Offer, including fees and disbursements of counsel, and to indemnify Salomon Brothers Inc against certain liabilities, including certain liabilities under the Federal securities laws. The Dealer Manager has rendered various investment banking and other advisory services to the Company in the past, for which it has received customary compensation, and can be expected to continue to render similar services to the Company in the future. The Company has retained MacKenzie Partners, Inc. to act as Information Agent and The First National Bank of Boston to act as Depositary in connection with the Offer. The Information Agent and the Dealer Manager may contact holders of Shares by mail, telephone, telex, telegraph and personal interviews and may request brokers, dealers and other nominee stockholders to forward materials relating to the Offer to beneficial owners. The Information Agent and the Depositary will each receive reasonable and customary compensation for their respective services, will be reimbursed for certain reasonable out-of-pocket expenses and will be 27 28 indemnified against certain liabilities and expenses in connection with the Offer, including certain liabilities under the Federal securities laws. The Information Agent and the Depositary have rendered information and stock transfer services, respectively, to the Company in the past for which they have received customary compensation, and can be expected to continue to render similar services to the Company in the future. Neither the Depositary, the Information Agent or the Dealer Manager has been retained to, or is authorized to, make recommendations in connection with the Offer. The Company will not pay any fees or commissions to any broker or dealer or any other person (other than the Dealer Manager, the Information Agent and the Depositary) for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust companies will, upon request, be reimbursed by the Company for reasonable and necessary costs and expenses incurred by them in forwarding materials to their customers. 18. MISCELLANEOUS The Company is not aware of any jurisdiction in which the making of the Offer or the acceptance for payment of Shares in connection therewith would not be in compliance with the laws of such jurisdiction. If the Company becomes aware of any jurisdiction where the making of the Offer would not be in compliance with such laws, the Company will make a good faith effort to comply with such laws or seek to have such laws declared inapplicable to the Offer. If after such good faith effort the Company cannot comply with any such laws, the Offer will not be made to, nor will tenders be accepted from or on behalf of, holders of Shares in any such jurisdictions. In those jurisdictions whose laws require that the Offer be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Company by Salomon Brothers Inc as Dealer Manager or one or more registered brokers or dealers licensed under the laws of such jurisdictions. Harcourt General, Inc. March 15, 1995 28 29 Facsimile copies of the Letter of Transmittal will be accepted from Eligible Institutions. The Letter of Transmittal and certificates for Shares and any other required documents should be sent or delivered by each tendering stockholder or his or her broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses set forth below. The Depositary for the Offer is: THE FIRST NATIONAL BANK OF BOSTON By Mail: By Hand: The First National Bank of Boston BancBoston Trust Company Shareholder Services Division of New York P.O. Box 1889 55 Broadway, Third Floor Mail Stop 45-01-19 New York, New York Boston, Massachusetts 02105 By Facsimile Transmission: Telephone: By Overnight Courier: (617) 575-2232 (617) 575-3170 The First National Bank of Boston (617) 575-2233 Shareholder Services Division (for Eligible Institutions Only) Mail Stop 45-01-19 Confirm by Telephone 150 Royall Street Canton, Massachusetts 02021
- ------------------------------------------------------------------------------ Any questions or requests for assistance or for additional copies of the Offer to Purchase or the Letter of Transmittal may be directed to the Information Agent or Dealer Manager. Stockholders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer. - ------------------------------------------------------------------------------ The Information Agent for the Offer is: MACKENZIE PARTNERS, INC. 156 Fifth Avenue New York, New York 10010 (212) 929-5500 (call collect) or Call Toll-Free (800) 322-2885 The Dealer Manager for the Offer is: SALOMON BROTHERS INC Seven World Trade Center New York, New York 10048 (212) 783-2947 (in New York City) or Call Toll-Free (800) 221-5424 EX-99.A2 3 FORM OF LETTER OF TRANSMITTAL 1 LETTER OF TRANSMITTAL TO ACCOMPANY SHARES OF COMMON STOCK OF HARCOURT GENERAL, INC. TENDERED PURSUANT TO THE OFFER TO PURCHASE DATED MARCH 15, 1995 - ----------------------------------------------------------------------------- THIS OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, APRIL 11, 1995, UNLESS THE OFFER IS EXTENDED. - ----------------------------------------------------------------------------- TO: THE FIRST NATIONAL BANK OF BOSTON, DEPOSITARY By Mail: By Hand: The First National Bank of Boston BancBoston Trust Company Shareholder Services Division of New York P.O. Box 1889 55 Broadway, Third Floor Mail Stop 45-01-19 New York, New York Boston, Massachusetts 02105 By Facsimile Transmission: Telephone: By Overnight Courier: (617) 575-2232 (617) 575-3170 The First National Bank of (617) 575-2233 Boston (for Eligible Institutions Only) Shareholder Services Division Confirm by Telephone Mail Stop 45-01-19 150 Royall Street Canton, Massachusetts 02021
------------------------ DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN ONE OF THOSE SHOWN ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN ONE OF THOSE LISTED ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY. SHARES OF CLASS B STOCK, PAR VALUE $1.00 PER SHARE (THE "CLASS B STOCK"), OR SERIES A CUMULATIVE CONVERTIBLE STOCK, PAR VALUE $1.00 PER SHARE (THE "SERIES A STOCK"), WILL NOT BE ACCEPTED FOR TENDER. HOLDERS OF EITHER THE CLASS B STOCK OR THE SERIES A STOCK WHO WISH TO PARTICIPATE IN THE OFFER MUST CONVERT SUCH CLASS B STOCK OR SERIES A STOCK IN ACCORDANCE WITH THEIR RESPECTIVE TERMS AND PROVISIONS AND TENDER THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE OFFER PRIOR TO THE EXPIRATION THEREOF. SEE SECTION 4 OF THE OFFER TO PURCHASE, SECTION 16 OF THIS LETTER OF TRANSMITTAL AND THE INSTRUCTIONS TO THE APPLICABLE NOTICE OF CONVERSION (BLUE WITH RESPECT TO THE CLASS B STOCK AND GREEN WITH RESPECT TO THE SERIES A STOCK). This Letter of Transmittal is to be used only if (a) certificates for shares of Common Stock (as defined below) are to be forwarded with it; (b) a tender of shares of Common Stock is to be made by book-entry transfer to the account maintained by the Depositary at The Depository Trust Company, the Midwest Securities Trust Company or the Philadelphia Depository Trust Company (collectively, the "Book-Entry Transfer Facilities") pursuant to Section 3 of the Offer to Purchase; (c) a tender of shares of Common Stock held in the Company's Dividend Reinvestment Plan is to be made; or (d) a tender of shares of Common Stock issued upon conversion of Class B Stock or Series A Stock pursuant to a Notice of Conversion accompanying this Letter of Transmittal is to be made. Stockholders who desire to tender shares of Common Stock pursuant to the Offer and who cannot deliver their Common Stock certificates (or who are unable to comply with the procedures for book-entry transfer on a timely basis) and all other documents required by this Letter of Transmittal to the Depositary at or before the Expiration Date (as defined in the Offer to Purchase) may tender their shares of Common Stock according to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. See Instruction 2. Delivery of documents to one of the Book-Entry Transfer Facilities does not constitute delivery to the Depositary. 2 - -------------------------------------------------------------------------------- DESCRIPTION OF SHARES OF COMMON STOCK TENDERED (SEE INSTRUCTIONS 3 AND 4) - ------------------------------------------------------------------------------------------------------------------------ NAMES AND ADDRESS(ES) OF REGISTERED HOLDER(S) (PLEASE FILL IN EXACTLY AS CERTIFICATE(S) TENDERED NAME(S) APPEAR ON CERTIFICATE(S)) (ATTACH SIGNED LIST IF NECESSARY) ------------------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES OF COMMON STOCK NUMBER OF SHARES CERTIFICATE REPRESENTED BY OF COMMON STOCK NUMBER(S)* CERTIFICATE(S)* TENDERED** --------------------------------------------------------------- --------------------------------------------------------------- --------------------------------------------------------------- --------------------------------------------------------------- --------------------------------------------------------------- TOTAL SHARES OF COMMON STOCK TENDERED ------------------------------------------------------------------------------------------------------------------------
INDICATE IN THIS BOX ORDER (BY CERTIFICATE NUMBER) IN WHICH SHARES OF COMMON STOCK ARE TO BE PURCHASED IN EVENT OF PRORATION. (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY):*** SEE INSTRUCTION 9. 1st: ; 2nd: ; 3rd: ; 4th: ; 5th: ; 6th: - -------------------------------------------------------------------------------- * Need not be completed if shares of Common Stock are delivered by book-entry transfer or with respect to shares of Common Stock issued upon conversion of Class B Stock or Series A Stock. See Instruction 16. ** If you desire to tender fewer than all shares of Common Stock evidenced by any certificates listed above, please indicate in this column the number of shares of Common Stock you wish to tender. If you fail to indicate the number of shares of Common Stock tendered, all shares of Common Stock evidenced by such certificates will be deemed to have been tendered. See Instruction 4. If you seek to tender shares of Common Stock held in the Company's Dividend Reinvestment Plan or shares of Common Stock issued upon conversion of Class B Stock or Series A Stock pursuant to the Blue or Green Notice of Conversion, respectively, the tender of such shares of Common Stock must be for all such shares of Common Stock so held or so issued. See Instructions 15 and 16. *** If you do not designate an order, in the event less than all shares of Common Stock tendered are purchased due to proration, shares of Common Stock will be selected for purchase by the Depositary. - -------------------------------------------------------------------------------- 2 3 / / CHECK HERE IF TENDERED SHARES OF COMMON STOCK ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING: Name of Tendering Institution: --------------------------------------------- Check Box of Applicable Book-Entry Transfer Facility: DTC / / MSTC / / PDTC / / Account Number: ------------------------------------------------------------- Transaction Code Number: ----------------------------------------------------- / / CHECK HERE IF CERTIFICATES FOR TENDERED SHARES OF COMMON STOCK ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Registered Holder(s): -------------------------------------------- Date of Execution of Notice of Guaranteed Delivery: ------------------------- Name of Institution that Guaranteed Delivery: ------------------------------- Window ticket number (if available): ---------------------------------------- If Delivery is by Book-Entry Transfer Check Box of Applicable Book-Entry Transfer Facility: DTC / / MSTC / / PDTC / / Account Number: ------------------------------------------------------------ Transaction Code Number: --------------------------------------------------- / / CHECK HERE IF ANY TENDERED SHARES OF COMMON STOCK ARE SHARES OF COMMON STOCK ISSUED UPON CONVERSION OF CLASS B STOCK OR SERIES A STOCK PURSUANT TO A NOTICE OF CONVERSION THAT ACCOMPANIES THIS LETTER OF TRANSMITTAL. 3 4 ODD LOTS (SEE INSTRUCTION 8) To be completed ONLY if Shares are being tendered by or on behalf of a Person owning beneficially, as of the close of business on the Expiration Date, an aggregate of fewer than 100 shares of Common Stock (after giving effect to the conversion of Class B Stock or Series A Stock into shares of Common Stock prior to the Expiration Date and including any shares of Common Stock held in the Company's Dividend Reinvestment Plan). The undersigned either (check one box): / / will be the beneficial owner as of the close of business on the Expiration Date of an aggregate of fewer than 100 shares of Common Stock (after giving effect to the conversion of Class B Stock or Series A Stock into shares of Common Stock prior to the Expiration Date and including any shares of Common Stock held in the Company's Dividend Reinvestment Plan); or / / is a broker, dealer, commercial bank, trust company or other nominee that: (a) is tendering, for the beneficial owners thereof, shares of Common Stock with respect to which it is the record owner, and (b) believes, based upon representations made to it by such beneficial owners, that each such person will be the beneficial owner as of the close of business on the Expiration Date, of an aggregate of fewer than 100 shares of Common Stock (after giving effect to the conversion of Class B Stock or Series A Stock into shares of Common Stock prior to the Expiration Date and including any shares of Common Stock held in the Company's Dividend Reinvestment Plan). In addition, the undersigned is tendering shares of Common Stock either (check one box): / / at the Purchase Price (defined below), as the same shall be determined by the Company in accordance with the terms of the Offer (persons checking this box need not indicate the price per Share below); or / / at the price per share of Common Stock indicated below under "Price (in Dollars) Per Share of Common Stock at Which Shares of Common Stock Are Being Tendered" in this Letter of Transmittal. 4 5 TO THE FIRST NATIONAL BANK OF BOSTON: The undersigned hereby tenders to Harcourt General, Inc., a Delaware corporation (the "Company"), the above-described shares of the Company's Common Stock, par value $1.00 per share (the "Shares" or the "Common Stock"), at the price per Share indicated in this Letter of Transmittal, net to the seller in cash, upon the terms and subject to the conditions set forth in the Company's Offer to Purchase dated March 15, 1995, receipt of which is hereby acknowledged, and in this Letter of Transmittal (which together constitute the "Offer"). Subject to and effective upon acceptance for payment of the Shares tendered hereby in accordance with the terms of the Offer (including, if the Offer is extended or amended, the terms or conditions of any such extension or amendment), the undersigned hereby sells, assigns and transfers to or upon the order of the Company all right, title and interest in and to all Shares tendered hereby or orders the registration of such Shares tendered by book-entry transfer that are purchased pursuant to the Offer to or upon the order of the Company and hereby irrevocably constitutes and appoints the Depositary as attorney-in-fact of the undersigned with respect to such Shares, with full power of substitution (such power of attorney being an irrevocable power coupled with an interest), to: (a) deliver certificates for Shares or transfer ownership of such Shares on the account books maintained by a Book-Entry Transfer Facility, together in either such case with all accompanying evidences of transfer and authenticity, to or upon the order of the Company, upon receipt by the Depositary, as the undersigned's agent, of the Purchase Price (as defined below) with respect to such Shares; (b) present certificates for such Shares for cancellation and transfer on the Company's books; and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares, subject to the next paragraph, all in accordance with the terms of the Offer. The undersigned hereby represents and warrants to the Company that: (a) the undersigned understands that tenders of Shares pursuant to any one of the procedures described in Section 3 of the Offer to Purchase and in the Instructions hereto will constitute the undersigned's acceptance of the terms and conditions of the Offer, including the undersigned's representation and warranty that (i) the undersigned has a net long position in Shares or equivalent securities at least equal to the Shares tendered within the meaning of Rule 14e-4 under the Securities Exchange Act of 1934, as amended, and (ii) such tender of Shares complies with Rule 14e-4; (b) when and to the extent the Company accepts the Shares for purchase, the Company will acquire good, marketable and unencumbered title to them, free and clear of all security interests, liens, charges, encumbrances, conditional sales agreements or other obligations relating to their sale or transfer, and not subject to any adverse claim; (c) on request, the undersigned will execute and deliver any additional documents the Depositary or the Company deems necessary or desirable to complete the assignment, transfer and purchase of the Shares tendered hereby; and (d) the undersigned has read, understands and agrees with, all of the terms of the Offer. With respect to holders of certificates representing Shares tendered hereby, the names and addresses of the registered holders should be printed, if they are not already printed above, exactly as they appear on the certificates representing Shares tendered hereby. The certificate numbers, the number of Shares represented by such certificates, and the number of Shares that the undersigned wishes to tender, should be set forth in the appropriate boxes above. With respect to holders who tender only Shares issued upon conversion of Class B Stock or Series A Stock, such holders need not provide this information if a properly completed and duly executed Notice of Conversion accompanies this Letter of Transmittal. The undersigned understands that the Company will, upon the terms and subject to the conditions of the Offer, determine a single price per Share (not greater than $41.50 nor less than $36.00) that it will pay for Shares (the "Purchase Price") properly tendered and not withdrawn pursuant to the Offer, taking into account the number of Shares so tendered and the prices specified by tendering stockholders of the Shares. The undersigned understands that the Company will select the Purchase Price which will allow it to purchase 5,000,000 Shares (or such lesser number of Shares as are properly tendered and not withdrawn) at prices not greater than $41.50 nor less than $36.00 pursuant to the Offer. The undersigned understands that all Shares properly tendered at prices at or below the Purchase Price and not withdrawn will be purchased at the Purchase Price, net to the seller in cash, upon the terms and subject to the conditions of the Offer, including its proration provisions, and that the Company will 5 6 return all other Shares, including Shares tendered and not withdrawn at prices greater than the Purchase Price and Shares not purchased because of proration. The undersigned recognizes that under certain circumstances set forth in the Offer to Purchase, the Company may terminate or amend the Offer or may postpone the acceptance for payment of, or the payment for, Shares tendered or may accept for payment fewer than all of the Shares tendered hereby. In either event, the undersigned understands that certificate(s) for any Shares not tendered or not purchased will be returned to the undersigned at the address indicated above, unless otherwise indicated under the "Special Payment Instructions" or "Special Delivery Instructions" below. The undersigned recognizes that the Company has no obligation, pursuant to the Special Payment Instructions, to transfer any certificate for Shares from the name of their registered holder, or to order the registration or transfer of such Shares tendered by book-entry transfer, if the Company purchases none of the Shares represented by such certificate or tendered by such book-entry transfer. The undersigned understands that acceptance of Shares by the Company for payment will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Offer. The check for the Purchase Price for such of the tendered Shares as are purchased will be issued to the order of the undersigned and mailed to the address indicated above unless otherwise indicated under the Special Payment Instructions or the Special Delivery Instructions below. All authority conferred or agreed to be conferred in this Letter of Transmittal shall survive the death or incapacity of the undersigned and any obligations of the undersigned under this Letter of Transmittal shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable. NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. PRICE (IN DOLLARS) PER SHARE OF COMMON STOCK AT WHICH SHARES OF COMMON STOCK ARE BEING TENDERED - -------------------------------------------------------------------------------- CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, THERE IS NO PROPER TENDER OF SHARES OF COMMON STOCK. - -------------------------------------------------------------------------------- / / $36.000 / / $37.000 / / $38.000 / / $39.000 / / $40.000 / / $41.000 / / $36.125 / / $37.125 / / $38.125 / / $39.125 / / $40.125 / / $41.125 / / $36.250 / / $37.250 / / $38.250 / / $39.250 / / $40.250 / / $41.250 / / $36.375 / / $37.375 / / $38.375 / / $39.375 / / $40.375 / / $41.375 / / $36.500 / / $37.500 / / $38.500 / / $39.500 / / $40.500 / / $41.500 / / $36.625 / / $37.625 / / $38.625 / / $39.625 / / $40.625 / / $36.750 / / $37.750 / / $38.750 / / $39.750 / / $40.750 / / $36.875 / / $37.875 / / $38.875 / / $39.875 / / $40.875
