-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VomWH8fbpBhkrgWrDCRzZS/VT9XI8C2FG10FcYNWiE1UOaRgoKc0KpGf6xMLKMMP n8oYJPnv9M1O+QBtNHUjwQ== 0000912057-00-025185.txt : 20000517 0000912057-00-025185.hdr.sgml : 20000517 ACCESSION NUMBER: 0000912057-00-025185 CONFORMED SUBMISSION TYPE: SC TO-T PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 20000516 GROUP MEMBERS: INGERSOLL RAND CO GROUP MEMBERS: IR MERGER CORPORATION SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HUSSMANN INTERNATIONAL INC CENTRAL INDEX KEY: 0001046128 STANDARD INDUSTRIAL CLASSIFICATION: AIR COND & WARM AIR HEATING EQUIP & COMM & INDL REFRIG EQUIP [3585] IRS NUMBER: 431791715 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-T SEC ACT: SEC FILE NUMBER: 005-53593 FILM NUMBER: 637848 BUSINESS ADDRESS: STREET 1: 12999 ST CHARLES ROCK RD CITY: BRIDGETON STATE: MO ZIP: 63044-2483 BUSINESS PHONE: 3142912000 MAIL ADDRESS: STREET 1: 12999 ST CHARLES ROCK ROAD CITY: BRIDGETON STATE: M0 ZIP: 63044-2483 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: INGERSOLL RAND CO CENTRAL INDEX KEY: 0000050485 STANDARD INDUSTRIAL CLASSIFICATION: GENERAL INDUSTRIAL MACHINERY & EQUIPMENT [3560] IRS NUMBER: 135156640 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-T BUSINESS ADDRESS: STREET 1: 200 CHESTNUT RIDGE RD STREET 2: PO BOX 8738 CITY: WOODCLIFF LAKE STATE: NJ ZIP: 07675 BUSINESS PHONE: 2015730123 MAIL ADDRESS: STREET 1: 200 CHESTNUT RIDGE ROAD CITY: WOODCLIFF LAKE STATE: NJ ZIP: 07675 SC TO-T 1 SCHEDULE TO-T - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------- SCHEDULE TO TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 -------------------------- HUSSMANN INTERNATIONAL, INC. (Name of Subject Company (Issuer)) -------------------------- INGERSOLL-RAND COMPANY IR MERGER CORPORATION (Names of Filing Persons (Offerors)) COMMON STOCK, PAR VALUE $.001 PER SHARE (Title of Class of Securities) 448110106 (CUSIP Number of Class of Securities) -------------------------- Patricia Nachtigal, Esq. Vice President and General Counsel Ingersoll-Rand Company World Headquarters 200 Chestnut Ridge Road Woodcliff Lake, New Jersey 07675 (201) 573-0123 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Filing Persons) -------------------------- COPY TO: James M. Cotter, Esq. Mario A. Ponce, Esq. Simpson Thacher & Bartlett 425 Lexington Avenue New York, New York 10017-3954 (212) 455-2000 CALCULATION OF FILING FEE
TRANSACTION VALUATION* AMOUNT OF FILING FEE $1,555,966,841 $311,193.36
* Based on the offer to purchase all of the outstanding shares of Common Stock of the Subject Company at $29.00 cash per share and 50,593,522 shares of Common Stock outstanding and 3,060,507 shares of Common Stock (based on the treasury method of calculation) represented by stock options, as of May 8, 2000. / / Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: Form or Registration No: Filing Party: Date Filed: / / Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: /X/ third-party tender offer subject to Rule 14d-1. / / issuer tender offer subject to Rule 13e-4. / / going-private transaction subject to Rule 13e-3. / / amendment to Schedule 13D under Rule 13d-2. Check the following box if the filing is a final amendment reporting the results of the tender offer: / / - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- This Tender Offer Statement on Schedule TO ("Schedule TO") relates to the offer by IR Merger Corporation (the "Purchaser"), a Delaware corporation, and a wholly owned subsidiary of Ingersoll-Rand Company ("Parent"), a New Jersey corporation, to purchase all of the issued and outstanding shares of common stock, par value $.001 per share (the "Common Stock"), of Hussmann International, Inc. (the "Company"), a Delaware corporation, including the associated preferred stock purchase rights issued pursuant to the Amended and Restated Rights Agreement, dated as of July 15, 1999, by and between the Company and First Chicago Trust Company of New York, as Rights Agent (the "Rights" and, together with the Common Stock, the "Shares"), at a price of $29.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 16, 2000 (the "Offer to Purchase"), a copy of which is attached hereto as Exhibit (a)(1), and in the related Letter of Transmittal, a copy of which is attached hereto as Exhibit (a)(2) (which, as they may be amended and supplemented from time to time, together constitute the "Offer"). The information in the Offer to Purchase, including all schedules and annexes thereto, is hereby expressly incorporated herein by reference in response to all the items of this Schedule TO, except as otherwise set forth below. ITEM 10. FINANCIAL STATEMENTS. (a) Financial information. Not applicable. (b) Pro forma information. Not applicable. ITEM 11. ADDITIONAL INFORMATION. (b) Other material information. The information set forth in the Letter of Transmittal attached hereto as Exhibit (a) (2) is incorporated herein by reference. ITEM 12. EXHIBITS.
EXHIBIT NO. DESCRIPTION - ----------- ----------- Exhibit (a) (1) Offer to Purchase, dated May 16, 2000.* Exhibit (a) (2) Form of Letter of Transmittal.* Exhibit (a) (3) Form of Notice of Guaranteed Delivery.* Exhibit (a) (4) Guidelines for Substitute Form W-9.* Exhibit (a) (5) Form of letter to brokers, dealers, commercial banks, trust companies and other nominees. Exhibit (a) (6) Form of letter to be used by brokers, dealers, commercial banks, trust companies and other nominees to their clients. Exhibit (a) (7) Joint Press Release issued by Ingersoll-Rand Company and Hussmann International, Inc., dated May 12, 2000, announcing the tender offer. This Press Release was filed under cover of Schedule TO with the Securities and Exchange Commission on May 12, 2000 and is incorporated herein by reference. Exhibit (a) (8) Text of analyst presentation of Ingersoll-Rand Company. This analyst presentation was filed under cover of Schedule TO with the Securities and Exchange Commission on May 12, 2000 and is incorporated herein by reference.
2
EXHIBIT NO. DESCRIPTION - ----------- ----------- Exhibit (a) (9) Slides used in connection with the analyst presentation of Ingersoll-Rand Company on May 12, 2000. These slides were filed under cover of Schedule TO with the Securities and Exchange Commission on May 12, 2000 and are incorporated herein by reference. Exhibit (a) (10) Script of the call with analysts conducted by Ingersoll-Rand Company on May 12, 2000. Exhibit (a) (11) Summary newspaper advertisement, dated May 16, 2000, published in THE WALL STREET JOURNAL. Exhibit (b) None. Exhibit (d) (1) Agreement and Plan of Merger, dated as of May 11, 2000, by and among Ingersoll-Rand Company, IR Merger Corporation and Hussmann International, Inc. Exhibit (d) (2) Confidentiality Agreement, dated as of April 18, 2000, by and between Hussmann International, Inc. and Ingersoll-Rand Company. Exhibit (g) None. Exhibit (h) None.
- ------------------------ * Included in mailing to stockholders. ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3. Not applicable. 3 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: May 16, 2000 INGERSOLL-RAND COMPANY By: /s/ Herbert L. Henkel --------------------------------------------- Name: Herbert L. Henkel Title: Chairman, President and Chief Executive Officer Dated: May 16, 2000 IR MERGER CORPORATION By: /s/ Patricia Nachtigal --------------------------------------------- Name: Patricia Nachtigal Title: Vice President and Assistant Secretary
4 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION - ----------- ----------- Exhibit (a) (1) Offer to Purchase, dated May 16, 2000.* Exhibit (a) (2) Form of Letter of Transmittal.* Exhibit (a) (3) Form of Notice of Guaranteed Delivery.* Exhibit (a) (4) Guidelines for Substitute Form W-9.* Exhibit (a) (5) Form of letter to brokers, dealers, commercial banks, trust companies and other nominees. Exhibit (a) (6) Form of letter to be used by brokers, dealers, commercial banks, trust companies and other nominees to their clients. Exhibit (a) (7) Joint Press Release issued by Ingersoll-Rand Company and Hussmann International, Inc., dated May 12, 2000, announcing the tender offer. This Press Release was filed under cover of Schedule TO with the Securities and Exchange Commission on May 12, 2000 and is incorporated herein by reference. Exhibit (a) (8) Text of analyst presentation of Ingersoll-Rand Company. This analyst presentation was filed under cover of Schedule TO with the Securities and Exchange Commission on May 12, 2000 and is incorporated herein by reference. Exhibit (a) (9) Slides used in connection with the analyst presentation of Ingersoll-Rand Company on May 12, 2000. These slides were filed under cover of Schedule TO with the Securities and Exchange Commission on May 12, 2000 and are incorporated herein by reference. Exhibit (a) (10) Script of the call with analysts conducted by Ingersoll-Rand Company on May 12, 2000. Exhibit (a) (11) Summary newspaper advertisement, dated May 16, 2000, published in THE WALL STREET JOURNAL. Exhibit (b) None. Exhibit (d) (1) Agreement and Plan of Merger, dated as of May 11, 2000, by and among Ingersoll-Rand Company, IR Merger Corporation and Hussmann International, Inc. Exhibit (d) (2) Confidentiality Agreement, dated as of April 18, 2000, by and between Hussmann International, Inc. and Ingersoll-Rand Company. Exhibit (g) None. Exhibit (h) None.
- ------------------------ * Included in mailing to stockholders. EX-99.(A)(1) 2 EXHIBIT 99(A)(1) OFFER TO PURCHASE FOR CASH ALL OF THE OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) OF HUSSMANN INTERNATIONAL, INC. AT $29.00 NET PER SHARE BY IR MERGER CORPORATION A WHOLLY-OWNED SUBSIDIARY OF INGERSOLL-RAND COMPANY ------------------------------------------------------------ THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JUNE 13, 2000, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF SHARES OF COMMON STOCK, PAR VALUE $0.001 PER SHARE (THE "COMMON STOCK"), OF HUSSMANN INTERNATIONAL, INC. (THE "COMPANY"), INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS (THE "RIGHTS" AND, TOGETHER WITH THE COMMON STOCK, THE "SHARES"), WHICH REPRESENT AT LEAST A MAJORITY OF THE OUTSTANDING SHARES OF COMMON STOCK ON A FULLY DILUTED BASIS, AND (II) THE EXPIRATION OR TERMINATION OF ANY APPLICABLE WAITING PERIOD UNDER ANTITRUST LAWS DESCRIBED IN SECTION 15--"CERTAIN LEGAL MATTERS; REGULATORY APPROVALS". THE OFFER IS ALSO CONDITIONED UPON THE SATISFACTION OF CERTAIN OTHER TERMS AND CONDITIONS DESCRIBED IN SECTION 14--"CONDITIONS OF THE OFFER". ------------------------ THE OFFER IS AN INTEGRAL PART OF THE TRANSACTIONS CONTEMPLATED BY, AND IS BEING MADE PURSUANT TO, THE AGREEMENT AND PLAN OF MERGER (THE "MERGER AGREEMENT"), DATED AS OF MAY 11, 2000, BY AND AMONG INGERSOLL-RAND COMPANY ("PARENT"), IR MERGER CORPORATION (THE "PURCHASER") AND THE COMPANY. SEE SECTION 11--"PURPOSE OF THE OFFER; PLANS FOR THE COMPANY; CERTAIN AGREEMENTS". THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY (I) DETERMINED THAT EACH OF THE OFFER AND THE MERGER OF THE PURCHASER WITH AND INTO THE COMPANY (THE "MERGER") ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE HOLDERS (THE "HOLDERS") OF THE SHARES, (II) APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, AND (III) DECLARED THE ADVISABILITY OF THE MERGER AGREEMENT AND RECOMMENDED THAT THE HOLDERS ACCEPT THE OFFER, TENDER THEIR SHARES PURSUANT TO THE OFFER AND (IF REQUIRED BY APPLICABLE LAW) ADOPT THE MERGER AGREEMENT. ------------------------ THE DEALER MANAGERS FOR THE OFFER ARE: GOLDMAN, SACHS & CO. May 16, 2000 IMPORTANT Any Holder desiring to tender all or any portion of the Shares owned by such Holder should either (i) complete and sign the Letter of Transmittal or a copy thereof in accordance with the instructions in the Letter of Transmittal and mail or deliver it together with the certificate(s) evidencing tendered Shares, and any other required documents, to The Bank of New York (the "Depositary"), (ii) tender such Shares pursuant to the procedures for book-entry transfer set forth in Section 3--"Procedures for Tendering Shares", (iii) if such Shares are direct registration shares, simply ensure that the "Direct Registration Shares" box of the Letter of Transmittal is properly completed or (iv) request such Holder's broker, dealer, commercial bank, trust company or other nominee to effect the transaction for such Holder. Any Holder whose Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such broker, dealer, commercial bank, trust company or other nominee if such Holder desires to tender such Shares. In order to validly tender Shares, a Holder must tender the associated Rights. Unless a Distribution Date (as defined in the Amended and Restated Rights Agreement (the "Rights Agreement"), dated as of July 15, 1999, by and between the Company and First Chicago Trust Company of New York, as Rights Agent) has occurred, the tender of a Share will constitute the tender of the associated Right. See Section 3--"Procedures for Tendering Shares". Any Holder who desires to tender Shares and whose certificate(s) evidencing such Shares are not immediately available, or who cannot comply with the procedures for book-entry transfer described in this Offer to Purchase on a timely basis, may tender such Shares by following the procedures for guaranteed delivery set forth in Section 3--"Procedures for Tendering Shares". Copies of this Offer to Purchase, the Letter of Transmittal or any related documents must not be mailed to or otherwise distributed or sent in, into or from any country where such distribution or offering would require any additional measures to be taken or would be in conflict with any law or regulation of such a country or any political subdivision thereof. Persons into whose possession this document comes are required to inform themselves about and to observe any such laws or regulations. This Offer to Purchase may not be used for, or in connection with, any offer to, or solicitation by, anyone in any jurisdiction or under any circumstances in which such offer or solicitation is not authorized or is unlawful. Questions and requests for assistance may be directed to the Information Agent or the Dealer Managers 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 other related tender offer materials may be obtained at no cost from the Information Agent or from brokers, dealers, commercial banks or trust companies. 2 TABLE OF CONTENTS
PAGE -------- SUMMARY TERM SHEET.......................................... 4 INTRODUCTION................................................ 8 THE TENDER OFFER............................................ 10 Section 1. Terms of the Offer............................. 10 Section 2. Acceptance for Payment and Payment for Shares.................................................. 12 Section 3. Procedures for Tendering Shares................ 13 Section 4. Withdrawal Rights.............................. 17 Section 5. Certain United States Federal Income Tax Consequences............................................ 18 Section 6. Price Range of Shares; Dividends............... 18 Section 7. Certain Information Concerning the Company..... 19 Section 8. Certain Information Concerning the Purchaser and Parent.............................................. 24 Section 9. Source and Amount of Funds..................... 25 Section 10. Background of the Offer....................... 26 Section 11. Purpose of the Offer; Plans for the Company; Certain Agreements...................................... 27 Section 12. Dividends and Distributions................... 40 Section 13. Effects of the Offer on the Market for the Shares; Exchange Act Registration....................... 41 Section 14. Conditions of the Offer....................... 41 Section 15. Certain Legal Matters; Regulatory Approvals... 43 Section 16. Fees and Expenses............................. 46 Section 17. Miscellaneous................................. 47 SCHEDULE I-- Information Concerning the Directors and Executive Officers of Ingersoll-Rand Company and IR Merger Corporation........................... I-1
3 SUMMARY TERM SHEET IR Merger Corporation is offering to buy all of the outstanding shares of common stock of Hussmann International, Inc. The tender price is $29.00 per share, in cash. Set out below are some of the questions you, as a stockholder of Hussmann International, Inc., may have and answers to those questions. The information in this summary term sheet is not complete. The Offer to Purchase and the Letter of Transmittal contain additional important information. We urge you to carefully read all of the material about our offer that is sent to you before you decide whether to accept our offer. - - WHO IS OFFERING TO BUY MY SECURITIES? Our name is IR Merger Corporation. We are a Delaware corporation formed for the purpose of making this offer. We are a wholly-owned subsidiary of Ingersoll-Rand Company, a New Jersey corporation. See the "Introduction" and Section 8--"Certain Information Concerning the Purchaser and Parent" of this Offer to Purchase. - - WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER? We are offering to buy all of the outstanding shares of common stock (including the associated preferred stock purchase rights) of Hussmann International, Inc. See the "Introduction" to this Offer to Purchase. - - HOW MUCH ARE YOU OFFERING TO PAY AND WHAT IS THE FORM OF PAYMENT? We are offering to pay $29.00 per share, net to you, in cash. - - WILL I HAVE TO PAY ANY FEES OR COMMISSIONS? If you are the record owner of your shares and you tender your shares to us in the offer, you will not have to pay brokerage fees or similar expenses. If you own your shares through a broker or other nominee, and your broker tenders your shares on your behalf, your broker or nominee may charge you a fee for doing so. You should consult your broker or nominee to determine whether any charges will apply. See the "Introduction" to this Offer to Purchase. - - DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT? Ingersoll-Rand Company, our parent company, will provide us with sufficient funds to acquire all of the outstanding shares of Hussmann International, Inc. Ingersoll-Rand Company currently intends to provide the necessary funds through the issuance of commercial paper and extendible commercial notes. Our offer is not conditioned upon any financing arrangements. See Section 9--"Source and Amount of Funds" of this Offer to Purchase. - - IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION ON WHETHER TO TENDER IN THE OFFER? We do not think our financial condition is relevant to your decision whether to tender shares and accept the offer because: - the offer is being made for all outstanding shares; - the offer is solely for cash; - the offer is not subject to any financing condition; and - if we are successful with our offer, we will acquire all remaining shares for the same cash price in the merger of IR Merger Corporation with and into Hussmann International, Inc. 4 - - HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER? The offer will expire at 12:00 midnight, New York City time, on June 13, 2000, unless we extend the offer. Please note that, if you cannot deliver everything that is required in order to accept the offer by that time, you may be able to use a guaranteed delivery procedure. The guaranteed delivery procedure is described later in this Offer to Purchase. See Section 1--"Terms of the Offer" and Section 3--"Procedures for Tendering Shares" of this Offer to Purchase. - - CAN THE OFFER BE EXTENDED, AND UNDER WHAT CIRCUMSTANCES? Yes. We have agreed with Hussmann International, Inc. that we may extend the offer if: - immediately prior to the expiration of the offer, less than 90% of the shares have been tendered and we agree to waive all conditions then satisfied other than: - the requirement that at least a majority of the outstanding shares of Hussmann International, Inc. have been tendered (and not withdrawn); - certain regulatory conditions; and - the requirement that the Board of Directors of Hussmann International, Inc. fully support the offer; and - such extension is for no more than 10 business days. In addition, we have agreed with Hussmann International, Inc. that we must extend the offer if: - any condition to the offer has not been waived or satisfied by the time the offer is scheduled to expire; or - we are required by law to extend the offer. See Section 1--"Terms of the Offer" of this Offer to Purchase. - - HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED? If we extend the offer, we will inform The Bank of New York, the depositary for the offer, of that fact. We will also make a public announcement of the extension, not later than 9:00 a.m., New York City time, on the next business day after the day on which the offer was scheduled to expire. See Section 1-- "Terms of the Offer" of this Offer to Purchase. - - WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER? We are not obligated to buy any Shares unless: - at least a majority of the outstanding shares of Hussmann International, Inc. (assuming the exercise of all outstanding stock options) are validly tendered and not withdrawn prior to the expiration of the offer; and - we receive U.S. federal and foreign antitrust clearance for the acquisition. The offer is also subject to a number of other conditions. See the "Introduction" and Section 14--"Conditions of the Offer" of this Offer to Purchase. The offer is not conditioned on our receiving financing. - - HOW DO I TENDER MY SHARES? If you wish to accept our offer, this is what you must do: - If you are a record holder and have your stock certificate, you must complete and sign the enclosed Letter of Transmittal and send it with your stock certificate to the depositary for the offer or follow the procedures described in the offer for book-entry transfer. These materials 5 must reach the depositary before the offer expires. Detailed instructions are contained in the Letter of Transmittal and Section 3--"Procedures for Tendering Shares" of this document. - If you are a record holder but your stock certificate is not available or you cannot deliver it to the depositary before the offer expires, you may be able to tender your shares using the enclosed Notice of Guaranteed Delivery. Please call our information agent, Georgeson Shareholder Communications, Inc. at (800)-223-2064 (toll free) or, if you live outside of the U.S. and Canada, at 011-44-207-335-7296 (call collect) for assistance. See Section 3--"Procedures for Tendering Shares" for further details. - If you hold your shares as direct registration shares, you must complete the appropriate provisions of and sign the enclosed Letter of Transmittal and send it to the depositary for the offer. The Letter of Transmittal must reach the depositary before the offer expires. Detailed instructions are contained in the Letter of Transmittal and Section 3 --"Procedures for Tendering Shares" of this document. - If you hold your shares through a broker or bank, you should contact your broker or bank and give instructions that your shares be tendered. See Section 3--"Procedures for Tendering Shares" of this Offer to Purchase. - - UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES? You can withdraw shares at any time until the offer has expired. In addition, if we have not agreed to accept your shares for payment by July 14, 2000, you can withdraw them at any time after that date until we accept shares for payment. See Section 1--"Terms of the Offer" and Section 4--"Withdrawal Rights" of this Offer to Purchase. - - HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES? To withdraw shares, you must deliver a written notice of withdrawal, or a copy of one, with the required information to The Bank of New York, the depositary for the Offer, while you still have the right to withdraw the shares. If you tendered your shares by giving instructions to a broker or nominee, you must instruct your broker or nominee to arrange for the withdrawal of your shares. See Section 4--"Withdrawal Rights" of this Offer to Purchase. - - WHAT DOES THE HUSSMANN INTERNATIONAL, INC. BOARD OF DIRECTORS THINK OF THE OFFER? We are making the offer pursuant to an agreement and plan of merger among us, Ingersoll-Rand Company and Hussmann International, Inc. The board of directors of Hussmann International, Inc. unanimously approved the Merger Agreement, our tender offer and our proposed merger with and into Hussmann International, Inc. Following the proposed merger, Hussmann International, Inc. will be the surviving corporation and a direct wholly owned subsidiary of Ingersoll-Rand Company. The board of directors of Hussmann International, Inc. has determined that the terms of the offer and the merger are fair to, and in the best interests of, the stockholders of Hussmann International, Inc. and recommends that you tender your shares in the Offer. See the "Introduction" to this Offer to Purchase. - - IF A MAJORITY OF THE SHARES ARE TENDERED AND ACCEPTED FOR PAYMENT, WILL HUSSMANN INTERNATIONAL, INC. CONTINUE AS A PUBLIC COMPANY? No. If the merger takes place, Hussmann International, Inc. will no longer be publicly owned. Even if the merger does not take place, if we purchase all of the tendered shares, there may be so few remaining stockholders and publicly held shares that: - Hussmann International, Inc. shares will no longer meet the published guidelines of the New York Stock Exchange for continued listing and may be taken off the New York Stock Exchange; 6 - there may not be a public trading market for Hussmann International, Inc. shares; and - Hussmann International, Inc. may cease making filings with the Securities and Exchange Commission or otherwise cease being required to comply with the SEC rules relating to publicly held companies. See Section 13--"Effect of the Offer on the Market for the Shares; Exchange Act Registration" of this Offer to Purchase. - - WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL OF HUSSMANN INTERNATIONAL, INC.'S SHARES ARE NOT TENDERED IN THE OFFER? If we accept for payment and pay for at least a majority of the outstanding shares of Hussmann International, Inc., we will be merged with and into Hussmann International, Inc. If that merger takes place, Ingersoll-Rand Company will own all of the shares of Hussmann International, Inc. and all remaining stockholders of Hussmann International, Inc., other than those who assert appraisal rights, will receive $29.00 per share in cash. See the "Introduction" to this Offer to Purchase. - - IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES? If the merger takes place, stockholders who do not tender in the offer will receive the same amount of cash per share that they would have received had they tendered their shares in the offer (subject to their right to pursue appraisal under Delaware law). Therefore, if the merger takes place, the only difference to you between tendering your shares and not tendering your shares is that you will be paid earlier if you tender your shares. However, if the merger does not take place, the number of stockholders and of shares of Hussmann International, Inc. which are still in the hands of the public may be so small that there no longer will be an active public trading market (or, possibly, there may not be any public trading market) for the shares. Also: - the shares may no longer be eligible to be traded on the New York Stock Exchange; and - Hussmann International, Inc. may cease making filings with the SEC or otherwise being required to comply with the SEC rules relating to publicly held companies. See the "Introduction" and Section 13--"Effect of the Offer on the Market for the Shares; Exchange Act Registration" of this Offer to Purchase. - - WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE? On May 11, 2000, the last trading day before we announced the tender offer and the possible subsequent merger, the last sale price of Hussmann International, Inc. shares reported on the New York Stock Exchange was $13.38 per share. Between December 31, 1999 and May 11, 2000, the price of Hussmann International, Inc. shares ranged between $12.63 and $14.75 per share. On May 15, 2000, the last full trading day prior to the date of this Offer to Purchase, the last reported closing sales price of the Shares was $28.56 per share. We advise you to obtain a recent quotation for shares of Hussmann International, Inc. in deciding whether to tender your shares. See Section 6--"Price Range of Shares; Dividends" of this Offer to Purchase. - - WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER? You can call: - Georgeson Shareholder Communications, Inc. at (800) 223-2064 (toll free) or, if you live outside of the U.S. and Canada, at 011-44-207-335-7296 (call collect); or - Goldman, Sachs & Co. at (212) 902-1000 (call collect) or (800) 323-5678 (call toll free). Georgeson Shareholder Communications, Inc. is acting as the information agent and Goldman, Sachs & Co. are acting as the dealer managers for our tender offer. See the back cover of this Offer to Purchase. 