- -------------------------------------------------------------------------------- 6 7 IF PORTIONS OF SHARE HOLDINGS ARE BEING TENDERED AT MORE THAN ONE PRICE, USE A SEPARATE LETTER OF TRANSMITTAL FOR EACH PRICE SPECIFIED. (SEE INSTRUCTION 5) - --------------------------------------------------------- SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 4, 6, 7, 10 AND 16) To be completed ONLY if certificate(s) for Shares not tendered or not purchased and/or any check for the Purchase Price of Shares purchased are to be issued in the name of someone other than the undersigned, or if Shares delivered by book-entry transfer that are not purchased are to be returned by credit to an account maintained by a Book-Entry Transfer Facility. Issue / / Check / / Certificate(s) to: Name: ------------------------------------------------ (PLEASE PRINT) Address: ---------------------------------------------- --------------------------------------------- (INCLUDE ZIP CODE) --------------------------------------------- (TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER) / / Credit Shares tendered by book-entry transfer and not purchased to the account set forth below: Name of account party: ------------------------------ Account number: ------------------------------------- Check box of Applicable Book-Entry Transfer Facility: DTC / / MSTC / / PDTC / / - ------------------------------------------------------- - ------------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 4, 6, 7, 10 AND 16) To be completed ONLY if certificate(s) for Shares not tendered or not purchased and/or any check for the Purchase Price of Shares purchased are to be sent to someone other than the undersigned or to the undersigned at an address other than that shown above. Deliver / / Check / / Certificate(s) to: Name: ------------------------------------------------ (PLEASE PRINT) Address: ---------------------------------------------- - ------------------------------------------------------- (INCLUDE ZIP CODE) - ------------------------------------------------------- - ------------------------------------------------------- TENDER OF DIVIDEND REINVESTMENT PLAN SHARES (SEE INSTRUCTION 15) To be completed ONLY if the undersigned intends to tender all shares of Common Stock held by him or her in the Company's Dividend Reinvestment Plan. / / CHECK HERE TO TENDER ALL SHARES OF COMMON STOCK HELD IN THE COMPANY'S DIVIDEND REINVESTMENT PLAN. - --------------------------------------------------------- 7 8 STOCKHOLDER(S) SIGN HERE (SEE INSTRUCTIONS 1 AND 6) (PLEASE COMPLETE ENCLOSED SUBSTITUTE FORM W-9) Must be signed by the registered holder(s) exactly as name(s) appear(s) on certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificate(s) and documents transmitted with this Letter of Transmittal. If signature is by attorney-in-fact, executor, administrator, trustee, guardian, officer of a corporation or another acting in a fiduciary or representative capacity, please set forth the full title. See Instruction 6. X - ------------------------------------------------------------------------------- X - ------------------------------------------------------------------------------- (SIGNATURE(S) OF OWNER(S)) Name(s): ----------------------------------------------------------------------- (PLEASE PRINT) Capacity (full title): --------------------------------------------------------- Address: ----------------------------------------------------------------------- - ------------------------------------------------------------------------------- Area Code and Telephone Number: ------------------------------------------------ Tax ID Number or Social Security Number: --------------------------------------- Dated: , 1995 GUARANTEE OF SIGNATURES (SEE INSTRUCTIONS 1 AND 6) Authorized Signature: ---------------------------------------------------------- Name(s): ----------------------------------------------------------------------- (PLEASE PRINT) Title: ------------------------------------------------------------------------ Name of Firm: ------------------------------------------------------------------ Address: ----------------------------------------------------------------------- - ------------------------------------------------------------------------------- (INCLUDING ZIP CODE) Area Code and Telephone Number: ----------------------------------------------- Tax ID Number or Social Security Number: -------------------------------------- Dated: , 1995 8 9 INSTRUCTIONS FORMING PART OF THE TERMS OF THE OFFER 1. GUARANTEE OF SIGNATURES. No signature guarantee is required if: (a) this Letter of Transmittal is signed by the registered holder of the Shares (which term, for purposes of this document, shall include any participant in a Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) exactly as the name of the registered holder appears on the certificate tendered with this Letter of Transmittal and payment and delivery are to be made directly to such owner unless such owner has completed either the box entitled "Special Payment Instructions" or "Special Delivery Instructions" above; or (b) such Shares are tendered for the account of a member firm of a registered national securities exchange, a member of the Stock Transfer Association's approved medallion program (such as STAMP, SEMP or MSP) or a commercial bank or trust company having an office, branch or agency in the United States (each such entity, an "Eligible Institution"); or (c) this Letter of Transmittal is signed by a holder of shares of Common Stock issued upon conversion of Class B Stock or Series A Stock (and tendered herein) exactly as the signature of such holder appears on the accompanying Notice of Conversion. In all other cases, an Eligible Institution must guarantee all signatures on this Letter of Transmittal. See Instruction 6. 2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY PROCEDURES. This Letter of Transmittal is to be used only if certificates are delivered with it to the Depositary (or such certificates will be delivered pursuant to a Notice of Guaranteed Delivery previously sent to the Depositary), if tenders are to be made pursuant to the procedure for tender by book-entry transfer set forth in Section 3 of the Offer to Purchase, if tenders of Shares held in the Company's Dividend Reinvestment Plan are to be made, or if tenders are to be made pursuant to the procedure for tender of Shares issued upon conversion of shares of Class B Stock or Series A Stock set forth in Section 4 of the Offer to Purchase. Certificates for all physically tendered Shares or confirmation of a book-entry transfer into the Depositary's account at a Book-Entry Transfer Facility of Shares tendered electronically, together in each case with a facsimile of the Letter of Transmittal and any other documents required by this Letter of Transmittal, should be mailed or delivered to the Depositary at the appropriate address set forth herein and must be delivered to the Depositary on or before the Expiration Date. With respect to tenders herein of Shares issued upon conversion of Class B Stock or Series A Stock, a properly completed and duly executed Notice of Conversion and any other documents required by the Notice of Conversion, must accompany this Letter of Transmittal. See Instruction 16. Holders of Shares whose certificates are not immediately available or who cannot deliver Shares and all other required documents to the Depositary before the Expiration Date, or whose Shares cannot be delivered on a timely basis pursuant to the procedures for book-entry transfer, may tender their Shares by or through any Eligible Institution by properly completing and duly executing and delivering a Notice of Guaranteed Delivery (or facsimile of it) and by otherwise complying with the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to such procedure, the certificates for all physically tendered Shares or book-entry confirmation, as the case may be, as well as a properly completed and duly executed Letter of Transmittal and all other documents required by this Letter of Transmittal, must be received by the Depositary within five New York Stock Exchange trading days after receipt by the Depositary of such Notice of Guaranteed Delivery, all as provided in Section 3 of the Offer to Purchase. The Notice of Guaranteed Delivery may be delivered by hand or transmitted by a telegram, facsimile transmission or mail to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in such Notice. For Shares to be tendered validly pursuant to the guaranteed delivery procedure, the Depositary must receive the Notice of Guaranteed Delivery on or before the Expiration Date. The guaranteed delivery procedure is inapplicable to the tender of Shares issued upon conversion of Class B Stock or Series A Stock pursuant to a Notice of Conversion because the Depositary will effect the tender of such Shares through physical delivery or book-entry transfer. See Instruction 16. 9 10 THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES OF COMMON STOCK, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY. The Company will not accept any alternative or contingent tenders, nor will it purchase any fractional Shares, except as expressly provided in the Offer to Purchase. All tendering stockholders, by execution of this Letter of Transmittal (or a photocopy of it), waive any right to receive any notice of the acceptance of their tender. 3. INADEQUATE SPACE. If the space provided in the box captioned "Description of Shares of Common Stock Tendered" is inadequate, the certificate numbers and/or the number of Shares should be listed on a separate signed schedule and attached to this Letter of Transmittal. 4. PARTIAL TENDERS AND UNPURCHASED SHARES. (Not applicable to stockholders who tender by book-entry transfer, to stockholders who tender Shares held in the Dividend Reinvestment Plan or to stockholders who tender Shares issued upon conversion of shares of Class B Stock or Series A Stock pursuant to the Blue or Green Notice of Conversion, respectively.) If fewer than all of the Shares evidenced by any certificate are to be tendered, fill in the number of Shares which are to be tendered in the column entitled "Number of Shares of Common Stock Tendered." In such case, if any tendered Shares are purchased, a new certificate for the remainder of the Shares evidenced by the old certificate(s) will be issued and sent to the registered holder(s), unless otherwise specified in either the "Special Payment Instructions" or "Special Delivery Instructions" box on this Letter of Transmittal, as soon as practicable after the Expiration Date. Unless otherwise indicated, all Shares represented by the certificates listed and delivered to the Depositary will be deemed to have been tendered. Partial tenders may not be effected with respect to Shares held in the Dividend Reinvestment Plan or with respect to Shares issued upon conversion of Class B Stock or Series A Stock pursuant to the Blue or Green Notice of Conversion, respectively. See Instruction 16. 5. INDICATION OF PRICE AT WHICH SHARES ARE BEING TENDERED. For Shares to be properly tendered, the stockholder MUST check the box indicating the price per Share at which he or she is tendering Shares under "Price (In Dollars) Per Share of Common Stock at Which Shares of Common Stock Are Being Tendered" on this Letter of Transmittal, provided however, that an Odd Lot Owner (as defined in Instruction 8) may check the box above in the section entitled "Odd Lots" indicating that he or she is tendering all of his or her Shares at the Purchase Price. ONLY ONE BOX MAY BE CHECKED. IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED, THERE IS NO PROPER TENDER OF SHARES. A stockholder wishing to tender portions of Share holdings at different prices must complete a separate Letter of Transmittal for each price at which he or she wishes to tender each such portion of his or her Shares. The same Shares cannot be tendered (unless previously properly withdrawn as provided in Section 5 of the Offer to Purchase) at more than one price. 6. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. (a) If this Letter of Transmittal is signed by the registered holder(s) of any tendered Shares issued upon conversion of Class B Stock or Series A Stock pursuant to the Blue or Green Notice of Conversion, respectively, the signature(s) on this Letter of Transmittal must correspond exactly with the signature(s) upon the accompanying Notice of Conversion without any change whatsoever. (b) If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond exactly with the name(s) as written on the face of the certificate(s) without any change whatsoever. (c) If the Shares are registered in the names of two or more joint holders, each such holder must sign this Letter of Transmittal. (d) If any tendered Shares are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal (or photocopies of it) as there are different registrations of certificates. 10 11 (e) When this Letter of Transmittal is signed by the registered holder(s) of the Shares listed and transmitted hereby, no endorsement(s) of certificate(s) representing such Shares or separate stock powers are required unless payment is to be made, or the certificate(s) for Shares not tendered or not purchased are to be issued to a person other than the registered holder(s). SIGNATURES ON SUCH CERTIFICATES MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION. If this Letter of Transmittal is signed by any person other than the registered holder(s) of the certificate(s) listed, the certificate(s) must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appears on the certificate(s), and the signature(s) or such certificate(s) or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. (f) If this Letter of Transmittal or any certificates or stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such person should so indicate when signing and must submit proper evidence satisfactory to the Company of their authority so to act. 7. STOCK TRANSFER TAXES. Except as provided in this Instruction 7, no stock transfer tax stamps or funds to cover such stamps need accompany this Letter of Transmittal. The Company will pay or cause to be paid any stock transfer taxes payable on the transfer to it of Shares purchased pursuant to the Offer. If, however: (a) payment of the Purchase Price is to be made to any person other than the registered holder(s); (b) Shares not tendered or not accepted for purchase are to be registered in the name of any person other than the registered holder(s); or (c) tendered certificates are registered in the name of any person other than the person(s) signing the Letter of Transmittal; then the Depositary will deduct from the Purchase Price the amount of any stock transfer taxes (whether imposed on the registered holder, such other person or otherwise) payable on account of the transfer to such person unless satisfactory evidence of the payment of such taxes or an exemption from them is submitted. 8. ODD LOTS. As described in Section 1 of the Offer to Purchase, if the Company is to purchase fewer than all Shares tendered before the Expiration Date and not withdrawn, the Shares purchased first will consist of all Shares tendered by or on behalf of stockholders ("Odd Lot Owners") who beneficially hold, as of the close of business on the Expiration Date, an aggregate of fewer than 100 Shares (after giving effect to the conversion by any such Odd Lot Owner of Class B Stock or Series A Stock into the Shares prior to the Expiration Date and including any Shares held by such Odd Lot Owner in the Company's Dividend Reinvestment Plan) at or below the Purchase Price. This preference will not be available unless the box captioned "Odd Lots" is completed. In order to qualify for the preference afforded to a tender by an Odd Lot Owner, a holder of Series A Stock who has converted any shares of Series A Stock for the purposes of tendering the shares of Common Stock issued upon conversion must multiply the number of shares of Series A Stock converted by 1.1 to calculate the total number of shares of Common Stock issued upon conversion to be tendered. 9. ORDER OF PURCHASE IN EVENT OF PRORATION. As described in Section 1 of the Offer to Purchase, stockholders may designate the order in which their Shares are to be purchased in the event of proration. If a stockholder is entitled to capital gain or loss treatment as described in Section 15 of the Offer to Purchase, the order of purchase may have an effect on the amount of any taxable gain or loss on the Shares purchased, depending on the stockholder's basis in the Shares. See Sections 1 and 15 of the Offer to Purchase. 10. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If certificate(s) for Shares not tendered or not purchased and/or check(s) are to be issued in the name of a person other than the signer of the Letter of Transmittal or if such certificate(s) and/or check(s) are to be sent to someone other than the person signing the Letter of Transmittal or to the signer at a different address, the boxes captioned "Special Payment Instructions" and/or "Special Delivery Instructions" on this Letter of Transmittal should be completed as applicable and signatures must be guaranteed as described in Instruction 1. Stockholders tendering Shares by book-entry transfer may request that Shares not purchased be credited to such account 11 12 maintained at a Book-Entry Transfer Facility as such stockholder may designate under "Special Payment Instructions". If no such instructions are given, such Shares not purchased will be returned by crediting the account at the Book-Entry Transfer Facility designated above. These boxes may also be completed by a holder tendering shares of Common Stock issued upon conversion of Class B Stock or Series A Stock pursuant to the applicable Notice of Conversion who desires payment and/or delivery options different from those provided with respect to tenders of such Shares. See Instruction 16. 11. IRREGULARITIES. All questions as to the number of Shares to be accepted, the price to be paid therefor and the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Company in its sole discretion, which determination shall be firm and binding on all parties. The Company reserves the absolute right to reject any or all tenders of Shares it determines not to be in proper form or the acceptance of which or payment for which may, in the opinion of the Company's counsel, be unlawful. The Company also reserves the absolute right to waive any of the conditions of the Offer and any defect or irregularity in the tender of any particular Shares, and the Company's interpretation of the terms of the Offer (including these instructions) will be final and binding on all parties. No tender of Shares will be deemed to be properly made until all defects and irregularities have been cured or waived. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as the Company shall determine. None of the Company, the Dealer Manager, the Depositary, the Information Agent (as defined in the Offer to Purchase) or any other Person is or will be obligated to give notice of any defects or irregularities in tenders and none of them will incur any liability for failure to give any such notice. THE COMPANY RESERVES THE ABSOLUTE RIGHT TO REJECT TENDERS OF SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF CLASS B STOCK OR SERIES A STOCK IF THE ACCOMPANYING NOTICE OF CONVERSION HAS NOT BEEN PROPERLY COMPLETED AND DULY EXECUTED IN ACCORDANCE WITH THE INSTRUCTIONS THEREIN. 12. QUESTIONS AND REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions and requests for assistance may be directed to, or additional copies of the Offer to Purchase, the Notice of Guaranteed Delivery and this Letter of Transmittal may be obtained from, the Information Agent or the Dealer Manager at their addresses and telephone numbers set forth at the end of this Letter of Transmittal. 13. SUBSTITUTE FORM W-9 AND FORM W-8. Under U.S. Federal income tax law, a stockholder whose tendered Shares are accepted for payment is required to provide the Depositary with such stockholder's correct taxpayer identification number ("TIN") on Substitute Form W-9 below. If the Depositary is not provided with the correct TIN, the Internal Revenue Service may subject the stockholder or other payee to a $50 penalty. In addition, payments that are made to such stockholder or other payee with respect to Shares purchased pursuant to the Offer may be subject to 31% backup withholding. Certain stockholders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, the stockholder must submit a Form W-8, signed under penalties of perjury, attesting to that individual's exempt status. A Form W-8 may be obtained from the Depositary. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for more instructions. If backup withholding applies, the Depositary is required to withhold 31% of any such payments made to the stockholder or other payee. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. The box in Part 3 of the Substitute Form W-9 may be checked if the tendering stockholder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 3 is checked, the stockholder or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. Notwithstanding that the box in Part 3 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the Depositary will withhold 31% of all payments made prior to the time a properly certified TIN is provided to the Depositary. The stockholder is required to give the Depositary the TIN (e.g., social security number or employer identification number) of the record owner of the Shares or of the last transferee appearing on the transfers attached to, or endorsed on, the Shares. If the Shares are in more than one name or are not in the name of the actual owner, 12 13 consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. 