7 To the Holders of Shares of Common Stock of Hussmann International, Inc.: INTRODUCTION IR Merger Corporation (the "Purchaser"), a Delaware corporation, and a wholly-owned subsidiary of Ingersoll-Rand Company ("Parent"), a New Jersey corporation, hereby offers to purchase all of the issued and outstanding shares of common stock, par value $0.001 per share (the "Common Stock"), of Hussmann International, Inc. (the "Company"), a Delaware corporation, including the associated preferred stock purchase rights (the "Rights" and, together with the Common Stock, the "Shares"), at a price of $29.00 per Share, net to the seller in cash, without interest thereon (the "Offer Price"), upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which, as they may be amended and supplemented from time to time, together constitute the "Offer"). In order to validly tender Shares, a holder must tender the associated Rights. Unless a Distribution Date (as defined in the Amended and Restated Rights Agreement, dated as of July 15, 1999, by and between the Company and First Chicago Trust Company of New York, as Rights Agent (as amended, the "Rights Agreement")) has occurred, the tender of Shares will constitute the tender of the associated Rights. If you hold direct registration shares (the "Direct Registration Shares"), you may tender all or part of such Shares. Direct Registration Shares as to which The Bank of New York, as depositary (the "Depositary"), has not received instructions through timely delivery of a properly completed Letter of Transmittal will not be deemed tendered. See Section 1--"Terms of the Offer" and Section--"Procedures for Tendering Shares". Tendering holders of Shares ("Holders") whose Shares are registered in their own names and who tender directly to the Depositary will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of Shares pursuant to the Offer. The Purchaser will pay all charges and expenses of Goldman, Sachs & Co., as Dealer Managers (the "Dealer Managers"), the Depositary and Georgeson Shareholder Communications, Inc., as Information Agent (the "Information Agent"), in each case incurred in connection with the Offer. See Section 16--"Fees and Expenses". THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF SHARES WHICH REPRESENTS AT LEAST A MAJORITY OF THE OUTSTANDING SHARES ON A FULLY DILUTED BASIS (THE "MINIMUM CONDITION") AND (II) THE EXPIRATION OR TERMINATION OF ANY APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE "HSR ACT") AND UNDER ANY FOREIGN STATUTES OR REGULATIONS. THE OFFER IS ALSO CONDITIONED UPON THE SATISFACTION OF CERTAIN OTHER TERMS AND CONDITIONS DESCRIBED IN SECTION 14--"CONDITIONS OF THE OFFER". THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY (I) DETERMINED THAT THE TERMS OF EACH OF THE OFFER AND THE MERGER (THE "MERGER") OF THE PURCHASER WITH AND INTO THE COMPANY ARE FAIR TO, AND IN THE BEST INTERESTS OF, HOLDERS OF SHARES, (II) APPROVED THE MERGER AGREEMENT (AS HEREINAFTER DEFINED) AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, AND (III) DECLARED THE ADVISABILITY OF THE MERGER AGREEMENT AND RECOMMENDED THAT HOLDERS ACCEPT THE OFFER, TENDER THEIR SHARES PURSUANT TO THE OFFER AND (IF REQUIRED BY APPLICABLE LAW) ADOPT THE MERGER AGREEMENT. THE COMPANY HAS ADVISED PARENT THAT CREDIT SUISSE FIRST BOSTON CORPORATION, THE FINANCIAL ADVISOR TO THE COMPANY, HAS DELIVERED TO THE BOARD OF DIRECTORS OF THE COMPANY ITS OPINION, DATED MAY 11, 2000, THAT THE OFFER PRICE TO BE RECEIVED BY HOLDERS, PURSUANT TO THE OFFER AND THE MERGER, 8 IS FAIR FROM A FINANCIAL POINT OF VIEW TO SUCH HOLDERS, SUBJECT TO THE ASSUMPTIONS AND QUALIFICATIONS SET FORTH THEREIN. A COPY OF THE OPINION OF CREDIT SUISSE FIRST BOSTON CORPORATION, WHICH SETS FORTH THE ASSUMPTIONS MADE, FACTORS CONSIDERED AND SCOPE OF REVIEW UNDERTAKEN BY CREDIT SUISSE FIRST BOSTON CORPORATION, IS CONTAINED IN THE COMPANY'S SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 (THE "SCHEDULE 14D- 9"), WHICH IS BEING MAILED TO HOLDERS CONCURRENTLY HEREWITH. HOLDERS ARE URGED TO READ THE FULL TEXT OF THAT OPINION. The Offer is being made pursuant to an Agreement and Plan of Merger (the "Merger Agreement"), dated as of May 11, 2000, by and among Parent, the Purchaser and the Company. The Merger Agreement provides that, upon consummation of the Offer and upon the terms and subject to the conditions of the Merger Agreement and in accordance with the General Corporation Law of the State of Delaware (the "DGCL"), the Purchaser will be merged with and into the Company. Following the effective time of the Merger (the "Effective Time"), the Company will continue as the surviving corporation and become a wholly-owned subsidiary of Parent and the separate corporate existence of the Purchaser will cease. At the Effective Time, except for (i) Shares which are held in the treasury of the Company, or which are held, directly or indirectly, by Parent or any direct or indirect subsidiary of Parent, including the Purchaser (other than shares in trust accounts, managed accounts, custodial accounts and the like that are beneficially owned by third parties), all of which shall cease to be outstanding and be canceled and none of which shall receive any payment with respect thereto and (ii) Shares held by Holders exercising their rights to dissent in accordance with the DGCL, each Share issued and outstanding immediately prior to the Effective Time and all rights in respect thereof shall, by virtue of the Merger and without any action on the part of the Holder thereof, forthwith cease to exist and be converted into and represent the right to receive an amount in cash, without interest thereon, equal to $29.00. The Merger Agreement is more fully described in Section 11--"Purpose of the Offer; Plans for the Company; Certain Agreements". Under the DGCL, if the Purchaser acquires, pursuant to the Offer or otherwise, at least 90% of the issued and outstanding Shares, the Purchaser will be able to approve and effect the Merger without a vote of the Company's stockholders pursuant to Section 253 of the DGCL. If, however, the Purchaser does not acquire at least 90% of the issued and outstanding Shares, pursuant to the Offer or otherwise, a vote of the Company's stockholders to effect the Merger is required under the DGCL and a longer period of time will be required to effect the Merger. See Section 11--"Purpose of the Offer; Plans for the Company; Certain Agreements". The Company has informed the Purchaser that, as of May 8, 2000, there (i) were 50,593,522 Shares issued and outstanding, (ii) were 721,408 Shares held in the Company's treasury and (iii) were options, rights, restricted stock units and participant account balances issued and outstanding, representing in the aggregate the right to purchase 5,755,817 Shares. As a result, as of such date, the Minimum Condition would be satisfied if at least 28,174,670 Shares are validly tendered and not properly withdrawn prior to the Expiration Date (as hereinafter defined). The Company has been advised, and has informed Parent, that each of its directors and executive officers intends to tender pursuant to the Offer all shares of Common Stock owned of record and beneficially by him or her, except to the extent that such tender would require disgorgement of profits from any such tender to the Company under Section 16 of the Securities Exchange Act of 1934 (the "Exchange Act"). THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. 9 THE TENDER OFFER SECTION 1. TERMS OF THE OFFER. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), the Purchaser will accept for payment and pay for all Shares validly tendered prior to the Expiration Date (as hereinafter defined) and not withdrawn in accordance with Section 4--"Withdrawal Rights". The term "Expiration Date" means 12:00 midnight, New York City time, on Tuesday, June 13, 2000, unless and until the Purchaser (subject to the terms of the Merger Agreement) shall have extended the period of time during which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date at which the Offer, as so extended by the Purchaser, shall expire. The Offer is conditioned upon, among other things, satisfaction of the Minimum Condition and the HSR Condition (as defined in Section 14 of this Offer to Purchase). The Offer is also subject to certain other conditions set forth in Section 14--"Conditions of the Offer". If these or any of the other conditions referred to in Section 14--"Conditions of the Offer" are not satisfied or any of the events specified in Section 14--"Conditions of the Offer" have occurred or are determined by the Purchaser to have occurred prior to the Expiration Date, the Purchaser, subject to the terms of the Merger Agreement, expressly reserves the right to (i) decline to purchase any of the Shares tendered in the Offer and terminate the Offer, and return all tendered Shares to the tendering Holders, (ii) waive or amend any or all conditions to the Offer and, to the extent permitted by the Merger Agreement or applicable law and applicable rules and regulations of the Securities and Exchange Commission (the "Commission"), purchase all Shares validly tendered or (iii) subject to the limitations described below, extend the Offer and, subject to the right of a tendering Holder to withdraw its Shares until the Expiration Date, retain the Shares which have been tendered during the period or periods for which the Offer is extended, provided, however, that the Minimum Condition and the HSR Condition may not be waived by the Purchaser without the Company's prior written consent. The Rights are currently evidenced by the certificates for the Common Stock and the tender by a Holder of such Holder's Shares will also constitute a tender of the associated Rights. Pursuant to the Offer, no separate payment will be made by the Purchaser for the Rights. Subject to the terms of the Merger Agreement, the applicable rules and regulations of the Commission and to applicable law, the Purchaser expressly reserves the right, at any time and from time to time, to extend the period of time during which the Offer is open by giving notice of such extension to the Depositary and by making a public announcement thereof, not later than 9:00 a.m. New York City time, on the next business day after the day on which the offer was scheduled to expire. Pursuant to the terms of the Merger Agreement, if any condition to the Offer has not been satisfied or waived, the Purchaser is required to extend the expiration date of the Offer from time to time for one or more periods, but in no event later than the Termination Date (as hereinafter defined). During any such extension, all Shares previously tendered and not withdrawn will remain subject to the Offer, subject to the rights of a tendering Holder to withdraw its Shares. See Section 4--"Withdrawal Rights". Subject to the terms of the Merger Agreement, the applicable rules and regulations of the Commission and to applicable law, the Purchaser also expressly reserves the right, in its sole discretion, at any time and from time to time (i) to delay acceptance for payment of, or, regardless of whether such Shares were theretofore accepted for payment, payment for, any Shares (a) if any applicable waiting period under the HSR Act has not expired or been terminated or (b) in order to comply in whole or in part with any other applicable law, (ii) to terminate the Offer on any scheduled expiration date and not accept for payment any Shares if any of the conditions referred to in Section 14--"Conditions of the Offer" are not satisfied or any of the events specified in Section 14--"Conditions of the Offer" have occurred, and (iii) to waive any condition or otherwise amend the Offer in any respect by giving oral or written notice of 10 such delay, termination, waiver or amendment to the Depositary and by making a public announcement thereof. Subject to the terms of the Merger Agreement, the applicable rules and regulations of the Commission and to applicable law, the Purchaser reserves the right to modify the terms of the Offer including, without limitation, except as provided below, the right to extend the Offer beyond any scheduled expiration date, but in no event later than October 31, 2000 (the "Termination Date"), provided that, without the prior written consent of the Company, the Purchaser will not (i) reduce the maximum number of Shares to be purchased pursuant to the Offer, (ii) reduce the Offer Price, (iii) impose additional terms or conditions to the Offer, (iv) change the form of consideration payable in the Offer (other than by adding consideration), (v) make any other change to the terms or conditions of the Offer which is adverse in any manner to Holders, (vi) extend the expiration date of the Offer beyond the twentieth business day after commencement of the Offer except (A) as required by applicable law, (B) that in certain circumstances where, on any expiration date of the Offer, less than 90% of the Shares have been tendered Purchaser may extend the Offer for one or more periods not to exceed an aggregate of ten business days, notwithstanding that all conditions to the Offer are satisfied as of such expiration date of the Offer; PROVIDED that, after the initial such extension the Offer shall not be subject to any conditions that are at the time of such extension satisfied other than (1) the Minimum Condition, and (2) the conditions set forth in clause (v)(a) and clause (v)(e)(2) of Section 14--"Conditions of the Offer" of this Offer to Purchase, and (C) that if any condition to the Offer has not been satisfied or waived, the Purchaser shall extend the expiration date of the Offer from time to time for one or more periods but in no event later than the Termination Date, (vii) change the Minimum Condition, or (viii) waive the HSR Condition, provided that the Offer may be extended in connection with an increase in the consideration to be paid pursuant to the Offer so as to comply with applicable rules and regulations of the Commission. The Purchaser acknowledges that (i) Rule 14e-1(c) under the Exchange Act, requires the Purchaser to pay the consideration offered or return the Shares tendered promptly after the termination or withdrawal of the Offer and (ii) the Purchaser may not delay acceptance for payment of, or payment for (except as provided in clause (i) of the second preceding paragraph), any Shares upon the occurrence of any of the conditions specified in Section 14--"Conditions of the Offer" without extending the period of time during which the Offer is open. During any such extension, all Shares previously tendered and not withdrawn will remain subject to the Offer, subject to the right of a tendering Holder to withdraw its Shares. Any such extension, delay, termination, waiver or amendment will be followed, as promptly as practicable, by a public announcement thereof, with such announcement in the case of an extension to be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. Subject to applicable law (including Rules 14d-4, 14d-6 and 14e-1 under the Exchange Act, which require that material changes be promptly disseminated to Holders in a manner reasonably designed to inform them of such changes) and without limiting the manner in which the Purchaser may choose to make any public announcement, the Purchaser will have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a press release to the Dow Jones News Service or as otherwise may be required by applicable law. If the Purchaser makes a material change in the terms of the Offer or the information concerning the Offer, or if it waives a material condition of the Offer, the Purchaser will extend the Offer to the extent required by Rules 14d-4, 14d-6 and 14e-1 under the Exchange Act. The minimum period during which an offer must remain open following material changes in the terms of the Offer or information concerning the Offer, other than a change in price or a change in the percentage of Shares sought, will depend upon the facts and circumstances then existing, including the relative materiality of the changed terms or information. With respect to a change in price or a change in the percentage of Shares sought, a minimum period of ten business days is generally required to allow for adequate dissemination to Holders and investor response. 11 The Company has provided the Purchaser with the Company's stockholder lists and security position listings in respect of the Shares for the purpose of disseminating the Offer to Purchase, the Letter of Transmittal and other relevant materials to Holders. This Offer to Purchase, the Letter of Transmittal and other relevant materials will be mailed to holders of record of Shares whose names appear on the Company's list of holders of Shares and will be furnished, for subsequent transmittal to beneficial owners of Shares, to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the Company's list of stockholders of the Shares or, where applicable, who are listed as participants in the security position listing of The Depository Trust Company ("DTC"). SECTION 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and subject to the conditions of the Offer, the Merger Agreement and applicable law (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the Purchaser will purchase, by accepting for payment, and will pay for, all Shares validly tendered prior to the Expiration Date (and not properly withdrawn in accordance with Section 4--"Withdrawal Rights") as promptly as practicable after the later to occur of (i) the Expiration Date and (ii) the satisfaction or waiver of the conditions set forth in Section 14--"Conditions of the Offer", including, but not limited to, the regulatory conditions specified in Section 15--"Certain Legal Matters; Regulatory Approvals". Subject to applicable rules of the Commission and the terms of the Merger Agreement, the Purchaser expressly reserves the right, in its sole discretion, to delay acceptance for payment of, or payment for, Shares in order to comply, in whole or in part, with any applicable law or satisfaction or waiver of the Minimum Condition. If, following acceptance for payment of Shares, the Purchaser asserts such regulatory approvals as a condition and does not promptly pay for Shares tendered, the Purchaser will promptly return such Shares. In all cases, payment for Shares purchased pursuant to the Offer will be made only after timely receipt by the Depositary of (i)(A) the certificates evidencing such Shares (the "Certificates"), (B) timely confirmation of a book-entry transfer (a "Book-Entry Confirmation") of such Shares into the Depositary's account at DTC (the "Book-Entry Transfer Facility") or (C) in the case of Direct Registration Shares, a properly completed Letter of Transmittal, in each case pursuant to the procedures set forth in Section 3--"Procedures for Tendering Shares", (ii) the Letter of Transmittal (or a copy thereof), properly completed and duly executed with any required signature guarantees, or an Agent's Message (as hereinafter defined) in connection with a book-entry transfer and (iii) any other documents required to be included with the Letter of Transmittal under the terms and subject to the conditions thereof and to this Offer to Purchase. The term "Agent's Message" means a message, transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary forming a part of a Book-Entry Confirmation system, which states that the Book-Entry Transfer Facility has received an express acknowledgment from a participant in the Book-Entry Transfer Facility tendering the Shares that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Purchaser may enforce such agreement against such participant. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment (and thereby purchased) Shares validly tendered and not properly withdrawn if, as and when the Purchaser gives oral or written notice to the Depositary of the Purchaser's acceptance for payment of such Shares. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for tendering Holders for the purpose of receiving payments from the Purchaser and transmitting payments to such tendering Holders whose Shares have been accepted for payment. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID BY THE PURCHASER, REGARDLESS OF ANY DELAY IN MAKING SUCH PAYMENT OR EXTENSION OF THE EXPIRATION DATE. Upon the deposit of funds with the 12 Depositary for the purpose of making payments to tendering Holders, the Purchaser's obligation to make such payment shall be satisfied, and tendering Holders must thereafter look solely to the Depositary for payment of amounts owed to them by reason of the acceptance for payment of Shares pursuant to the Offer. If any tendered Shares are not accepted for payment for any reason pursuant to the terms and conditions of the Offer, or if Certificates are submitted evidencing more Shares than are tendered, Certificates evidencing Shares not purchased will be returned, without expense to the tendering Holder (or, in the case of Shares tendered by book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility pursuant to the procedure set forth in Section 3--"Procedures for Tendering Shares", such Shares will be credited to an account maintained at the Book-Entry Transfer Facility), as promptly as practicable following the expiration or termination of the Offer. If, prior to the Expiration Date, the Purchaser increases the consideration to be paid per Share pursuant to the Offer, the Purchaser will pay such increased consideration for all such Shares purchased pursuant to the Offer, whether or not such Shares were tendered prior to such increase in consideration. THE PURCHASER RESERVES THE RIGHT TO ASSIGN TO PARENT, OR TO ANY OTHER DIRECT OR INDIRECT WHOLLY OWNED SUBSIDIARY OF PARENT, THE RIGHT TO PURCHASE ALL OR ANY PORTION OF THE SHARES TENDERED PURSUANT TO THE OFFER, BUT ANY SUCH ASSIGNMENT WILL NOT RELIEVE THE PURCHASER OF ITS OBLIGATIONS UNDER THE OFFER AND THE MERGER AGREEMENT AND WILL IN NO WAY PREJUDICE THE RIGHTS OF TENDERING HOLDERS TO RECEIVE PAYMENT FOR SHARES VALIDLY TENDERED AND ACCEPTED FOR PAYMENT PURSUANT TO THE OFFER. SECTION 3. PROCEDURES FOR TENDERING SHARES. VALID TENDER OF SHARES. In order for Shares to be validly tendered pursuant to the Offer, a Holder must, prior to the Expiration Date, either (i) deliver to the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase (a) a properly completed and duly executed Letter of Transmittal (or a copy thereof) with any required signature guarantees, (b) the Certificates for Shares to be tendered or, if your Shares are Direct Registration Shares, you must ensure that the Direct Registration Shares box of the Letter of Transmittal that is delivered to the Depositary is properly completed and (c) any other documents required to be included with the Letter of Transmittal under the terms and subject to the conditions thereof and of this Offer to Purchase, (ii) cause such Holder's broker, dealer, commercial bank, trust company or custodian to tender applicable Shares pursuant to the procedures for book-entry transfer described below or (iii) comply with the guaranteed delivery procedures described below. Pursuant to the Rights Agreement, until the close of business on the Distribution Date (as defined in the Rights Agreement), the Rights will be transferred with and only with the certificates for Common Stock and the surrender for transfer of any certificates for Common Stock will also constitute the transfer of the Rights associated with the Common Stock represented by such certificates. Pursuant to an amendment to the Rights Agreement, the Rights will be inoperative with respect to the acquisition of Shares pursuant to the Offer or the consummation of the Merger or the other transactions contemplated by the Merger Agreement. If separate certificates representing the Rights are issued to Holders prior to the time a Holder's Shares are tendered pursuant to the Offer, certificates representing the number of Rights equal to the number of Shares tendered must be delivered to the Depositary, or, if available, a Book-Entry Confirmation received by the Depositary with respect thereto, in order for such Shares to be validly tendered. If the Distribution Date occurs and separate certificates representing the Rights are not distributed prior to the time Shares are tendered pursuant to the Offer, Rights may be tendered prior to a Holder receiving the certificates for Rights by use of the guaranteed delivery procedures described below. A tender of Shares constitutes an agreement by the tendering Holder to deliver certificates representing all Rights formerly associated with the number of Shares tendered pursuant to the Offer to the Depositary prior to expiration 13 of the period permitted by such guaranteed delivery procedures for delivery of certificates for, or a Book- Entry Confirmation with respect to, Rights (the "Rights Delivery Period"). However, after expiration of the Rights Delivery Period, the Purchaser may elect to reject as invalid a tender of Shares with respect to which certificates for, or a Book-Entry Confirmation with respect to, the number of Rights required to be tendered with such Shares have not been received by the Depositary. Nevertheless, the Purchaser will be entitled to accept for payment Shares tendered by a Holder prior to receipt of the certificates for the Rights required to be tendered with such Shares, or a Book-Entry Confirmation with respect to such Rights, and either (i) subject to complying with applicable rules and regulations of the Commission, withhold payment for such Shares pending receipt of the certificates for, or a Book-Entry Confirmation with respect to, such Rights or (ii) make payment for Shares accepted for payment pending receipt of the certificates for, or a Book-Entry Confirmation with respect to, such Rights in reliance upon the agreement of a tendering Holder to deliver Rights and such guaranteed delivery procedures. Any determination by the Purchaser to make payment for Shares in reliance upon such agreement and such guaranteed delivery procedures or, after expiration of the Rights Delivery Period, to reject a tender as invalid will be made in the sole and absolute discretion of the Purchaser. THE METHOD OF DELIVERY OF THE SHARES, CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING HOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect to the Shares at the Book-Entry Transfer Facility for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the Book-Entry Transfer Facility's system may make book-entry delivery of Shares by (i) causing such securities to be transferred in accordance with the Book-Entry Transfer Facility's procedures into the Depositary's account and (ii) causing the Letter of Transmittal to be delivered to the Depositary by means of an Agent's Message. Although delivery of Shares may be effected through book-entry transfer, either the Letter of Transmittal (or a manually signed copy thereof), properly completed and duly executed, together with any required signature guarantees, or any Agent's Message in lieu of the Letter of Transmittal, and any other required documents, must, in any case, be transmitted to and received by the Depositary prior to the Expiration Date at one of its addresses set forth on the back cover of this Offer to Purchase, or the tendering Holder must comply with the guaranteed delivery procedures described below. DELIVERY OF THE LETTER OF TRANSMITTAL AND OTHER REQUIRED DOCUMENTS OR