14. WITHHOLDING ON FOREIGN STOCKHOLDERS. The Depositary will withhold federal income tax equal to 30% of the gross proceeds payable to a foreign stockholder or his agent unless the stockholder proves in a manner satisfactory to the Company and the Depositary that it is entitled to capital gain or loss treatment as described in Section 15 of the Offer to Purchase, that a reduced rate of withholding is available pursuant to a tax treaty or that an exemption from withholding is applicable because such gross proceeds are effectively connected with the conduct of a trade or business in the United States. For this purpose, a foreign stockholder is any stockholder that is not (i) a citizen or resident of the United States, (ii) a corporation, partnership or other entity created or organized in or under the laws of the United States or any political subdivision thereof or (iii) an estate or trust the income of which is subject to United States federal income taxation regardless of the source of such income. In order to apply for a reduced rate of withholding pursuant to a tax treaty, a foreign stockholder must deliver to the Depositary a properly completed Form 1001. In order to apply for exemption from withholding on the basis that the gross proceeds are effectively connected with the conduct of a trade or business in the United States, a foreign stockholder must deliver to the Depositary a properly completed Form 4224. (Exemption from backup withholding does not exempt a foreign stockholder from the 30% withholding.) These forms can be obtained from the Depositary, Information Agent or Dealer Manager. The Depositary will determine a stockholder's status as a foreign stockholder and eligibility for a reduced rate of, or an exemption from, withholding by reference to the stockholder's address and to any submitted certificates or statements concerning eligibility for a reduced rate of, or exemption from, withholding, unless facts and circumstances indicate that reliance is not warranted or applicable law requires some other method for determining eligibility for determining whether a reduced rate of withholding is applicable. A foreign stockholder with respect to whom tax has been withheld may be eligible to obtain a refund of all or a portion of the withheld tax if such stockholder meets one of the exceptions for capital gain or loss treatment described in Section 15 of the Offer to Purchase or is otherwise able to establish that no tax or a reduced amount of tax was due. Foreign stockholders are urged to consult their tax advisors regarding the application of federal income tax withholding, including eligibility for a withholding tax reduction or exemption and the refund procedures. 15. DIVIDEND REINVESTMENT PLAN. Shares held in the Harcourt General, Inc. Dividend Reinvestment Plan may be tendered by checking the box captioned "Tender of Dividend Reinvestment Plan Shares" in this Letter of Transmittal. Any tender of Dividend Reinvestment Plan Shares held in the account of a participant must be for all Dividend Reinvestment Plan Shares in such account and must be made at a single price. 16. TENDER OF SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF SHARES OF CLASS B STOCK OR SERIES A STOCK. Shares of Class B Stock or Series A Stock will not be accepted for tender. Holders of either Class B Stock or Series A Stock who wish to participate in the Offer must convert such Class B Stock or Series A Stock in accordance with their respective terms and provisions, utilizing, if desired, the applicable Notice of Conversion (Blue with respect to the Class B Stock and Green with respect to the Series A Stock), and tender the shares of Common Stock issuable upon conversion in accordance with the terms and conditions of the Offer, utilizing a Letter of Transmittal. With respect to a Letter of Transmittal which accompanies the applicable Notice of Conversion, the following provisions apply: (a) Holders of Class B Stock or Series A Stock who are converting such shares for the purpose of tendering the shares of Common Stock issued upon conversion need not complete the columns captioned "Certificate Number(s)", "Number of shares of Common Stock Represented by Certificate(s)" or "Number of shares of Common Stock Tendered" in the section of the Letter of Transmittal captioned "Description of shares of Common Stock Tendered." Such holders must, however, designate the price at which the shares of Common Stock are being tendered, fill out the Substitute Form W-9 provided in this Letter of Transmittal and provide the signatures required by this Letter of Transmittal. (b) Partial tenders may not be effected with respect to shares of Common Stock issued upon conversion of Class B Stock or Series A Stock pursuant to the applicable Blue or Green Notice of Conversion, respectively. 13 14 (c) In order to qualify for the preference afforded to a tender by an Odd Lot Owner, a holder of Series A Stock who is converting any shares of Series A Stock for the purposes of tendering the shares of Common Stock issuable upon conversion, must multiply the number of shares of Series A Stock to be converted by 1.1 to calculate the total number of shares of Common Stock issuable upon conversion to be tendered. (d) Certificated shares of Class B Stock or Series A Stock delivered for conversion accompanied by a properly completed and duly executed Notice of Conversion will be converted into certificated shares of Common Stock and, if a properly completed Letter of Transmittal has been provided, delivered for tender by the Depositary in certificated form, and if withdrawn or not purchased, returned in certificated form to the holder. Shares of Class B Stock or Series A Stock delivered for conversion by book-entry transfer accompanied by a properly completed and duly executed Notice of Conversion will be converted into shares of Common Stock and, if a properly completed Letter of Transmittal has been provided, delivered for tender by the Depositary through book-entry transfer, and if withdrawn or not purchased, returned through book-entry transfer to the holder. (e) The guaranteed delivery procedure is inapplicable to the tender of Shares issued upon conversion of Class B Stock or Series A Stock pursuant to a Notice of Conversion because the Depositary will effect the tender of such Shares through physical delivery or book-entry transfer. (f) No signature guarantee is required on the Letter of Transmittal if the Letter of Transmittal is signed by a holder of shares of Common Stock issued upon conversion of Class B Stock or Series A Stock (and tendered herein) exactly as the signature of such holder appears on the accompanying Notice of Conversion. See Section 4 of the Offer to Purchase and the Instructions to the applicable Notice of Conversion (Blue with respect to the Class B Stock and Green with respect to the Series A Stock). 14 15 - ------------------------------------------------------------------------------------------- PAYER'S NAME: FIRST NATIONAL BANK OF BOSTON - ------------------------------------------------------------------------------------------- PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT Social Security THE RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. Number or Employer Identification Number ---------------- --------------------------------------------------------------------- SUBSTITUTE PART 2 -- Certificates -- Under penalties of perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification FORM W-9 Number (or I am waiting for a number to be issued to me); and (2) I am not subject to backup withholding because: (a) I am exempt DEPARTMENT OF THE TREASURY from backup withholding, or (b) I have not been notified by the INTERNAL REVENUE SERVICE Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. PAYER'S REQUEST FOR CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if TAXPAYER you have been notified by the IRS that you are currently subject to IDENTIFICATION NUMBER backup withholding because of under-reporting interest or dividends ("TIN") on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such item (2). ------------------------------------------------------------------- SIGNATURE DATE , 1995 ----------------------- ---------- NAME ------------------------------------------- PART 3-- ADDRESS ------------------------------------------- Awaiting TIN / / -------------------------------------------
(City, State and Zip Code) - ------------------------------------------------------------------------------- NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office, or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all reportable payments made to me will be withheld. Signature Date 1995 --------------------------------------------- ------------, 15 16 Facsimile copies of the Letter of Transmittal will be accepted from Eligible Institutions. The Letter of Transmittal and certificates for Shares and any other required documents should be sent or delivered by each tendering stockholder or his or her broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses set forth below. The Depositary for the Offer is: THE FIRST NATIONAL BANK OF BOSTON By Mail: By Hand: The First National Bank of Boston BancBoston Trust Company Shareholder Services Division of New York P.O. Box 1889 55 Broadway, Third Floor Mail Stop 45-01-19 New York, New York Boston, Massachusetts 02105 By Facsimile Transmission: Telephone: By Overnight Courier: (617) 575-2232 (617) 575-3170 The First National Bank of (617) 575-2233 Boston (for Eligible Institutions Only) Shareholder Services Division Confirm by Telephone Mail Stop 45-01-19 150 Royall Street Canton, Massachusetts 02021
Any questions or requests for assistance or for additional copies of the Offer to Purchase or the Letter of Transmittal may be directed to the Information Agent or Dealer Manager. Stockholders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer. The Information Agent for the Offer is: MACKENZIE PARTNERS INC. 156 Fifth Avenue New York, New York 10010 (212) 929-5500 (call collect) or Call Toll-Free (800) 322-2885 The Dealer Manager for the Offer is: SALOMON BROTHERS INC Seven World Trade Center New York, New York 10048 (212) 783-2947 (in New York City) or Call Toll-Free (800) 221-5424 16 EX-99.A3 4 FORM OF NOTICE OF GUARANTEED DELIVERY 1 NOTICE OF GUARANTEED DELIVERY FOR HARCOURT GENERAL, INC. OFFER TO PURCHASE FOR CASH UP TO 5,000,000 SHARES OF ITS COMMON STOCK AT A PURCHASE PRICE NOT GREATER THAN $41.50 NOR LESS THAN $36.00 PER SHARE AS SET FORTH IN SECTION 3 OF THE OFFER TO PURCHASE, THIS FORM OR A PHOTOCOPY OF IT MUST BE USED TO ACCEPT THE OFFER (AS DEFINED BELOW) IF: (a) certificates for Common Stock, par value $1.00 per share (the "Shares" or the "Common Stock"), of Harcourt General, Inc., a Delaware corporation (the "Company"), are not immediately available; or (b) the procedure for book-entry transfer cannot be completed on a timely basis; or (c) time will not permit the Letter of Transmittal or other required documents to reach the Depositary referred to below before the Expiration Date (as defined in Section 1 of the Offer to Purchase referred to below). This form should not be used with respect to tenders of Shares issued upon conversion of the Company's Class B Stock, par value 1.00 per share (the "Class B Stock"), or the Company's Series A Cumulative Convertible Stock, par value 1.00 per share (the "Series A Stock"), pursuant to a Notice of Conversion because the Depositary will effect the tender of such Shares through physical delivery or book-entry transfer. This form or a photocopy of it, signed and properly completed, may be delivered by hand or transmitted by telegram, facsimile transmission or mail, to the Depositary by the Expiration Date. See Section 3 of the Offer to Purchase. TO: THE FIRST NATIONAL BANK OF BOSTON, DEPOSITARY By Mail: By Hand: The First National Bank of BancBoston Trust Company Boston of New York Shareholder Services Division 55 Broadway, Third Floor P.O. Box 1889 New York, New York Mail Stop 45-01-19 Boston, Massachusetts 02105 By Facsimile Transmission: Telephone: By Overnight Courier: (617) 575-2232 (617) 575-3170 The First National Bank of (617) 575-2233 Boston (for Eligible Institutions Shareholder Services Division Only) Mail Stop 45-01-19 Confirm by Telephone 150 Royall Street Canton, Massachusetts 02021
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN ONE OF THOSE SHOWN ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN ONE OF THOSE LISTED ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY. Ladies and Gentlemen: The undersigned hereby tenders to Harcourt General, Inc., a Delaware corporation, at the price per Share indicated below, net to the seller in cash, upon the terms and subject to conditions set forth in the Company's Offer to Purchase, dated March 15, 1995, (the "Offer to Purchase"), and the related Letter of Transmittal (which together constitute the "Offer"), receipt of which is hereby acknowledged, shares of Common Stock, par value $1.00 per Share. 2 PRICE (IN DOLLARS) PER SHARE OF COMMON STOCK AT WHICH SHARES OF COMMON STOCK ARE BEING TENDERED - -------------------------------------------------------------------------------- IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE, USE A SEPARATE NOTICE OF GUARANTEED DELIVERY FOR EACH PRICE SPECIFIED. - -------------------------------------------------------------------------------- CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, THERE IS NO PROPER TENDER OF SHARES OF COMMON STOCK. - ------------------------------------------------------------------------------------------- / / $36.000 / / $37.000 / / $38.000 / / $39.000 / / $40.000 / / $41.000 / / $36.125 / / $37.125 / / $38.125 / / $39.125 / / $40.125 / / $41.125 / / $36.250 / / $37.250 / / $38.250 / / $39.250 / / $40.250 / / $41.250 / / $36.375 / / $37.375 / / $38.375 / / $39.375 / / $40.375 / / $41.375 / / $36.500 / / $37.500 / / $38.500 / / $39.500 / / $40.500 / / $41.500 / / $36.625 / / $37.625 / / $38.625 / / $39.625 / / $40.625 / / $36.750 / / $37.750 / / $38.750 / / $39.750 / / $40.750 / / $36.875 / / $37.875 / / $38.875 / / $39.875 / / $40.875 - --------------------------------------------------------------------------------------------
3 ODD LOTS (SEE INSTRUCTION 8 OF THE LETTER OF TRANSMITTAL) To be completed ONLY if Shares are being tendered by or on behalf of a Person owning beneficially, as of the close of business on the Expiration Date, an aggregate of fewer than 100 shares of Common Stock (after giving effect to the conversion of Class B Stock or Series A Stock into shares of Common Stock prior to the Expiration Date and including any shares of Common Stock held in the Company's Dividend Reinvestment Plan). The undersigned either (check one box): / / will be the beneficial owner as of the close of business on the Expiration Date of an aggregate of fewer than 100 shares of Common Stock (after giving effect to the conversion of Class B Stock or Series A Stock into shares of Common Stock prior to the Expiration Date and including any shares of Common Stock held in the Company's Dividend Reinvestment Plan); or / / is a broker, dealer, commercial bank, trust company or other nominee that: (a) is tendering, for the beneficial owners thereof, shares of Common Stock with respect to which it is the record owner, and (b) believes, based upon representations made to it by such beneficial owners, that each such person will be the beneficial owner as of the close of business on the Expiration Date, of an aggregate of fewer than 100 shares of Common Stock (after giving effect to the conversion of Class B Stock or Series A Stock into shares of Common Stock prior to the Expiration Date and including any shares of Common Stock held in the Company's Dividend Reinvestment Plan). In addition, the undersigned is tendering shares of Common Stock either (check one box): / / at the Purchase Price (as defined in the Offer), as the same shall be determined by the Company in accordance with the terms of the Offer (persons checking this box need not indicate the price per Share above); or / / at the price per share of Common Stock indicated above under "Price (in Dollars) Per Share of Common Stock at Which Shares of Common Stock Are Being Tendered" on this Notice of Guaranteed Delivery. 4 - ---------------------------------------------------------------------------------------- Certificate Nos. (if available): SIGN HERE - ---------------------------------------- -------------------------------------------- (Signature(s)) - ---------------------------------------- -------------------------------------------- (Signature(s)) If Shares will be tendered by book-entry transfer: --------------------------------------- (Name(s)) (Please Print) Name of Tendering Institution: ------------------------------- --------------------------------------- (Address) - --------------------------------------------- --------------------------------------- (Zip Code) Account No. ------------------------------- at / / The Depository Trust Company --------------------------------------- (Area Code and Telephone No.) / / Midwest Securities Trust Company / / Philadelphia Depository Trust Company
- ------------------------------------------------------------------------------- GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a firm which is a member of a registered national securities exchange or of the Stock Transfer Association's approved medallion program (such as STAMP, SEMP or MSP) or which is a commercial bank or trust company having an office or correspondent in the United States, hereby (i) represents that the undersigned has a net long position in Shares or equivalent securities within the meaning of Rule 14e-4 under the Securities Exchange act of 1934, as amended, at least equal to the Shares tendered, (ii) represents that such tender of Shares complies with Rule 14e-4, and (iii) guarantees to deliver to the Depositary, at one of its addresses set forth above, Share certificates evidencing the Shares tendered hereby, in proper form for transfer, or confirmation of book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company, the Midwest Securities Trust Company or the Philadelphia Depository Trust Company; in each case with delivery of a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, and any other required documents, all within five New York Stock Exchange trading days of the date hereof. Name of Firm: --------------------------------------------------------------- Authorized Signature: ------------------------------------------------------- Name: ---------------------------------------------------------------------- Title: ---------------------------------------------------------------------- Address: -------------------------------------------------------------------- Zip Code: ------------------------------------------------------------------- Area Code and Telephone Number: --------------------------------------------- Dated: , 1995 DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL EX-99.A4 5 FORM OF BROKER-DEALER LETTER 1 SALOMON BROTHERS INC SEVEN WORLD TRADE CENTER NEW YORK, NEW YORK 10048 HARCOURT GENERAL, INC. OFFER TO PURCHASE FOR CASH UP TO 5,000,000 SHARES OF ITS COMMON STOCK AT A PURCHASE PRICE NOT GREATER THAN $41.50 NOR LESS THAN $36.00 PER SHARE THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON APRIL 11, 1995, UNLESS THE OFFER IS EXTENDED March 15, 1995 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: Harcourt General, Inc., a Delaware corporation (the "Company"), has appointed us to act as Dealer Manager in connection with its offer to purchase up to 5,000,000 shares of its Common Stock, par value $1.00 per share (the "Shares" or the "Common Stock") at a price, net to the seller in cash, not greater than $41.50 nor less than $36.00 per Share, upon the terms and subject to the conditions set forth in the Company's Offer to Purchase, dated March 15, 1995, and in the related Letter of Transmittal (which together constitute the "Offer"). The Company will, upon the terms and subject to the conditions of the Offer, determine a single price per Share (not greater than $41.50 nor less than $36.00 per Share) that it will pay for Shares (the "Purchase Price") properly tendered and not withdrawn pursuant to the Offer, taking into account the number of Shares so tendered and the prices specified by tendering stockholders that will allow it to buy 5,000,000 Shares (or such lesser number of Shares as are properly tendered and not withdrawn) at prices not greater than $41.50 nor less than $36.00 per Share pursuant to the Offer. All Shares properly tendered and not withdrawn at prices at or below the Purchase Price prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase) will be purchased at the Purchase Price, net to the Seller in cash, upon the terms and subject to the conditions of the Offer, including the proration terms thereof. See Section 1 of the Offer to Purchase. If, prior to the Expiration Date, more than 5,000,000 Shares (or such greater number of Shares as the Company elects to purchase) are properly tendered and not withdrawn at or below the Purchase Price, the Company will, upon the terms and subject to the conditions of the Offer, accept Shares for purchase first from Odd Lot Owners (as defined in Section 2 of the Offer to Purchase) who properly tender their Shares at or below the Purchase Price and then on a pro rata basis from other stockholders whose Shares are properly tendered and not withdrawn at or below the Purchase Price. See Introduction and Section 1 of the Offer to Purchase. The Offer is not being made for (nor will tenders be accepted of) either the Company's Class B Stock, par value $1.00 per share (the "Class B Stock"), or the Company's Series A Cumulative Convertible Stock, par value $1.00 per share (the "Series A Stock"). Holders of either the Class B Stock or the Series A Stock who wish to participate in the Offer must convert such Class B Stock or Series A Stock in accordance with their respective terms and provisions and tender the shares of Common Stock issuable upon conversion in accordance with the terms and conditions of the Offer prior to the expiration of the Offer. See Section 4 of the Offer to Purchase. THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 7 OF THE OFFER TO PURCHASE. 2 For your information and for forwarding to your clients for whom you hold Shares registered in your name or in the name of your nominee, we are enclosing the following documents: 1. Offer to Purchase, dated March 15, 1995; 2. Letter to Clients who are Common Stockholders which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Offer; 3. Letter to Clients who are Series A Stockholders which may be sent to your clients for whose accounts you hold shares of Series A Stock registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Offer; 4. Letter to stockholders of the Company, dated March 15, 1995, from Robert J. Tarr, Jr., President and Chief Executive Officer, and Richard A. Smith, Chairman of the Board; 5. Letter to Series A Stockholders of the Company, dated March 15, 1995, from Robert J. Tarr, Jr., President and Chief Executive Officer, and Richard A. Smith, Chairman of the Board; 6. Notice of Conversion for Series A Stockholders for your use and for the information of your clients; 7. Letter of Transmittal for your use and for the information of your clients (together with accompanying Substitute Form W-9 and guidelines); and 8. Notice of Guaranteed Delivery to be used to accept the Offer if the Share certificates and all other required documents cannot be delivered to the Depositary by the Expiration Date or if the procedure for book-entry transfer cannot be completed on a timely basis. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON APRIL 11, 1995, UNLESS THE OFFER IS EXTENDED. No fees or commissions will be payable to brokers, dealers or any person for soliciting tenders of Shares pursuant to the Offer other than fees paid to the Dealer Manager, the Information Agent or the Depositary as described in Section 17 of the Offer to Purchase. The Company will, however, upon request, reimburse you for customary mailing and handling expenses incurred by you in forwarding any of the enclosed materials to the beneficial owners of shares of Common Stock or shares of Series A Stock held by you as a nominee or in a fiduciary capacity. The Company will pay or cause to be paid any stock transfer taxes applicable to its purchase of Shares, except as otherwise provided in Instruction 7 of the Letter of Transmittal. In order to take advantage of the Offer, a duly executed and properly completed Letter of Transmittal and, if necessary, Notice of Conversion and any other required documents should be sent to the Depositary with either certificate(s) representing the tendered Shares and/or the Series A Stock to be converted, or confirmation of the book-entry transfer of the tendered Shares and/or the Series A Stock to be converted, all in accordance with the instructions set forth in the Notice of Conversion, the Letter of Transmittal and the Offer to Purchase. As described in Section 3 of the Offer to Purchase, tenders may be made without the concurrent deposit of stock certificates or concurrent compliance with the procedure for book-entry transfer if such tenders are made by or through a broker or dealer which is a member firm of a registered national securities exchange, a member of the Stock Transfer Association's approved medallion program (such as STAMP, SEMP or MSP) or a commercial bank or trust company having an office, branch or agency in the United States. Certificates for Shares so tendered (or a confirmation of a book-entry transfer of such Shares into the Depositary's account at one of the "Book-Entry Transfer Facilities" described in Section 3 of the Offer to Purchase), together with a properly completed and duly executed Letter of Transmittal and any other documents required by the Letter of Transmittal must be received by the Depositary within five New York Stock Exchange trading days after timely receipt by the Depositary of a properly completed and duly executed Notice of Guaranteed Delivery. 3 Any inquiries you may have with respect to the Offer should be addressed to the Dealer Manager or the Information Agent at their respective addresses and telephone numbers set forth on the back cover page of the Offer to Purchase. Additional copies of the enclosed material may be obtained from the Information Agent, MacKenzie Partners Inc., telephone: (212) 929-5500 (collect) or (800) 322-2885 (toll-free). Very truly yours, SALOMON BROTHERS INC Enclosures NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON AS AN AGENT OF THE COMPANY OR ANY OF ITS AFFILIATES, THE DEALER MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN. EX-99.A5 6 FORM OF CLIENT LETTER (COMMON) 1 HARCOURT GENERAL, INC. OFFER TO PURCHASE FOR CASH UP TO 5,000,000 SHARES OF ITS COMMON STOCK AT A PURCHASE PRICE NOT GREATER THAN $41.50 NOR LESS THAN $36.00 PER SHARE To Our Clients who are Common Stockholders: Enclosed for your consideration are the Offer to Purchase dated March 15, 1995, and the related Letter of Transmittal (which together constitute the "Offer") in connection with the Offer by Harcourt General, Inc., a Delaware corporation (the "Company"), to purchase up to 5,000,000 shares of its Common Stock, par value $1.00 per share (the "Shares" or the "Common Stock"), at a price, net to the seller in cash, not greater than $41.50 nor less than $36.00 per Share, upon the terms and subject to the conditions set forth in the Offer. The Company will, upon the terms and subject to the conditions of the Offer, determine a single price per Share that it will pay for the Shares (the "Purchase Price") properly tendered and not withdrawn pursuant to the Offer, taking into account the number of Shares so tendered and the prices specified by tendering stockholders of the Shares that will allow it to buy 5,000,000 Shares (or such lesser number of Shares as are properly tendered and not withdrawn) at prices not greater than $41.50 nor less than $36.00 per Share pursuant to the Offer. All Shares properly tendered prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase) at prices at or below the Purchase Price and not withdrawn will be purchased at the Purchase Price, net to the seller in cash, upon the terms and subject to the conditions of the Offer, including the proration terms described in the Offer to Purchase. The Company will return all other Shares, including Shares tendered at prices greater than the Purchase Price and Shares not purchased because of proration. See Section 1 of the Offer to Purchase. Upon the terms and subject to the conditions of the Offer, in the event that prior to the Expiration Date, more than 5,000,000 Shares (or such greater number of Shares as the Company elects to purchase) are properly tendered and not withdrawn at or below the Purchase Price, the Company will accept Shares for purchase first from Odd Lot Owners (as defined in Section 2 of the Offer to Purchase) whose Shares are properly tendered at or below the Purchase Price (and not withdrawn) and then on a pro rata basis from all other stockholders whose Shares are properly tendered at or below the Purchase Price (and not withdrawn). See Introduction and Section 1 of the Offer to Purchase. Shares of Class B Stock, par value $1.00 per Share (the "Class B Stock"), or the Series A Cumulative Convertible Stock, par value $1.00 per Share (the "Series A Stock"), will not be accepted for tender. Holders of either the Class B Stock or the Series A Stock who wish to participate in the Offer must convert such Class B Stock or Series A Stock in accordance with their respective terms and provisions and tender the Shares issuable upon conversion in accordance with the terms and conditions of the Offer. WE ARE THE OWNER OF RECORD OF SHARES OF COMMON STOCK HELD FOR YOUR ACCOUNT. AS SUCH, WE ARE THE ONLY ONES WHO CAN TENDER YOUR SHARES OF COMMON STOCK, AND THEN ONLY PURSUANT TO YOUR INSTRUCTIONS. WE ARE SENDING YOU THE LETTER OF TRANSMITTAL FOR YOUR INFORMATION ONLY; YOU CANNOT USE IT TO TENDER SHARES OF COMMON STOCK WE HOLD FOR YOUR ACCOUNT. IF WE ARE ALSO THE OWNER OF RECORD OF SHARES OF SERIES A STOCK HELD FOR YOUR ACCOUNT, YOU SHOULD HAVE RECEIVED FROM US AN ADDITIONAL LETTER INFORMING YOU HOW TO INSTRUCT US TO CONVERT SHARES OF SERIES A STOCK HELD FOR YOUR ACCOUNT IN ORDER TO TENDER TO THE COMPANY ALL SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION. YOU MUST COMPLETE THAT SEPARATE INSTRUCTION FORM IN ORDER TO HAVE US CONVERT YOUR SERIES A STOCK AND TENDER THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION. Please instruct us as to whether you wish us to tender any or all of the Shares we hold for your account on the terms and subject to the conditions of the Offer. 2 We call your attention to the following: 1. You may tender Shares at prices not greater than 41.50 nor less than 36.00 per Share, as indicated in the attached Instruction Form, net to you in cash. 2. You may designate the priority in which your Shares shall be purchased in the event of proration. 3. If you beneficially hold Shares in the Company's Dividend Reinvestment Plan, you may instruct us to tender on your behalf all, but not less than all, such Shares held therein. By checking the box captioned "Tender of Dividend Reinvestment Plan Shares" in the attached Instruction Form, you will instruct us to tender to the Company all of your Shares in the Company's Dividend Reinvestment Plan. 4. The Offer is not conditioned upon any minimum number of Shares being tendered. 5. The Offer, proration period and withdrawal rights will expire at 12:00 Midnight, New York City time, on April 11, 1995, unless the Company extends the Offer. 6. The Offer is for 5,000,000 Shares, constituting approximately 6.3% of the Company's outstanding equity securities as of March 10, 1995. 7. Tendering stockholders will not be obligated to pay any brokerage commissions, solicitation fees or, subject to Instruction 7 of the Letter of Transmittal, stock transfer taxes on the Company's purchase of Shares pursuant to the Offer. 8. If you beneficially hold, as of the close of business on the Expiration Date, an aggregate of fewer than 100 Shares (after giving effect to the conversion by you of Class B Stock or Series A Stock into the Shares prior to the Expiration Date and including any Shares held by you in the Company's Dividend Reinvestment Plan), and you instruct us to tender on your behalf all such Shares at or below the Purchase Price before the Expiration Date and check the box captioned "Odd Lots" in the attached Instruction Form, the Company, upon the terms and subject to the conditions of the Offer, will accept all such Shares for purchase before proration, if any, of the purchase of other Shares properly tendered at or below the Purchase Price. 9. If you wish to tender portions of your Shares at different prices you must complete a separate Instruction Form for each price at which you wish to tender each such portion of your Shares. We must submit separate Letters of Transmittal on your behalf for each price you will accept. If you wish to have us tender any or all of your Shares, please so instruct us by completing, executing, detaching and returning to us the attached Instruction Form. An envelope to return your Instruction Form to us is enclosed. If you authorize us to tender your Shares, we will tender all such Shares unless you specify otherwise on the attached Instruction Form. YOUR INSTRUCTION FORM SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF ON OR BEFORE THE EXPIRATION DATE OF THE OFFER. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON APRIL 11, 1995, UNLESS THE COMPANY EXTENDS THE OFFER. As described in Section 1 of the Offer to Purchase, if prior to the Expiration Date more than 5,000,000 Shares (or such greater number of Shares as the Company elects to purchase) are properly tendered and not withdrawn at or below the Purchase Price, the Company will accept Shares for purchase at the Purchase Price in the following order of priority: (a) first, all Shares properly tendered at or below the Purchase Price prior to the Expiration Date (and not withdrawn) by any Odd Lot Owner (as defined in the Offer to Purchase), including any shares held by such Odd Lot Owner in the Company's Dividend Reinvestment Plan, who: (1) tenders all Shares beneficially owned by such Odd Lot Owner at or below the Purchase Price (partial tenders will not qualify for this preference); and 3 (2) completes the section entitled "Odd Lots" on the Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery; and (b) then, after purchase of all the foregoing Shares, all other Shares properly tendered at or below the Purchase Price, before the Expiration Date (and not withdrawn) on a pro rata basis, if necessary (with adjustments to avoid purchases of fractional Shares). The Offer is not being made to, nor will the Company accept tenders from or on the behalf of, holders of Shares in any jurisdiction in which the Offer or its acceptance would not comply with the securities or Blue Sky laws of such jurisdiction. In any jurisdiction in which the securities or Blue Sky laws require the Offer to be made by a licensed broker or dealer, the Offer is being made on the Company's behalf by Salomon Brothers Inc as Dealer Manager or one or more registered brokers or dealers licensed under the law of such jurisdiction. INSTRUCTION FORM WITH RESPECT TO THE HARCOURT GENERAL, INC. OFFER TO PURCHASE FOR CASH UP TO 5,000,000 SHARES OF ITS COMMON STOCK AT A PURCHASE PRICE NOT GREATER THAN $41.50 NOR LESS THAN $36.00 PER SHARE The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated March 15, 1995, and the related Letter of Transmittal (which together constitute the "Offer") in connection with the Offer by Harcourt General, Inc., a Delaware corporation (the "Company"), to purchase up to 5,000,000 shares of its Common Stock, par value $1.00 per share (the "Shares" or the "Common Stock"), at a price, net to the seller in cash, not greater than $41.50 nor less than $36.00 per Share, upon the terms and subject to the conditions of the Offer. The undersigned understands that the Company will, upon the terms and subject to the conditions of the Offer, determine a single price per Share that it will pay for the Shares (the "Purchase Price") properly tendered and not withdrawn pursuant to the Offer, taking into account the number of Shares so tendered and the prices specified by tendering stockholders of the Shares that will allow it to buy 5,000,000 Shares (or such lesser number of Shares as are properly tendered and not withdrawn) at prices not greater than $41.50 nor less than $36.00 per Share pursuant to the Offer. All Shares properly tendered at prices at or below the Purchase Price and not withdrawn will be purchased at the Purchase Price, net to the seller in cash, upon the terms and subject to the conditions of the Offer, including the proration terms described in the Offer to Purchase. The Company will return all other Shares, including Shares tendered at prices greater than the Purchase Price and Shares not purchased because of proration. See Section 1 of the Offer to Purchase. The undersigned hereby instruct(s) you to tender to the Company the number of Shares indicated below held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer to Purchase and the related Letter of Transmittal. / / By checking this box, all Shares held by us for your account, including fractional Shares but excluding Shares, if any, held in the Company's Dividend Reinvestment Plan, will be tendered. If fewer than all Shares are to be tendered, please check the box and indicate below the aggregate number of Shares to be tendered by us. Shares* - --------------- * Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered. TENDER OF DIVIDEND REINVESTMENT PLAN SHARES / / CHECK HERE TO TENDER TO THE COMPANY ALL SHARES HELD IN THE COMPANY'S DIVIDEND REINVESTMENT PLAN. 4 ODD LOTS (SEE INSTRUCTION 8 OF THE LETTER OF TRANSMITTAL) / / By Checking this box, the undersigned represents that the undersigned will be the beneficial owner as of the close of business on the Expiration Date of an aggregate of fewer than 100 shares of Common Stock (after giving effect to the conversion of Class B Stock or Series A Stock into shares of Common Stock prior to the Expiration Date and including any shares of Common Stock held in the Company's Dividend Reinvestment Plan) and is instructing the holder to tender all such Shares of Common Stock. In addition, the undersigned is tendering shares of Common Stock either (check one box): / / at the Purchase Price, as the same shall be determined by the Company in accordance with the terms of the Offer (persons checking this box need not indicate the price per Share of Common Stock below); or / / at the price per share of Common Stock indicated below under "Price (in Dollars) Per Share of Common Stock at Which Shares of Common Stock Are Being Tendered" on this Instructional Form. PRICE (IN DOLLARS) PER SHARE OF COMMON STOCK AT WHICH SHARES OF COMMON STOCK ARE BEING TENDERED - -------------------------------------------------------------------------------- IF SHARES OF COMMON STOCK ARE BEING TENDERED AT MORE THAN ONE PRICE, USE A SEPARATE INSTRUCTION FORM FOR EACH PRICE SPECIFIED. - -------------------------------------------------------------------------------- CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, THERE IS NO PROPER TENDER OF SHARES OF COMMON STOCK. - -------------------------------------------------------------------------------- / / $36.000 / / $37.000 / / $38.000 / / $39.000 / / $40.000 / / $41.000 / / $36.125 / / $37.125 / / $38.125 / / $39.125 / / $40.125 / / $41.125 / / $36.250 / / $37.250 / / $38.250 / / $39.250 / / $40.250 / / $41.250 / / $36.375 / / $37.375 / / $38.375 / / $39.375 / / $40.375 / / $41.375 / / $36.500 / / $37.500 / / $38.500 / / $39.500 / / $40.500 / / $41.500 / / $36.625 / / $37.625 / / $38.625 / / $39.625 / / $40.625 / / $36.750 / / $37.750 / / $38.750 / / $39.750 / / $40.750 / / $36.875 / / $37.875 / / $38.875 / / $39.875 / / $40.875
- -------------------------------------------------------------------------------- SIGNATURE BOX Signature(s) - -------------------------------------------------------------------------------- Dated - -------------------------------------------------------------------------------- Name(s) and Address(es) ----------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (PLEASE PRINT) Account Number - -------------------------------------------------------------------------------- Area Code and Telephone Number --------------------------------------------------------------------- Taxpayer Identification or Social Security Number ----------------------------------------------------- EX-99.A6 7 FORM OF CLIENT LETTER (SERIES A) 1 HARCOURT GENERAL, INC. OFFER TO PURCHASE FOR CASH UP TO 5,000,000 SHARES OF ITS COMMON STOCK AT A PURCHASE PRICE NOT GREATER THAN $41.50 NOR LESS THAN $36.00 PER SHARE To Our Clients who are Series A Stockholders: Enclosed for your consideration are the Offer to Purchase dated March 15, 1995, and the related Letter of Transmittal (which together constitute the "Offer") and the related Notice of Conversion for Series A Stock (the "Notice of Conversion") in connection with the Offer by Harcourt General, Inc., a Delaware corporation (the "Company"), to purchase up to 5,000,000 shares of its Common Stock, par value $1.00 per share (the "Shares" or the "Common Stock"), at a price, net to the seller in cash, not greater than $41.50 nor less than $36.00 per Share, upon the terms and subject to the conditions set forth in the Offer. The Company will, upon the terms and subject to the conditions of the Offer, determine a single price per Share that it will pay for the Shares (the "Purchase Price") properly tendered and not withdrawn pursuant to the Offer, taking into account the number of Shares so tendered and the prices specified by tendering stockholders of the Shares that will allow it to buy 5,000,000 Shares (or such lesser number of Shares as are properly tendered and not withdrawn) at prices not greater than $41.50 nor less than $36.00 per Share pursuant to the Offer. All Shares properly tendered prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase) at prices at or below the Purchase Price and not withdrawn will be purchased at the Purchase Price, net to the seller in cash, upon the terms and subject to the conditions of the Offer, including the proration terms described in the Offer to Purchase. The Company will return all other Shares, including Shares tendered at prices greater than the Purchase Price and Shares not purchased because of proration. See Section 1 of the Offer to Purchase. Upon the terms and subject to the conditions of the Offer, in the event that prior to the Expiration Date, more than 5,000,000 Shares (or such greater number of Shares as the Company elects to purchase) are properly tendered and not withdrawn at or below the Purchase Price, the Company will accept Shares for purchase first from Odd Lot Owners (as defined in Section 2 of the Offer to Purchase) whose Shares are properly tendered at or below the Purchase Price (and not withdrawn) and then on a pro rata basis from all other stockholders whose Shares are properly tendered at or below the Purchase Price (and not withdrawn). See Introduction and Section 1 of the Offer to Purchase. Shares of the Company's Class B Stock, par value $1.00 per Share (the "Class B Stock"), or Series A Cumulative Convertible Stock, par value $1.00 per Share (the "Series A Stock"), will not be accepted for tender. Holders of either the Class B Stock or the Series A Stock who wish to participate in the Offer must convert such Class B Stock or Series A Stock in accordance with their respective terms and provisions and tender the Shares issuable upon conversion in accordance with the terms and conditions of the Offer. WE ARE THE OWNER OF RECORD OF SHARES OF SERIES A STOCK HELD FOR YOUR ACCOUNT. AS SUCH, WE ARE THE ONLY ONES WHO CAN CONVERT YOUR SHARES OF SERIES A STOCK AND TENDER THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION TO THE COMPANY, AND THEN IN EACH CASE ONLY PURSUANT TO YOUR INSTRUCTIONS. WE ARE SENDING YOU THE LETTER OF TRANSMITTAL AND THE NOTICE OF CONVERSION FOR YOUR INFORMATION ONLY; YOU CANNOT USE THE NOTICE OF CONVERSION TO CONVERT SHARES OF SERIES A STOCK WE HOLD FOR YOUR ACCOUNT AND YOU CANNOT USE THE LETTER OF TRANSMITTAL TO TENDER SHARES OF COMMON STOCK ISSUED UPON CONVERSION OF SERIES A STOCK. IF WE ARE ALSO THE OWNER OF RECORD OF SHARES OF COMMON STOCK HELD FOR YOUR ACCOUNT, YOU SHOULD HAVE RECEIVED FROM US AN ADDITIONAL LETTER INFORMING YOU HOW TO INSTRUCT US TO TENDER THOSE SHARES OF COMMON STOCK TO THE COMPANY. YOU MUST COMPLETE THAT SEPARATE INSTRUCTION FORM IN ORDER TO HAVE US TENDER THOSE SHARES OF COMMON STOCK FOR YOU. 2 Please instruct us as to whether you wish us to convert any or all of the shares of Series A Stock we hold for your account. All shares of Common Stock issued upon conversion of such shares of Series A Stock pursuant to the Green Notice of Conversion supplied for your information will be tendered to the Company on the terms and subject to the conditions of the Offer. We call your attention to the following: 1. You may convert all or a portion of shares of Series A Stock. 2. Partial tenders may not be effected with respect to Shares issued upon conversion of Series A Stock pursuant to the Green Notice of Conversion supplied for your information. 