INSTRUCTIONS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. SIGNATURE GUARANTEE. All signatures on a Letter of Transmittal must be guaranteed by a financial institution (including most banks, savings and loan associations and brokerage houses) that is a participant in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program (each, an "Eligible Institution"), unless the Shares tendered thereby are tendered (i) by the registered holder(s) (which term, for purposes of this document, shall include any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) of Shares who has not completed the box entitled "Special Delivery Instructions" or the box entitled "Special Payment Instructions" on the Letter of Transmittal or (ii) for the account of an Eligible Institution. See Instruction 1 to the Letter of Transmittal. If a Certificate is registered in the name of a person other than the signatory of the Letter of Transmittal, or if payment is to be made, or a Certificate not accepted for payment or not tendered is to be returned to a person other than the registered holder(s), then the Certificate must be endorsed or 14 accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on the Certificate, with the signature(s) on such Certificate or stock powers guaranteed as described above. See Instructions 1, 5 and 7 to the Letter of Transmittal. GUARANTEED DELIVERY. If a Holder desires to tender Shares pursuant to the Offer and such Holder's Certificates are not immediately available (including because certificates for Rights have not yet been distributed by the Rights Agent) or time will not permit all required documents to reach the Depositary prior to the Expiration Date or the procedure for book-entry transfer cannot be completed on a timely basis, such Shares may nevertheless be tendered if all the following conditions are satisfied: (i) such tender is made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Purchaser, is received by the Depositary as provided below prior to the Expiration Date; and (iii) the Certificates for all tendered Shares in proper form for transfer, together with a properly completed and duly executed Letter of Transmittal (or a copy thereof) with any required signature guarantee (or, in the case of a book-entry transfer, a Book-Entry Confirmation along with an Agent's Message) and any other documents required by such Letter of Transmittal, are received by the Depositary within three New York Stock Exchange, Inc. ("NYSE") trading days after the date of execution of the Notice of Guaranteed Delivery, or in the case certificates for the Rights have been issued, three NYSE trading days after the date certificates for Rights are distributed to Holders by the Rights Agent. A trading day is when the NYSE is open for business. Any Notice of Guaranteed Delivery may be delivered by hand to the Depositary or transmitted by facsimile transmission or by mail to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in the Notice of Guaranteed Delivery. In the case of Shares held through the Book-Entry Transfer Facility, the Notice of Guaranteed Delivery must be delivered to the Depositary by a participant by means of the confirmation system of the Book-Entry Transfer Facility. DIRECT REGISTRATION SHARES. Holders of Direct Registration Shares will receive all documents furnished to stockholders generally in connection with the Offer. A stockholder who wishes to tender Direct Registration Shares must use the Letter of Transmittal to tender such Shares by completing the box entitled "Direct Registration Shares". Each holder of Direct Registration Shares may tender all, some or none of such stockholder's Direct Registration Shares. Any Direct Registration Shares tendered but not purchased will be credited back to such Holder's Direct Registration Shares account. OTHER REQUIREMENTS. Notwithstanding any other provision hereof, payment for Shares accepted for payment pursuant to the Offer will, in all cases, be made only after timely receipt by the Depositary of: (i) Certificates evidencing such Shares, a Book-Entry Confirmation of the delivery of such Shares or, if such Shares are Direct Registration Shares, a properly completed Letter of Transmittal and if certificates evidencing Rights have been issued, such certificates or a Book-Entry Confirmation, if available, with respect to such certificates (unless the Purchaser elects, in its sole discretion, to make payment for the Shares pending receipt of such certificates or a Book-Entry Confirmation, if available, with respect to such certificates); (ii) a properly completed and duly executed Letter of Transmittal or a copy thereof with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message); and (iii) any other documents required by the Letter of Transmittal. Accordingly, tendering Holders may be paid at different times depending upon when Certificates for Shares (or certificates for 15 Rights) or Book-Entry Confirmations with respect to Shares (or Rights, if applicable) are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT. DETERMINATION OF VALIDITY. All questions as to the validity, form, eligibility (including, but not limited to, time of receipt) and acceptance for payment of any tendered Shares pursuant to any of the procedures described above will be determined by the Purchaser, in its sole discretion, whose determination will be final and binding on all parties. The Purchaser reserves the absolute right to reject any or all tenders of any Shares determined by it not to be in proper form or if the acceptance for payment of, or payment for, such Shares may, in the opinion of the Purchaser's counsel, be unlawful. The Purchaser also reserves the right, in its sole discretion, subject to the terms of the Merger Agreement and the rules and regulations of the Commission, to waive any of the conditions of the Offer or any defect or irregularity in any tender with respect to Shares of any particular Holder, whether or not similar defects or irregularities are waived in the case of other Holders. No tender of Shares will be deemed to have been validly made until all defects and irregularities have been cured or waived. Subject to the terms of the Merger Agreement, the Purchaser's interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto) will be final and binding. APPOINTMENT AS PROXY. By executing a Letter of Transmittal (or delivering an Agent's Message) as set forth above, a tendering Holder irrevocably appoints each designee of the Purchaser as attorney-in-fact and proxy of such Holder, with full power of substitution, to vote the Shares as described below in such manner as each such attorney-in-fact and proxy (or any substitute thereof) shall deem proper in its sole discretion, and to otherwise act (including pursuant to written consent) to the full extent of such Holder's rights with respect to the Shares (and any and all dividends (other than regular quarterly dividends declared and paid prior to the Effective Date of the Merger), distributions, rights, or other securities issued or issuable in respect of such Shares on or after May 16, 2000 (collectively, the "Distributions")) tendered by such Holder and accepted for payment by the Purchaser prior to the time of such vote or action. All such proxies shall be considered coupled with an interest in the tendered Shares and shall be irrevocable and are granted in consideration of, and are effective upon, the acceptance for payment of such Shares and all Distributions in accordance with the terms of the Offer. Such acceptance for payment by the Purchaser shall revoke, without further action, any other proxy or power of attorney granted by such Holder at any time with respect to such Shares and all Distributions and no subsequent proxies or powers of attorney will be given (or, if given, will not be deemed effective) with respect thereto by such Holder. The designees of the Purchaser will, with respect to the Shares for which the appointment is effective, be empowered to exercise all voting and other rights as they in their sole discretion may deem proper at any annual, special, adjourned or postponed meeting of the Company's stockholders, by written consent or otherwise, and the Purchaser reserves the right to require that, in order for Shares or any Distributions to be deemed validly tendered, immediately upon the Purchaser's acceptance for payment of such shares of Common stock, the Purchaser must be able to exercise all rights (including, without limitation, all voting rights and rights of conversion) with respect to such Shares and receive all Distributions. BACKUP FEDERAL INCOME TAX WITHHOLDING AND SUBSTITUTE FORM W-9. Under the "backup withholding" provisions of federal income tax law, the Depositary may be required to withhold 31% of the amount of any payments of cash pursuant to the Offer. In order to avoid backup withholding, each Holder surrendering Shares in the Offer must, unless an exemption applies, provide the payor of such cash with such Holder's correct taxpayer identification number ("TIN") on a substitute form W-9 and certify, under penalties of perjury, that such TIN is correct and that such Holder is not subject to backup withholding. If a Holder does not provide its correct TIN or fails to provide the certifications described 16 above, the Internal Revenue Service ("IRS") may impose a penalty on such Holder and payment of cash to such Holder pursuant to the Offer may be subject to backup withholding of 31%. All Holders surrendering Shares pursuant to the Offer should complete and sign the substitute Form W-9 included in the Letter of Transmittal to provide the information and certification necessary to avoid backup withholding (unless an applicable exemption exists and is proved in a manner satisfactory to the Depositary). Certain Holders (including among others all corporations and certain foreign individuals and entities) are not subject to backup withholding. Noncorporate foreign Holders should complete and sign a Form W-8, Certificate of Foreign Status, a copy of which may be obtained from the Depositary, in order to avoid backup withholding. See "Important Tax Information" in the Letter of Transmittal. OTHER REQUIREMENTS. The Purchaser's acceptance for payment of the Common Stock tendered pursuant to the Offer will constitute a binding agreement between the tendering Holder and the Purchaser upon the terms and subject to the conditions of the Offer. SECTION 4. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer are irrevocable except that such Shares may be withdrawn at any time prior to the Expiration Date and, unless theretofore accepted for payment by the Purchaser pursuant to the Offer, may also be withdrawn at any time after July 14, 2000. If the Purchaser extends the Offer, is delayed in its acceptance for payment of Shares or is unable to accept Shares for payment pursuant to the Offer for any reason, then, without prejudice to the Purchaser's rights under the Offer, the Depositary may, nevertheless, on behalf of the Purchaser, retain tendered Shares, and such Shares may not be withdrawn except to the extent that tendering Holders are entitled to withdrawal rights as described in this Section 4--"Withdrawal Rights". Any such delay will be an extension of the Offer to the extent required by law. For a withdrawal to be effective, a written 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 of the Shares, if different from that of the person who tendered such Shares. If Certificates evidencing Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such Certificates, the serial numbers shown on such Certificates must be submitted to the Depositary and the signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution, unless such Shares have been tendered for the account of an Eligible Institution. Shares tendered pursuant to the procedure for book-entry transfer as set forth in Section 3--"Procedures for Tendering Shares", may be withdrawn only by means of the withdrawal procedures made available by the Book-Entry Transfer Facility, must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares and must otherwise comply with the Book-Entry Transfer Facility's procedures. If Direct Registration Shares are being withdrawn, the notice of withdrawal must make specific reference to the withdrawal of such Direct Registration Shares. Withdrawals of tendered Shares may not be rescinded without the Purchaser's consent and any Shares properly withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Purchaser, in its sole discretion, which determination will be final and binding. None of Parent, the Purchaser, the Depositary, the Information Agent, the Dealer Managers or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. However, any Shares properly withdrawn may be re-tendered at any time prior to the Expiration Date by following any of the procedures described in Section 3--"Procedures for Tendering Shares". 17 SECTION 5. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES. The summary of tax consequences set forth below is for general information only and is based on the law as currently in effect. The tax treatment of each Holder will depend in part upon such Holder's particular situation. Special tax consequences not described herein may be applicable to particular classes of taxpayers, such as financial institutions, broker-dealers, insurance companies, foreign corporations, foreign partnerships, foreign trusts, foreign estates, persons who are not citizens or residents of the United States, tax-exempt entities, Holders who acquired their Shares through the exercise of an employee stock option or otherwise as compensation, and persons who received payments in respect of options to acquire Shares. ALL HOLDERS SHOULD CONSULT WITH THEIR TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO THEM, INCLUDING THE APPLICABILITY AND EFFECT OF THE ALTERNATIVE MINIMUM TAX AND ANY STATE, LOCAL OR FOREIGN INCOME OR OTHER TAX LAWS AND CHANGES IN SUCH TAX LAWS. The receipt of cash pursuant to the Offer or the Merger will be a taxable transaction for federal income tax purposes under the Internal Revenue Code of 1986, as amended (the "Code"), and may also be a taxable transaction under applicable state, local, foreign income or other tax laws. Generally, for federal income tax purposes, a Holder will recognize gain or loss in an amount equal to the difference between the cash received by the Holder pursuant to the Offer or the Merger and the Holder's adjusted tax basis in the Shares purchased pursuant to the Offer or converted to cash in the Merger. Gain or loss will be calculated separately for each block of Shares tendered and purchased pursuant to the Offer or converted in the Merger, as the case may be. For federal income tax purposes, such gain or loss will be a capital gain or loss if the Shares are a capital asset in the hands of the Holder, and a long-term capital gain or loss if the Holder's holding period is more than one year as of the date the Purchaser accepts such Shares for payment pursuant to the Offer or the effective date of the Merger, as the case may be. In the case of a noncorporate Holder, capital gain is currently eligible for reduced rates of taxation if the Shares were held for more than one year. There are limitations on the deductibility of capital losses. All Holders should consult their own tax advisors to determine the U.S., federal, state, local or foreign income or other tax consequences that may be relevant to them. SECTION 6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are listed and traded on the NYSE under the symbol "HSM". The table below sets forth, for the periods indicated, the quarterly high and low daily closing prices of the Shares on the NYSE:
HIGH LOW -------- -------- Fiscal Year Ended December 31, 1998 First Quarter............................................. $18.75 $13.63 Second Quarter............................................ 19.50 17.00 Third Quarter............................................. 18.94 12.63 Fourth Quarter............................................ 19.38 12.00 Fiscal Year Ended December 31, 1999 First Quarter............................................. $18.13 $13.75 Second Quarter............................................ 17.44 14.63 Third Quarter............................................. 18.31 16.56 Fourth Quarter............................................ 18.44 12.88 Fiscal Year Ended December 31, 2000 First Quarter............................................. $14.75 $12.63 Second Quarter (through May 11)........................... 14.00 13.00
- ------------------------ Source: Company's Annual Report on Form 10-K filed with the Commission on March 30, 2000, other than fiscal year 2000 data; fiscal year 2000 data from Bloomberg. 18 On May 11, 2000, the last full trading day prior to the public announcement of the Offer, the reported closing sales price of the Shares on the NYSE was $13.38 per share of Common Stock. On May 15, 2000, the last full trading day prior to the date of this Offer to Purchase, the last reported closing sales price of the Shares was $28.56 per share. Holders are urged to obtain current market quotations for the Shares. The Company has paid a quarterly cash dividend of $0.02 per Share for each of the last two years. The Merger Agreement prohibits the Company from declaring or paying any dividends (other than regular quarterly dividends) until the Effective Date of the Merger without the prior written consent of Parent. SECTION 7. CERTAIN INFORMATION CONCERNING THE COMPANY. THE COMPANY. Except as otherwise stated in this Offer to Purchase, the information concerning the Company contained in this Offer to Purchase, including financial information, has been taken from or is based upon publicly available documents and records on file with the Commission and other public sources. Neither Parent nor the Purchaser assumes any responsibility for the accuracy or completeness of the information concerning the Company contained in such documents and records or for any failure by the Company to disclose events which may have occurred or may affect the significance or accuracy of any such information but which are unknown to Parent or the Purchaser. The Company manufactures, sells, installs and services merchandising and refrigeration systems for the commercial food industry. The Company offers a variety of systems including refrigerated and non-refrigerated display merchandisers, refrigeration systems and beverage coolers. Display merchandisers are used to display refrigerated and frozen products in supermarkets, convenience stores, food service outlets and delicatessens. The Company's display merchandisers can be customized to display a variety of items. The Company's refrigeration systems include multi-compressors, automatic flow control systems and electronic controls, which are generally located in a store's back room, away from the display and merchandising areas. In addition, the Company manufactures air handlers, condensers and coils for the commercial/industrial refrigeration market. The Company also manufactures and installs walk-in storage coolers and freezers used for bulk storage and non-display items. The Company is a Delaware corporation. The address of the Company's principal executive offices is 12999 St. Charles Rock Road, Bridgeton, Missouri, 63044-2483. The telephone number of the Company at such offices is (314) 291-2000. CAPITAL STRUCTURE. The authorized capital of the Company consists of (a) 150,000,000 Shares and (b) 20,000,000 shares of preferred stock, par value $0.001 per share. As of May 11, 2000, no shares of preferred stock were outstanding, but 1,500,000 of such preferred shares were designated as Series A Junior Participating Preferred Stock (the "Series A Preferred Stock") in accordance with the terms of the Rights Agreement. (A) COMMON STOCK As of May 8, 2000, the Company had 50,593,522 Shares outstanding. As of May 8, 2000, no other shares of any class of the capital stock of the Company were outstanding. (B) RIGHTS The Company has adopted a Rights Agreement providing for the issuance of one Right with each share of Common Stock. The Rights Agreement was amended on July 15, 1999. As amended, the Rights Agreement provides that the registered holder of each Right is entitled to purchase from the Company, one one-hundredth of a share of Series A Junior Preferred Stock (a "Preferred Share") at a price of $150 per one one-hundredth of a Preferred Share, subject to adjustment. The Rights will become exercisable on the Rights Distribution Date, which is the earlier of the close of business on the 19 tenth day following a public announcement that a person or group has acquired beneficial ownership of 15% or more of the outstanding shares of the Common Stock (an "Acquiring Person") or the close of business on the tenth business day after the commencement of a tender offer or exchange offer that would, if consummated, result in a person or group becoming an Acquiring Person. If a person becomes an Acquiring Person, each Right holder (other than the Acquiring Person) will be entitled to receive, upon exercise of the Right, a number of shares of Common Stock having a market value of two times the exercise price of the Right. If the Company is acquired in a merger or other business combination, each Right holder (other than the Acquiring Person) will be entitled to receive, upon exercise of a Right, a number of the acquiring company's common shares having a market value at that time of two times the exercise price of the Right. In general, the Company can redeem all Rights for one cent per Right at any time until a person or group has become an Acquiring Person. The board of directors of the Company, without the consent of the Rights holders, is also authorized to reduce the stock ownership thresholds to 10% or increase them to not more than 20%. The Rights will expire immediately prior to the initial purchase of Shares in the Offer or otherwise at the close of business on December 31, 2007. Until a Right is exercised, the holder of a Right (merely by being a Right holder) will not have rights as a shareholder of the Company including voting or dividend rights. Each Preferred Share will be entitled to a minimum preferential quarterly dividend payment of at least $1.00 per share, but will be entitled to an aggregate dividend of 100 times the dividend declared per share of Common Stock. Each Preferred Share will have 100 votes, to be voted together with the Common Stock. In the event of a merger or other transaction in which shares of Common Stock are exchanged, each Preferred Share will be entitled to receive 100 times the amount received per share of Common Stock. (C) OPTIONS The Company has issued options to acquire Shares pursuant to its Stock Incentive Plan and Deferred Compensation Plan for Directors to non-management directors, executives and other employees. As of May 8, 2000, these options and other rights were exercisable into 5,755,817 Shares. 20 HUSSMANN INTERNATIONAL, INC. SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA Set forth below is certain selected consolidated financial information relating to the Company and its subsidiaries which has been excerpted or derived from the financial statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999 (the "Company's 10-K"). More comprehensive financial information is included in the Company's 10-K and other documents filed by the Company with the Commission. The financial information that follows is qualified in its entirety by reference to the Company's 10-K and other documents, including the financial statements and related notes contained therein. The Company's 10-K and other documents may be inspected at, and copies may be obtained from, the same places and in the manner set forth under "Available Information". CONSOLIDATED STATEMENTS OF OPERATIONS
FISCAL YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 1999 1998 1997 ------------ ----------------- ------------ (IN MILLIONS EXCEPT SHARE DATA) Revenues.......................................... $1,315.0 $1,221.2 $1,096.2 Cost of goods sold................................ 1,035.3 964.0 889.5 Gross profit...................................... 279.7 257.2 206.7 Selling, general and administrative expenses...... 153.4 135.9 115.9 Non-recurring charges............................. -- 1.4 47.8 Operating income.................................. 126.3 119.9 43.0 Whitman charges................................... -- 1.5 28.4 Interest expense: Whitman......................... -- 1.0 17.3 Other............................................. 22.5 17.8 1.6 Total interest expense............................ 22.5 18.8 18.9 Foreign exchange loss on purchase price hedge..... (10.3) -- -- Other income (expense), net....................... 1.9 (3.4) 1.2 Total other income (expense), net................. (8.4) (3.4) 1.2 Income (loss) before income tax expense and minority interests.............................. 95.4 96.2 (3.1) Income tax expense................................ 34.4 39.0 9.4 Income (loss) before minority interests........... 61.0 57.2 (12.5) Minority interests................................ (0.8) 0.3 (0.3) Net income (loss)................................. $ 60.2 $ 57.5 $ (12.8) Weighted average shares--Basic (in thousands)..... 50,859 50,841 -- Basic--EPS........................................ $ 1.18 $ 1.13 -- Weighted average shares--Diluted (in thousands).................................... 51,867 52,006 -- Diluted--EPS...................................... $ 1.16 $ 1.11 --
21 CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, --------------------- 1999 1998 --------- --------- (IN MILLIONS, EXCEPT SHARE DATA) ASSETS Current assets: Cash and cash equivalents................................. $ 34.9 $ 26.1 Receivables, net of allowance for doubtful accounts of $4.3 and $2.7, respectively............................. 290.5 285.3 Inventories............................................... 139.3 106.9 Other current assets...................................... 19.8 11.5 Total current assets........................................ 484.5 429.8 Property and equipment, net................................. 199.5 168.4 Intangible assets, net...................................... 109.1 29.4 Other assets................................................ 23.3 26.1 Total assets................................................ $816.4 $653.7 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term debt and current maturities long-term debt..... $ 18.4 $ 16.9 Accounts payable.......................................... 149.5 137.5 Income taxes payable...................................... 1.7 9.1 Accrued expenses.......................................... 64.7 72.7 Total current liabilities................................... 234.3 236.2 Long-term debt.............................................. 294.6 200.7 Other liabilities........................................... 51.9 31.3 Total liabilities........................................... 580.8 468.2 Shareholders' equity: Preferred stock, $.001 par value, 20,000,000 shares authorized, none issued or outstanding.................. -- -- Common stock, $.001 par value, 150,000,000 shares authorized, 51,166,000 and 51,006,000 issued; 50,909,000 and 50,763,000 shares outstanding, respectively......... 0.1 0.1 Additional paid-in capital................................ 92.8 90.6 Retained earnings......................................... 217.1 161.0 Accumulated other comprehensive loss...................... (70.2) (62.2) Treasury stock, at cost: 257,000 and 243,000 shares, respectively............................................ (4.2) (4.0) Total shareholders' equity.................................. 235.6 185.5 Total liabilities and shareholders' equity.................. $816.4 $653.7
22 CERTAIN PROJECTED FINANCIAL DATA FOR THE COMPANY Prior to entering into the Merger Agreement, Parent received from the Company certain information which Parent and the Purchaser believe was not and is not publicly available, including certain projected financial data (the "Projections") for the fiscal years 2000 through 2004. The Company does not publicly disclose projections, and the Projections were not prepared with a view to public disclosure.