3. You may tender Shares issued upon conversion of Series A Stock at prices not greater than 41.50 nor less than 36.00 per Share, as indicated in the attached Instruction Form, net to you in cash. 4. You may designate the priority in which your Shares issued upon conversion of Series A Stock shall be purchased in the event of proration. 5. The Offer is not conditioned upon any minimum number of Shares being tendered. 6. The Offer, proration period and withdrawal rights will expire at 12:00 Midnight, New York City time, on April 11, 1995, unless the Company extends the Offer. 7. The Offer is for 5,000,000 Shares, constituting approximately 6.3% of the Company's currently outstanding equity securities as of March 10, 1995. 8. Tendering stockholders will not be obligated to pay any brokerage commissions, solicitation fees or, subject to Instruction 7 of the Letter of Transmittal, stock transfer taxes on the Company's purchase of Shares pursuant to the Offer. 9. If you beneficially hold, as of the close of business on the Expiration Date, an aggregate of fewer than 100 Shares (after giving effect to the conversion by you of Class B Stock or Series A Stock into the Shares prior to the Expiration Date and including any Shares held by you in the Company's Dividend Reinvestment Plan), and you instruct us to tender on your behalf all such Shares at or below the Purchase Price before the Expiration Date and check the box captioned "Odd Lots" in the attached Instruction Form, the Company, upon the terms and subject to the conditions of the Offer, will accept all such Shares for purchase before proration, if any, of the purchase of other Shares properly tendered at or below the Purchase Price. 10. If you wish to tender portions of your Shares issued upon conversion of Series A Stock at different prices you must complete a separate Instruction Form for each price at which you wish to tender each such portion of your Shares. We must submit separate Letters of Transmittal on your behalf for each price you will accept. If you wish to have us convert any or all of your shares of Series A Stock and tender the Shares issued upon conversion, please so instruct us by completing, executing, detaching and returning to us the attached Instruction Form. An envelope to return your Instruction Form to us is enclosed. If you authorize us to convert your shares of Series A Stock, we will convert all such shares of Series A Stock, unless you specify otherwise on the attached Instruction Form, and tender all Shares issued upon conversion. YOUR INSTRUCTION FORM SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A NOTICE OF CONVERSION AND TENDER ON YOUR BEHALF ON OR BEFORE THE EXPIRATION DATE OF THE OFFER. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON APRIL 11, 1995, UNLESS THE COMPANY EXTENDS THE OFFER. As described in Section 1 of the Offer to Purchase, if prior to the Expiration Date more than 5,000,000 Shares (or such greater number of Shares as the Company elects to purchase) are properly tendered and not 3 withdrawn at or below the Purchase Price, the Company will accept Shares for purchase at the Purchase Price in the following order of priority: (a) first, all Shares properly tendered at or below the Purchase Price prior to the Expiration Date (and not withdrawn) by any Odd Lot Owner (as defined in the Offer to Purchase), including any shares held by such Odd Lot Owner in the Company's Dividends Reinvestment Plan, who: (1) tenders all Shares beneficially owned by such Odd Lot Owner at or below the Purchase Price (partial tenders will not qualify for this preference); and (2) completes the section entitled "Odd Lots" on the Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery; and (b) then, after purchase of all the foregoing Shares, all other Shares properly tendered at or below the Purchase Price, before the Expiration Date (and not withdrawn) on a pro rata basis, if necessary (with adjustments to avoid purchases of fractional Shares). The Offer is not being made to, nor will the Company accept tenders from or on the behalf of, holders of Shares in any jurisdiction in which the Offer or its acceptance would not comply with the securities or Blue Sky laws of such jurisdiction. In any jurisdiction in which the securities or Blue Sky laws require the Offer to be made by a licensed broker or dealer, the Offer is being made on the Company's behalf by Salomon Brothers Inc as Dealer Manager or one or more registered brokers or dealers licensed under the law of such jurisdiction. 4 INSTRUCTION FORM WITH RESPECT TO THE HARCOURT GENERAL, INC. OFFER TO PURCHASE FOR CASH UP TO 5,000,000 SHARES OF ITS COMMON STOCK AT A PURCHASE PRICE NOT GREATER THAN $41.50 NOR LESS THAN $36.00 PER SHARE The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated March 15, 1995, and the related Letter of Transmittal (which together constitute the "Offer") and the related Notice of Conversion for Series A Stock (the "Notice of Conversion") in connection with the Offer by Harcourt General, Inc., a Delaware corporation (the "Company"), to purchase up to 5,000,000 shares of its Common Stock, par value $1.00 per share (the "Shares" or the "Common Stock"), at a price, net to the seller in cash, not greater than $41.50 nor less than $36.00 per Share, upon the terms and subject to the conditions of the Offer. The undersigned understands that the Company will, upon the terms and subject to the conditions of the Offer, determine a single price per Share that it will pay for the Shares (the "Purchase Price") properly tendered and not withdrawn pursuant to the Offer, taking into account the number of Shares so tendered and the prices specified by tendering stockholders of the Shares that will allow it to buy 5,000,000 Shares (or such lesser number of Shares as are properly tendered and not withdrawn) at prices not greater than $41.50 nor less than $36.00 per Share pursuant to the Offer. All Shares properly tendered at prices at or below the Purchase Price and not withdrawn will be purchased at the Purchase Price, net to the seller in cash, upon the terms and subject to the conditions of the Offer, including the proration terms described in the Offer to Purchase. The Company will return all other Shares, including Shares tendered at prices greater than the Purchase Price and Shares not purchased because of proration. See Section 1 of the Offer to Purchase. The undersigned hereby instruct(s) you to convert the number of shares of Series A Cumulative Convertible Stock (the "Series A Stock") indicated below held by you for the account of the undersigned and tender to the Company all Shares issued upon such conversion, upon the terms and subject to the conditions set forth in the Offer to Purchase and the related Letter of Transmittal. / / By checking this box, all shares of Series A Stock held by us for your account, including fractional shares, will be converted, and all Shares issued upon conversion will be tendered. If fewer than all shares of Series A Stock are to be converted, please check the box and indicate below the aggregate number of shares of Series A Stock to be converted by us. All Shares issued upon conversion will be tendered. Shares* - --------------- * Unless otherwise indicated, it will be assumed that all shares of Series A Stock held by us for your account are to be converted. All Shares issued upon conversion will be tendered. 5 ODD LOTS (SEE INSTRUCTION 8 OF THE LETTER OF TRANSMITTAL) / / By Checking this box, the undersigned represents that the undersigned will be the beneficial owner as of the close of business on the Expiration Date of an aggregate of fewer than 100 shares of Common Stock (after giving effect to the conversion of Class B Stock or Series A Stock into shares of Common Stock prior to the Expiration Date and including any shares of Common Stock held in the Company's Dividend Reinvestment Plan) and is instructing the holder to tender all such shares of Common Stock. In addition, the undersigned is tendering the shares of Common Stock (including shares of Common Stock issued upon conversion of Class B Stock or Series A Stock) either (check one box): / / at the Purchase Price, as the same shall be determined by the Company in accordance with the terms of the Offer (persons checking this box need not indicate the price per Share of Common Stock below); or / / at the price per share of Common Stock indicated below under "Price (in Dollars) Per Share of Common Stock at Which Shares of Common Stock Issued Upon Conversion of Series A Stock are Being Tendered" on this Instructional Form. PRICE (IN DOLLARS) PER SHARE OF COMMON STOCK AT WHICH SHARES OF COMMON STOCK ISSUED UPON CONVERSION OF SERIES A STOCK ARE BEING TENDERED - --------------------------------------------------------------------------- IF SHARES OF COMMON STOCK ISSUED UPON CONVERSION OF SERIES A STOCK ARE BEING TENDERED AT MORE THAN ONE PRICE, USE A SEPARATE INSTRUCTION FORM FOR EACH PRICE SPECIFIED. - --------------------------------------------------------------------------- CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, THERE IS NO PROPER TENDER OF SHARES OF COMMON STOCK ISSUED UPON CONVERSION OF SERIES A STOCK. / / $36.000 / / $37.000 / / $38.000 / / $39.000 / / $40.000 / / $41.000 / / $36.125 / / $37.125 / / $38.125 / / $39.125 / / $40.125 / / $41.125 / / $36.250 / / $37.250 / / $38.250 / / $39.250 / / $40.250 / / $41.250 / / $36.375 / / $37.375 / / $38.375 / / $39.375 / / $40.375 / / $41.375 / / $36.500 / / $37.500 / / $38.500 / / $39.500 / / $40.500 / / $41.500 / / $36.625 / / $37.625 / / $38.625 / / $39.625 / / $40.625 / / $36.750 / / $37.750 / / $38.750 / / $39.750 / / $40.750 / / $36.875 / / $37.875 / / $38.875 / / $39.875 / / $40.875
SIGNATURE BOX Signature(s) ---------------------------------------------------------------- Dated ---------------------------------------------------------------------- Name(s) and Address(es) ----------------------------------------------------- - ---------------------------------------------------------------------------- (PLEASE PRINT) Account Number -------------------------------------------------------------- Area Code and Telephone Number ---------------------------------------------- Taxpayer Identification or Social Security Number --------------------------- EX-99.A7 8 FORM OF LETTER TO HOLDERS FROM PRES. & CHAIRMAN 1 March 15, 1995 DEAR FELLOW STOCKHOLDERS: We are pleased to inform you that the Board of Directors of Harcourt General, Inc. (the "Company") has approved an offer to purchase up to 5,000,000 shares of the Company's Common Stock, representing approximately 6.3% of the Company's currently outstanding equity securities. This offer provides stockholders with an opportunity to sell some or all of their shares without the payment of any brokerage fees. The Company will use a portion of its available cash on hand to purchase the shares. Under the terms of the offer, the price paid for your shares will be between $36.00 and $41.50 per share. The Offer to Purchase is being made by means of a so-called "Dutch Auction," which permits you to select the cash price within the specified range at which you are willing to sell shares to the Company. The Company will determine the lowest single purchase price within that range that will enable it to buy 5,000,000 shares, assuming at least that many shares have been properly tendered. The Company will then pay that price for all shares properly tendered at or below that price, subject to possible proration. Any shares tendered by you which the Company does not purchase will be returned to you. The Board of Directors has determined to make this offer because, over the past several years, the Company's operations have generated substantial cash, resulting in a strong balance sheet with substantial borrowing capacity. In addition, we sold our insurance businesses on October 31, 1994, realizing after-tax cash proceeds of approximately $375 million. We continue to consider potential acquisitions as a use of our cash balances, but major acquisitions have not been available at prices we believe would result in attractive returns for our stockholders. Even after this share repurchase is completed, we will have adequate cash balances as well as ready access to other sources of capital sufficient to pursue attractive acquisition opportunities that might become available. Therefore, the Board of Directors believes that the purchase of shares is an attractive use of a portion of the Company's available cash on behalf of its stockholders, and is consistent with our long-term corporate goal of increasing stockholder value. Stockholders who own fewer than 100 shares should note that the offer represents an opportunity for them to sell their shares without having to pay brokerage commissions or odd lot discounts. Neither the Company nor the Board of Directors is making any recommendation to stockholders as to whether to tender or refrain from tendering shares. As explained in more detail in the enclosed Offer to Purchase, no stockholders affiliated with the Smith Family Group, which includes Richard A. Smith, the Chairman of the Board of the Company, and members of his family, intend to tender any shares pursuant to the offer, except that Jeffrey R. Lurie, a member of the Group, has informed the Company that he may tender up to 510,640 shares. Mr. Lurie may, however, sell any or all of these shares in the open market rather than under the offer. No director or executive officer of the Company intends to tender any shares under the offer. Unless extended by the Company, the offer will expire at 12:00 Midnight, New York City time, on April 11, 1995. The offer is explained in detail in the enclosed Offer to Purchase and related Letter of Transmittal. We encourage you to read these materials carefully before making any decision with respect to the offer. Should you have any questions regarding the offer or need assistance in tendering your shares, please call MacKenzie Partners, Inc., the Information Agent for the offer, toll-free at (800) 322-2885. Richard A. Smith Robert J. Tarr, Jr. Chairman of the Board President and Chief Executive Officer
EX-99.A8 9 FORM OF LETTER TO HOLDERS (B) FROM PRES. & CHAIR. 1 March 15, 1995 DEAR CLASS B STOCKHOLDER: Enclosed for your information are materials relating to our offer (the "Offer") to purchase up to 5,000,000 shares of the Company's Common Stock, par value $1.00 per share (the "Common Stock"), at a price between $36.00 and $41.50 per share by means of a so-called "Dutch Auction." Under the terms of the Offer, we will determine a single price per share between $36.00 and $41.50 that we will pay for the shares of Common Stock to be purchased pursuant to the Offer, taking into account the number of shares of Common Stock tendered and the prices specified by tendering stockholders. We will select as the purchase price the lowest single purchase price within that range which will allow us to buy up to 5,000,000 shares of Common Stock. The Offer expires on April 11, 1995. The Offer is not being made for the Class B Stock, par value $1.00 per share (the "Class B Stock"). If you wish to participate in the Offer, you must convert your Class B Stock into Common Stock and then tender the shares of Common Stock prior to the expiration of the Offer. Each share of Class B Stock is convertible at any time into one share of Common Stock. A conversion of the Class B Stock into shares of Common Stock cannot be revoked under any circumstances, including a withdrawal of shares of Common Stock tendered pursuant to the Offer or the expiration or termination of the Offer without the purchase of any of the shares of Common Stock pursuant thereto. To the extent your Class B Stock is converted into shares of Common Stock, but the resulting shares of Common Stock are not purchased pursuant to the Offer (whether because the Offer is terminated or withdrawn, or by reason of proration or otherwise), you will have lost all preferential rights as a holder of Class B Stock (for example, while Class B Stock normally carries one vote per share, it is entitled to ten votes per share on the election of directors under certain circumstances) as compared to Common Stock and all rights to dividends in respect of the shares of Class B Stock. Shares of Class B Stock so converted will not receive the quarterly cash dividend of $.144 per share of Class B Stock, to be paid by the Company on April 28, 1995 to holders of record on April 22, 1995. However, to the extent your shares of Common Stock issuable upon conversion of your Class B Stock are not purchased pursuant to the Offer for any reason whatsoever, you will be entitled as a holder of Common Stock to the quarterly cash dividend of $.16 per share of Common Stock to be paid by the Company on April 28, 1995 to holders of record on April 22, 1995. Neither the Company nor its Board of Directors makes any recommendation to stockholders as to whether to convert any or all of your Class B Stock and tender all the shares of Common Stock issuable upon such conversion. In the event you wish to participate in the Offer, we have established procedures designed to help facilitate the conversion of your Class B Stock and the concurrent tender of your shares of Common Stock. In order for you to convert all or any portion of your shares of Class B Stock and concurrently tender all of the shares of Common Stock issuable upon conversion of such shares of Class B Stock, (i) a properly completed and duly executed Blue Notice of Conversion (or manually executed facsimile thereof) with any required signature guarantees and any other documents required by such Notice of Conversion must be received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase, and certificates for the shares of Class B Stock to be converted must be transmitted to and received by the Depositary at one of such addresses, by April 11, 1995 and (ii) a properly completed and duly executed Letter of Transmittal (or manually executed facsimile thereof) with any required signature guarantees and any other documents required by the Letter of Transmittal with respect to the shares of Common Stock issued upon conversion of the Class B Stock must be delivered to the Depositary in accordance with the procedures for tendering shares of Common Stock and completing the Letter of Transmittal as set forth in the Offer to Purchase and in the instructions to the Letter of Transmittal. 2 By properly completing and duly executing the enclosed Blue Notice of Conversion and Letter of Transmittal, you will be deemed to have tendered all of the shares of Common Stock issuable upon conversion of the shares of Class B Stock that you seek to convert. If you desire to convert your shares of Class B Stock and participate in the Offer, you should carefully read the enclosed Offer to Purchase in its entirety. Questions and requests for assistance with the conversion of shares of Class B Stock and concurrent tender of the shares of Common Stock issuable upon conversion may be directed to the Information Agent, toll-free at (800) 322-2885. Richard A. Smith Robert J. Tarr, Jr. Chairman of the Board President and Chief Executive Officer
EX-99.A9 10 FORM OF LETTER TO HOLDERS (A) FROM PRES. & CHAIR. 1 March 15, 1995 DEAR SERIES A STOCKHOLDER: Enclosed for your information are materials relating to our offer (the "Offer") to purchase up to 5,000,000 shares of the Company's Common Stock, par value $1.00 per share (the "Common Stock"), at a price between $36.00 and $41.50 per share by means of a so-called "Dutch Auction." Under the terms of the Offer, we will determine a single price per share between $36.00 and $41.50 that we will pay for the shares of Common Stock to be purchased pursuant to the Offer, taking into account the number of shares of Common Stock tendered and the prices specified by tendering stockholders. We will select as the purchase price the lowest single purchase price within that range which will allow us to buy up to 5,000,000 shares of Common Stock. The Offer expires on April 11, 1995. The Offer is not being made for the Series A Cumulative Convertible Stock, par value $1.00 per share (the "Series A Stock"). If you wish to participate in the Offer, you must convert your Series A Stock into Common Stock and then tender the shares of Common Stock prior to the expiration of the Offer. Each share of Series A Stock is convertible at any time into 1.1 shares of Common Stock, subject to adjustment in certain events. A conversion of the Series A Stock into shares of Common Stock cannot be revoked under any circumstances, including a withdrawal of shares of Common Stock tendered pursuant to the Offer or the expiration or termination of the Offer without the purchase of any of the shares of Common Stock pursuant thereto. To the extent your Series A Stock is converted into shares of Common Stock, but the resulting shares of Common Stock are not purchased pursuant to the Offer (whether because the Offer is terminated or withdrawn, or by reason of proration or otherwise), you will have lost all preferential rights as a holder of Series A Stock as compared to Common Stock and all rights to dividends in respect of the shares of Series A Stock. Shares of Series A Stock so converted will not receive the quarterly cash dividend of $.1835 per share of Series A Stock, to be paid by the Company on April 28, 1995 to holders of record on April 22, 1995. However, to the extent your shares of Common Stock issuable upon conversion of your Series A Stock are not purchased pursuant to the Offer for any reason whatsoever, you will be entitled as a holder of Common Stock to the quarterly cash dividend of $.16 per share of Common Stock, to be paid by the Company on April 28, 1995 to holders of record on April 22, 1995. Neither the Company nor its Board of Directors makes any recommendation to stockholders as to whether to convert any or all of your Series A Stock and tender all the shares of Common Stock issuable upon such conversion. In the event you wish to participate in the Offer, we have established procedures designed to help facilitate the conversion of your Series A Stock and the concurrent tender of your shares of Common Stock. In order for you to convert all or any portion of your shares of Series A Stock and concurrently tender all of the shares of Common Stock issuable upon conversion of such shares of Series A Stock, (i) a properly completed and duly executed Green Notice of Conversion (or manually executed facsimile thereof) with any required signature guarantees and any other documents required by such Notice of Conversion must be received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase, and either certificates for the shares of Series A Stock to be converted must be transmitted to and received by the Depositary at one of such addresses or such shares must be delivered pursuant to the procedures for book-entry transfer described in the enclosed Offer to Purchase (and a confirmation of such delivery received by the Depositary), in each case by April 11, 1995 and (ii) a properly completed and duly executed Letter of Transmittal (or manually executed facsimile thereof) with any required signature guarantees and any other documents required by the Letter of Transmittal with respect to the shares of Common Stock issued upon conversion of the Series A Stock must be delivered to the Depositary in accordance with the procedures for tendering shares of Common Stock and completing the Letter of Transmittal as set forth in the Offer to Purchase and in the instructions to the Letter of Transmittal. 2 By properly completing and duly executing the enclosed Green Notice of Conversion and Letter of Transmittal, you will be deemed to have tendered all of the shares of Common Stock issuable upon conversion of the shares of Series A Stock that you seek to convert. If you desire to convert your shares of Series A Stock and participate in the Offer, you should carefully read the enclosed Offer to Purchase in its entirety. Questions and requests for assistance with the conversion of shares of Series A Stock and concurrent tender of the shares of Common Stock issuable upon conversion may be directed to the Information Agent, toll-free at (800) 322-2885. Richard A. Smith Robert J. Tarr, Jr. Chairman of the Board President and Chief Executive Officer