FISCAL YEAR FISCAL YEAR FISCAL YEAR FISCAL YEAR FISCAL YEAR 2000 2001 2002 2003 2004 ----------- ----------- ----------- ----------- ----------- (IN MILLIONS EXCEPT PER SHARE AMOUNTS) Selected Income Statement Data: Sales............................... $1,422.0 $1,506.3 $1,596.2 $1,692.8 $1,796.5 Operating Income.................... 152.4 174.7 198.5 224.2 252.3 Net Income.......................... 81.6 97.3 115.2 135.6 158.2 Diluted Shares Outstanding.......... 50.7 49.4 49.4 49.4 49.4 Earnings Per Share.................. 1.61 1.97 2.33 2.74 3.20 Selected Supplemental Data: EBITDA.............................. $ 183 $ 206 $ 230 $ 256 $ 284 Capital expenditures................ 40 40 40 40 40
- ------------------------ CAUTIONARY STATEMENTS CONCERNING THE PROJECTIONS AND FORWARD-LOOKING STATEMENTS The Projections were not prepared with a view to public disclosure or compliance with published guidelines of the Commission, the guidelines established by the American Institute of Certified Public Accountants for Prospective Financial Information or generally accepted accounting principles. Neither Parent's nor the Company's certified public accountants have examined or compiled any of the Projections or expressed any conclusion or provided any form of assurance with respect to the Projections and, accordingly, assume no responsibility for the Projections. The Projections were not prepared with the approval of the Company's Board of Directors. The Projections are included herein to give the Holders access to information which was provided to Parent and which is believed by Parent and the Purchaser to be not publicly available. Certain matters discussed herein (including, but not limited to, the Projections) are forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from the statements included herein (including the Projections) and should be read with caution. The Company has advised Parent and the Purchaser that the Projections are subjective in many respects and thus susceptible to interpretations and periodic revisions based on actual experience and recent developments. While presented with numerical specificity, the Projections were not prepared by the Company in the ordinary course and are based upon a variety of estimates and hypothetical assumptions made by management of the Company with respect to, among other things, industry performance, general economic, market, interest rate and financial conditions, sales, cost of goods sold, operating and other revenues and expenses, capital expenditures and working capital of the Company, and other matters which may not be realized and are inherently subject to significant business, economic and competitive uncertainties and contingencies, all of which are difficult to predict and many of which are beyond the Company's control. Accordingly, there can be no assurance that the assumptions made in preparing the Projections will prove accurate, and actual results may be materially greater or less than those contained in the Projections. In addition, the Projections do not take into account any of the transactions contemplated by the Merger Agreement, including the Offer and the Merger. These events may cause actual results to materially differ from the Projections. For these reasons, as well as the bases and assumptions on which the Projections were complied, the inclusion of such Projections herein should not be regarded as an indication that the Company, 23 Parent, the Purchaser or any of their respective affiliates or representatives considers such information to be an accurate prediction of future events, and the Projections should not be relied on as such. None of such persons assumes any responsibility for the reasonableness, completeness, accuracy or reliability of such Projections. No party nor any of their respective affiliates or representatives has made, or makes, any representation to any person regarding the information contained in the Projections and none of them intends to update or otherwise revise the Projections to reflect circumstances existing after the date when made or to reflect the occurrence of future events even in the event that any or all of the assumptions are shown to be in error. AVAILABLE INFORMATION. The Company is subject to the information and reporting requirements of the Exchange Act and, in accordance therewith, is required to file reports and other information with the Commission relating to its business, financial condition and other matters. Certain information, as of particular dates, concerning the Company's directors and officers, their remuneration, stock options granted to them, the principal holders of the Company's securities, any material interests of such persons in transactions with the Company and other matters is required to be disclosed in proxy statements distributed to the Company's stockholders and filed with the Commission. These reports, proxy statements and other information should be available for inspection at the public reference facilities of the Commission located in Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and also should be available for inspection and copying at prescribed rates at regional offices of the Commission located at Seven World Trade Center, New York, New York 10048 and Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of this material may also be obtained by mail, upon payment of the Commission's customary fees, from the Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. Electronic filings filed through the Commission's Electronic Data Gathering, Analysis and Retrieval system ("EDGAR"), including those made by or in respect of the Company, are publicly available through the Commission's home page on the Internet at http://www.sec.gov. Such information should also be available for inspection at the library of the NYSE, 20 Broad Street, New York, NY 10005. SECTION 8. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT. THE PURCHASER. The Purchaser, a newly incorporated Delaware corporation and a wholly owned subsidiary of Parent, has not conducted any business other than in connection with the Offer and the Merger Agreement. All of the issued and outstanding shares of capital stock of the Purchaser are beneficially owned by Parent. The principal address of the Purchaser is 200 Chestnut Ridge Road, Woodcliff Lake, New Jersey, 07675. The telephone number of the Purchaser at such office is (201) 573-0123. PARENT. Parent is subject to the informational and reporting requirements of the Exchange Act and, in accordance therewith, is required to file reports and other information with the Commission relating to its business, financial condition and other matters. Certain information, as of particular dates, concerning Parent's directors and officers, their remuneration, stock options granted to them, the principal holders of Parent's securities and other matters is required to be disclosed in proxy statements distributed to Parent's stockholders and filed with the Commission. These reports, proxy statements and other information may be inspected at, and copies may be obtained from, the same places and in the manner set forth with respect to information concerning the Company in Section 7--"Certain Information Concerning the Company--Available Information". Additional information regarding Parent and the Offer may be obtained at Parent's website: www.ingersoll-rand.com. The name, citizenship, business address, present principal occupation or employment and five-year employment history of each of the directors and executive officers of the Purchaser and Parent are set forth in Schedule I hereto. During the last five years, none of Parent, the Purchaser or, to the best of their knowledge, any of the persons listed in Schedule I hereto (i) has been convicted in a criminal proceeding (excluding traffic 24 violations or similar misdemeanors) or (ii) was a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws. Except as described in this Offer to Purchase, (i) none of Parent, the Purchaser or, to the best of their knowledge, any of the persons listed in Schedule I to this Offer to Purchase, or any associate or majority-owned subsidiary of Parent or the Purchaser or, to the best of their knowledge, any associate or majority-owned subsidiary of any of the persons listed in Schedule I to this Offer to Purchase, beneficially owns or has any right to acquire, directly or indirectly, any equity securities of the Company, and (ii) none of Parent, the Purchaser, or to the best of their knowledge, any of the persons listed in Schedule I to this Offer to Purchase has effected any transaction in such equity securities during the past 60 days. The Purchaser and Parent disclaim beneficial ownership of any Shares owned by any pension plans of Parent or the Purchaser or any pension plans of any associate or majority-owned subsidiary of Parent or the Purchaser. Except as described in this Offer to Purchase, none of Parent, the Purchaser or, to the best of their knowledge, any of the persons listed in Schedule I to this Offer to Purchase has any contract, arrangement, understanding or relationship with any other person with respect to any securities of the Company, including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or voting of such securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies. Except as set forth in this Offer to Purchase, during the past two years, none of Parent, the Purchaser or, to the best of their knowledge, any of the persons listed on Schedule I hereto has had any business relationship or transaction with the Company or any of its executive officers, directors or affiliates that is required to be reported under the rules and regulations of the Commission applicable to the Offer. Except as set forth in this Offer to Purchase, during the past two years, there have been no contacts, negotiations or transactions between any of Parent, the Purchaser or any of their subsidiaries or, to the best knowledge of Parent or the Purchaser, any of the persons listed in Schedule I to this Offer to Purchase, on the one hand, and the Company or its affiliates, on the other hand, concerning a merger, consolidation or acquisition, tender offer or other acquisition of securities, an election of directors or a sale or other transfer of a material amount of assets. SECTION 9. SOURCE AND AMOUNT OF FUNDS. SOURCE AND AMOUNT OF FUNDS The Offer is not conditioned upon any financing arrangements. The Purchaser estimates that the total amount of funds required by the Purchaser to purchase all of the outstanding Shares will be approximately $1.55 billion. In addition, the Purchaser will refinance approximately $107 million of debt, net of cash, and plans to assume approximately $170 million of the Company's debt. Based on the foregoing, the total funds required are approximately $1.66 billion, plus reasonable and customary fees and expenses incurred in connection with the Offer and the Merger. The Purchaser will obtain the necessary funds through capital contributions and/or loans by Parent and/or various wholly owned direct or indirect subsidiaries of Parent. Parent intends to obtain such funds through the issuance of approximately $800 million of commercial paper, which is backed by existing revolving credit arrangements, and approximately $862 million of extendible commercial notes, in each case bearing a market interest rate. In the event that the extendible commercial notes are not repaid on the initial redemption date, the interest rate on such notes will be reset to a higher rate. The commercial paper and extendible commercial notes will be senior unsecured obligations of Parent ranking pari passu to all other unsecured debt of Parent. Parent intends to repay the commercial paper and extendible commercial notes with the proceeds of planned divestitures and general corporate funds. 25 SECTION 10. BACKGROUND OF THE OFFER. Representatives of the Company and Parent met in late 1999 to discuss opportunities for cooperating in the home shopping/e-commerce area. These discussions did not contemplate any acquisition of the Company by Parent. At the regularly scheduled meetings of the board of directors of Parent (the "Parent Board") held on February 2, 2000 and March 1, 2000, Parent's management made summary presentations with respect to various possible acquisition candidates, including the Company. On March 23, 2000, the Parent Board met telephonically to consider, among other things, a possible acquisition of the Company. The Parent Board received a presentation from management of Parent in which management described the strategic rationale for the proposed acquisition. At such meeting, the Parent Board authorized management to explore an acquisition of the Company and to initiate discussions and negotiations with the Company regarding an acquisition of the Company by Parent at a price not to exceed $26 per share. On March 25, 2000, Mr. Henkel, President and Chief Executive Officer of Parent, in a telephone conversation initiated the previous day with Mr. Vowell, President and Chief Executive Officer of the Company, proposed an acquisition of the Company by Parent at a price ranging from $22 to $24 per share. Mr. Henkel indicated that Parent would not pursue an acquisition of the Company on a hostile basis. Mr. Vowell responded that, although the Company was not for sale, he would consider Parent's proposal. On March 31, 2000, Mr. Vowell contacted Mr. Henkel and indicated that he believed that the value of the Company was in a range between $28 and $30 per share. Mr. Henkel responded that a price in that range would not be justified based on the information available to him. Mr. Henkel also reiterated that Parent was not interested in proceeding on a hostile basis. On April 4, 2000, Mr. Henkel contacted Mr. Vowell and indicated that Parent was prepared to raise its price to between $24 and $26 per share, in an all-cash transaction. Mr. Vowell responded that he continued to believe that a price in that range did not reflect the full value of the Company. On April 17, 2000, further discussions were held between Mr. Henkel and Mr. Vowell. Mr. Henkel indicated that based on publicly available information about the Company, he was unwilling to propose an acquisition of the Company for a price in excess of $26 per share. However, he indicated a willingness to consider nonpublic information that the Company would make available. Accordingly, Mr. Vowell scheduled a meeting with Mr. Henkel for April 20, 2000. On April 18, 2000, the Company and Parent entered into a confidentiality/standstill agreement, a copy of which has been filed as Exhibit (e)(2) hereto. On April 20, 2000, the scheduled meeting between Mr. Vowell and Mr. Henkel took place. The Company's plans and projections were discussed, but there was no discussion concerning the price of Parent's proposal. In the following week, Mr. Vowell and Mr. Henkel held additional discussions concerning the price that Parent was prepared to offer for the Company. On April 24 and 25, Mr. Henkel contacted each of the Parent Board members individually by telephone and they expressed a willingness to increase the Offer to acquire the Company to an amount not to exceed $29 per share. Early in the week, Mr. Henkel indicated that Parent was prepared to pursue a transaction at $28.50 per share. Mr. Vowell responded that he did not believe such price adequately reflected the Company's value. On April 26, Mr. Henkel indicated that Parent's Board had provisionally authorized discussions with the Company with respect to a transaction at $29 per share, subject to satisfactory completion of more detailed due diligence. Mr. Vowell conveyed this to members of the Board who were available at that time and it was determined to request that Parent furnish to the Company the form of contract that Parent 26 would propose to effect the transaction and, if the form of contract was generally acceptable, to allow Parent to proceed with more detailed due diligence. Counsel to Parent furnished to WLRK an outline of contractual terms, followed by Parent's proposed form of agreement and various due diligence meetings between representatives of Parent and the Company took place during the weeks of May 1 and May 8. The terms of the agreement were negotiated during the period from May 3 through May 11, 2000. On May 3, 2000, the Parent Board met to consider the contacts with the Company and received a presentation from Goldman Sachs regarding the proposed acquisition of the Company. Management of Parent updated its presentation regarding the strategic rationale for the proposed acquisition and discussed the status of the due diligence investigation of the Company. At such meeting, the Parent Board authorized the acquisition of the Company at a price of up to $29 per share, subject to satisfactory completion of due diligence and negotiation of acceptable definitive documentation. On Thursday afternoon, May 11, 2000, the board of directors of the Company (the "Board") met to consider the Offer, the Merger and the Merger Agreement. Following discussion, the Board determined that the terms of the Offer and the Merger were advisable, fair to and in the best interests of, the stockholders of the Company, approved the Offer, the Merger, the Merger Agreement and the other transactions contemplated thereby, and determined to recommend that the Company's stockholders accept the Offer and tender their Shares pursuant to the Offer and approve and adopt the Merger Agreement. Following the Board meeting, Parent, the Purchaser and the Company executed the Merger Agreement. In the morning of May 12, 2000, Parent and the Company issued a joint press release announcing the execution of the Merger Agreement. On May 16, 2000, in accordance with the Merger Agreement, the Purchaser commenced the Offer. SECTION 11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY; CERTAIN AGREEMENTS. PURPOSE OF THE OFFER. The purpose of the Offer is to enable Parent to acquire as many outstanding Shares as possible as a first step in acquiring the entire equity interest in the Company. The purpose of the Merger is for Parent to acquire all remaining Shares not purchased pursuant to the Offer. Upon consummation of the Merger, the Company will become a wholly owned subsidiary of Parent. The Offer is being made pursuant to the Merger Agreement. Under the DGCL, the approval of the Board of Directors of the Company is required to approve and adopt the Merger Agreement and the transactions contemplated thereby, including the Merger. Unless the Merger is consummated pursuant to the "short-form" merger provisions under Section 253 of the DGCL described below (in which case no vote of the holders of the outstanding Shares is required), the only remaining required corporate action of the Company is the adoption of the Merger Agreement and the approval of the Merger by vote of the holders of a majority of the outstanding Shares. The Board of Directors of the Company has unanimously (i) determined that the terms of each of the Offer and the Merger of the Purchaser with and into the Company are fair to, and in the best interests of, the Holders, (ii) approved the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, and (iii) declared the advisability of the Merger Agreement and recommended that the Holders accept the Offer, tender their Shares (including the Rights) pursuant to the Offer and (if required by applicable law) adopt the Merger Agreement. In the Merger Agreement, the Company has agreed to take all action necessary to convene a meeting of its stockholders as soon as practicable after the consummation of the Offer for the purpose of considering and taking action on the Merger Agreement and the transactions contemplated thereby if such action is required by the DGCL. However, under the DGCL, if the Purchaser acquires, pursuant to the Offer or otherwise, at least 90% of the outstanding Shares, the Purchaser will be able to approve the Merger without a vote of the Company's stockholders. Accordingly, if the Purchaser acquires at least 90% of the outstanding Shares, it will have sufficient voting power to cause the approval and adoption of 27 the Merger Agreement and the transactions contemplated thereby without a vote of the Company's stockholders. In such event, Parent, the Purchaser and the Company have agreed in the Merger Agreement to take, at the request of the Purchaser, all necessary and appropriate action to cause the Merger to become effective without a meeting of the Company's stockholders. If, however, the Purchaser does not acquire at least 90% of the outstanding Shares pursuant to the Offer or otherwise and a vote of the Company's stockholders is required under the DGCL, a significantly longer period of time would be required to effect the Merger. If the Purchaser purchases a majority of the outstanding Shares pursuant to the Offer, the Merger Agreement provides that the Purchaser will be entitled to designate representatives to serve on the Board of Directors of the Company in proportion to the Purchaser's ownership of Shares following such purchase. The Purchaser expects that such representation would permit the Purchaser to exert substantial influence over the Company's conduct of its business and operations. PLANS FOR THE COMPANY. Subject to certain matters described below, it is currently expected that, initially following the Merger, the business and operations of the Company will generally continue as they are currently being conducted. Parent currently intends to cause the Company's operations to continue to be run and managed by, amongst others, the Company's existing executive officers. Parent will continue to evaluate all aspects of the business, operations, capitalization and management of the Company during the pendency of the Offer and after the consummation of the Offer and the Merger and will take such further actions as it deems appropriate under the circumstances then existing. Parent intends to seek additional information about the Company during this period. Thereafter, Parent intends to review such information as part of a comprehensive review of the Company's business, operations, capitalization and management. As a result of the completion of the Offer, the interest of Parent in the Company's net book value and net earnings will be in proportion to the number of Shares acquired in the Offer. If the Merger is consummated, Parent's interest in such items and in the Company's equity generally will equal 100% and Parent and its subsidiaries will be entitled to all benefits resulting from such interest, including all income generated by the Company's operations and any future increase in the Company's value. Similarly, Parent will also bear the risk of losses generated by the Company's operations and any future decrease in the value of the Company after the Merger. Subsequent to the Merger, current stockholders of the Company will cease to have any equity interest in the Company, will not have the opportunity to participate in the earnings and growth of the Company after the Merger and will not have any right to vote on corporate matters. Similarly, stockholders will not face the risk of losses generated by the Company's operations or decline in the value of the Company after the Merger. The Shares are currently traded on the NYSE. Following the consummation of the Merger, the Shares will no longer be listed on the NYSE and the registration of the Shares under the Exchange Act will be terminated. Accordingly, after the Merger there will be no publicly-traded equity securities of the Company outstanding and the Company may no longer be required to file periodic reports with the Commission. See Section 13--"Effect of the Offer on the Market for the Shares; Exchange Act Registration". It is expected that, if Shares are not accepted for payment by the Purchaser pursuant to the Offer and the Merger is not consummated, the Company's current management, under the general direction of the current Board of Directors, will continue to manage the Company as an ongoing business. Except as otherwise discussed in this Offer to Purchase, Parent has no present plans or proposals that would result in any extraordinary corporate transaction, such as a merger, reorganization, liquidation involving the Company or any of its subsidiaries, or purchase, sale or transfer of a material amount of assets of the Company or any of its subsidiaries or in any other material changes to the Company's capitalization, corporate structure, business or composition of the Board of Directors of the Company or the management of the Company, except that Parent intends to review the composition of the boards of directors (or similar governing bodies) of the Company and its subsidiaries and to cause the election to such boards of directors (or similar governing bodies) of certain of its representatives. 28 MERGER AGREEMENT. The following is a summary of the material terms of the Merger Agreement. The summary is qualified in its entirety by reference to the Merger Agreement, a copy of which has been filed with the Commission as an exhibit to the Schedule TO. The Merger Agreement may be inspected at, and copies may be obtained from, the same places and in the manner set forth in Section 7--"Certain Information Concerning the Company--Available Information". MERGER AGREEMENT. THE OFFER. The Merger Agreement provides that no later than five business days after the public announcement of the Merger Agreement, Parent and the Purchaser will commence the Offer and that the obligation of Parent and the Purchaser to consummate the Offer and to accept for payment and to pay for any Shares validly tendered pursuant to the Offer and not withdrawn shall be subject to only those conditions set forth therein. Subject to the terms of the Merger Agreement, the Purchaser may modify the terms and conditions of the Offer; provided, however, that the Purchaser shall not, without the prior written consent of the Company, (i) reduce the minimum number of Shares to be purchased pursuant to the Offer, (ii) reduce the Offer Consideration, (iii) change the form of consideration payable in the Offer, (iv) reduce the maximum number of shares to be purchased in the Offer, (v) amend the terms or the conditions of the Offer in a manner which is adverse to the Holders, or which imposes conditions or terms to the Offer in addition to those set forth therein, (vi) extend the Expiration Date beyond twenty (20) business days after commencement of the Offer, except (A) as required by applicable law, (B) as specified in the immediately succeeding paragraph or (C) that if any condition set forth in Section 14--"Conditions of the Offer" has not been satisfied or waived, the Purchaser will extend the Expiration Date for one or more periods, but in no event later than October 31, 2000, or (vii) waive the HSR Condition; provided, however, that the Offer may be extended in connection with an increase in the consideration to be paid pursuant to the Offer so as to comply with applicable rules and regulations of the Commission. Notwithstanding the foregoing, the Purchaser may, without the consent of the Company, extend the Offer for up to ten (10) business days in the aggregate, notwithstanding that all conditions set forth in Section 14--"Conditions of the Offer" are satisfied on the Expiration Date, if, immediately prior to the Expiration Date, less than 90% of the Shares have been tendered and not withdrawn; provided that, after the initial such extension, the Offer shall not be subject to any conditions that are at the time of such extension satisfied other than the Minimum Condition and the conditions set forth in clauses (v)(a) and (v)(e)(2) of Section 14--"Conditions of the Offer". COMPOSITION OF THE BOARD FOLLOWING CONSUMMATION OF THE OFFER. The Merger Agreement provides that, promptly after the purchase of and payment for the Shares by the Purchaser pursuant to the Offer, Parent shall, subject to the provisions of the next paragraph, be entitled to designate such number of directors (the "Parent Designees"), rounded up to the next whole number, on the Company's Board of Directors as is equal to the product of the total number of directors on such Board (after giving effect to any increase in the size of such Board pursuant to this sentence) multiplied by the percentage that the number of Shares beneficially owned by the Purchaser at such time (including Shares so accepted for payment) bears to the total number of Shares then outstanding; provided that in no event shall the Parent Designees constitute less than a majority of the entire Board of Directors. In furtherance thereof, the Company shall, upon the request of Parent, use its reasonable best efforts promptly either to increase the size of its Board of Directors or to secure the resignations of such number of its incumbent directors, or both, as is necessary to enable the Parent Designees to be so elected or appointed to the Company's Board of Directors, and the Company shall take all actions available to the Company to cause the Parent Designees to be so elected or appointed. At such time, the Company shall, subject to the provisions of the next paragraph, if requested by Parent, also take all action necessary to cause persons designated by Parent to constitute at least the same percentage (rounded up to the next whole number) as is on the Company's Board of Directors of (i) each committee of the Company's Board of 29 Directors, (ii) each board of directors (or similar body) of each subsidiary of the Company and (iii) each committee of each such board. The Merger Agreement further provides that the Company's obligation to appoint Parent Designees to the Company's Board of Directors will be subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. Notwithstanding the foregoing, the parties to the Merger Agreement will use their respective reasonable best efforts to ensure that at least two of the members of the Board shall, at all times prior to the Effective Time, be directors of the Company who were directors of the Company on the date of the Merger Agreement (the "Continuing Directors"), provided that, if there shall be in office less than two Continuing Directors for any reason, the Board of Directors will cause the person designated by the remaining Continuing Director to fill such vacancy, and such person will be deemed to be a Continuing Director for all purposes of the Merger Agreement, or if no Continuing Directors then remain, the other directors of the Company then in office will designate two persons to fill such vacancies who will not be officers or employees or affiliates of the Company or Parent or any of their respective subsidiaries. From and after the time, if any, that the Parent Designees constitute a majority of the Company's Board of Directors and prior to the Effective Time, pursuant to the terms of the Merger Agreement, any amendment or modification of the Merger Agreement, any amendment to the Company's Certificate of Incorporation or By-Laws, any termination of the Merger Agreement by the Company, any extension of time for performance of any of the obligations of Parent or the Purchaser thereunder, any waiver of any condition to the Company's obligations hereunder or any of the Company's rights hereunder or other action by the Company hereunder which adversely affects the Holders other than Parent or Purchaser may be effected only if there are in office one or more Continuing Directors and such action is approved by the action of unanimous vote of the entire Board of Directors of the Company. THE MERGER. The Merger Agreement provides that subject to the conditions thereof, and in accordance with the DGCL, the Merger shall be effected and the Purchaser shall be merged with and into the Company at the Effective Time. At the Effective Time, the separate existence of the Purchaser will cease and the Company will continue as the surviving corporation (as such, the "Surviving Corporation") and shall continue to be governed by the laws of the state of Delaware. The Merger Agreement provides that the certificate of incorporation of the Company shall be the certificate of incorporation of the Surviving Corporation until thereafter changed or amended in accordance with the provisions thereof and applicable law. The Merger Agreement provides that the by-laws of the Company shall be the bylaws of the Surviving Corporation until thereafter changed or amended in accordance with the provisions thereof and applicable law. The Merger Agreement provides that from and after the Effective Time, (a) the directors of the Purchaser will be the directors of the Surviving Corporation, until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be, and (b) the officers of the Company shall be the officers of the Surviving Corporation, until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be. EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS. At the Effective Time, each issued and outstanding share of Common Stock (other than Shares held by the Company or by Parent or any other subsidiary of Parent other than shares in accounts beneficially owned by third parties, which will automatically be canceled and will cease to exist and no cash or other consideration will be delivered or deliverable in exchange therefor, and other Shares, if any, held by Holders who have not voted such Shares in favor of the Merger and who have perfected their appraisal rights under the DGCL) will, by virtue of the Merger and without any action by the Holders thereof, be converted into the right to receive an amount in cash equal to the Offer Consideration (the "Merger Consideration") payable to the Holder thereof, without interest thereon, less any required withholding taxes, upon surrender and exchange of a Certificate. Immediately prior to the Effective Time, each share of common stock, par value $0.01 per share, of the Purchaser then issued and outstanding will, by virtue of the Merger and without any action on the 30 part of the holders thereof, be converted into one fully paid and nonassessable share of common stock, par value $0.001 per share, of the Surviving Corporation. The Merger Agreement provides that upon consummation of the Offer, each then outstanding option to purchase Shares, whether or not otherwise vested and exercisable (a "Stock Option") shall be cancelled by the Company and in consideration of such cancellation and except to the extent that Parent and the holder of any such Stock Option otherwise agree, the Company shall pay to such holders of Stock Options an amount in respect thereof equal to the product of (A) the excess, if any, of (i) the Merger Consideration over (ii) the exercise price per Share subject to such Stock Option and (B) the number of Shares subject to such Stock Option immediately prior to its cancellation. Such payment shall be less any required withholding taxes and without interest. REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains various customary representations and warranties of the parties thereto including, without limitation, representations and warranties by the Company as to the Company's organization, authorization, consents and noncontravention, capital structure, filings with the Commission, absence of material adverse change, absence of undisclosed liabilities, absence of material untrue statements, real property, intellectual property, certain contracts and arrangements, legal proceedings and compliance with the law, environmental laws, taxes, benefit plans, labor matters, the opinion of a financial advisor, voting requirements, rights plan and brokers. Some of the representations are qualified by the limitation that, in order for the representation to have been breached, the event breaching the representation must have a Material Adverse Effect. A "Material Adverse Effect" as to the Company means a material adverse effect on (i) the ability of the Company to perform its obligations under the Merger Agreement or to consummate the transactions contemplated thereby or (ii) the financial condition, business, assets, or results of operations of the Company, other than adverse effects resulting from (A) conditions, circumstances or changes in the general economy, the capital markets or the industry in which the Company is engaged or (B) any public disclosure of the Merger Agreement. In addition, the Merger Agreement contains representations and warranties of Parent and the Purchaser concerning their organization, authorization, consents and noncontravention, absence of material untrue statements, voting requirements, absence of business activities by the Purchaser and sufficient