EX-99.A10 11 FORM OF SUMMARY ADVERTISEMENT DATED MARCH 15, 1995 1 This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares. The Offer is made solely by the Offer to Purchase, dated March 15, 1995, and the related Letter of Transmittal. Capitalized terms not defined in the notice have the respective meanings ascribed to such terms in the Offer to Purchase. The Company is not aware of any jurisdiction where the making of the Offer would not be in compliance with the laws of such jurisdiction. If the Company becomes aware of any jurisdiction where the making of the Offer would not be in compliance with such laws, the Company will make a good faith effort to comply with such laws or seek to have such laws declared inapplicable to the Offer. If after such good faith effort the Company cannot comply with any such applicable laws, the Offer will not be made to, nor will tenders be accepted from or on behalf of, owners of Shares in any such jurisdictions. In those jurisdictions whose laws require that the Offer be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Company by Salomon Brothers Inc as Dealer Manager or one or more registered brokers or dealers licensed under the laws of such jurisdiction. NOTICE OF OFFER TO PURCHASE FOR CASH BY HARCOURT GENERAL, INC. UP TO 5,000,000 SHARES OF ITS COMMON STOCK AT A PURCHASE PRICE NOT GREATER THAN $41.50 NOR LESS THAN $36.00 PER SHARE Harcourt General, Inc., a Delaware corporation (the "Company"), invites its stockholders to tender shares of its Common Stock, par value $1.00 per share (the "Shares" or the "Common Stock"), to the Company at prices, net to the seller in cash, not greater than $41.50 nor less than $36.00 per Share, specified by such stockholders, upon the terms and subject to the conditions set forth in the Offer to Purchase dated March 15, 1995 (the "Offer to Purchase"), and in the related Letter of Transmittal (which together constitute the "Offer"). The information contained in the Offer to Purchase and the Letter of Transmittal is incorporated by reference herein in its entirety. THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS SET FORTH IN THE OFFER. ================================================================================ THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, APRIL 11, 1995, UNLESS THE OFFER IS EXTENDED. ================================================================================ 2 2 Neither the Company nor the Board of Directors of the Company makes any recommendation to stockholders as to whether to tender or refrain from tendering Shares. As explained in more detail in the Offer to Purchase, no director or executive officer of the Company, or member of the Smith Family Group, intends to tender any Shares pursuant to the Offer, except that Jeffrey R. Lurie, a member of the Smith Family Group, has informed the Company that he may tender up to 510,640 Shares pursuant to the Offer. Mr. Lurie may, however, sell any or all of these Shares in the open market rather than pursuant to the Offer. Each stockholder must make his or her own decision whether to tender Shares and, if so, how many Shares to tender and the price or prices at which Shares should be tendered. The Company will, upon the terms and subject to the conditions of the Offer, determine a single price per Share that it will pay for Shares (the "Purchase Price") properly tendered and not withdrawn pursuant to the Offer, taking into account the number of Shares so tendered and the prices specified by tendering stockholders of the Shares that will allow it to buy 5,000,000 Shares (or such lesser number of Shares as are properly tendered and not withdrawn) at prices not greater than $41.50 nor less than $36.00 pursuant to the Offer. All Shares properly tendered at prices at or below the Purchase Price and not withdrawn will be purchased at the Purchase Price, net to the seller in cash, upon the terms and subject to the conditions of the Offer, including the proration terms of the Offer. For purposes of the Offer, the Company will be deemed to have accepted for payment, subject to proration, Shares tendered at or below the Purchase Price and not withdrawn if, as and when the Company gives oral or written notice to the Depositary of its acceptance of such Shares for purchase pursuant to the Offer. Payment for Shares accepted for purchase pursuant to the Offer will be made by depositing the aggregate Purchase Price for such Shares with the Depositary, which will act as agent for the tendering stockholders for the purpose of receiving payment from the Company and transmitting such payments to tendering stockholders. Shares tendered and purchased by the Company will not receive or otherwise be entitled to the regular quarterly cash dividend of $.16 per Share to be paid by the Company on April 28, 1995 to holders of record on April 22, 1995, unless the Offer is extended beyond April 22, 1995 for any reason whatsoever. Shares which are tendered but not purchased as a result of proration or otherwise will remain entitled to receipt of the dividend to be paid on April 28, 1995. THE OFFER IS NOT BEING MADE FOR (NOR WILL TENDERS BE ACCEPTED OF) EITHER THE COMPANY'S CLASS B STOCK, PAR VALUE $1.00 PER SHARE (THE "CLASS B STOCK"), OR THE COMPANY'S SERIES A CUMULATIVE CONVERTIBLE STOCK, PAR VALUE $1.00 PER SHARE (THE "SERIES A STOCK"). EACH SHARE OF CLASS B STOCK IS CONVERTIBLE AT ANY TIME INTO ONE SHARE OF COMMON STOCK, AND EACH SHARE OF SERIES 3 3 A STOCK IS CONVERTIBLE AT ANY TIME INTO 1.1 SHARES OF COMMON STOCK, SUBJECT TO ADJUSTMENT IN CERTAIN EVENTS. HOLDERS OF EITHER THE CLASS B STOCK OR THE SERIES A STOCK WHO WISH TO PARTICIPATE IN THE OFFER MUST CONVERT SUCH CLASS B STOCK OR SERIES A STOCK IN ACCORDANCE WITH THEIR RESPECTIVE TERMS AND PROVISIONS AND TENDER THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE OFFER PRIOR TO THE EXPIRATION THEREOF. TO THE EXTENT THAT EITHER CLASS B STOCK OR SERIES A STOCK IS CONVERTED INTO SHARES OF COMMON STOCK, BUT THE RESULTING SHARES OF COMMON STOCK ARE NOT PURCHASED PURSUANT TO THE OFFER (WHETHER BECAUSE THE OFFER IS TERMINATED OR WITHDRAWN, OR BY REASON OF PRORATION OR OTHERWISE), HOLDERS OF CLASS B STOCK OR SERIES A STOCK SO CONVERTED WILL HAVE LOST ALL PREFERENTIAL RIGHTS AS HOLDERS OF CLASS B STOCK OR SERIES A STOCK, RESPECTIVELY, AS COMPARED TO SHARES OF COMMON STOCK AND ALL RIGHTS TO DIVIDENDS IN RESPECT OF THE SHARES OF CLASS B STOCK OR SERIES A STOCK, RESPECTIVELY. A CONVERSION OF EITHER THE CLASS B STOCK OR THE SERIES A STOCK INTO SHARES OF COMMON STOCK CANNOT BE REVOKED UNDER ANY CIRCUMSTANCES, INCLUDING A WITHDRAWAL OF SHARES OF COMMON STOCK TENDERED PURSUANT TO THE OFFER OR THE EXPIRATION OR TERMINATION OF THE OFFER WITHOUT THE PURCHASE OF ANY OF THE SHARES PURSUANT THERETO. ANY HOLDER OF CLASS B STOCK OR SERIES A STOCK WHO WISHES TO CONVERT HIS OR HER SHARES AND PARTICIPATE IN THE OFFER MAY TAKE ADVANTAGE OF THE PROCEDURES THAT ARE AVAILABLE FOR A HOLDER TO CONVERT THE CLASS B STOCK OR THE SERIES A STOCK AND CONCURRENTLY TENDER THE UNDERLYING SHARES OF COMMON STOCK AS SET FORTH IN THE OFFER TO PURCHASE. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO STOCKHOLDERS AS TO WHETHER TO CONVERT ANY OR ALL SUCH CLASS B STOCK OR SERIES A STOCK AND TENDER ALL SHARES OF COMMON STOCK ISSUABLE UPON SUCH CONVERSION. Upon the terms and subject to the conditions of the Offer, in the event that prior to the Expiration Date more than 5,000,000 Shares (or such greater number of Shares as the Company elects to purchase) are properly tendered and not withdrawn at or below the Purchase Price, the Company will accept Shares for purchase in the following order of priority: (a) first, all Shares properly tendered at or below the Purchase Price prior to the Expiration Date (and not withdrawn) by any Odd Lot Owner, including any Shares held by such Odd Lot Owner in the Company's Dividend Reinvestment Plan, who: (1) tenders all Shares beneficially owned by such Odd Lot Owner at or below the Purchase Price (partial tenders will not qualify for this preference); and (2) completes the section entitled "Odd Lots" on the Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery; and 4 4 (b) then, after purchase of all of the foregoing Shares, all other Shares properly tendered at or below the Purchase Price, before the Expiration Date (and not withdrawn), on a pro rata basis, if necessary (with adjustments to avoid purchases of fractional Shares). Each stockholder will be afforded the opportunity to designate in the Letter of Transmittal the order of priority in which Shares owned are to be purchased in the event less than all of the Shares tendered are purchased as a result of proration. Over the past several years, the Company's operations have generated substantial cash, resulting in a strong balance sheet with substantial borrowing capacity. In addition, the Company sold its insurance businesses on October 31, 1994, realizing after-tax cash proceeds of approximately $375 million. The Company continues to consider potential acquisitions as a use of its cash balances, but major acquisitions have not been available at prices the Company believes would result in attractive returns for its stockholders. Even after this share repurchase is completed, the Company will have adequate cash balances as well as ready access to other sources of capital sufficient to pursue attractive acquisition opportunities that might become available. Therefore, the Board of Directors believes that the purchase of Shares is an attractive use of a portion of the Company's available cash on behalf of its stockholders, and is consistent with the Company's long-term corporate goal of increasing stockholder value. The Company expressly reserves the right, in its sole discretion, at any time or from time to time, to extend the period of time during which the Offer for the Shares is open by giving oral or written notice of such extension to the Depositary, followed by a public announcement thereof no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. There can be no assurance that the Company will exercise its right to extend the Offer for the Shares. During any such extension, all Shares previously tendered and not withdrawn will remain subject to the Offer. Subject to certain conditions, the Company also expressly reserves the right, in its sole discretion, to delay payment for any Shares not theretofore paid for or to terminate the Offer and not accept for payment any Shares not theretofore accepted for payment or, at any time or from time to time, to amend the Offer for the Shares in any respect, including increasing or decreasing the number of Shares the Company may purchase or the range of prices it may pay pursuant to the Offer. Except as otherwise provided in the Offer, tenders of Shares pursuant to the Offer will be irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date and, unless theretofore accepted for payment by the Company as provided in the Offer to Purchase, may also be withdrawn after 12:00 Midnight, New York City time, on 5 5 May 9, 1995. For a withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder, if different from that of the person who tendered such Shares. If the certificates have been delivered or otherwise identified to the Depositary, then, prior to the release of such certificates, the tendering stockholder must submit the serial numbers shown on the particular certificates evidencing the Shares to be withdrawn and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution, except in the case of Shares tendered by an Eligible Institution. If Shares have been tendered pursuant to the procedure for book-entry transfer set forth in the Offer to Purchase, the notice of withdrawal must specify the name and the number of the account at the applicable Book-Entry Transfer Facility to be credited with the withdrawn Shares and otherwise comply with the procedures of such facility. THE OFFER TO PURCHASE AND LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION THAT SHOULD BE READ BEFORE STOCKHOLDERS DECIDE WHETHER TO ACCEPT OR REJECT THE OFFER AND, IF ACCEPTED, AT WHAT PRICE OR PRICES TO TENDER THEIR SHARES. THESE MATERIALS ARE BEING MAILED TO ALL RECORD OWNERS OF SHARES AND ARE BEING FURNISHED TO BROKERS, BANKS AND SIMILAR PERSONS WHOSE NAMES, OR THE NAMES OF WHOSE NOMINEES, APPEAR ON THE COMPANY'S STOCKHOLDER LIST AS OF MARCH 14, 1995 (OR, IF APPLICABLE, WHO ARE LISTED AS PARTICIPANTS IN A CLEARING AGENCY'S SECURITY POSITION LISTING) FOR TRANSMITTAL TO BENEFICIAL OWNERS OF SHARES. THE INFORMATION REQUIRED TO BE DISCLOSED BY RULE 13e-4(d)(1) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, IS CONTAINED IN THE OFFER TO PURCHASE AND IS INCORPORATED IN THIS NOTICE BY REFERENCE. 6 6 Please contact the Information Agent or the Dealer Manager at the telephone numbers and addresses set forth below for copies of the Offer to Purchase, the related Letter of Transmittal and other tender offer materials. They will furnish copies promptly at the Company's expense. The information agent is: MACKENZIE PARTNERS, INC. 156 Fifth Avenue New York, New York 10010 (212) 929-5500 (call collect) or Call Toll Free (800) 322-2885 The Dealer Manager for the Offer is: SALOMON BROTHERS INC Seven World Trade Center New York, New York 10048 (212) 783-2947 (in New York City) or Call Toll-Free (800) 221-5424 EX-99.A11 12 FORM OF TAX GUIDELINES 1 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER. -- Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payer. - ----------------------------------------------------- ----------------------------------------------------- GIVE THE GIVE THE EMPLOYER FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY FOR THIS TYPE OF ACCOUNT: IDENTIFICATION NUMBER OF -- NUMBER OF -- - ----------------------------------------------------- ----------------------------------------------------- 1. An individual's account The individual 9. A valid trust, estate, or The legal entity pension trust (Do not furnish the 2. Two or more individuals The actual owner of identifying number (joint account) the account or, if of the personal combined funds, representative or any one of the trustee unless the individuals(1) legal entity itself is not designated 3. Husband and wife (joint The actual owner of in the account account) the account or, if title.)(5) joint funds, either person(1) 10. Corporate account The corporation 4. Custodian account of a minor The minor(2) 11. Religious, charitable, or The organization (Uniform Gift to Minors Act) educational organization account 5. Adult and minor (joint The adult or, if account) the minor is the 12. Partnership account held in The partnership only contributor, the name of the business the minor(1) 13. Association, club, or other The organization tax- 6. Account in the name of The ward, minor, exempt organization guardian or committee for a or incompetent designated ward, minor, or person(3) 14. A broker or registered The broker or incompetent person nominee nominee 7. a. The usual revocable The grantor- 15. Account with the Department The public entity savings trust account trustee(1) of Agriculture in the name of (grantor is also trustee) a public entity (such as a b. So-called trust account The actual owner(1) State or local government, that is not a legal or valid school district, or prison) trust under State law that receives agricultural program payments 8. Sole proprietorship account The owner(4) _______________________________________________________ ________________________________________________
(1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Circle the ward's, minor's or incompetent person's name and furnish such person's social security number. (4) Show the name of the owner. (5) List first and circle the name of the legal trust, estate, or pension trust. NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. 2 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER OF SUBSTITUTE FORM W-9 PAGE 2 OBTAINING A NUMBER If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding on ALL payments include the following: - - A corporation. - - A financial institution. - - An organization exempt from tax under section 501(a), or an individual retirement plan. - - The United States or any agency or instrumentality thereof. - - A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. - - A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. - - An international organization or any agency, or instrumentality thereof. - - A registered dealer in securities or commodities registered in the U.S. or a possession of the U.S. - - A real estate investment trust. - - A common trust fund operated by a bank under section 584(a). - - An exempt charitable remainder trust, or a nonexempt trust described in section 4947(a)(1). - - An entity registered at all times under the Investment Company Act of 1940. - - A foreign central bank of issue. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: - - Payments to nonresident aliens subject to withholding under section 1441. - - Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner. - - Payments of patronage dividends where the amount received is not paid in money. - - Payments made by certain foreign organizations. - - Payments made to a nominee. Payments of interest not generally subject to backup withholding include the following: - - Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. - - Payments of tax-exempt interest (including exempt-interest dividends under section 852). - - Payments described in section 6049(b)(5) to non-resident aliens. - - Payments on tax-free covenant bonds under section 1451. - - Payments made by certain foreign organizations. - - Payments made to a nominee. Exempt payees described above should file Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM. Certain payments other than interest, dividends, and patronage dividends, that are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under sections 6041, 6041A(a), 6045, and 6050A. PRIVACY ACT NOTICE. -- Section 6109 requires most recipients of dividend, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS. -- If you fail to include any portion of an includible payment for interest, dividends, or patronage dividends in gross income, such failure will be treated as being due to negligence and will be subject to a penalty of 5% on any portion of an under-payment attributable to that failure unless there is clear and convincing evidence to the contrary. (3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500 (4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE EX-99.A12 13 PRESS RELEASE DATED MARCH 10, 1995 1 [LOGO] Harcourt General, Inc. 27 Boylston Street, Chestnut Hill, MA 02167 Tel 617 232 8200 Contact Peter Farwell News Release Vice President Corporate Relations (617) 232-8200 FOR IMMEDIATE RELEASE HARCOURT GENERAL ANNOUNCES "DUTCH AUCTION" SELF-TENDER OFFER FOR UP TO 5 MILLION SHARES CHESTNUT HILL, MA, March 10, 1995 -- The Board of Directors of Harcourt General, Inc. (NYSE:H) today authorized a "Dutch Auction" self-tender offer for up to 5,000,000 shares of the Company's Common Stock. The tender price range will be from $36 up to $41.50 per share. The offer is expected to commence on Wednesday, March 15, 1995 and expire at midnight on Tuesday, April 11, 1995, unless extended. If more than 5,000,000 shares are tendered at or below the purchase price, there will be a proration. The Company indicated it would use cash on hand to purchase the shares. As of January 31, 1995, Harcourt General had cash and short term investments of $859.9 million. The offer will be subject to various terms and conditions described in offering materials to be distributed to shareholders next week. Under the terms of the Dutch Auction offer, Harcourt General shareholders will be given the opportunity to specify prices within the Company's stated price range at which they are willing to tender their shares. Upon receipt of the tenders, Harcourt General will determine a final price that enables it to purchase up to the stated amount of shares from those shareholders who agreed to sell at or below the company-selected purchase price. All shares purchased will be at that determined price. The offer will not be contingent upon any minimum number of shares being tendered. -more- 2 Harcourt General Dutch Auction Page 2 March 10, 1995 Robert J. Tarr, Jr., president and chief executive officer, said, "Over the past several years, the Company's operations have generated substantial cash, resulting in a strong balance sheet with significant borrowing capacity. In