funds. CONDUCT OF BUSINESS OF THE COMPANY. Pursuant to the Merger Agreement, the Company has agreed that prior to the Effective Time, the Company and its subsidiaries will carry on its business in the ordinary course of business consistent with past practice and, to the extent consistent therewith, use its reasonable best efforts to preserve intact its current business organizations, keep available the services of its current key officers and employees and preserve the goodwill of those engaged in material business relationships with the Company. Without limiting the generality of the foregoing, except as expressly contemplated by the Merger Agreement, the Company and its subsidiaries will not, without the prior consent of Parent: (1) (A) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its outstanding capital stock (other than, with respect to a subsidiary of the Company, to its corporate parent), except regular quarterly dividends with respect to the Shares on the regular quarterly record date and at a rate less than or equal to the rate paid on the last quarterly dividend date, (B) split, combine or reclassify any of its outstanding capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its outstanding capital stock or (C) purchase, redeem or otherwise acquire any shares of outstanding capital stock or any rights, warrants or options to acquire any such shares (except for the acquisition of Shares from holders of Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Stock Options to the extent required under the terms of such Stock Options as in effect at the time of the Merger Agreement; 31 (2) issue, sell, grant, pledge or otherwise encumber any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities, other than upon the exercise of vested Options outstanding at the time of the Merger Agreement; (3) amend its certificate of incorporation, by-laws or other organizational documents; (4) directly or indirectly acquire, make any investment (other than investments not exceeding $5.0 million in the aggregate) in, or make any capital contributions to, any person (other than a subsidiary of the Company) other than in the ordinary course of business consistent with past practice; (5) make any new capital expenditure or expenditures in excess of $10.0 million in the aggregate; (6) enter into, amend or terminate any Material Contract (as defined in the Merger Agreement) or any contract involving amounts in excess of $2.0 million per year other than in the ordinary course of business consistent with past practice; (7) directly or indirectly sell, pledge or otherwise dispose of or encumber any of its properties or assets, except for sales, pledges or other dispositions or encumbrances in the ordinary course of business consistent with past practice; (8) (A) other than in connection with any action otherwise permitted under the Merger Agreement, incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, other than indebtedness owing to or guarantees of indebtedness owing to the Company or a subsidiary of the Company (except for borrowings under the Credit Agreement and other existing credit facilities (as defined in the Merger Agreement) in the ordinary course of business consistent with past practice) or (B) make any loans or advances to any other person, other than to the Company or to a subsidiary of the Company and other than routine advances to employees consistent with past practice; (9) grant or agree to grant to any director or officer or, other than in the ordinary course of business consistent with past practice, any employee (other than employees who receive less than $200,000 in total annual cash compensation from the Company or its subsidiaries), any increase in wages or bonus, severance, profit sharing, retirement (including any discretionary company contribution amounts under ERP), deferred compensation, insurance or other compensation or benefits to such officers and employees, or establish any new compensation or benefit plans or arrangements, or amend or agree to amend any existing Company Plans, except as may be required under the Merger Agreement, existing agreements or by law or other than in the ordinary course of business consistent with past practice; (10) except as set forth in the Merger Agreement and except as required under the existing Company Plans (as defined in the Merger Agreement) and existing collective bargaining agreements, accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits; (11) enter into or amend any employment, severance or similar agreement with any existing officers or, other than in the ordinary course of business consistent with past practice, any employees (other than employees who receive less than $200,000 in total annual cash compensation from the Company or its subsidiaries), except for severance agreements entered into to the extent required pursuant to severance plans existing on the date hereof; (12) make or rescind any material tax election or settle or compromise any material income tax liability of the Company or of any of its subsidiaries with any governmental entity or settle any action, suit, claim, investigation or proceeding with any government entity (legal, administrative or arbitrative) in an amount in excess of $1.0 million; 32 (13) pay, discharge or satisfy any claims, liabilities or obligations, other than the payment, discharge or satisfaction (x) of any such claims, liabilities or obligations in the ordinary course of business or (y) of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated subsidiaries or (z) other than settlements which involve solely the payment of money that would not result in an uninsured or underinsured payment by or liability of the Company in excess of $2.0 million in the aggregate above reserves established therefor on the books of the Company; (14) except as disclosed in the documents filed with the SEC and publicly available prior to the date of the Merger Agreement or required by a governmental entity, make any change in any method of accounting or accounting practice or policy, except as required by generally accepted accounting principles; (15) enter into any agreement, understanding or commitment that restrains, limits or impedes the Company's ability to compete with or conduct any line of business, including, but not limited to, geographic limitations on the Company's activities; (16) plan, announce, implement or effect any reduction in force, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of the Company or its subsidiaries, except for routine employee terminations; (17) take any action, engage in any transaction or enter into any agreement which would cause any of the representations or warranties contained in the Merger Agreement to be untrue as of the Closing Date; (18) revalue any material assets of the Company or any of its subsidiaries, including but not limited to writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business, except for any revaluation resulting from a change in circumstances or conditions from those prevailing at March 31, 2000; or (19) authorize any of, or commit or agree to take any of, the foregoing actions described in paragraphs (1) through (18), in respect of which it is restricted, except to the extent such action is otherwise expressly contemplated under the Merger Agreement. NO SOLICITATION. Pursuant to the Merger Agreement, after May 11, 2000, the Company shall not (whether directly or indirectly through advisors, agents, representatives or other intermediaries), and the Company shall use its reasonable best efforts to cause its respective officers, directors, advisors, representatives and other agents of the Company not to, directly or indirectly, (a) continue any discussions or negotiations, if any, with any parties, other than Parent and the Purchaser, conducted theretofore with respect to any Acquisition Proposal (as defined in the Merger Agreement) or which could reasonably be expected to lead to an Acquisition Proposal, (b) solicit, initiate or knowingly encourage any inquiries relating to, or the submission of, any Acquisition Proposal, (c) participate in any discussions or negotiations regarding any Acquisition Proposal, or, in connection with any Acquisition Proposal, furnish to any person any information or data with respect to or access to the properties of the Company or any of its Subsidiaries, or take any other action to facilitate the making of any proposal that constitutes or may reasonably be expected to lead to, any Acquisition Proposal or (d) enter into any agreement with respect to any Acquisition Proposal or approve or resolve to approve any Acquisition Proposal. Notwithstanding the foregoing, the Company or its Board of Directors shall be permitted to furnish information with respect to the Company and its Subsidiaries and participate in discussions or negotiations regarding an unsolicited bona fide written Acquisition Proposal if, and only to the extent that, a majority of the entire Board of Directors of the Company determines in good faith that such Acquisition Proposal could reasonably be expected to constitute a Superior Proposal (as defined in the Merger Agreement), in which case the Company will not disclose any information to such person without entering into a confidentiality agreement substantially identical to the Letter Agreement; provided such 33 confidentiality agreement shall not prohibit the presentation of an Acquisition Proposal to the Company's Board of Directors. The Company shall promptly (but in no case later than 24 hours after receipt) provide Parent with a copy of any written Acquisition Proposal received and a written statement with respect to any non-written Acquisition Proposal received, which statement shall include the identity of the parties making the Acquisition Proposal and the material terms thereof. The Company shall keep Parent informed on a reasonably current basis of the status and content of any discussions regarding any Acquisition Proposal with a third party. Notwithstanding the foregoing, nothing shall prohibit the Company or the Company's Board of Directors from taking and disclosing to the Company's stockholders a position contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act (or any similar communications in connection with the making or amendment of a tender offer or exchange offer) or from making any disclosure required by applicable law, provided that the Board of Directors of the Company shall not recommend that the stockholders of the Company tender their Shares in connection with any such tender or exchange offer unless the Board of Directors, by majority vote of the entire board, shall have determined in good faith, based upon the advice of its independent financial advisors and outside counsel, that the relevant Acquisition Proposal constitutes a Superior Proposal. MEETING OF STOCKHOLDERS; PROXY STATEMENT. The Merger Agreement provides that as soon as practicable following the acceptance for payment of and payment for Shares by the Purchaser in the Offer, if required by law to consummate the Merger, the Company, with the cooperation of Parent, take all action necessary, in accordance with the DGCL, the Exchange Act and other applicable law and its certificate of incorporation and by-laws to convene and hold a special meeting of the stockholders of the Company (the "Stockholders Meeting") for the purpose of considering and voting upon the adoption of the Merger Agreement and to solicit proxies pursuant to the Proxy Statement in connection therewith. Subject to the Board of Directors' fiduciary duties under applicable law, the Board of Directors of the Company shall recommend that the holders of Shares vote in favor of the adoption of the Merger Agreement at the Stockholders Meeting and shall cause such recommendation to be included in the Proxy Statement. At the Stockholders Meeting, Parent and the Purchaser shall cause all of the Shares owned by them to be voted in favor of the adoption of this Agreement. The Company, if requested by Parent, shall promptly prepare and file with the SEC a proxy statement or information statement (together with any supplement or amendment thereto, the "Proxy Statement") relating to the Stockholders Meeting in accordance with the Exchange Act and the rules and regulations thereunder. Parent, the Purchaser and the Company will cooperate with each other in the preparation of the Proxy Statement. Without limiting the generality or effect of the foregoing, the Company shall use its best efforts to respond to all SEC comments with respect to the Proxy Statement and, subject to compliance with SEC rules and regulations, to cause the Proxy Statement to be mailed to the Company's stockholders at the earliest practicable date. Each of Parent and the Purchaser shall promptly supply to the Company in writing for inclusion in the Proxy Statement, all information concerning Parent and the Purchaser required under the Exchange Act and the rules and regulations thereunder to be in the Proxy Statement. The Merger Agreement provides that in the event that the Purchaser shall acquire at least 90% of the outstanding Shares in the Offer, the Purchaser and Parent shall take all necessary actions to cause the Merger to become effective, as soon as practicable after the expiration of the Offer, without a meeting of stockholders of the Company, in accordance with Section 253 of the DGCL. ACCESS TO INFORMATION; NOTIFICATION OF CERTAIN MATTERS. The Merger Agreement provides that the Company and its subsidiaries shall afford to Parent and its officers, employees, counsel, financial advisors and other representatives prompt, reasonable access during normal business hours prior to the Effective Time to all of the Company's and its subsidiaries' properties, books, contracts, commitments, personnel and records and, during such period, the Company and its subsidiaries shall furnish as promptly as practicable to Parent such information concerning the Company's and its subsidiaries 34 businesses, properties, financial condition, operations and personnel as Parent may from time to time reasonably request; PROVIDED that the Company may restrict the foregoing access to the extent that (i) it would unreasonably interfere with the conduct of the Company's business or (ii) any law, rule or regulation of any Governmental Entity applicable to the Company or its subsidiaries requires that the Company or its subsidiaries restrict access to any properties or information. The Merger agreement provides that the Company shall give prompt notice to Parent of (i) the occurrence or non-occurrence of any event which would cause any representation or warranty contained thereunder to be untrue or inaccurate in any material respect at or prior to the Effective Time and (ii) any material failure of the Company to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it thereunder. PUBLIC ANNOUNCEMENTS. The Merger Agreement provides that Parent and the Purchaser, on the one hand, and the Company, on the other hand, shall attempt in good faith to consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release, SEC filing or other public statements with respect to the transactions contemplated under the Merger Agreement, and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law, by court process or by obligations pursuant to any listing agreement with any securities exchange. EMPLOYEE BENEFIT PLANS. The Merger Agreement provides that Parent shall cause the Surviving Corporation to use reasonable efforts to have those individuals who are employed by the Company or any of its subsidiaries immediately prior to the Effective Time continue to be employed with the Surviving Corporation as of the Effective Time (each such employee, an "Affected Employee"); PROVIDED, HOWEVER, that the Merger Agreement shall not be construed to limit the ability of the applicable employer to terminate the employment of any Affected Employee at any time. The Merger Agreement provides that until at least December 31, 2001, Parent shall cause the Surviving Corporation to provide each Affected Employee (other than those employees whose terms and conditions of employment are subject to a collective bargaining agreement) with employee benefits (other than stock-based programs) that are no less favorable in the aggregate than those provided to such Affected Employees immediately prior to the Effective Time. Parent shall, until at least December 31, 2000 maintain (or cause its subsidiaries to maintain) a severance pay practice, program or arrangement for the benefit of each Affected Employee that is no less favorable than such practice, program or arrangement in effect immediately prior to the Effective Time with respect to such Affected Employee; PROVIDED, HOWEVER, that in no event shall anything contained in the Merger Agreement (i) prohibit Parent from amending or terminating any or all Company Plans and establishing any new employee benefit plans for the benefit of the Affected Employees, or (ii) require Parent or the Surviving Corporation to continue or establish any equity-based program for Affected Employees. DIRECTORS' AND OFFICERS' INSURANCE AND INDEMNIFICATION. The Merger Agreement provides that for a period of six years after the Effective Time, the provisions with respect to indemnification, exculpation and advancement of expenses set forth in the certificate of incorporation and by-laws of the Company as in effect at the time of the Merger Agreement shall not be amended, repealed or otherwise modified in any manner that would adversely affect the rights thereunder of individuals who at any time prior to the Effective Time were directors or officers of the Company in respect of actions or omissions occurring at or prior to the Effective Time (including the transactions contemplated by the Merger Agreement), unless such modification is required by law. The Merger Agreement provides that from and after the Effective Time, Parent shall indemnify, defend and hold harmless each person who is now, or has been at any time prior to the date thereof or who becomes prior to the Effective Time, an officer or director of the Company (the "Covered Parties") against all losses, claims, damages, costs, expenses (including reasonable attorneys' fees and 35 expenses), liabilities or judgments or amounts that are paid in settlement with the approval of the indemnifying party (which approval shall not be unreasonably withheld or delayed) incurred in connection with any threatened or actual action, suit or proceeding based in whole or in part on or arising in whole or in part out of the fact that such person is or was a director or officer of the Company ("Indemnified Liabilities"), including all Indemnified Liabilities based in whole or in part on, or arising in whole or in part out of, the Merger Agreement or the transactions contemplated thereby, in each case, to the full extent that Parent or the Company is permitted under applicable law to so indemnify. In the event any such claim, action, suit, proceeding or investigation is brought against any Covered Party, the indemnifying party shall assume and direct all aspects of the defense thereof, including settlement, and the Covered Party shall cooperate in the vigorous defense of any such matter. The Covered Party shall have a right to participate in (but not control) the defense of any such matter with its own counsel and at its own expense. Notwithstanding the right of the indemnifying party to assume and control the defense of such litigation, claim or proceeding, such Covered Party shall have the right to employ separate counsel and to participate in the defense of such litigation, claim or proceeding, and the indemnifying party shall bear the fees, costs and expenses of such separate counsel and shall pay such fees, costs and expenses promptly after receipt of an invoice from such Covered Party if (i) the use of counsel chosen by the indemnifying party to represent such Covered Party would present such counsel with a conflict of interest, (ii) the defendants in, or targets of, any such litigation, claim or proceeding shall have been advised by counsel that there may be legal defenses available to it or to other Covered Parties which are different from or in addition to those available to the indemnifying party or (iii) the indemnifying party shall not have employed counsel satisfactory to such Covered Party, in the exercise of the Covered Party's reasonable judgment, to represent such Covered Party within a reasonable time after notice of the institution of such litigation, claim or proceeding. The indemnifying party shall not settle any such matter unless (i) the Covered Party gives prior written consent, which shall not be unreasonably withheld or delayed, or (ii) the terms of the settlement provide that the Covered Party shall have no responsibility for the discharge of any settlement amount and impose no other obligations or duties on the Covered Party and the settlement discharges all rights against Covered Party with respect to such matter. In no event shall the indemnifying party be liable for any settlement effected without its prior written consent. Any Covered Party wishing to claim indemnification under the Merger Agreement, upon learning of any such claim, action, suit, proceeding or investigation, shall promptly notify Parent and the Surviving Corporation (but the failure so to notify shall not relieve the indemnifying party from any liability which it may have under the Merger Agreement except to the extent such failure materially prejudices such indemnifying party), and shall deliver to Parent and the Surviving Corporation all undertakings required under applicable law. The Covered Parties as a group will be represented by a single law firm (plus no more then one local counsel in any jurisdiction) with respect to each such matter unless there is, under applicable standards of professional conduct, a conflict or any significant issue between the positions of any two or more Covered Persons. The rights to indemnification under the Merger Agreement shall continue in full force and effect for a period of six years from the Effective Time; PROVIDED, HOWEVER, that all rights to indemnification in respect of any Indemnified Liabilities asserted or made within such period shall continue until the disposition of such Indemnified Liabilities. The Merger Agreement provides that for a period of six years after the Effective Time, Parent shall cause to be maintained in effect policies of directors' and officers' insurance, for the benefit of those persons who are covered by the Company's directors' and officers' liability insurance policies at the Effective Time, providing coverage with respect to matters occurring prior to the Effective Time that is at least equal to the coverage provided under the Company's current directors' and officers' liability insurance policies, to the extent that such liability insurance can be maintained at an annual cost to Parent not greater than 150 percent of the premium for the current Company directors' and officers' liability insurance (which the Company represents and warrants to be not more than $242,000); PROVIDED that if such insurance cannot be so maintained at such cost, Parent shall maintain as much of such 36 insurance as can be so maintained at a cost equal to 150 percent of the current annual premiums of the Company for such insurance. AGREEMENT TO USE REASONABLE EFFORTS. Pursuant to the terms and conditions of the Merger Agreement, each of the Company, Parent and the Purchaser shall use its reasonable best efforts to take, or cause to be taken, all actions, and do, or cause to be done, and assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Offer, the Merger and the other transactions contemplated by the Merger Agreement, including the satisfaction of the respective conditions set forth in the Merger Agreement. CONDITIONS TO THE MERGER. The Merger Agreement provides that the respective obligation of each party to effect the Merger is subject to the satisfaction or written waiver on or prior to the Closing Date, of the following conditions: (i) the Purchaser shall have purchased all Shares validly tendered pursuant to the Offer and not withdrawn; (ii) to the extent required by applicable law and the certificate of incorporation of the Company, the Merger Agreement shall have been adopted by the requisite vote of the holders of the Shares; (iii) there shall not be in effect any temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Merger; and (iv) all necessary waiting periods under the HSR Act applicable to the Merger shall have expired or been earlier terminated. The conditions to the Merger set forth above are different from the conditions to the Offer which are set forth in Section 14--"Conditions of the Offer". TERMINATION. The Merger Agreement may be terminated and the Merger contemplated herein abandoned at any time prior to the Effective Time, whether before or after approval of the Merger by the stockholders of the Company: (a) by the mutual written consent of Parent and the Company; provided, however, that if Parent shall have nominated a majority of the directors pursuant to the terms of the Merger Agreement, such consent of the Company may only be given if approved by the Board of Directors of the Company in accordance with the Merger Agreement. (b) by either of Parent or the Company if (i) a statute, rule or executive order shall have been enacted, entered or promulgated prohibiting the Offer or the Merger, or (ii) any Governmental Entity shall have issued an order, decree or ruling or taken any other action that permanently restrains, enjoins or otherwise prohibits the Offer or the Merger and such order, decree, ruling or other action shall have become final and non-appealable; (c) by either of Parent or the Company if the Offer has not been consummated on or before October 31, 2000 (the "Termination Date") (provided that the party seeking to terminate the Merger Agreement on this ground shall not have breached in any material respect its obligations under the Merger Agreement); (d) by the Company: (i) if, prior to the purchase of the Shares pursuant to the Offer, (A) the Board of Directors of the Company, by majority vote of the entire board, determines in good faith, based upon (among other things) the advice of outside financial advisors and outside counsel to the Company, that an Acquisition Proposal constitutes a Superior Proposal, (B) the Board of Directors of the Company directs the Company to notify Parent in writing that it intends to enter into an agreement with respect to such Superior Proposal, attaching the most current version of such agreement (or a description of all material terms and conditions thereof) to such notice, (C) Parent does not make, within four business days of receipt of such notice from the Company, an offer that the Board of Directors of the Company determines, in good faith after consultation with its financial advisors, is at least as 37 favorable to the stockholders of the Company as such Superior Proposal (it being understood that the Company shall not enter into any such binding agreement during such four-day period) and (D) the Company concurrently with such termination pays to Parent in immediately available funds a termination fee of $58 million. The Company agrees to notify Parent promptly if its intention to enter into a written agreement referred to in its notification shall change at any time after giving effect to such notification; or (ii) prior to the consummation of the Offer (A) there has been a breach of any representation or warranty of Parent or the Purchaser in the Merger Agreement that is qualified as to Material Adverse Effect (as such term is defined in Section 14--"Conditions of the Offer"), (B) there has been a breach in any material respect of any representation or warranty of Parent or the Purchaser in the Merger Agreement that is not so qualified, other than any such breaches which, in the aggregate, have not had or would not reasonably be likely to have a Material Adverse Effect on Parent and the Purchaser, taken as a whole, or (C) there has been a material breach by Parent or the Purchaser of any of its covenants or agreements contained in the Merger Agreement, which breach, in the case of clause (A), (B) or (C), either is not capable of being cured or, if it is capable of being cured, has not been cured by the earlier of (x) 10 business days following written notice to Parent from the Company of such breach and (y) the expiration of the Offer, provided that the Company may not terminate the Merger Agreement pursuant to this clause (d)(ii) if the Company is in material breach of the Merger Agreement. (e) by Parent or the Purchaser: (i) if, prior to the purchase of the Shares pursuant to the Offer, the Board of Directors of the Company shall have withdrawn, or modified or changed in a manner adverse to Parent or the Purchaser, its approval or recommendation of the Offer, the Merger Agreement or the Merger or shall have recommended or approved an Acquisition Proposal; (ii) if any Person or "group" (as defined in Section 13(d)(3) of the Exchange Act), other than Parent, the Purchaser or their affiliates or any group of which any of them is a member, shall have acquired beneficial ownership (as determined pursuant to Rule 13d-3 under the Exchange Act) of 15% or more of the Shares; (iii) if there shall have been a material breach by the Company of any provision set forth under the heading--"No Solicitation" of this subsection entitled "Merger Agreement" of this Section 11--"Purpose of the Offer; Plans for the Company; Certain Agreements"; (iv) if the Company shall have (i) exempted for purposes of Section 203 of the DGCL any acquisition of Shares by any person or "group" (as defined in Section 13(d)(3) of the Exchange Act), other than Parent, the Purchaser or their affiliates, or (ii) amended (or agreed to amend) its Rights Agreement or redeemed (or agreed to redeem) its outstanding Rights for the purpose of exempting an acquisition of Shares other than pursuant to the Merger Agreement from such Rights Agreement and Rights; or (v) prior to the consummation of the Offer if (A) there has been a breach of any representation or warranty of the Company in the Merger Agreement that is qualified as to Material Adverse Effect, (B) there has been a breach in any material respect of any representation or warranty of the Company in the Merger Agreement that is not so qualified other than any such breaches which, in the aggregate, have not had or would not reasonably be likely to have a Material Adverse Effect on the Company, or (C) there has been a material breach by the Company of any of its covenants or agreements contained in the Merger Agreement, which breach, in the case of clause (A), (B) or (C), either is not capable of being cured or, if it is capable of being cured, has not been cured by the earlier of (x) 10 business days following written notice to the Company from Parent or the Purchaser of such breach and (y) the expiration of the Offer; provided that Parent or the Purchaser may not 38 terminate the Merger Agreement pursuant to this clause (e)(v) if Parent or the Purchaser is in material breach of the Merger Agreement. If (i) Parent or the Purchaser terminates the Merger Agreement pursuant to subsections (e)(i), (iii) or (iv) set forth under the heading "Termination" of this subsection entitled "Merger Agreement" of this Section 11--"Purpose of the Offer; Plans for the Company; Certain Agreements" or (ii) the Company terminates the Merger Agreement pursuant to Subsection (d)(i) set forth under the heading "Termination", then in each case, the Company shall pay, or cause to be paid, to Parent, concurrently with the time of termination in the case of a termination pursuant to subsection (d)(i) set forth under the heading "Termination" or as promptly as is reasonably practicable (but in no event later than two business days) in the case of a termination pursuant to subsections (e)(i), (iii) or (iv) set forth under the heading "Termination", an amount (the "Termination Fee") equal to $58.0 million. In addition, if: (i)(A) the Merger Agreement is terminated pursuant to subsection (c) (by the Company) or subsection (e)(v) (where the breach by the Company is willful) set forth under the heading "Termination", (B) prior to such termination an Acquisition Proposal has been publicly announced, disclosed or communicated and (C) on the date of such termination, Parent is not in material breach of the Merger Agreement and the Minimum Condition has not been satisfied and (ii) within fifteen months after such termination pursuant to clause (i), the Company shall consummate or enter into an agreement with respect to any Acquisition Proposal, then the Company shall pay the Termination Fee concurrently with the earlier of entering into any such agreement or consummating such transaction. The Merger Agreement provides that, in the event of termination of the Merger Agreement by either Parent, the Purchaser or the Company pursuant to the provisions described above, the Merger Agreement will become void and have no effect and there will be no liability or obligation thereunder on the part of Parent, the Purchaser or the Company, except that (i) certain provisions, including fees and expenses, governing law and specific enforcement, shall survive termination, and (ii) no party shall be relieved of liability for any wilful breach of the Merger Agreement. CONFIDENTIALITY AGREEMENT. The following is a summary of the Confidentiality Agreement, dated as of April 18, 2000, between Parent and the Company (the "Confidentiality Agreement"). The summary is qualified in its entirety by reference to the Confidentiality Agreement, a copy of which has been filed with the Commission as an exhibit to the Schedule TO. The Confidentiality Agreement can be inspected at, and copies may be obtained from, the same places and in the manner set forth in Section 7--"Certain Information Concerning the Company". Pursuant to the Confidentiality Agreement, Parent has agreed for a period of two years commencing on April 18, 2000, among other things, (a) except as required by law, to keep confidential and not to disclose any information concerning the business, financial condition, operations, assets and liabilities of the Company (whether prepared by the Company, its advisors or otherwise and irrespective of the form of communication) (the "Evaluation Material"), (b) to use the Evaluation Material solely for the purpose of evaluating a possible transaction with the Company and (c) except as required by law, not to disclose to any other person the fact that the Evaluation Material has been made available. Disclosure of the Evaluation Material, however, may be made (a) if the Company gives its prior written consent or (b) to certain of Parent's directors, officers, employees, representatives, agents or advisors (collectively, the "Representatives") for purposes of evaluating a possible transaction with the Company. The term "Evaluation Material" does not include information which: (a) at the time of disclosure or thereafter is generally available to and known by the public other than as a result of a disclosure directly or indirectly by Parent or the Representatives; 39 (b) at the time of disclosure or thereafter becomes available to Parent on a non-confidential basis from a source other than the Company or any of its representatives, provided that such source is not bound by an obligation of confidentiality with the Company or is not otherwise prohibited from transmitting the information to Parent on a non-confidential basis by a contractual, legal or fiduciary obligation; or (c) has been or is independently acquired or developed by Parent without violation of any of its obligations under the Confidentiality Agreement. Parent has agreed that for a period of one year commencing on April 18, 2000, it will not employ or solicit for employment or otherwise engage any of the Company's current employees with whom Parent has had contact during the course of discussions related to the possible transaction. Parent further agreed that, for a period of two years commencing on April 18, 2000, neither Parent nor the Representatives will, without the prior written consent of the Company: (a) in any manner acquire, agree to acquire or make any proposal to acquire, directly or indirectly, any securities or property of the Company or any of its affiliates; (b) propose to enter into, directly or indirectly, any merger, consolidation recapitalization, business combination or other similar transaction involving the Company or any of its subsidiaries; (c) make or in any way participate in any "solicitation" of "proxies" (as such terms are used in the proxy rules of the Commission) to vote, to advise or to influence any person with respect to the voting of any voting securities of the Company or any of its affiliates; (d) form, join or in any way participate in a "group" as defined in Section 13(d)(3) of the Exchange Act with respect to any voting securities of the Company or any of its affiliates; (e) otherwise act, alone or in concert with others, to seek to control or influence the management, Board of Directors or policies of the Company; (f) disclose any intention, plan or arrangement inconsistent with the foregoing; or (g) advise, assist or encourage any other Person in connection with any of the foregoing. These restrictions expire in the event that the Company enters into a definitive agreement the consummation of which would result in a third party owning at least 50% of the outstanding Common Stock of the Company. SECTION 12. DIVIDENDS AND DISTRIBUTIONS. As described above, the Merger Agreement provides that, subject to certain exceptions, the Company shall not, and shall not permit any of its subsidiaries to, without the prior written consent of Parent, (i) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its outstanding capital stock (other than, with respect to a subsidiary of the Company, to its corporate parent), except regular quarterly dividends with respect to the Shares, (ii) split, combine or reclassify any of its outstanding capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its outstanding capital stock, or (iii) purchase, redeem or otherwise acquire any shares of outstanding capital stock or any rights, warrants or options to acquire any such shares, except, in the case of this clause (iii), for the acquisition of Shares from holders of options in full or partial payment of the exercise price payable by such holder upon exercise of options to the extent required under the terms of such options. 