addition, the sale of our insurance businesses on October 31, 1994 generated after-tax cash proceeds of approximately $375 million. The Company continues to consider using its cash balances for potential acquisitions, but major acquisitions have not been available at prices we believe would result in attractive returns for our stockholders. Even after this share repurchase, we will still have adequate cash balances as well as ready access to other sources of capital to pursue attractive acquisition opportunities that might become available. Therefore, the Board of Directors believes that the purchase of shares is an attractive use of a portion of the Company's available cash on behalf of its stockholders and is consistent with our long-term corporate goal of increasing shareholder value." The Company noted that it had received a favorable ruling from the Internal Revenue Service allowing it to undertake this share repurchase without affecting the tax-free nature of the spinoff of its General Cinema theatre operations, which took place in December of 1993. Harcourt General currently has 56,634,663 Common shares outstanding, 21,316,009 Class B shares outstanding, and 1,422,315 Series A Cumulative Convertible shares outstanding. Each Class B share is convertible into one Common share, while each Series A share is convertible into 1.1 Common shares. The offer is not being made for the Class B Stock or for the Series A Stock. However, Class B and Series A holders may participate in the tender offer by first converting their shares into Common Stock. -more- 3 Harcourt General Dutch Auction Page 3 March 10, 1995 As of March 1, 1995, the Smith family group, which includes Richard A. Smith, the Chairman of the Board of the Company, his sister Nancy L. Marks and members of their families, as well as various Smith family corporations, trusts and charitable foundations, owned a total of 828,319 shares of Common Stock and 21,277,038 shares of Class B Stock, equaling approximately 27.9% of the outstanding equity of the Company. No member of the Smith family group plans to tender any shares pursuant to the offer, except that Jeffrey R. Lurie, a member of the Smith family group, has informed the Company that he may tender 510,640 shares pursuant to the offer or that he may sell those shares in the open market. If the Company purchases Mr. Lurie's shares and also purchases the maximum number of shares pursuant to the terms of the offer, the Smith family group will own 828,319 shares of Common Stock and 20,766,398 shares of Class B Stock, equal to approximately 29.3% of the Company's outstanding equity after the offer. The Company's executive officers and board members do not plan to sell any shares pursuant to the offer. Participants in the offer will avoid the transaction costs typically associated with market sales. Harcourt General is making no recommendation to its shareholders regarding their participation in this tender offer. Salomon Brothers Inc will be the Dealer Manager, and First National Bank of Boston will be the Depositary for the offer. MacKenzie Partners, Inc. of New York will serve as the Information Agent. Harcourt General, Inc. is a growth-oriented operating company with core businesses in publishing and specialty retailing. The Company also provides professional outplacement services to clients worldwide. # # # EX-99.A13 14 FORM OF NOTICE OF CONVERSION, CLASS B STOCK 1 NOTICE OF CONVERSION TO ACCOMPANY SHARES OF CLASS B STOCK OF HARCOURT GENERAL, INC. TO BE CONVERTED INTO SHARES OF COMMON STOCK OF HARCOURT GENERAL, INC. - ------------------------------------------------------------------------------- TO PROPERLY TENDER SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION PURSUANT TO THE OFFER TO PURCHASE DATED MARCH 15, 1995, YOU MUST PROPERLY COMPLETE AND DULY EXECUTE THE ATTACHED LETTER OF TRANSMITTAL. - ------------------------------------------------------------------------------- TO: THE FIRST NATIONAL BANK OF BOSTON, DEPOSITARY By Mail: By Hand: The First National Bank of BancBoston Trust Company Boston of New York Shareholder Services Division 55 Broadway, Third Floor P.O. Box 1889 New York, New York Mail Stop 45-01-19 Boston, Massachusetts 02105 By Facsimile Transmission: Telephone: By Overnight Courier: (617) 575-2232 (617) 575-3170 The First National Bank of (617) 575-2233 Boston (for Eligible Institutions Shareholder Services Division Only) Mail Stop 45-01-19 Confirm by Telephone 150 Royall Street Canton, Massachusetts 02021
------------------------ DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN ONE OF THOSE SHOWN ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN ONE OF THOSE LISTED ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY. This Notice of Conversion, or a manually executed facsimile thereof, is to be used only if certificates for shares of Class B Stock (as defined below) are to be forwarded with it. Procedures for notice of guaranteed delivery are not available for the delivery of shares of Class B Stock pursuant to this Notice of Conversion. The Green Notice of Conversion should be used for conversion of shares of Series A Cumulative Convertible Stock, par value $1.00 per share (the "Series A Stock"). 2 - -------------------------------------------------------------------------------- DESCRIPTION OF SHARES OF CLASS B STOCK TO BE CONVERTED (SEE INSTRUCTIONS 3 AND 4) - ------------------------------------------------------------------------------------------------------------------ NAMES AND ADDRESS(ES) OF REGISTERED HOLDER(S) (PLEASE FILL IN EXACTLY AS CERTIFICATE(S) FOR SHARES OF CLASS B STOCK TO BE CONVERTED NAME(S) APPEAR ON CERTIFICATE(S)) (ATTACH SIGNED LIST IF NECESSARY) ------------------------------------------------------------------------------------------------------------------ NUMBER OF SHARES OF CLASS B STOCK NUMBER OF SHARES CERTIFICATE REPRESENTED BY OF CLASS B STOCK NUMBER(S) CERTIFICATE(S) TO BE CONVERTED* --------------------------------------------------------------- --------------------------------------------------------------- --------------------------------------------------------------- --------------------------------------------------------------- --------------------------------------------------------------- TOTAL SHARES OF CLASS B STOCK TO BE CONVERTED ------------------------------------------------------------------------------------------------------------------
INDICATE IN THIS BOX (BY CERTIFICATE NUMBER) WHICH SHARES OF CLASS B STOCK ARE TO BE CONVERTED. (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY) * If you desire to convert fewer than all shares of Class B Stock evidenced by any certificates listed above, please indicate in this column the number of shares of Class B Stock you wish to convert. If you fail to indicate the number of shares of Class B Stock you wish to convert, all shares of Class B Stock evidenced by such certificates will be converted. See Instruction 4. - -------------------------------------------------------------------------------- TO THE FIRST NATIONAL BANK OF BOSTON: The undersigned hereby delivers to Harcourt General, Inc., a Delaware corporation (the "Company"), the above-described shares of the Company's Class B Stock, par value $1.00 per share (the "Class B Stock"), and requests that you convert all such shares of Class B Stock (or such lesser number of shares of Class B Stock as are indicated in the column captioned "Number of Shares of Class B Stock to be Converted" in the section of this Notice of Conversion captioned "Description of Shares of Class B Stock to be Converted") into shares of the Company's Common Stock, par value $1.00 per share (the "Shares" or the "Common Stock"), so that all such shares of Common Stock issued upon conversion of Class B Stock so delivered may be tendered to the Company at the price per Share indicated in the accompanying Letter of Transmittal, net to the seller in cash, upon the terms and subject to the conditions set forth in the Company's Offer to Purchase dated March 15, 1995, receipt of which is hereby acknowledged, and in the Letter of Transmittal (which together constitute the "Offer"). The undersigned hereby represents and warrants to the Company that the undersigned understands that, by properly completing, duly executing and timely delivering this Notice of Conversion, or manually executed facsimile thereof, and the attached Letter of Transmittal, he or she, as a holder of shares of Class B Stock, will be deemed to have converted all of his or her shares of Class B Stock so delivered, unless he or she has indicated otherwise in this Notice of Conversion, and he or she will be deemed to have tendered all of his or her Shares issued upon such conversion of his or her shares of Class B Stock. The undersigned understands, though, that both this Notice of Conversion and the attached Letter of Transmittal (including the section of the Letter of Transmittal relating to the price at which the Shares issued upon conversion of Class B Stock are to be tendered) must be properly completed, duly executed and timely delivered, in order to effect a valid tender of such Shares issued upon conversion of Class B Stock. 3 With respect to holders of certificates representing shares of Class B Stock delivered hereby, the names and addresses of the registered holders should be printed, if they are not already printed above, exactly as they appear on the certificates representing shares of Class B Stock delivered hereby to be converted into Shares. The certificate number(s), the number of shares of Class B Stock represented by such certificates, and the number of shares of Class B Stock that the undersigned wishes to convert, should be set forth in the appropriate boxes above. The undersigned also understands that certificated shares of Class B Stock delivered for conversion accompanied by a properly completed and duly executed Notice of Conversion will be converted into certificated Shares, and such Shares will be delivered for tender by the Depositary in certificated form. Unless the boxes captioned "Special Conversion Instructions" and/or "Special Delivery Instructions" on this Notice of Conversion have been completed, please issue certificates for any shares of Class B Stock not converted in the name of the undersigned, and please mail such certificates to the undersigned at the address shown on your records. NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. - --------------------------------------------------------- SPECIAL CONVERSION INSTRUCTIONS (SEE INSTRUCTIONS 1, 4, 6 AND 8) To be completed ONLY if certificate(s) for shares of Class B Stock not converted are to be issued in the name of someone other than the undersigned. Issue Certificate(s) to: Name: ------------------------------------------------ (PLEASE PRINT) Address: ---------------------------------------------- ------------------------------------------------------ (INCLUDING ZIP CODE) ------------------------------------------------------- (TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER) - --------------------------------------------------------- - --------------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 4, 6, AND 8) To be completed ONLY if certificate(s) for shares of Class B Stock not converted are to be sent to someone other than the undersigned or to the undersigned at an address other than that shown above. Deliver Certificate(s) to: Name: ------------------------------------------------ (PLEASE PRINT) Address: --------------------------------------------- ---------------------------------------------------- (INCLUDING ZIP CODE) - ------------------------------------------------------ 4 STOCKHOLDER(S) SIGN HERE (SEE INSTRUCTIONS 1 AND 6) Must be signed by the registered holder(s) exactly as name(s) appear(s) on certificate(s) or by person(s) authorized to become registered holder(s) by certificate(s) and documents transmitted with this Notice of Conversion. If signature is by attorney-in-fact, executor, administrator, trustee, guardian, officer of a corporation or another acting in a fiduciary or representative capacity, please set forth the full title. See Instruction 6. X - ---------------------------------------------------------------------------- X - ---------------------------------------------------------------------------- (SIGNATURE(S) OF OWNER(S)) Name(s): -------------------------------------------------------------------- (PLEASE PRINT) Capacity (full title): ------------------------------------------------------ Address: -------------------------------------------------------------------- - ---------------------------------------------------------------------------- Area Code and Telephone Number: -------------------------------------------- Tax ID Number or Social Security Number: ------------------------------------ Dated: , 1995 GUARANTEE OF SIGNATURES (SEE INSTRUCTIONS 1 AND 6) Authorized Signature: ------------------------------------------------------- Name(s): -------------------------------------------------------------------- (PLEASE PRINT) Title: ---------------------------------------------------------------------- Name of Firm: -------------------------------------------------------------- Address: -------------------------------------------------------------------- - ---------------------------------------------------------------------------- (INCLUDING ZIP CODE) Area Code and Telephone Number: --------------------------------------------- Tax ID Number or Social Security Number: ------------------------------------ Dated: , 1995 5 INSTRUCTIONS 1. GUARANTEE OF SIGNATURES. No signature guarantee is required if either: (a) this Notice of Conversion is signed by the registered holder of the shares of Class B Stock exactly as the name of the registered holder appears on the certificate delivered with this Notice of Conversion unless such owner has completed either the boxes entitled "Special Conversion Instructions" or "Special Delivery Instructions" above; or (b) such shares of Class B Stock are delivered for the account of a member firm of a registered national securities exchange, a member of the Stock Transfer Association's approved medallion program (such as STAMP, SEMP or MSP) or a commercial bank or trust company having an office, branch or agency in the United States (each such entity, an "Eligible Institution"). In all other cases, an Eligible Institution must guarantee all signatures on this Notice of Conversion. See Instruction 6. 2. DELIVERY OF NOTICE OF CONVERSION AND CERTIFICATES. This Notice of Conversion, or a manually executed facsimile thereof, is to be used only if certificates for shares of Class B Stock are delivered with it to the Depositary. Certificates for all physically delivered shares of Class B Stock, together with a facsimile of the Notice of Conversion and any other documents required by this Notice of Conversion, should be mailed or delivered to the Depositary at one of its addresses set forth herein and must be delivered to the Depositary on or before the Expiration Date (as defined in the Offer to Purchase). Procedures for notice of guaranteed delivery are not available for the delivery of shares of Class B Stock pursuant to this Notice of Conversion. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES OF CLASS B STOCK, IS AT THE OPTION AND RISK OF THE CONVERTING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY. 3. INADEQUATE SPACE. If the space provided in the box captioned "Description of Shares of Class B Stock to be Converted" is inadequate, the certificate numbers and/or the number of shares of Class B Stock should be listed on a separate signed schedule and attached to this Notice of Conversion. 4. PARTIAL CONVERSIONS AND UNCONVERTED SHARES. If fewer than all of the shares of Class B Stock evidenced by any certificate are to be converted, fill in the number of shares of Class B Stock which are to be converted in the column entitled "Number of Shares of Class B Stock to be Converted." In such case, a new certificate for the remainder of the shares of Class B Stock evidenced by the old certificate(s) and not converted will be issued and sent to the registered holder(s) (unless otherwise specified in either the "Special Conversion Instructions" or "Special Delivery Instructions" box in this Notice of Conversion) as soon as practicable after the Expiration Date. Unless otherwise indicated, all shares of Class B Stock represented by the certificates listed and delivered to the Depositary will be deemed to have been converted. 5. NO PARTIAL TENDERS OF CONVERTED SHARES. While you may convert all or a portion of your shares of Class B Stock pursuant to this Notice of Conversion, you must tender all Shares issued upon conversion pursuant to the Offer. 6 6. SIGNATURES ON NOTICE OF CONVERSION, STOCK POWERS AND ENDORSEMENTS. (a) If this Notice of Conversion is signed by the registered holder(s) of the shares of Class B Stock delivered hereby, the signature(s) must correspond exactly with the name(s) as written on the face of the certificate(s) without any change whatsoever. (b) If the shares of Class B Stock are registered in the names of two or more joint holders, each such holder must sign this Notice of Conversion. (c) If any delivered shares of Class B Stock are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate Notices of Conversion (or photocopies of it) as there are different registrations of certificates. (d) When this Notice of Conversion is signed by the registered holder(s) of the shares of Class B Stock listed and transmitted hereby, no endorsement(s) of certificate(s) representing such shares of Class B Stock or separate stock powers are required unless the certificate(s) for shares of Class B Stock not to be converted are to be issued or sent to a person other than the registered holder(s). SIGNATURES ON SUCH CERTIFICATES MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION. If this Notice of Conversion is signed by any person other than the registered holder(s) of the certificate(s) listed, the certificate(s) must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appears on the certificate(s), and the signature(s) or such certificate(s) or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. (e) If this Notice of Conversion or any certificates or stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such person should so indicate when signing and must submit proper evidence satisfactory to the Company of their authority so to act. 7. SPECIAL CONVERSION AND DELIVERY INSTRUCTIONS. If certificate(s) for shares of Class B Stock not converted are to be issued in the name of a person other than the signer of the Notice of Conversion or if such certificate(s) are to be sent to someone other than the person signing the Notice of Conversion or to the signer at a different address, the boxes captioned "Special Conversion Instructions" and/or "Special Delivery Instructions" on this Notice of Conversion should be completed as applicable and signatures must be guaranteed as described in Instruction 1. 8. IRREGULARITIES. All questions as to the number of shares of Class B Stock to be converted and the validity, form, eligibility (including time of receipt) and acceptance for conversion of any delivery of shares of Class B Stock for conversion will be determined by the Company in its sole discretion, which determination shall be firm and binding on all parties. The Company reserves the absolute right to reject any or all deliveries of shares of Class B Stock for conversion it determines not to be in proper form or the acceptance of which or conversion of which may, in the opinion of the Company's counsel, be unlawful. The Company also reserves the absolute right to waive any defect or irregularity in the delivery of any particular shares of Class B Stock for conversion. No delivery of shares of Class B Stock for conversion will be deemed to be properly made until all defects and irregularities have been cured or waived. Unless waived, any defects or irregularities in connection with deliveries of Class B Stock for conversion must be cured within such time as the Company shall determine. None of the Company, the Dealer Manager, the Depositary, the Information Agent (as defined in the Offer to Purchase) or any other Person is or will be obligated to give notice of any defects or irregularities in deliveries of Class B Stock for conversion and none of them will incur any liability for failure to give any such notice. 9. QUESTIONS AND REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions and requests for assistance may be directed to, or additional copies of this Notice of Conversion may be obtained from, the Information Agent or the Dealer Manager at their addresses and telephone numbers set forth at the end of this Notice of Conversion or from your broker, dealer, commercial bank or trust company. 7 Facsimile copies of this Notice of Conversion will be accepted from Eligible Institutions. This Notice of Conversion and certificates for shares of Class B Stock and any other required documents should be sent or delivered by each stockholder or his or her broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses set forth below. The Depositary for the Offer is: THE FIRST NATIONAL BANK OF BOSTON By Mail: By Hand: The First National Bank of BancBoston Trust Company Boston of New York Shareholder Services Division 55 Broadway, Third Floor P.O. Box 1889 New York, New York Mail Stop 45-01-19 Boston, Massachusetts 02105 By Facsimile Transmission: Telephone: By Overnight Courier: (617) 575-2232 (617) 575-3170 The First National Bank of (617) 575-2233 Boston (for Eligible Institutions Shareholder Services Division Only) Mail Stop 45-01-19 Confirm by Telephone 150 Royall Street Canton, Massachusetts 02021