40 SECTION 13. EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES; EXCHANGE ACT REGISTRATION. MARKET FOR SHARES. The purchase of Shares pursuant to the Offer will reduce the number of Shares that might otherwise trade publicly and could adversely affect the liquidity and market value of the remaining Shares held by the public. STOCK QUOTATION. The Shares are listed on the NYSE. Depending on the number of Shares purchased pursuant to the Offer, the Shares may no longer meet the published requirements for continued listing on the NYSE and may therefore be delisted from the NYSE. According to the NYSE's published guidelines, the NYSE would consider delisting the Shares if, among other things, (i) the number of holders of Shares (including beneficial holders of Shares held in the names of NYSE member organizations in addition to holders of record) should fall below 1,200 and the average monthly trading volume of Shares for the most recent 12 months should be less than 100,000 Shares, (ii) the number of publicly held Shares (exclusive of the holdings of officers, directors or their immediate families and other concentrated holdings of 10% or more) should fall below 600,000 (exclusive of the holdings of officers, directors or their immediate families and other concentrated holdings of 10% or more), (iii) the Shares are no longer registered under the Exchange Act, as described below or (iv) the number of holders of Shares (including beneficial holders of Shares held in the names of NYSE members organizations in addition to holders of record) should fall below 400. If the NYSE were to delist the Shares, it is possible that the Shares would continue to trade on other securities exchanges or in the over-the-counter market and that price quotations would be reported by such exchanges or through the Nasdaq Stock Market, Inc.'s National Market System or other sources. However, the extent of the public market for the Shares and the availability of such quotations would depend upon such factors as the number of stockholders and/or the aggregate market value of the Shares remaining at such time, the interest in maintaining a market in the Shares on the part of securities firms, the possible termination of registration under the Exchange Act (as described below) and other factors. EXCHANGE ACT REGISTRATION. The Shares are currently registered under the Exchange Act. Such registration under the Exchange Act may be terminated upon application of the Company to the Commission if the Shares are neither listed on a national securities exchange nor held by 300 or more holders of record. Termination of registration under the Exchange Act would substantially reduce the information required to be furnished by the Company to its stockholders and to the Commission and would make certain provisions of the Exchange Act no longer applicable to the Company, such as the short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the requirement of furnishing a proxy statement pursuant to Section 14(a) of the Exchange Act in connection with stockholders' meetings, the related requirement of furnishing an annual report to stockholders and the requirements of Rule 13e-3 under the Exchange Act with respect to "going private" transactions. Furthermore, the ability of "affiliates" of the Company and persons holding "restricted securities" of the Company to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended, may be impaired or eliminated. The Purchaser intends to seek to cause the Company to apply for termination of registration of the Shares under the Exchange Act as soon after the completion of the Offer as the requirements for such termination are met. If registration of the Shares is not terminated prior to the Merger, then the Shares will be delisted from all stock exchanges and the registration of the Shares under the Exchange Act will be terminated following the consummation of the Merger. SECTION 14. CONDITIONS OF THE OFFER. Notwithstanding any other provision of the Offer and subject to the terms of the Merger Agreement, the Purchaser shall not be required to accept for payment or, subject to any applicable rules and 41 regulations of the Commission, including Rule 14e-1(c) under the Exchange Act (relating to the Purchaser's obligation to pay for or return tendered Shares promptly after termination or withdrawal of the Offer), pay for, and may delay the acceptance for payment of or, subject to the restriction referred to above, the payment for, any tendered Shares, and may amend the Offer or terminate the Offer, in each case, consistent with the terms of the Agreement and not accept for payment any tendered Shares, if: (i) the Minimum Condition has not been satisfied; (ii) (x) any applicable waiting period under the HSR Act or any applicable waiting periods under any foreign statutes or regulations shall not have expired or been terminated, or (y) any necessary material approval, permit, authorization or consent of any domestic or foreign governmental, administrative or regulatory agency (federal, state, local, provincial or otherwise) shall not have been obtained (collectively, the "HSR Condition"); (iii) there shall not have been delivered to the Company and Parent an opinion of Wachtell, Lipton, Rosen & Katz, counsel to the Company, to the effect that the transactions contemplated by the Merger Agreement will not result in (A) the January 30, 1998 spin-off of the Company (the "Spinoff") failing to qualify under Section 355(a) of the Code or (B) the shares of common stock of the Company failing to qualify as qualified property for purposes of Section 355(c)(2) of the Code by reason of Section 355(e) of the Code; (iv) the Merger Agreement shall have been terminated in accordance with its terms; or (v) at any time on or after the date of the Agreement and prior to the Expiration Date, any of the following events shall occur and be continuing and shall not have resulted from the breach by Parent or the Purchaser of any of their obligations under the Agreement: (a) there shall be any statute, rule, regulation, judgment, order or injunction enacted, entered, enforced, promulgated or deemed applicable to the Offer or the Merger that shall (1) prohibit or impose any material limitations on Parent's or the Purchaser's ownership or operation (or that of any of their respective Subsidiaries or affiliates) of all or a material portion of their or the Company's businesses or assets or compel Parent or the Purchaser to dispose of or hold separate all or any portion of the business or assets of the Company or any of its subsidiaries or Parent or any of its subsidiaries, which in any such case referred to in this clause (1) accounted, in the aggregate, for more than $75.0 million in sales of Parent or the Company, as the case may be, in the most recently completed fiscal year, (2) prohibit the making or consummation of the Offer or the Merger, (3) impose material limitations on the ability of the Purchaser, or render the Purchaser unable, to accept for payment, pay for or purchase some or all of the Shares pursuant to the Offer and the Merger, or effectively to exercise full rights of ownership of the Shares, including, without limitation, the right to vote the Shares purchased by the Purchaser or Parent on all matters properly presented to the Company's stockholders, or (4) require the divestiture by Parent or the Purchaser of any Shares; or (b)(1) any representation or warranty of the Company contained in the Agreement that is qualified as to Material Adverse Effect or materiality shall not be true and correct, or (2) any representation or warranty of the Company in the Agreement that is not so qualified shall not be true and correct in all material respects, in each case as of the date of consummation of the Offer as though made on or as of such date (other than representations and warranties that by their terms address matters only as of another specified date, which shall be true and correct only as of such other specified date); or (c) the Company shall have breached or failed in any material respect to perform any material obligation or to comply with any material agreement or covenant of the Company to be performed by or complied with by it under the Agreement; or 42 (d) except as disclosed in the Filed SEC Documents or in Section 4.1(f) of the Disclosure Schedule, there shall have occurred an event, change, occurrence, or development of a state of facts or circumstances having, or which would reasonably be expected to have, a Material Adverse Effect on the Company; or (e)(1) it shall have been publicly disclosed or the Purchaser shall have otherwise learned that beneficial ownership (determined for the purposes of this paragraph as set forth in Rule 13d-3 promulgated under the Exchange Act) of more than 15% of the outstanding Shares has been acquired by any corporation (including the Company or any of its subsidiaries or affiliates), partnership, person or other entity or group (as defined in Section 13(d)(3) of the Exchange Act), other than Parent or any of its affiliates, or (2) (A) the Board of Directors of the Company or any committee thereof shall have withdrawn or modified in a manner adverse to Parent or the Purchaser the approval or recommendation of the Offer, the Merger or the Merger Agreement, or approved or recommended any takeover proposal or any other acquisition of Shares other than the Offer and the Merger, (B) any corporation, partnership, person or other entity or group shall have entered into a definitive agreement or an agreement in principle with the Company with respect to an Acquisition Proposal, (C) the Board of Directors of the Company or any committee thereof shall have resolved to do any of the foregoing or (D) upon request of the Purchaser, the Board of Directors of the Company shall fail to reaffirm its approval or recommendation of the Offer, the Agreement or the Merger; which, in the reasonable judgment of Parent or the Purchaser, in any such case set forth in clauses (a)-(e), and regardless of the circumstances (including any action or inaction by Parent or the Purchaser) giving rise to such condition makes it inadvisable to proceed with the Offer and/or with such acceptance for payment or, of payment for, Shares. "Material Adverse Effect", with respect to any person, means a material adverse effect on (i) the ability of such person to perform its obligations under the Merger Agreement, or to consummate the transactions contemplated thereby or (ii) the financial condition, business, assets or results of operations of such person and its subsidiaries taken as a whole, other than adverse effects resulting from (x) conditions, circumstances or changes in the general economy, the capital markets or the industry in which the Company is engaged or (y) any public disclosure of the Merger Agreement. The foregoing conditions are for the sole benefit of Parent and the Purchaser subject to the terms of the Merger Agreement and may be waived by Parent or the Purchaser, in whole or in part, at any time and from time to time in their, respective sole discretion. The failure by Parent or the Purchaser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. SECTION 15. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS. GENERAL. Except as otherwise disclosed herein, neither Parent nor the Purchaser is aware of (i) any license or regulatory permit that appears to be material to the business of the Company and its subsidiaries, taken as a whole, that might be adversely affected by the acquisition of Shares by the Purchaser pursuant to the Offer, the Merger or otherwise or (ii) any approval or other action by any governmental, administrative or regulatory agency or authority, domestic or foreign, that would be required for the acquisition or ownership of Shares by the Purchaser as contemplated herein, other than as described below under "Regulatory Approvals". Should any such approval or other action be required, the Purchaser currently contemplates that it would seek such approval or action. The Purchaser's obligation under the Offer to accept for payment and pay for Shares is subject to certain conditions. See Section 14--"Conditions of the Offer". While, except as described in this Offer to Purchase, the Purchaser does not currently intend to delay the acceptance for payment of Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that 43 any such approval or action, if needed, would be obtained or would be obtained without substantial conditions or that adverse consequences might not result to the business of the Company, Parent or the Purchaser or that certain parts of the businesses of the Company, Parent or the Purchaser might not have to be disposed of in the event that such approvals were not obtained or any other actions were not taken. STATE TAKEOVER LAWS. The Company is incorporated under the laws of the State of Delaware. In general, Section 203 of the DGCL prevents an "interested stockholder" (generally a person who owns or has the right to acquire 15% or more of a corporation's outstanding voting stock, or an affiliate or associate thereof) from engaging in a "business combination" (defined to include mergers and certain other transactions) with a Delaware corporation for a period of three years following the date such person became an interested stockholder unless, among other things, prior to the date the interested stockholder became an interested stockholder, the board of directors of the corporation approved either the business combination or the transaction in which the interested stockholder became an interested stockholder. The Company has represented to Parent and the Purchaser in the Merger Agreement that the Board of Directors of the Company has taken all action necessary to render Section 203 of the DGCL inapplicable to the Offer, the Merger, the Merger Agreement and the transactions contemplated thereby. A number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, stockholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects, in such states. In EDGAR V. MITE CORP., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover Statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However, in 1987 in CTS CORP. V. DYNAMICS CORP. OF AMERICA, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining stockholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of holders in the state and were incorporated there. The Company, directly or through subsidiaries, conducts business in a number of states throughout the United States, some of which have enacted takeover laws. The Purchaser does not believe that any state takeover statutes apply to the Offer. Neither Parent nor the Purchaser has currently complied with any state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer or the Merger and nothing in this Offer to Purchase or any action taken in connection with the Offer or the Merger is intended as a waiver of such right. In the event it is asserted that one or more state takeover laws is applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer or the Merger, the Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Merger. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See Section 14-- "Conditions of the Offer". APPRAISAL RIGHTS. No appraisal rights are available to Holders in connection with the Offer. However, if the Merger is consummated, a Holder of Shares will have certain rights under Section 262 of the DGCL to dissent and demand appraisal of, and payment in cash for the fair value of, such Holder's Shares. Those rights, if the statutory procedures are complied with, could lead to a judicial determination of the fair value (excluding any value arising from the Merger) required to be paid in cash to dissenting stockholders for their Shares. Any judicial determination of the fair value of Shares could be 44 based upon considerations other than or in addition to the Offer Price and the market value of the Shares, including asset values and the investment value of the Shares. The value so determined could be more or less than the Offer Price. Failure to follow the steps required by Section 262 of the DGCL for perfecting appraisal rights may result in the loss of those rights. If a Holder who demands appraisal under Section 262 of the DGCL fails to perfect, or effectively withdraws or loses, its right to appraisal, as provided in the DGCL, the Shares of such Holder will be converted into the merger consideration in accordance with the Merger Agreement. A Holder may withdraw his demand for appraisal by delivering to the Purchaser a written notice withdrawing such demand for appraisal and accepting the Merger. The foregoing summary of the rights of objecting Holders does not purport to be a complete statement of the procedures to be followed by Holders desiring to exercise any available appraisal rights. The preservation and exercise of appraisal rights require strict adherence to the applicable provisions of the DGCL. The provisions of Section 262 of the DGCL are complex and technical in nature. Holders desiring to exercise their appraisal rights may wish to consult counsel, since the failure to comply strictly with these provisions will result in the loss of their appraisal rights. GOING PRIVATE TRANSACTIONS. Rule 13e-3 under the Exchange Act is applicable to certain "going private" transactions. The Purchaser does not believe that Rule 13e-3 will be applicable to the Merger, unless, among other things, the Merger is completed more than one year after termination of the Offer. If applicable, Rule 13e-3 would require, among other things, that certain financial information regarding the Company and certain information regarding the fairness of the Merger and the consideration offered to stockholders of the Company therein be filed with the Commission and disclosed to stockholders of the Company prior to consummation of the Merger. REGULATORY APPROVALS. ANTITRUST. Under the HSR Act and the rules that have been promulgated thereunder by the Federal Trade Commission ("FTC"), certain mergers and acquisitions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the FTC and certain waiting period requirements have been satisfied. The acquisition of Shares by the Purchaser pursuant to the Offer is subject to the HSR Act requirements. Under the provisions of the HSR Act applicable to the purchase of Shares pursuant to the Offer, such purchase may not be made until the expiration of a fifteen calendar day waiting period following the required filing of a Notification and Report Form under the HSR Act by Parent, which Parent submitted on May 12, 2000. Accordingly, the waiting period under the HSR Act will expire at 11:59 P.M., New York City time, on May 27, 2000, which is the fifteenth calendar day following filing of the Notification and Report Form by Parent, unless early termination of the waiting period is granted or Parent receives a request for additional information or documentary material prior thereto. If either the FTC or the Antitrust Division were to request additional information or documentary material from Parent prior to the expiration of the fifteen day waiting period, the waiting period would be extended and would expire at 11:59 P.M., New York City time, on the tenth calendar day after the date of substantial compliance by Parent with such request. Thereafter, the waiting period could be extended only by court order or by consent of Parent. If the acquisition of Shares is delayed pursuant to a request by the FTC or the Antitrust Division for additional information or documentary material pursuant to the HSR Act, the purchase of and payment for Shares pursuant to the Offer will be deferred until ten days after the request is substantially complied with unless the waiting period is terminated sooner by the FTC or the Antitrust Division (and assuming all of the other Offer conditions have been satisfied or waived). See Section 2--"Acceptance for Payment and Payment for Shares". Only one extension of such waiting period pursuant to a request for additional 45 information or documentary material is authorized by the rules promulgated under the HSR Act, except by court order or by consent. Although the Company is required to file certain information and documentary material with the Antitrust Division and the FTC in connection with the Offer, neither the Company's failure to make such filings nor a request to the Company from the Antitrust Division or the FTC for additional information or documentary material will extend the waiting period. However, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing these issues and may agree to delay consummation of the transaction while such negotiations continue. The Antitrust Division and the FTC frequently scrutinize the legality under the antitrust laws of transactions such as the proposed acquisition of Shares by the Purchaser pursuant to the Offer. At any time before or after the Purchaser's purchase of Shares, either the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Parent, the Company or any of their respective subsidiaries. State attorneys general may also bring legal action under the antitrust laws, and private parties may bring such action under certain circumstances. Parent and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer on antitrust grounds will not be made or, if a challenge is made, what the result will be. See Section 14--"Conditions of the Offer" for certain conditions to the Offer, including conditions with respect to litigation and certain governmental actions. OTHER FILINGS. The Company believes that the Offer and the Merger will require filings with the competition authorities of Austria, Brazil, Canada, Germany, Ireland, Mexico and Spain, and there is a possibility that other filings may have to be made with other foreign governments under their pre-merger notification statutes. The filing requirements of various nations are being analyzed by the parties and, where necessary, the parties intend to make such filings. SECTION 16. FEES AND EXPENSES. Except as set forth below, neither Parent nor the Purchaser will pay any fees or commissions to any broker, dealer or other person for soliciting tenders of Shares pursuant to the Offer. Goldman, Sachs & Co. ("Goldman") are acting as the Dealer Managers in connection with the Offer. Pursuant to an engagement letter between Parent and Goldman, Goldman has been retained to act as financial advisor to Parent in connection with its possible acquisition of the Company. Parent has agreed to pay a customary fee to Goldman for services as financial advisor upon the earlier of the consummation of the transactions contemplated by the Merger Agreement or the purchase of Shares pursuant to the Offer. Parent has also agreed to reimburse Goldman for all of Goldman's reasonable out-of-pocket expenses, including the reasonable fees and disbursements of their counsel. In addition, Parent has agreed to indemnify Goldman and certain related persons against certain liabilities and expenses, including liabilities under the Federal securities laws. The Purchaser and Parent have also retained The Bank of New York as the Depositary. The Depositary has not been retained to make solicitations or recommendations in its role as Depositary. The Depositary will receive reasonable and customary compensation for its services, will be reimbursed for certain reasonable out-of-pocket expenses and will be indemnified against certain liabilities and expenses in connection therewith, including certain liabilities under the United States federal securities laws. In addition, the Purchaser and Parent have retained Georgeson Shareholder Communications, Inc., to act as the Information Agent in connection with the Offer. The Information Agent will receive reasonable and customary compensation for its services, will be reimbursed for certain reasonable 46 out-of-pocket expenses and will be indemnified against certain liabilities and expenses in connection therewith, including certain liabilities under the United States federal securities laws. Brokers, dealers, commercial banks and trust companies will be reimbursed by the Purchaser for customary mailing and handling expenses incurred by them in forwarding offering material to their customers. SECTION 17. MISCELLANEOUS. The Purchaser is not aware of any jurisdiction where the making of the Offer is prohibited by any administrative or judicial action pursuant to any valid state statute. If the Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of the Shares pursuant thereto, the Purchaser will make a good faith effort to comply with such state statute or seek to have such statute declared inapplicable to the Offer. If, after such good faith effort, the Purchaser cannot comply with any such state statute, the Offer will not be made to (and tenders will not be accepted from or on behalf of) Holders in such state. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchaser by the Dealer Manager or one or more registered brokers or dealers which are licensed under the laws of such jurisdiction. No person has been authorized to give any information or make any representation on behalf of Parent or the Purchaser not contained in this Offer to Purchase or in the Letter of Transmittal and, if given or made, such information or representation must not be relied upon as having been authorized. Parent and the Purchaser have filed with the Commission the Schedule TO, together with exhibits, pursuant to Section 14(d)(1) of the Exchange Act and Rule 14d-3 promulgated thereunder, furnishing certain additional information with respect to the Offer, and may file amendments thereto. The Schedule TO and any amendments thereto, including exhibits, may be inspected at, and copies may be obtained from, the same places and in the manner set forth in Section 7--"Certain Information Concerning the Company--Available Information" (except that they will not be available at the regional offices of the Commission). IR MERGER CORPORATION May 16, 2000 47 SCHEDULE I INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF INGERSOLL-RAND COMPANY AND IR MERGER CORPORATION 1. BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF INGERSOLL-RAND COMPANY. Set forth below is the name, present principal occupation or employment and material occupations, positions, offices or employments for the past five years of each director and executive officer of Ingersoll-Rand Company. The principal address of Ingersoll-Rand Company and, unless indicated below, the current business address for each individual listed below is 200 Chestnut Ridge Road, Woodcliff Lake, New Jersey, 07675, Telephone: (201) 573-0123 Each such person is, unless indicated below, a citizen of the United States of America. Directors are identified by an asterisk.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL NAME AND CURRENT BUSINESS ADDRESS POSITIONS HELD DURING THE PAST FIVE YEARS - ------------------------------------------ -------------------------------------------------------- David W. Devonshire....................... Executive Vice President and Chief Financial Officer of Ingersoll-Rand Company from 1999 to the present; Director, Vice President and Treasurer of IR Merger Corporation from 2000; Senior Vice President and Chief Financial Officer of Ingersoll-Rand Company from 1998 to 1999; Senior Vice President and Chief Financial Officer of Owens Corning from 1993 to 1998. Joseph P. Flannery* ...................... Chairman, President and Chief Executive Officer of c/o Uniroyal Holding, Inc. Uniroyal Holding, Inc. from 1986 to present; Director of 70 Great Hill Road Arvin Industries, Inc. from 1991 to present; Director of Naugatuck, Connecticut 06770 K Mart Corporation from 1985 to present; Director of Newmont Mining Corporation from 1982 to present; Director of The Scotts Company from 1987 to present. Peter C. Godsoe* ......................... Chairman of the Board and Chief Executive Officer of The c/o The Bank of Nova Scotia Bank of Nova Scotia from 1995 to present; Director of Scotia Plaza, 7th Floor Empire Company Limited from 1993 to present. Mr. Godsoe 44 King Street West is a Canadian citizen. Toronto, Ontario, M5H 1H1 Canada Herbert L. Henkel* ....................... Chairman of the Board of Ingersoll-Rand Company from 2000; President and Chief Executive Officer of Ingersoll-Rand Company from 1999 to present; Director and President of IR Merger Corporation from 2000; President and Chief Operating Officer of Ingersoll-Rand Company 1999; Chief Operating Officer of Textron Inc. from 1998 to 1999; Vice President of Textron Inc, from 1993 to 1998; Director of Kollmorgen Corporation from 1997 to present; Director of Pitney-Bowes, Inc. from 1999 to present. Constance J. Horner* ..................... Guest Scholar at The Brookings Institution from 1993 to c/o The Brookings Institution present; Commissioner of the United States Commission on 1775 Massachusetts Avenue N.W. Civil Rights from 1993 to 1998; Director of Foster Washington, DC 20036 Wheeler Corporation from 1996 to present; Director of Pfizer Inc. from 1993 to present; Director of The Prudential Insurance Company of America from 1994 to present.
I-1
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL NAME AND CURRENT BUSINESS ADDRESS POSITIONS HELD DURING THE PAST FIVE YEARS - ------------------------------------------ -------------------------------------------------------- Brian D. Jellison......................... Executive Vice President of Ingersoll-Rand Company from 1998 to present; Vice President of Ingersoll-Rand Company and President of Architectural Hardware Group from 1996 to 1998; President of Door Hardware Group of Ingersoll-Rand Company from 1994 to 1996. H. William Lichtenberger* ................ Chairman of Praxair, Inc., from 1992 to present; Chief c/o Praxair, Inc. Executive Officer of Praxair, Inc. from 1992 to March 39 Old Ridgebury Road 2000; Director of Arch Chemicals, Inc. from 1999 to Danbury, Connecticut 06810 present. Steven T. Martin.......................... Executive Vice President of Ingersoll-Rand Company from 1998 to present; Vice President of Ingersoll-Rand Company and President of Production Equipment Group of Ingersoll-Rand Company from 1996 to 1998; President of Production Equipment Group of Ingersoll-Rand Company from 1995 to 1996. Theodore E. Martin* ...................... President and Chief Executive Officer of Barnes Group, Inc., from 1995 to 1998; Director of Barnes Group, Inc. from 1993 to 1998; Director of PE Corporation from 1999 to present; Director of Nabisco Group Holdings Corporation from 1997 to present; Director of Nabisco Holding Corporation from 1999 to present; Director of Unisys Corporation from 1995 to present. Patricia Nachtigal........................ Vice President and General Counsel of Ingersoll-Rand Company from 1991 to present; Director, Vice President and Assistant Secretary of IR Merger Corporation from 2000. Nicholas J. Pishotti...................... Vice President, Strategic Technologies of Ingersoll-Rand Company from 1998 to present; Vice President, Strategic Sourcing of Ingersoll-Rand Company from 1995 to 1998. Steve Shawley............................. Vice President and Controller of Ingersoll-Rand Company from 1999 to present; Controller of Ingersoll-Rand Company from 1998 to 1999; Vice President and Controller of Thermo King Corporation from 1994 to 1998. Orin R. Smith* ........................... Chairman and Chief Executive Officer of Engelhard c/o Engelhard Corporation Corporation from 1995 to present; Director of 101 Wood Avenue P E Corporation from 1995 to present; Director of The Iselin, New Jersey 08830 Summit Bancorporation from 1996 to present; Director of Vulcan Materials Company from 1983 to present. Richard J. Swift* ........................ Chairman, President and Chief Executive Officer of c/o Foster Wheeler Corporation Foster Wheeler Corporation from 1994 to present; Perryville Corporate Park Director of Public Service Enterprise Group Incorporated Clinton, New Jersey 08809 from 1994 to present. Tony L. White* ........................... Chairman, President and Chief Executive officer of P E c/o P E Corporation Corporation from 1995 to present; Director of C.R. Bard, 761 Main Avenue Inc. from 1996 to present. Norwalk, Connecticut 06859
I-2 2. DIRECTORS AND EXECUTIVE OFFICERS OF IR MERGER CORPORATION. Set forth below is the name, present principal occupation or employment and material occupations, positions, offices or employments for the past five years of each director and executive officer of IR Merger Corporation. Each person identified below has held his position since the formation of IR Merger Corporation on May 5, 2000. The principal address of IR Merger Corporation 200 Chestnut Ridge Road, Woodcliff Lake, New Jersey 07675, Telephone: 201-573-0123. The current business address for each individual listed below, unless indicated below, is 200 Chestnut Ridge Road, Woodcliff Lake, New Jersey 07675, Telephone (201) 573-0123. Each such person is, unless indicated below, a citizen of The United States of America. Each person listed is a director of IR Merger Corporation.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; NAME AND CURRENT BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS - ------------------------------------------ -------------------------------------------------------- David W. Devonshire....................... Executive Vice President and Chief Financial Officer of Ingersoll-Rand Company from 1999 to the present; Director, Vice President and Treasurer of IR Merger Corporation from 2000; Senior Vice President and Chief Financial Officer of Ingersoll-Rand Company from 1998 to 1999; Senior Vice President and Chief Financial Officer of Owens Corning from 1993 to 1998. Ronald G. Heller.......................... Secretary of Ingersoll-Rand Company from 1991 to present; Secretary of IR Merger Corporation from 2000. Herbert L. Henkel......................... Chairman of the Board of Ingersoll-Rand Company from 2000; President and Chief Executive Officer of Ingersoll-Rand Company from 1999 to present; Director and President of IR Merger Corporation from 2000; President and Chief Operating Officer of Ingersoll-Rand Company 1999; Chief Operating Officer of Textron Inc. from 1998 to 1999; Vice President of Textron Inc, from 1993 to 1998; Director of Kollmorgen Corporation from 1997 to present; Director of Pitney-Bowes, Inc. from 1999 to present. Patricia Nachtigal........................ Vice President and General Counsel of Ingersoll-Rand Company from 1991 to present; Director, Vice President and Assistant Secretary of IR Merger Corporation from 2000.
3. OWNERSHIP OF SHARES BY DIRECTORS AND EXECUTIVE OFFICERS. To the best knowledge of Ingersoll-Rand Company and IR Merger Corporation, none of the persons listed on this Schedule I beneficially owns or has a right to acquire directly or indirectly any Shares, and none of the persons listed on this Schedule I has effected any transactions in the Shares during the past 60 days. I-3 Copies of the Letter of Transmittal, properly completed and duly signed, will be accepted. The Letter of Transmittal, certificates and any other required documents should be sent by each Holder or such Holder's broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of the addresses set forth below: The Depositary for the Offer is: THE BANK OF NEW YORK BY MAIL: BY FACSIMILE: BY HAND/OVERNIGHT COURIER: The Bank of New York (For Eligible Institutions Only) The Bank of New York Tender & Exchange Department (212) 815-6213 Tender & Exchange Department P.O. Box 11248 101 Barclay Street Church Street Station Receive and Deliver Window New York, NY 10286 New York, NY 10286 FOR CONFIRMATION TELEPHONE: (212) 815-6173
Questions and requests for assistance may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers as set forth below. Additional copies of this Offer to Purchase, the Letter of Transmittal, or other related tender offer materials may be obtained from the Information Agent or from brokers, dealers, commercial banks or trust companies. The Information Agent for the Offer is: [LOGO] NEW YORK OFFICE LONDON OFFICE 17 State Street, 10th Floor Crosby Court New York, NY 10004 39 Bishopgate London EC2N 4AF, England
Shareholders in the U.S. and Canada Please Call Toll Free: (800) 223-2064 Banks and Brokerage Firms Call Collect: (212) 440-9800 Shareholders outside the U.S. and Canada Please Call Collect: 011-44-207-335-7296 The Dealer Managers for the Offer are: GOLDMAN, SACHS & CO. 85 Broad Street New York, New York 10004 (212) 902-1000 (call collect) (800) 323-5678 (call toll free) EX-99.(A)(2) 3 EXHIBIT 99(A)(2) LETTER OF TRANSMITTAL TO TENDER SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) OF HUSSMANN INTERNATIONAL, INC. PURSUANT TO THE OFFER TO PURCHASE DATED MAY 16, 2000 BY IR MERGER CORPORATION A WHOLLY-OWNED SUBSIDIARY OF INGERSOLL-RAND COMPANY - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JUNE 13, 2000, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- THE DEPOSITARY FOR THE OFFER IS: THE BANK OF NEW YORK BY MAIL: BY HAND/OVERNIGHT COURIER: Tender & Exchange Department Tender & Exchange Department P.O. Box 11248 101 Barclay Street Church Street Station Receive and Deliver Window New York, New York 10286 New York, New York 10286
BY FACSIMILE: (FOR ELIGIBLE INSTITUTIONS ONLY) (212) 815 -6213 FOR CONFIRMATION TELEPHONE: (212) 815-6173 DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE COPY NUMBER OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. This Letter of Transmittal is to be completed by holders of certificates representing Shares (as such term is defined in the Offer to Purchase) (such holders of Shares, collectively, the "Holders"), if certificates for Shares are to be forwarded herewith or, unless an Agent's Message (as defined in the Offer to Purchaser) is utilized, if tenders of Shares are to be made by book-entry transfer into the account of The Bank of New York, as Depositary (the "Depositary"), at The Depository Trust Company (the "Book-Entry Transfer Facility" or "DTC") or, if the Shares are held as direct registration shares (the "Direct Registration Shares"), by completing the "Direct Registration Shares" box contained in this Letter of Transmittal, in each case pursuant to the procedures set forth in Section 3--"Procedures for Tendering Shares" of the Offer to Purchase. Holders who tender Shares by book-entry transfer are referred to herein as "Book-Entry Holders" and Holders who tender Shares by completing the "Direct Registration Shares" box are referred to herein as "Direct Registration Share Holders". Any holders who desire to tender Shares and whose certificate(s) evidencing such Shares (the "Certificates") are not immediately available, or who cannot comply with the procedures for book-entry transfer described in the Offer to Purchase on a timely basis, may nevertheless tender such Shares by following the procedures for guaranteed delivery set forth in Section 3--"Procedures for Tendering Shares" of the Offer to Purchase. See Instruction 2 of this Letter of Transmittal. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
- ----------------------------------------------------------------------------------------------------------------- DESCRIPTION OF SHARES TENDERED - ----------------------------------------------------------------------------------------------------------------- NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARES TENDERED (PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) (ATTACH ADDITIONAL LIST IF NECESSARY) APPEAR(S) ON THE CERTIFICATE(S) OR ON THE SECURITY POSITION LISTING) - ----------------------------------------------------------------------------------------------------------------- CERTIFICATE TOTAL NUMBER OF NUMBER OF NUMBER(S)* SHARES EVIDENCED SHARES TENDERED** BY CERTIFICATE(S)* ---------------------------------------------------------- ---------------------------------------------------------- ---------------------------------------------------------- ---------------------------------------------------------- ---------------------------------------------------------- ---------------------------------------------------------- TOTAL SHARES TENDERED - -----------------------------------------------------------------------------------------------------------------
* Need not be completed by Book-Entry Holders or by Direct Registration Share Holders. ** Unless otherwise indicated, it will be assumed that all Shares evidenced by any Certificate(s) delivered to the Depositary are being tendered. See Instruction 4. ---------------------------------------------------------------------------- DIRECT REGISTRATION SHARES (SEE INSTRUCTION 10) / / CHECK HERE IF YOU ARE TENDERING DIRECT REGISTRATION SHARES AND COMPLETE THE FOLLOWING: Write your DRS number and the number of Direct Registration Shares tendered in the space provided. DRS Number: __________________________________________________________________ Number of Direct Registration Shares tendered*: ______________________________ *Tender of Direct Registration Shares includes the tender of all associated preferred stock purchase rights. BOOK-ENTRY TRANSFER (SEE INSTRUCTION 2) / / CHECK HERE IF SHARES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER): Name(s) of Tendering Institution(s): ______________________________________ Account Number: ___________________________________________________________ Transaction Code Number: __________________________________________________ PRIOR GUARANTEED DELIVERY (SEE INSTRUCTION 2) / / CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Registered Holder(s): __________________________________________ Window Ticket Number (if any): ____________________________________________ Date of Execution of Notice of Guaranteed Delivery: _______________________ Name of Institution which Guaranteed Delivery: ____________________________ Account Number (if delivered by Book-Entry Transfer): _____________________ Transaction Code Number: __________________________________________________ / / CHECK HERE IF TENDER IS BEING MADE IN RESPECT OF LOST, MUTILATED OR DESTROYED CERTIFICATES. SEE INSTRUCTION 9. NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: The undersigned hereby tenders to IR Merger Corporation (the "Purchaser"), a Delaware corporation, and a wholly-owned subsidiary of Ingersoll-Rand Company, a New Jersey corporation ("Parent"), the above-described Shares including the associated preferred stock purchase rights, of Hussmann International, Inc., a Delaware corporation (the "Company"), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 16, 2000 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which, as they may be amended and supplemented from time to time, together constitute the "Offer"). The undersigned understands that the Purchaser reserves the right to assign to any other direct or indirect wholly-owned subsidiary of Parent the right to purchase all or any portion of the Shares tendered pursuant to the Offer, but the undersigned further understands that any such assignment will not relieve the Purchaser of its obligations under the Offer and the Merger Agreement (as hereinafter defined) and that any such assignment will in no way prejudice the rights of tendering Holders to receive payment for the Shares validly tendered (and not withdrawn) and accepted for payment pursuant to the Offer. This Offer is being made pursuant to the Agreement and Plan of Merger, dated as of May 11, 2000 (as amended from time to time, the "Merger Agreement"), by and among Parent, the Purchaser and the Company. Subject to, and effective upon, acceptance for payment of, and payment for, the Shares tendered herewith in accordance with the terms of the Offer (including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), the undersigned hereby sells, assigns and transfers to, or upon the order of, the Purchaser, all right, title and interest in and to all of the Shares that are being tendered hereby and any and all dividends (other than regular quarterly dividends declared and paid prior to the Effective Date of the Merger (as such terms are defined in the Offer to Purchase), distributions, rights or other securities issued or issuable in respect of such Shares on or after May 16, 2000 (collectively, "Distributions"), and irrevocably appoints the Depositary the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares and all Distributions with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to (a) deliver such Certificates and all Distributions and transfer ownership of such Shares on the account books maintained by the Book-Entry Transfer Facility or as Direct Registration Shares, as the case may be, together with all accompanying evidences of transfers and authenticity, to or upon the order of the Purchaser, (b) present such Shares and all Distributions for transfer on the books of the Company and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares and all Distributions, all in accordance with the terms and subject to the conditions of the Offer as set forth in the Offer to Purchase. The undersigned hereby irrevocably appoints each designee of the Purchaser as such attorney-in-fact and proxy of the undersigned, with full power of substitution, to vote the Shares as described below in such manner as each such attorney-in-fact and proxy (or any substitute thereof) shall deem proper in its sole discretion, and to otherwise act (including pursuant to written consent) to the full extent of the undersigned's rights with respect to the Shares and all Distributions tendered hereby and accepted for payment by the Purchaser prior to the time of such vote or action. All such proxies shall be considered coupled with an interest in the tendered Shares and shall be irrevocable and are granted in consideration of, and are effective upon, the acceptance for payment of such Shares and all Distributions in accordance with the terms of the Offer. Such acceptance for payment by the Purchaser shall revoke, without further action, any other proxy or power of attorney granted by the undersigned at any time with respect to such Shares and all Distributions and no subsequent proxies or powers of attorney will be given (or, if given, will not be deemed effective) with respect thereto by the undersigned. The designees of the Purchaser will, with respect to the Shares for which the appointment is effective, be empowered to exercise all voting and other rights as they in their sole discretion may deem proper at any annual, special, adjourned or postponed meeting of the Company's stockholders, by written consent or otherwise, and the Purchaser reserves the right to require that, in order for Shares or any Distributions to be deemed validly tendered, immediately upon the Purchaser's acceptance for payment of such Shares, the Purchaser must be able to exercise all rights (including, without limitation, all voting rights) with respect to such Shares and receive all Distributions. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares and all Distributions tendered hereby and that, when the same are accepted for payment by the Purchaser, the Purchaser will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances, and the same will not be subject to any adverse claim. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or the Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares and all Distributions tendered hereby. In addition, the undersigned shall promptly remit and transfer to the Depositary for the account of the Purchaser any and all Distributions in respect of the Shares tendered hereby, accompanied by appropriate documentation of transfer and, pending such remittance or appropriate assurance thereof, the Purchaser shall be, subject to applicable law, entitled to all rights and privileges as owner of any such Distributions and may withhold the entire purchase price or deduct from the purchase price the amount or value thereof, as determined by the Purchaser in its sole discretion. No authority herein conferred or agreed to be conferred shall be affected by, and all such authority shall survive, the death or incapacity of the undersigned. All obligations of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Subject to the withdrawal rights set forth in Section 4--"Withdrawal Rights" of the Offer to Purchase, the tender of the Shares and related Distributions hereby made is irrevocable. The undersigned understands that tenders of the Shares pursuant to any of the procedures described in Section 3--"Procedures for Tendering Shares" of the Offer to Purchase and in the instructions hereto will constitute a binding agreement between the undersigned and the Purchaser upon the terms and subject to the conditions set forth in the Offer. Without limiting the generality of the foregoing, if the price to be paid in the Offer is amended in accordance with the terms of the Merger Agreement, the price to be paid to the undersigned will be amended. The undersigned recognizes that under certain circumstances set forth in the Offer to Purchase, the Purchaser may not be required to accept for payment any of the Shares tendered hereby. Unless otherwise indicated herein under "Special Payment Instructions", please issue the check for the purchase price and/or return any Certificates not tendered or not accepted for payment in the name(s) of the registered Holder(s) appearing under "Description of Shares Tendered". Similarly, unless otherwise indicated under "Special Delivery Instructions", please mail the check for the purchase price and/or return any Certificates not tendered or not accepted for payment (and accompanying documents, as appropriate) to the address(es) of the registered Holder(s) appearing under "Description of Shares Tendered". In the event that both the Special Delivery Instructions and the Special Payment Instructions are completed, please issue the check for the purchase price and/or issue any Certificates not so tendered or accepted for payment in the name of, and deliver said check and/or return such Certificates to, the person or persons so indicated. Unless otherwise indicated under Special Payment Instructions, please credit any Shares tendered herewith by book-entry transfer that are not accepted for payment by crediting the account at the Book-Entry Transfer Facility designated above. Unless otherwise indicated under Special Payment Instructions, please credit any Direct Registration Shares tendered herewith that are not accepted for payment by crediting the appropriate Direct Registration account designated above. The undersigned recognizes that the Purchaser has no obligation, pursuant to the Special Payment Instructions, to transfer any Shares from the name(s) of the registered holder(s) thereof if the Purchaser does not accept for payment any of the Shares so tendered. - ------------------------------------------------ SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if Certificate(s) that are not tendered or that are not purchased and/or the check for the purchase price of Shares purchased are to be issued in the name of someone other than the undersigned, or if Shares tendered by book-entry transfer which are not accepted for payment are to be returned by credit to an account maintained at the Book-Entry Transfer Facility other than that designated above, or if Direct Registration Shares tendered that are not accepted for payment are to be returned by credit to a Direct Registration account other than that designated above. / / Issue check and Certificate(s) to: Name: ___________________________________________________________________ Please Type or Print Address: ___________________________________________________________________ ____________________________________________________________________ (Include Zip Code) * (Tax Identification or Social Security No.) (See Substitute Form W-9 Included Herewith) / / Credit Shares tendered by book-entry transfer that are not accepted for payment to the Book-Entry Transfer Facility account designated below. (DTC Account No.) __________________________________________________________ / / Credit Direct Registration Shares that are not accepted for payment to the Direct Registration Shares account designated below. (DRS Number) _______________________________________________________________ * Signature Guarantee required ------------------------------------------------------------------ ------------------------------------------------------------------ SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if Certificate(s) that are not tendered or that are not purchased and/or the check for the purchase price of Shares purchased are to be sent to someone other than the undersigned, or to the undersigned at an address other than that shown above. Mail check and Certificate(s) to: __________________________________________ Name: ______________________________________________________________________ Please Type or Print Address: ______________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ (Include Zip Code) (Tax Identification or Social Security No.) (See Substitute Form W-9 Included Herewith) ---------------------------------------------- IMPORTANT HOLDER(S) SIGN HERE (SEE INSTRUCTIONS 1 AND 5) (PLEASE COMPLETE SUBSTITUTE FORM W-9 CONTAINED HEREIN) Signature(s) of Holder(s): ___________________________________________________ Date: --------------------------, 2000 (Must be signed by 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 trustee(s), executor(s), administrator(s), guardian(s), attorney(s)-in-fact, officers of corporations or other person(s) acting in a fiduciary or representative capacity, please provide the following information and see Instruction 5.) If a Holder holds Direct Registration Shares, the person(s) signing above hereby directs EquiServe Limited Partnership, as the Company's transfer agent (the "Transfer Agent"), to place a stop against the aforementioned number of Shares held as Direct Registration Shares pending expiration of the Offer. Upon expiration of the Offer, the Transfer Agent is further directed to follow the directions for delivery to the Depositary. Name(s): _____________________________________________________________________ (Please Print) Capacity (Full Title): _______________________________________________________ Address: _____________________________________________________________________ ______________________________________________________________________________ (Include Zip Code) ______________________________________________________________________________ (Daytime Area Code and Telephone No.) ______________________________________________________________________________ (Tax Identification or Social Security Number) GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5) Authorized Signature: ________________________________________________________ Name: ________________________________________________________________________ (Please Type or Print) Title: _______________________________________________________________________ Name of Firm: ________________________________________________________________ Address: _____________________________________________________________________ ______________________________________________________________________________ (Include Zip Code) Area Code and Telephone Number: ______________________________________________ Date: --------------------------, 2000 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE SIGNATURES. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a financial institution (including most banks, savings and loan associations and brokerage houses) that is a participant in the Security Transfer Agents Medallion Program, The New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program (each, an "Eligible Institution"). Signatures on this Letter of Transmittal need not be guaranteed (a) if this Letter of Transmittal is signed by the registered Holder(s) (which term, for purposes of this document, includes any participant in the Book-Entry Transfer Facility and any Direct Registration Share Holder whose name appears on a security position listing as the owner of Shares) of the Shares tendered herewith and such Holder(s) has not completed the box entitled either "Special Payment Instructions" or "Special Delivery Instructions" on this Letter of Transmittal or (b) if such Shares are tendered for the account of an Eligible Institution. See Instruction 5 of this Letter of Transmittal. 2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES OR BOOK-ENTRY CONFIRMATIONS. This Letter of Transmittal must be received by the Depositary at one of its addresses set forth herein prior to the Expiration Date (as defined in the Offer to Purchase). Holders whose Certificates are not immediately available or who cannot deliver their Certificates and all other required documents to the Depositary prior to the Expiration Date or who cannot complete the procedures for book-entry transfer on a timely basis may nevertheless tender their Shares by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in Section 3--"Procedures for Tendering Shares" of the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Purchaser, must be received by the Depositary prior to the Expiration Date; and (iii) Certificates, as well as a Letter of Transmittal (or copy thereof), properly completed and duly executed with any required signature guarantees (or, in the case of a book-entry delivery, an Agent's Message (as defined in the Offer to Purchase), and all other documents required by this Letter of Transmittal must be received by the Depositary within three New York Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery. Direct Registration Share Holders need not deliver certificates for such Shares or comply with the procedures for book-entry transfer but need only to complete the appropriate box captioned "Direct Registration Shares" in the Letter of Transmittal. If Certificates are forwarded to the Depositary in multiple deliveries, a properly completed and duly executed Letter of Transmittal (or copy thereof) must accompany each such delivery. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE SHARES, CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING HOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION (AS DEFINED IN THE OFFER TO PURCHASE)). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. All tendering Holders, by execution of this Letter of Transmittal (or a copy hereof), waive any right to receive any notice of the acceptance of their Shares for payment. 3. INADEQUATE SPACE. If the space provided under "Description of Shares Tendered" is inadequate, the share Certificate numbers and/or the number of Shares should be listed on a separate schedule and attached hereto. 4. PARTIAL TENDERS (Applicable to Certificate Holders Only; Not Applicable to Shares Which are Tendered by Book-Entry Transfer or to Direct Registration Shares). If fewer than all the Shares evidenced by any Certificate submitted are to be tendered, fill in the number of Shares which are to be tendered in the box entitled "Number of Shares Tendered". In such cases, new Certificate(s) evidencing the remainder of the Shares that were evidenced by Certificate(s) delivered to the Depositary will be sent to the person signing this Letter of Transmittal, unless otherwise provided in the box entitled "Special Delivery Instructions" on this Letter of Transmittal, as soon as practicable after the Expiration Date. All Shares represented by Certificate(s) delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If this Letter of Transmittal is signed by the registered Holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Certificate(s) without alteration, enlargement or any change whatsoever. If any of the Shares tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any of the tendered Shares are registered in different names on several Certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of the Shares. If this Letter of Transmittal or any Certificate or stock power is signed by a trustee, executor, administrator, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and evidence satisfactory to the Depositary and the Purchaser of such person's authority so to act must be submitted. If this Letter of Transmittal is signed by the registered Holder(s) of the Shares transmitted hereby, no endorsements of Certificate(s) or separate stock powers are required unless payment is to be made to, or Certificate(s) evidencing the Shares not tendered or purchased are to be issued in the name of, a person other than the registered Holder(s). Signatures on such Certificate(s) or stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered Holder(s) of the Shares tendered hereby, the Certificate(s) must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered Holder(s) appear(s) on such Certificate(s). Signatures on such Certificate(s) or stock powers must be guaranteed by an Eligible Institution. 6. TRANSFER TAXES. Except as otherwise provided in this Instruction 6, the Purchaser will pay or cause to be paid any transfer taxes with respect to the transfer and sale of purchased Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price of any Shares purchased is to be made to or, in the circumstances permitted hereby, if Certificate(s) for the Shares not tendered or purchased are to be registered in the name of, any person other than the registered holder, or if tendered Certificate(s) are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any transfer taxes (whether imposed on the registered Holder or such person) payable on account of the transfer to such person will be deducted from the purchase price for such Shares if satisfactory evidence of the payment of such taxes, or exemption therefrom, is not submitted. Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Certificate(s) listed in this Letter of Transmittal. 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase price is to be issued in the name of, and/or Certificates for the Shares not tendered or not accepted for payment are to be issued in the name of, a person other than the signer of this Letter of Transmittal or if a check and/or such Certificates for Shares are to be mailed to someone other than the signer of this Letter of Transmittal or to an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. A Book-Entry Holder may request that Shares not accepted for payment be credited to such account maintained at the Book-Entry Transfer Facility as such Book-Entry Holder may designate under "Special Payment Instructions". If no such instructions are given, such Shares not accepted for payment will be returned by crediting the account at the Book-Entry Transfer Facility designated above. If no such instructions are given, Direct Registration Share Holders tendering Direct Registration Shares will have any Shares not accepted for payment returned by crediting the appropriate Direct Registration Shares account. A Direct Registration Share Holder may request that Shares not accepted for payment be credited to such Direct Registration account as such Direct Registration Share Holder may designate under "Special Payment Instructions". 8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions or requests for assistance may be directed to, or additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and other tender offer materials may be obtained from, the Information Agent or the Dealer Managers at their respective addresses set forth on the back cover of the Offer to Purchase or from your broker, dealer, commercial bank or trust company. 9. LOST, MUTILATED OR DESTROYED CERTIFICATES. If any Certificates have been lost, mutilated or destroyed, the Holder should promptly notify the Depositary by checking the box immediately preceding the special payment/special delivery instructions and indicating the number of Shares lost. The Holder will then be instructed as to the procedure to be followed in order to replace the relevant Certificates. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, mutilated or destroyed Certificates have been followed. 10. DIRECT REGISTRATION SHARES. If you wish to tender Direct Registration Shares, you should complete the provisions under the caption "Direct Registration Shares" above. A Holder of Direct Registration Shares may complete such box on only one Letter of Transmittal submitted by such Holder. IMPORTANT: THIS LETTER OF TRANSMITTAL OR A COPY HEREOF, TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER OR COMPLETION OF THE PROVISIONS OF THIS LETTER OF TRANSMITTAL APPLICABLE TO DIRECT REGISTRATION SHARES AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE. IMPORTANT TAX INFORMATION Under United States federal income tax law, a tendering Holder may be subject to backup withholding tax at a rate of 31% with respect to payments by the Depositary pursuant to the Offer unless such Holder: (i) is a corporation or other exempt recipient and, if required, establishes its exemption from backup withholding; (ii) provides its correct taxpayer identification number ("TIN") and certifies that the TIN provided is correct (or that such Holder is awaiting a TIN); or (iii) certifies that it is not currently subject to backup withholding or certifies as to its non-United States status. If such Holder is an individual, the TIN is his or her social security number. Completion of a Substitute Form W-9, in the case of a U.S. Holder, provided in this Letter of Transmittal, should be used for this purpose. Failure to provide such Holder's TIN on the Substitute Form W-9, if applicable, may subject the tendering Holder (or other payee) to a $50 penalty imposed by the Internal Revenue Service ("IRS") and payments that are made to such tendering Holder with respect to Common Stock surrendered pursuant to the Offer may be subject to backup withholding (see below). More serious penalties may be imposed for providing false information which, if willfully done, may result in fines and/or imprisonment. The box in part 3 of the Substitute Form W-9 may be checked if the tendering Holder (or other payee) is required to submit a Substitute Form W-9 and 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 tendering Holder must also complete the attached Certificate of Awaiting Taxpayer Identification Number in order to avoid backup withholding. If the box in Part 3 is so checked and the Depositary is not provided with a TIN by the time of payment, the Depositary will withhold 31% on all such payments of the Offer Price until a TIN is provided to the Depositary. A tendering Holder who checks the box in Part 3 in lieu of furnishing his or her TIN should furnish the Depository with his or her TIN as soon as it is received. In order for a foreign Holder to qualify as an exempt recipient, that Holder should submit an IRS Form W-8 or a Substitute Form W-8, signed under penalties of perjury, attesting to that Holder's exempt status. Such forms can be obtained from the Depositary. Tendering Holders are urged to consult their own tax advisers to determine whether they are exempt from these backup withholding and reporting requirements. If backup withholding applies to a tendering Holder, the Depository is required to withhold 31% of any payments made to such Holder pursuant to the Offer. 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 by filing a tax return with the IRS. The Depositary cannot refund amounts withheld by reason of backup withholding. PAYER'S NAME: THE BANK OF NEW YORK, AS DEPOSITARY TO BE COMPLETED BY ALL TENDERING HOLDERS - ---------------------------------------------------------------------------------------------------------------------- SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN THE --------------- FORM W-9 BOX AT RIGHT AND CERTIFY BY SIGNING AND Social Security Number Department of the Treasury DATING BELOW. OR --------------- Internal Revenue Service Employer Identification Number ------------------------------------------------------------------------------ PART 2 Payer's Request for Taxpayer CERTIFICATIOn--Under the penalties of perjury, I certify that: Identification Number (TIN) (1) The number shown on this form is my correct Taxpayer Identification 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 from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. ------------------------------------------------------------------------------ PART 3--/ / Awaiting TIN - ---------------------------------------------------------------------------------------------------------------------- CERTIFICATE INSTRUCTIONS--You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of under-reporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such item (2). - ---------------------------------------------------------------------------------------------------------------------- Sign Here SIGNATURE -------------------------------------------------------------------- --> DATE ------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER, PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office, or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all reportable payments made to me will be withheld until such time as I provide the taxpayer identification number. Signature Date , 2000 - ------------------------------------------------------------ ------------------------------