Any questions or requests for assistance or for additional copies of the Offer to Purchase, the Letter of Transmittal or the Notices of Conversion may be directed to the Information Agent or Dealer Manager. Stockholders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer. The Information Agent for the Offer is: MACKENZIE PARTNERS, INC. 156 Fifth Avenue New York, New York 10010 (212) 929-5500 (call collect) or Call Toll-Free (800) 322-2885 The Dealer Manager for the Offer is: SALOMON BROTHERS INC Seven World Trade Center New York, New York 10048 (212) 783-2947 (in New York City) or Call Toll-Free (800) 221-5424 EX-99.A14 15 FORM OF NOTICE OF CONVERSION, SERIES A CUMULATIVE 1 NOTICE OF CONVERSION TO ACCOMPANY SHARES OF SERIES A CUMULATIVE CONVERTIBLE STOCK OF HARCOURT GENERAL, INC. TO BE CONVERTED INTO SHARES OF COMMON STOCK OF HARCOURT GENERAL, INC. TO PROPERLY TENDER SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION PURSUANT TO THE OFFER TO PURCHASE DATED MARCH 15, 1995, YOU MUST PROPERLY COMPLETE AND DULY EXECUTE THE ATTACHED LETTER OF TRANSMITTAL. TO: THE FIRST NATIONAL BANK OF BOSTON, DEPOSITARY By Mail: By Hand: The First National Bank of BancBoston Trust Company Boston of New York Shareholder Services Division 55 Broadway, Third Floor P.O. Box 1889 New York, New York Mail Stop 45-01-19 Boston, Massachusetts 02105 By Facsimile Transmission: Telephone: By Overnight Courier: (617) 575-2232 (617) 575-3170 The First National Bank of (617) 575-2233 Boston (for Eligible Institutions Only) Shareholder Services Division Confirm by Telephone Mail Stop 45-01-19 150 Royall Street Canton, Massachusetts 02021
------------------------ DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN ONE OF THOSE SHOWN ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN ONE OF THOSE LISTED ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY. This Notice of Conversion, or a manually executed facsimile thereof, is to be used only if (a) certificates for shares of Series A Stock (as defined below) are to be forwarded with it or (b) a delivery of shares of Series A Stock is to be made by book-entry transfer to the account maintained by the Depositary at The Depository Trust Company, the Midwest Securities Trust Company or the Philadelphia Depository Trust Company (collectively, the "Book-Entry Transfer Facilities") pursuant to Section 4 of the Offer to Purchase. Procedures for notice of guaranteed delivery are not available for the delivery of shares of Series A Stock pursuant to this Notice of Conversion. Delivery of documents to one of the Book-Entry Transfer Facilities does not constitute delivery to the Depositary. The Blue Notice of Conversion should be used for conversion of shares of Class B Stock, par value $1.00 per share (the "Class B Stock"). 2 - -------------------------------------------------------------------------------- DESCRIPTION OF SHARES OF SERIES A STOCK TO BE CONVERTED (SEE INSTRUCTIONS 3 AND 4) - ------------------------------------------------------------------------------------------------------------------------ NAMES AND ADDRESS(ES) OF REGISTERED HOLDER(S) (PLEASE FILL IN EXACTLY AS CERTIFICATE(S) FOR SHARES OF SERIES A STOCK TO BE CONVERTED NAME(S) APPEAR ON CERTIFICATE(S)) (ATTACH SIGNED LIST IF NECESSARY) ------------------------------------------------------------------------------------------------------------------------ NUMBER OF SHARES OF SERIES A STOCK NUMBER OF SHARES CERTIFICATE REPRESENTED BY OF SERIES A STOCK NUMBER(S)* CERTIFICATE(S)* TO BE CONVERTED** --------------------------------------------------------------- --------------------------------------------------------------- --------------------------------------------------------------- --------------------------------------------------------------- --------------------------------------------------------------- TOTAL SHARES OF SERIES A STOCK TO BE CONVERTED ------------------------------------------------------------------------------------------------------------------------
INDICATE IN THIS BOX (BY CERTIFICATE NUMBER) WHICH SHARES OF SERIES A STOCK ARE TO BE CONVERTED. (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY) * Need not be completed if shares of Series A Stock are delivered by book-entry transfer. ** If you desire to convert fewer than all shares of Series A Stock evidenced by any certificates listed above or fewer than all shares of Series A Stock delivered by book-entry transfer, please indicate in this column the number of shares of Series A Stock you wish to convert. If you fail to indicate the number of shares of Series A Stock you wish to convert, all shares of Series A Stock evidenced by such certificates or that are delivered by book-entry transfer will be converted. See Instruction 4. - -------------------------------------------------------------------------------- / / CHECK HERE IF SHARES OF SERIES A STOCK TO BE CONVERTED ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING: Name of Converting Institution: - ------------------------------------------------------------------------------- Check Box of Applicable Book-Entry Transfer Facility: DTC / / MSTC / / PDTC / / Account Number: - -------------------------------------------------------------------------------- Transaction Code Number: - -------------------------------------------------------------------------------- 2 3 TO THE FIRST NATIONAL BANK OF BOSTON: The undersigned hereby delivers to Harcourt General, Inc., a Delaware corporation (the "Company"), the above-described shares of the Company's Series A Cumulative Convertible Stock, par value $1.00 per share (the "Series A Stock"), and requests that you convert all such shares of Series A Stock (or such lesser number of shares of Series A Stock as are indicated in the column captioned "Number of Shares of Series A Stock to be Converted" in the section of this Notice of Conversion captioned "Description of Shares of Series A Stock to be Converted") into shares of the Company's Common Stock, par value $1.00 per share (the "Shares" or the "Common Stock"), so that all such shares of Common Stock issued upon conversion of Series A Stock so delivered may be tendered to the Company at the price per Share indicated in the accompanying Letter of Transmittal, net to the seller in cash, upon the terms and subject to the conditions set forth in the Company's Offer to Purchase dated March 15, 1995, receipt of which is hereby acknowledged, and in the Letter of Transmittal (which together constitute the "Offer"). The undersigned hereby represents and warrants to the Company that the undersigned understands that, by properly completing, duly executing and timely delivering this Notice of Conversion, or manually executed facsimile thereof, and the attached Letter of Transmittal, he or she, as a holder of shares of Series A Stock, will be deemed to have converted all of his or her shares of Series A Stock so delivered, unless he or she has indicated otherwise in this Notice of Conversion, and he or she will be deemed to have tendered all of his or her Shares issued upon such conversion of his or her shares of Series A Stock. The undersigned understands, though, that both this Notice of Conversion and the attached Letter of Transmittal (including the section of the Letter of Transmittal relating to the price at which the Shares issued upon conversion of Series A Stock are to be tendered) must be properly completed, duly executed and timely delivered, in order to effect a valid tender of such Shares issued upon conversion of Series A Stock. With respect to holders of certificates representing shares of Series A Stock delivered hereby, the names and addresses of the registered holders should be printed, if they are not already printed above, exactly as they appear on the certificates representing shares of Series A Stock delivered hereby to be converted into Shares. The certificate number(s), the number of shares of Series A Stock represented by such certificates, and the number of shares of Series A Stock that the undersigned wishes to convert, should be set forth in the appropriate boxes above. The undersigned also understands that certificated shares of Series A Stock delivered for conversion accompanied by a properly completed and duly executed Notice of Conversion will be converted into certificated Shares, and such Shares will be delivered for tender by the Depositary in certificated form. Unless the boxes captioned "Special Conversion Instructions" and/or "Special Delivery Instructions" on this Notice of Conversion have been completed, please issue certificates for any shares of Series A Stock not converted in the name of the undersigned, and please mail such certificates to the undersigned at the address shown on your records. Shares of Series A Stock delivered for conversion by book-entry transfer accompanied by a properly completed and duly executed Notice of Conversion will be converted into Shares, and such Shares will be delivered for tender by the Depositary through book-entry transfer. Unless the box captioned "Special Conversion Instructions" on this Notice of Conversion has been completed, please credit any shares of Series A Stock delivered by book-entry transfer that are not converted to the account maintained by a Book-Entry Transfer Facility in the name of the undersigned. NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. 3 4 - ----------------------------------------------------------------------------- SPECIAL CONVERSION INSTRUCTIONS (SEE INSTRUCTIONS 1, 4, 6 AND 7) To be completed ONLY if certificate(s) for shares of Series A Stock not converted are to be issued in the name of someone other than the undersigned, or if shares of Series A Stock delivered by book-entry transfer that are not converted are to be returned by credit to an account maintained by a Book-Entry Transfer Facility. Issue Certificate(s) to: Name: ------------------------------------------------------------------------------ (PLEASE PRINT) Address: ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ (INCLUDING ZIP CODE) ------------------------------------------------------------------------------ (TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER) / / Credit shares of Series A Stock delivered by book-entry transfer and not converted to the account set forth below: Name of account party: - ------------------------------------------------------------------------------- Account number: ------------------------------------------------------------------------------ Check box of Applicable Book-Entry Transfer Facility: DTC / / MSTC / / PDTC / / - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 4, 6 AND 7) To be completed ONLY if certificate(s) for shares of Series A Stock not converted are to be sent to someone other than the undersigned or to the undersigned at an address other than that shown above. Deliver Certificate(s) to: Name: ------------------------------------------------------------------------------ (PLEASE PRINT) Address: ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ (INCLUDING ZIP CODE) - ------------------------------------------------------------------------------- 4 5 STOCKHOLDER(S) SIGN HERE (SEE INSTRUCTIONS 1 AND 6) Must be signed by the registered holder(s) exactly as name(s) appear(s) on certificate(s) or on a security position listing or by persons(s) authorized to become registered holder(s) by certificate(s) and documents transmitted with this Notice of Conversion. If signature is by attorney-in-fact, executor, administrator, trustee, guardian, officer of a corporation or another acting in a fiduciary or representative capacity, please set forth the full title. See Instruction 6. X - -------------------------------------------------------------------------------- X - -------------------------------------------------------------------------------- (SIGNATURE(S) OF OWNER(S)) Name(s): - -------------------------------------------------------------------------------- (PLEASE PRINT) Capacity (full title): - -------------------------------------------------------------------------------- Address: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Area Code and Telephone Number: - -------------------------------------------------------------------------------- Tax ID Number or Social Security Number: - -------------------------------------------------------------------------------- Dated: , 1995 GUARANTEE OF SIGNATURES (SEE INSTRUCTIONS 1 AND 6) Authorized Signature: - -------------------------------------------------------------------------------- Name(s): - -------------------------------------------------------------------------------- (PLEASE PRINT) Title: - -------------------------------------------------------------------------------- Name of Firm: - -------------------------------------------------------------------------------- Address: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (INCLUDING ZIP CODE) Area Code and Telephone Number: - -------------------------------------------------------------------------------- Tax ID Number or Social Security Number: - -------------------------------------------------------------------------------- Dated: , 1995 5 6 INSTRUCTIONS 1. GUARANTEE OF SIGNATURES. No signature guarantee is required if either: (a) this Notice of Conversion is signed by the registered holder of the shares of Series A Stock (which term, for purposes of this document, shall include any participant in a Book-Entry Transfer Facility whose name appears on a security position listing as the owner of shares of Series A Stock) exactly as the name of the registered holder appears on the certificate delivered with this Notice of Conversion unless such owner has completed either the boxes entitled "Special Conversion Instructions" or "Special Delivery Instructions" above; or (b) such shares of Series A Stock are delivered for the account of a member firm of a registered national securities exchange, a member of the Stock Transfer Association's approved medallion program (such as STAMP, SEMP or MSP) or a commercial bank or trust company having an office, branch or agency in the United States (each such entity, an "Eligible Institution"). In all other cases, an Eligible Institution must guarantee all signatures on this Notice of Conversion. See Instruction 6. 2. DELIVERY OF NOTICE OF CONVERSION AND CERTIFICATES. This Notice of Conversion, or a manually executed facsimile thereof, is to be used only if certificates for shares of Series A Stock are delivered with it to the Depositary or if such deliveries of Series A Stock are to be made pursuant to the procedure for book-entry transfer set forth in Section 4 of the Offer to Purchase. Certificates for all physically delivered shares of Series A Stock or confirmation of a book-entry transfer into the Depositary's account at a Book-Entry Transfer Facility of shares of Series A Stock converted electronically, together in each case with a facsimile of the Notice of Conversion and any other documents required by this Notice of Conversion, should be mailed or delivered to the Depositary at one of its addresses set forth herein and must be delivered to the Depositary on or before the Expiration Date (as defined in the Offer to Purchase). Procedures for notice of guaranteed delivery are not available for the delivery of shares of Series A Stock pursuant to this Notice of Conversion. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES OF SERIES A STOCK, IS AT THE OPTION AND RISK OF THE CONVERTING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY. 3. INADEQUATE SPACE. If the space provided in the box captioned "Description of Shares of Series A Stock to be Converted" is inadequate, the certificate numbers and/or the number of shares of Series A Stock should be listed on a separate signed schedule and attached to this Notice of Conversion. 4. PARTIAL CONVERSIONS AND UNCONVERTED SHARES. If fewer than all of the shares of Series A Stock evidenced by any certificate are to be converted, fill in the number of shares of Series A Stock which are to be converted in the column entitled "Number of Shares of Series A Stock to be Converted." In such case, a new certificate for the remainder of the shares of Series A Stock evidenced by the old certificate(s) and not converted will be issued and sent to the registered holder(s) (unless otherwise specified in either the "Special Conversion Instructions" or "Special Delivery Instructions" box in this Notice of Conversion) as soon as practicable after the Expiration Date. Unless otherwise indicated, all shares of Series A Stock represented by the certificates listed and delivered to the Depositary will be deemed to have been converted. 5. NO PARTIAL TENDERS OF CONVERTED SHARES. While you may convert all or a portion of your shares of Series A Stock pursuant to this Notice of Conversion, you must tender all Shares issued upon conversion pursuant to the Offer. 6 7 6. SIGNATURES ON NOTICE OF CONVERSION, STOCK POWERS AND ENDORSEMENTS. (a) If this Notice of Conversion is signed by the registered holder(s) of the shares of Series A Stock delivered hereby, the signature(s) must correspond exactly with the name(s) as written on the face of the certificate(s) without any change whatsoever. (b) If the shares of Series A Stock are registered in the names of two or more joint holders, each such holder must sign this Notice of Conversion. (c) If any delivered shares of Series A Stock are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate Notices of Conversion (or photocopies of it) as there are different registrations of certificates. (d) When this Notice of Conversion is signed by the registered holder(s) of the shares of Series A Stock listed and transmitted hereby, no endorsement(s) of certificate(s) representing such shares of Series A Stock or separate stock powers are required unless the certificate(s) for shares of Series A Stock not to be converted are to be issued or sent to a person other than the registered holder(s). SIGNATURES ON SUCH CERTIFICATES MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION. If this Notice of Conversion is signed by any person other than the registered holder(s) of the certificate(s) listed, the certificate(s) must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appears on the certificate(s), and the signature(s) or such certificate(s) or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. (e) If this Notice of Conversion or any certificates or stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such person should so indicate when signing and must submit proper evidence satisfactory to the Company of their authority so to act. 7. SPECIAL CONVERSION AND DELIVERY INSTRUCTIONS. If certificate(s) for shares of Series A Stock not converted are to be issued in the name of a person other than the signer of the Notice of Conversion or if such certificate(s) are to be sent to someone other than the person signing the Notice of Conversion or to the signer at a different address, the boxes captioned "Special Conversion Instructions" and/or "Special Delivery Instructions" on this Notice of Conversion should be completed as applicable and signatures must be guaranteed as described in Instruction 1. Stockholders delivering shares of Series A Stock by book-entry transfer may request that shares of Series A Stock not converted be credited to such account maintained at a Book-Entry Transfer Facility as such stockholder may designate under "Special Conversion Instructions". If no such instructions are given, such shares of Series A Stock not converted will be returned by crediting the account at the Book-Entry Transfer Facility designated above. 8. IRREGULARITIES. All questions as to the number of shares of Series A Stock to be converted and the validity, form, eligibility (including time of receipt) and acceptance for conversion of any delivery of shares of Series A Stock for conversion will be determined by the Company in its sole discretion, which determination shall be firm and binding on all parties. The Company reserves the absolute right to reject any or all deliveries of shares of Series A Stock for conversion it determines not to be in proper form or the acceptance of which or conversion of which may, in the opinion of the Company's counsel, be unlawful. The Company also reserves the absolute right to waive any defect or irregularity in the delivery of any particular shares of Series A Stock for conversion. No delivery of shares of Series A Stock for conversion will be deemed to be properly made until all defects and irregularities have been cured or waived. Unless waived, any defects or irregularities in connection with deliveries of Series A Stock for conversion must be cured within such time as the Company shall determine. None of the Company, the Dealer Manager, the Depositary, the Information Agent (as defined in the Offer to Purchase) or any other Person is or will be obligated to give notice of any defects or irregularities in deliveries of Series A Stock for conversion and none of them will incur any liability for failure to give any such notice. 9. QUESTIONS AND REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions and requests for assistance may be directed to, or additional copies of this Notice of Conversion may be obtained from, the Information Agent or the Dealer Manager at their addresses and telephone numbers set forth at the end of this Notice of Conversion. 7 8 Facsimile copies of this Notice of Conversion will be accepted from Eligible Institutions. This Notice of Conversion and certificates for shares of Series A Stock and any other required documents should be sent or delivered by each stockholder or his or her broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses set forth below. The Depositary for the Offer is: THE FIRST NATIONAL BANK OF BOSTON By Mail: By Hand: The First National Bank of BancBoston Trust Company Boston of New York Shareholder Services Division 55 Broadway, Third Floor P.O. Box 1889 New York, New York Mail Stop 45-01-19 Boston, Massachusetts 02105 By Facsimile Transmission: Telephone: By Overnight Courier: (617) 575-2232 (617) 575-3170 The First National Bank of (617) 575-2233 Boston (for Eligible Institutions Only) Shareholder Services Division Confirm by Telephone Mail Stop 45-01-19 150 Royall Street Canton, Massachusetts 02021
Any questions or requests for assistance or for additional copies of the Offer to Purchase, the Letter of Transmittal or the Notices of Conversion may be directed to the Information Agent or Dealer Manager. Stockholders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer. The Information Agent for the Offer is: 156 Fifth Avenue New York, New York 10010 (212) 929-5500 (call collect) or Call Toll-Free (800) 322-2885 The Dealer Manager for the Offer is: SALOMON BROTHERS INC Seven World Trade Center New York, New York 10048 (212) 783-2947 (in New York City) or Call Toll-Free (800) 221-5424 8 -----END PRIVACY-ENHANCED MESSAGE-----