Questions and requests for assistance may be directed to the Information Agent or Dealer Managers at their respective addresses and telephone numbers set forth below. Additional copies of the Offer to Purchase, this Letter of Transmittal or other related tender offer materials may be obtained from the Information Agent or from brokers, dealers, commercial banks or trust companies. The Information Agent for the Offer is: [LOGO] NEW YORK OFFICE LONDON OFFICE 17 State Street, 10(th) Floor Crosby Court New York, NY 10004 38 Bishopgate London EC2N 4AF, England
Shareholders in the U.S. and Canada Please Call: (800) 223-2064 Banks and Brokerage Firms Call Collect: (212) 440-9800 Shareholders outside the U.S. and Canada Please Call Collect: 011-44-207-335-7296 THE DEALER MANAGERS FOR THE OFFER ARE: GOLDMAN, SACHS & CO. 85 Broad Street New York, New York 10004 (212) 902-1000 (call collect) (800) 323-5678 (call toll free) EX-99.(A)(3) 4 EXHIBIT 99(A)(3) THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU ARE IN ANY DOUBT AS TO THE ACTION TO BE TAKEN, YOU SHOULD SEEK YOUR OWN FINANCIAL ADVICE IMMEDIATELY FROM YOUR OWN APPROPRIATELY AUTHORIZED INDEPENDENT FINANCIAL ADVISOR. IF YOU HAVE SOLD OR TRANSFERRED ALL OF YOUR REGISTERED HOLDINGS OF SHARES (AS DEFINED BELOW), PLEASE FORWARD THIS DOCUMENT AND ALL ACCOMPANYING DOCUMENTS TO THE STOCKBROKER, BANK OR OTHER AGENT THROUGH WHOM THE SALE OR TRANSFER WAS EFFECTED FOR TRANSMISSION TO THE PURCHASER OR TRANSFEREE. NOTICE OF GUARANTEED DELIVERY (NOT TO BE USED FOR SIGNATURE GUARANTEES) FOR TENDER OF SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) OF HUSSMANN INTERNATIONAL, INC. PURSUANT TO THE OFFER TO PURCHASE DATED MAY 16, 2000 BY IR MERGER CORPORATION A WHOLLY-OWNED SUBSIDIARY OF INGERSOLL-RAND COMPANY As set forth under Section 3--"Procedures for Tendering Shares" in the Offer to Purchase, dated May 16, 2000, and any supplements or amendments thereto (the "Offer to Purchase"), this form (or a copy hereof) must be used to accept the Offer (as defined in the Offer to Purchase) if (i) certificates (the "Certificates") representing shares of common stock, par value $0.001 per share, together with the associated preferred stock purchase rights (together, the "Shares") of Hussmann International, Inc., a Delaware corporation (the "Company"), are not immediately available, (ii) if the procedures for book-entry transfer cannot be completed on a timely basis or (iii) time will not permit Certificates and all other required documents to reach The Bank of New York (the "Depositary") prior to the Expiration Date (as defined in the Offer to Purchase). Holders whose Shares are Direct Registration Shares (as defined in the Offer to Purchase) need not deliver certificates for such Shares or comply with the procedures for book-entry transfer. Therefore, such holders need not execute this Notice of Guaranteed Delivery, but should only complete the appropriate box captioned "Direct Registration Shares" in the Letter of Transmittal prior to its submission to the Depositary. This Notice of Guaranteed Delivery may be delivered by hand, by mail or by overnight courier or transmitted by facsimile transmission to the Depositary and must include a signature guarantee by an Eligible Institution (as defined in the Offer to Purchase) in the form set forth herein. See the guaranteed delivery procedures described in the Offer to Purchase under Section 3--"Procedures for Tendering Shares". THE DEPOSITARY FOR THE OFFER IS: THE BANK OF NEW YORK
BY MAIL: BY HAND/OVERNIGHT COURIER: Tender & Exchange Department Tender & Exchange Department P.O. Box 11248 101 Barclay Street Church Street Station Receive and Deliver Window New York, New York 10286 New York, New York 10286 BY FACSIMILE: (FOR ELIGIBLE INSTITUTIONS ONLY) (212) 815-6213 FOR CONFIRMATION TELEPHONE: (212) 815-6173
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTION VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. This Notice of Guaranteed Delivery is not to be used to guarantee a signature. If a signature on a Letter of Transmittal is required to be guaranteed by an Eligible Institution under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. 2 Ladies and Gentlemen: The undersigned hereby tenders to IR Merger Corporation, a Delaware corporation and a wholly-owned subsidiary of Ingersoll-Rand Company, a New Jersey corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase and the related Letter of Transmittal, receipt of each of which is hereby acknowledged, the number of Shares indicated below pursuant to the Guaranteed Delivery Procedures described in the Offer to Purchase under Section 3--"Procedures for Tendering Shares". - -------------------------------------------------------------------------------- Name of Record Holder(s): ______________________________________________________ Address(es): ___________________________________________________________________ Area Code(s) and Tel. No(s).: __________________________________________________ Signature(s): __________________________________________________________________ Date: __________________________________________________________________________ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Number of Shares: ______________________________________________________________ Certificate Number(s) if available: ____________________________________________ If Shares will be tendered by book-entry transfer check box: / / The Depository Trust Company________________________________________________ Account Number: ________________________________________________________________ - -------------------------------------------------------------------------------- 3 THE GUARANTEE BELOW MUST BE COMPLETED GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, an Eligible Institution (as defined in the Offer to Purchase), hereby guarantees that the undersigned will deliver to the Depositary, at one of its addresses set forth above, either the Certificates representing the Shares tendered hereby, in proper form for transfer, or Book-Entry Confirmation (as defined in the Offer to Purchase), together with a properly completed and duly executed Letter of Transmittal, including any required signature guarantees, or, in the case of book-entry delivery of Shares, an Agent's Message (as defined in the Offer to Purchase), and any other documents required by the Letter of Transmittal, all within three New York Stock Exchange trading days (as defined in the Offer to Purchase) after the date hereof. - --------------------------------------------- Name of Firm: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ Address: ___________________________________________________________________ (Zip Code) Area Code and Tel. No.: ____________________________________________________ - --------------------------------------------- - --------------------------------------------- Authorized Signature: ____________________________________________________________________________ Name _______________________________________________________________________ (Please Print) Title: _____________________________________________________________________ Date: ______________________________________________________________________ ---------------------------------------------- NOTE: DO NOT SEND CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY; CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. 3 EX-99.(A)(4) 5 EXHIBIT 99(A)(4) GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER FOR THE PAYEE (YOU) 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. All "Section" references are to the Internal Revenue Code of 1986, as amended. "IRS" is the Internal Revenue Service. - ----------------------------------------------- GIVE THE SOCIAL SECURITY FOR THIS TYPE OF ACCOUNT: NUMBER OF-- - ----------------------------------------------- 1. Individual The individual 2. Two or more The actual owner of individuals (joint the account or, if account) combined funds, the first individual on the account(1) 3. Custodian account of The minor(2) a minor (Uniform Gift to Minors Act) 4. a. The usual The revocable grantor-trustee(1) b. So-called trust The actual owner(1) account that is not a legal or valid trust under state law 5. Sole proprietorship The owner(3) - ----------------------------------------------- GIVE THE EMPLOYER IDENTIFICATION FOR THIS TYPE OF ACCOUNT: NUMBER OF-- - ----------------------------------------------- 6. Sole proprietorship The owner(3) 7. A valid trust, The legal entity(4) estate, or pension trust 8. Corporate The corporation 9. Association, club, The organization religious, charitable, educational, or other tax-exempt organization 10. Partnership The partnership 11. A broker or The broker or registered nominee nominee 12. Account with the The public entity Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments
- --------------------------------------------- - --------------------------------------------- (1) List first and circle the name of the person whose number you furnish. If only one person on a joint account has a social security number, that person's number must be furnished. (2) Circle the minor's name and furnish the minor's social security number. (3) You must show your individual name, but you may also enter your business or "doing business as" name. You may use either your social security number of your employer identification number (if you have one). (4) List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the taxpayer identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title). NOTE: IF NO NAME IS CIRCLED WHEN THERE IS MORE THAN ONE NAME LISTED, THE NUMBER WILL BE CONSIDERED TO BE THAT OF THE FIRST NAME LISTED. GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 PAGE 2 OBTAINING A NUMBER If you don't have a taxpayer identification number, obtain Form SS-5, Application for a Social Security Administration office, or Form SS-4, Application for Employer Identification Number, by calling 1 (800) TAX-FORM, and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING PAYEES SPECIFICALLY EXEMPTED FROM THE WITHHOLDING INCLUDE - An organization exempt from tax under Section 501(a), a individual retirement account (IRA), or a custodial account under Section 403 (b) (7), if the account satisfies the requirements of Section 401 (f) (2). - The United States or a state thereof, the District of Columbia, a possession of the United States, or a political subdivision or wholly- owned agency or instrumentality of any of the foregoing. - An international organization or any agency or instrumentality thereof. - A foreign government an any political subdivision, agency or instrumentality thereof. PAYEES THAT MAY BE EXEMPT FROM BACKUP WITHHOLDING INCLUDE: - A corporation. - A financial institution. - A dealer of securities or commodities required to register in the United States, the District of Columbia, a possession of the United States - A real estate investment trust. - A common trust fund operated by a bank under Section 584(a). - An entity registered at all times during the tax year under the Investment Company Act of 1940. - A middleman know in the investment community as a nominee or who is listed in the most recent publication of the American Society of Corporate Secretaries, Inc. Nominee List. - A futures commission merchant registered with the Commodity Futures Trading Commission. - A foreign central bank PAYEES OF DIVIDENDS AND PATRONAGE DIVIDENDS GENERALLY EXEMPT FROM BACKUP WITHHOLDING INCLUDE: - Payments to nonresident aliens subject to withholding under Section 1441 - Payments to partnerships not engaged in a trade or business in the United States and that have at least one nonresident alien partner. - Payments of patronage dividends not paid in money. - Payments made by certain foreign organizations. - Section 404(k) payments made by an ESOP PAYEES OF INTEREST GENERALLY EXEMPT FROM BACKUP WITHHOLDING INCLUDE: - Payments of tax-exempt interest (including exempt-interest dividends under Section 852). - Payments described in Section 6049(b)(5) to nonresident aliens. - Payments on tax-free covenant bonds under Section 1451. - Payments made by certain foreign organizations. CERTAIN PAYMENTS, OTHER THAN PAYMENTS OF INTEREST, DIVIDENDS, AND PATRONAGE DIVIDENDS, THAT ARE EXEMPT FROM INFORMATION REPORTING ARE ALSO EXEMPT FROM BACKUP WITHHOLDING. FOR DETAILS, SEE SECTIONS 6041, 6041A, 6042, 6044, 6045, 6049, 6050A AND 6050N AND THE REGULATIONS THEREUNDER. EXEMPT PAYEES SHOULD COMPLETE A SUBSTITUTE FORM W-9 TO AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FORM, SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER. PRIVACY ACT NOTICE.--Section 6019 requires you to provide your correct taxpayer identification number to payers who must report the payments to the IRS. The IRS uses the numbers for identification purposes and to help verify the accuracy of your return and may also provide this information to various government agencies for tax enforcement or litigation 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 nor furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) 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 willful neglect. (2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully 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.(A)(5) 6 EXHIBIT 99(A)(5) OFFER TO PURCHASE FOR CASH ALL OF THE OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) OF HUSSMANN INTERNATIONAL, INC. AT $29.00 NET PER SHARE BY IR MERGER CORPORATION A WHOLLY-OWNED SUBSIDIARY OF INGERSOLL-RAND COMPANY - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JUNE 13, 2000, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- May 16, 2000 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We have been appointed by IR Merger Corporation, a Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of Ingersoll-Rand Company, a New Jersey corporation ("Parent"), to act as Dealer Managers in connection with the Purchaser's offer to purchase all of the issued and outstanding shares of common stock, par value $0.001 per share, including the associated preferred stock purchase rights (together, the "Shares"), of Hussmann International, Inc., a Delaware corporation (the "Company"), at a price of $29.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 16, 2000 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, as they may be amended and supplemented from time to time, together constitute the "Offer"), copies of which are enclosed herewith. Please furnish copies of the enclosed materials to those of your clients for whose accounts you hold Shares in your name or in the name of your nominee. Enclosed herewith for your information and forwarding to your clients are copies of the following documents: 1. The Offer to Purchase, dated May 16, 2000. 2. The Letter of Transmittal to tender Shares for your use and for the information of your clients. Facsimile copies of the Letter of Transmittal may be used to tender Shares. 3. A letter to stockholders of the Company from Richard G. Cline, Chairman of the Board, and J. Larry Vowell, President and Chief Executive Officer, together with a Solicitation/ Recommendation Statement on Schedule 14D-9 filed with the Securities and Exchange Commission by the Company and mailed to stockholders of the Company. 4. The Notice of Guaranteed Delivery for Shares to be used to accept the Offer if the procedures for tendering Shares set forth in the Offer to Purchase cannot be completed prior to the Expiration Date (as defined in the Offer to Purchase). 5. A printed form of letter 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. 6. Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9. 7. A return envelope addressed to the Depositary. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JUNE 13, 2000, UNLESS THE OFFER IS EXTENDED. Please note the following: 1. The tender price is $29.00 per Share, net to the seller in cash, without interest thereon, as set forth in the Introduction to the Offer to Purchase. 2. The Offer is conditioned upon, among other things, (i) there being validly tendered and not properly withdrawn prior to the Expiration Date (as defined in the Offer to Purchase) a number of Shares which represent at least a majority of the outstanding Shares on a fully diluted basis, (ii) the termination or expiration of the waiting period under the HSR Act (as defined in the Offer to Purchase) and under any foreign statutes and regulations and (iii) certain other conditions. See the Introduction and Sections 1--"Terms of the Offer" and 14--"Conditions of the Offer" of the Offer to Purchase. 3. The Offer is being made for all of the issued and outstanding Shares. 4. Tendering holders of Shares ("Holders") whose Shares are registered in their own name and who tender directly to The Bank of New York, as depositary (the "Depositary"), will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of Shares by the Purchaser pursuant to the Offer. However, federal income tax backup withholding at a rate of 31% may be required, unless an exemption is available or unless the required tax identification information is provided. See Instruction 9 of the Letter of Transmittal. 5. The Offer and the withdrawal rights will expire at 12:00 midnight, New York City time, on Tuesday, June 13, 2000, unless the Offer is extended. 6. The Board of Directors of the Company has unanimously (i) determined that the terms of each of the Offer and the merger (the "Merger") of the Purchaser with and into the Company are fair to, and in the best interests of, the Holders and declared that the Offer and the Merger are advisable, (ii) approved the Agreement and Plan of Merger (the "Merger Agreement"), dated as of May 11, 2000 by and among Parent, the Purchaser and the Company and the transactions contemplated thereby, including the Offer and the Merger and (iii) recommended that the Holders accept the Offer, tender their Shares pursuant to the Offer and (if required by applicable law) adopt the Merger Agreement. 7. Notwithstanding any other provision of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates evidencing such Shares (the "Certificates") or, if such Shares are held in book-entry form, timely confirmation of a book-entry transfer (a "Book-Entry Confirmation") of such Shares into the account of the Depositary, at The Depository Trust Company, and if certificates evidencing the associated preferred stock purchase rights (the "Rights") have been issued, such certificates or a Book-Entry Confirmation, if available, with respect to such certificates (unless the Purchaser elects, in its sole discretion, to make payment for the Shares pending receipt of such certificates or a Book-Entry Confirmation, if available, with respect to such certificates), (ii) a properly completed and duly executed Letter of Transmittal or a copy thereof with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message (as defined in the Offer to Purchase)) and (iii) any other documents required by the Letter of Transmittal. Accordingly, tendering Holders may be paid at different times depending upon when Certificates for Shares (or certificates for Rights) or Book-Entry 2 Confirmations with respect to Shares (or Rights, if applicable) are actually received by the Depositary. Under no circumstances will interest be paid on the purchase price of the Shares to be paid by the Purchaser, regardless of any extension of the Offer or any delay in making such payment. In order to take advantage of the Offer, Certificates, as well as a Letter of Transmittal (or copy thereof), properly completed and duly executed with any required signature guarantees (or, in the case of a book-entry delivery, an Agent's Message), and all other documents required by the Letter of Transmittal must be received by the Depositary, all in accordance with the instructions set forth in the Letter of Transmittal and the Offer to Purchase. Any Holder who desires to tender Shares and whose Certificate(s) evidencing such Shares are not immediately available, or who cannot comply with the procedures for book-entry transfer described in the Offer to Purchase on a timely basis, may tender such Shares by following the procedures for guaranteed delivery set forth in Section 3--"Procedures for Tendering Shares" of the Offer to Purchase. Neither Parent nor the Purchaser will pay any fees or commissions to any broker, dealer or other person for soliciting tenders of Shares pursuant to the Offer (other than the Dealer Managers, the Depositary and the Information Agent as described in the Offer to Purchase). The Purchaser will, however, upon request, reimburse you for customary mailing and handling expenses incurred by you in forwarding any of the enclosed materials to your clients. The Purchaser will pay or cause to be paid any transfer taxes with respect to the transfer and sale of purchased Shares to it or its order pursuant to the Offer, except as otherwise provided in Instruction 6 of the Letter of Transmittal. Any inquiries you may have with respect to the Offer should be addressed to Goldman, Sachs & Co., the Dealer Managers for the Offer, at 85 Broad Street, New York, New York 10004, telephone numbers (212) 902-1000 (call collect) or (800) 323-5678 (call toll free), or to Georgeson Shareholder Communications, Inc., the Information Agent for the Offer, at 17 State Street, 10th Floor, New York, New York 10004, telephone number (800) 223-2064, for shareholders in the U.S. and Canada, and at Crosby Court, 38 Bishopgate, London EC2N 4AF, England, telephone number 011-44-207-335-7296 (please call collect), for shareholders outside the U.S. and Canada. Requests for copies of the enclosed materials may also be directed to the Dealer Managers or to the Information Agent at the above addresses and telephone numbers. Very truly yours, GOLDMAN, SACHS & CO. NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, PARENT, THE COMPANY, THE DEALER MANAGERS, THE DEPOSITARY, THE INFORMATION AGENT OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN. 3 EX-99.(A)(6) 7 EXHIBIT 99(A)(6) OFFER TO PURCHASE FOR CASH ALL OF THE OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) OF HUSSMANN INTERNATIONAL, INC. AT $29.00 NET PER SHARE BY IR MERGER CORPORATION A WHOLLY-OWNED SUBSIDIARY OF INGERSOLL-RAND COMPANY - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JUNE 13, 2000, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- May 16, 2000 To Our Clients: Enclosed for your consideration are the Offer to Purchase, dated May 16, 2000 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as they may be amended and supplemented from time to time, together constitute the "Offer") relating to the offer by IR Merger Corporation, a Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of Ingersoll-Rand Company, a New Jersey corporation ("Parent"), to purchase all of the issued and outstanding shares of common stock, par value $0.001 per share, including the associated preferred stock purchase rights (together, the "Shares"), of Hussman International, Inc., a Delaware corporation (the "Company"), at a price of $29.00 per Share, net to the seller in cash, without interest thereon (the "Offer Price"), upon the terms and subject to the conditions set forth in the Offer. Any holders who desire to tender Shares and whose certificate(s) evidencing such Shares (the "Certificates") are not immediately available, or who cannot comply with the procedures for book-entry transfer described in the Offer to Purchase on a timely basis, may tender such Shares by following the procedures for guaranteed delivery set forth in Section 3--"Procedures for Tendering Shares" of the Offer to Purchase. WE ARE (OR OUR NOMINEE IS) THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT. Accordingly, we request instructions as to whether you wish to have us tender on your behalf any or all Shares held by us for your account pursuant to the terms and conditions set forth in the Offer. Please note the following: 1. The Offer Price is $29.00 per Share, net to the seller in cash, without interest thereon, as set forth in the Introduction to the Offer to Purchase. 2. The Offer is conditioned upon, among other things, (i) there being validly tendered and not properly withdrawn prior to the Expiration Date (as defined in the Offer to Purchase) a number of Shares which represent at least a majority of the outstanding Shares on a fully diluted basis, (ii) the termination or expiration of the waiting period under the HSR Act (as defined in the Offer to Purchase) and under any foreign statutes or regulations and (iii) certain other conditions. See the Introduction and Sections 1--"Terms of the Offer" and 14--"Conditions of the Offer" of the Offer to Purchase. 3. The Offer is being made for all of the issued and outstanding Shares. 4. Tendering holders of Shares ("Holders") whose Shares are registered in their own name and who tender directly to The Bank of New York, as depositary (the "Depositary"), will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of Shares pursuant to the Offer. However, federal income tax backup withholding at a rate of 31% may be required, unless an exemption is available or unless the required tax identification information is provided. See Instruction 9 of the Letter of Transmittal. 5. The Offer and withdrawal rights will expire at 12:00 midnight, New York City time, on Tuesday, June 13, 2000, unless the Offer is extended. 6. The Board of Directors of the Company has unanimously (i) determined that the terms of each of the Offer and the merger (the "Merger") of the Purchaser with and into the Company are fair to, and in the best interests of, the Holders and declared that the Offer and the Merger are advisable, (ii) approved the Agreement and Plan of Merger (the "Merger Agreement"), dated as of May 11, 2000, by and among Parent, the Purchaser and the Company and the transactions contemplated thereby, including the Offer and the Merger and (iii) recommended that the Holders accept the Offer, tender their Shares pursuant to the Offer and (if required by applicable law) adopt the Merger Agreement. 7. Notwithstanding any other provision of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) Certificates or if such Shares are held in book-entry form, timely confirmation of a book-entry transfer (a "Book-Entry Confirmation") of such Shares into the Depositary's account at The Depository Trust Company, and if certificates evidencing the associated preferred stock purchase rights (the "Rights") have been issued, such certificates or a Book-Entry Confirmation, if available, with respect to such certificates (unless the Purchaser elects, in its sole discretion, to make payment for the Shares pending receipt of such certificates or a Book-Entry Confirmation, if available, with respect to such certificates), (ii) a properly completed and duly executed Letter of Transmittal or a copy thereof with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message (as defined in the Offer to Purchase)) and (iii) any other documents required by the Letter of Transmittal. Accordingly, tendering Holders may be paid at different times depending upon when Certificates (or certificates for Rights) or Book-Entry Confirmations with respect to Shares (or Rights, if applicable) are actually received by the Depositary. Under no circumstances will interest be paid on the purchase price of the Shares to be paid by the Purchaser, regardless of any extension of the Offer or any delay in making such payment. If you wish to have us tender any or all of the Shares held by us for your account, please so instruct us by completing, executing, detaching and returning to us the instruction form set forth herein. If you authorize the tender of your Shares, all such Shares will be tendered unless otherwise specified below. An envelope to return your instructions to us is enclosed. Your instructions should be forwarded to us in ample time to permit us to submit a tender on your behalf prior to the Expiration Date. 2 The Offer is being made solely by the Offer to Purchase and the related Letter of Transmittal and is being made to all Holders. The Purchaser is not aware of any jurisdiction where the making of the Offer is prohibited by administrative or judicial action pursuant to any valid state statute. If the Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of Shares pursuant thereto, the Purchaser will make a good faith effort to comply with such state statute or seek to have such statute declared inapplicable to the Offer. If, after such good faith effort, the Purchaser cannot comply with any such state statute, the Offer will not be made to (and tenders will not be accepted from or on behalf of) Holders in such state. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchaser by Goldman, Sachs & Co. or one or more registered brokers or dealers which are licensed under the laws of such jurisdiction. 3 INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL OF THE OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) OF HUSSMAN INTERNATIONAL, INC. The undersigned acknowledge(s) receipt of your letter, the Offer to Purchase, dated May 16, 2000, and the related Letter of Transmittal (which, as they may be amended and supplemented from time to time, together constitute the "Offer") in connection with the offer by IR Merger Corporation, a Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of Ingersoll-Rand Company, a New Jersey corporation, to purchase all of the issued and outstanding shares of common stock, par value $0.001 per share, including the associated preferred stock purchase rights (together, the "Shares"), of Hussman International, Inc., a Delaware corporation, at a purchase price of $29.00 per Share, upon the terms and subject to the conditions set forth in the Offer to Purchase and the related Letter of Transmittal. This will instruct you to tender to the Purchaser the number of Shares indicated below (or if no number is indicated below, all Shares) which are held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer. - -------------------------------------------------------------------------------- Number of Shares to be Tendered*: __________________________________________ Date: ______________________________________________________________________ SIGN HERE Signature(s): ______________________________________________________________ Print Name(s): _____________________________________________________________ Print Address(es): _________________________________________________________ Area Code and Telephone Number(s): _________________________________________ Taxpayer Identification or Social Security Number(s): ______________________ - -------------------------------------------------------------------------------- * Unless otherwise indicated, it will be assumed that all of your Shares held by us for your account are to be tendered. 4 EX-99.(A)(10) 8 EXHIBIT 99(A)(10) EXHIBIT 99(a)(10) INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE INGERSOLL RAND MAY 12, 2000 11:00 A.M. EDT Coordinator Moderating today's call is Mr. Joseph Fimbianti. Mr. Fimbianti? J. Fimbianti Thank you, Joel. Good morning, everyone, and welcome to the Ingersoll Rand conference call on our recently announced acquisition of Hussman International, the world's leading manufacturer of commercial refrigeration products. The press release on this transaction went out this morning, and I believe most of you have copies. The release has also been posted to our Web site. I'd like to cover some housekeeping items now before we begin. This morning, concurrent with the phone-in conference call, we will be broadcasting the call through our public Web site. The PowerPoint slide presentation to augment this call is also on the public Web site, for those of you who have not received it by e-mail. To participate via the Web, go to www.ingersoll-rand.com, and select the Special Conference Call link on the right side of the screen and just follow the instructions. We will prompt you when to change the slides. Both the call and the presentation will be archived on our Web site. So if you would please go to slide No. 2, which is our Safe Harbor. Before we begin, let me remind you that there will be forward-looking discussion this morning which is covered by our Safe Harbor statement. Please refer to form 10Q, dated March 30, 2000, for details on the factors that may influence results. I'd like to introduce the participants this morning on the call. We have Herb Henkel, who's the Chairman, President and CEO of Ingersoll Rand; and David Devonshire, Executive Vice President and CFO. As far as the discussion format, we will start with the formal presentations by Herb Henkel and Dave Devonshire, and then we will have question and answer. INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE Now, if you would please go to slide No. 3, which will give you some of the highlights of the Hussman transaction, Herb Henkel will begin. Herb. H. Henkel Thank you, Joe, and good morning, everyone. Today we're proud to discuss our acquisition of Hussman International, the first major acquisition that we've accomplished as a part of the long-term strategic growth plan we shared with you previously. There are several reasons why this acquisition is a perfect fit within our strategic growth plan, and I'd like to highlight a few of them. First, the acquisition of Hussman, combined with our ThermoKing unit, will make IR a world leader in the climate control market. This transaction creates a one-stop resource in a $25 billion global cold chain for products and services used in the storage, transportation and retailing of food. Second, the acquisition meets all of our acquisition criteria. It will be immediately accretive to earnings in 2000. Third, we'll be able to realize significant synergies throughout our total climate control sector. It's important to note, the synergies are generated from this transaction; they're not exclusive to Hussman. They will be gained throughout the entire climate control sector. The sharing of resources will reduce the need for capital expenditures that would otherwise have been required for the global expansion of our climate control operation; and fourth, we expect to receive a return on invested capital of 15% from the transaction by 2004. You will recall that last November we presented our long-range plan for achieving key growth and profitability targets. We said this plan would be accomplished by a combination of organic growth and acquisitions; actually, half and half is what I told you. I'm pleased to say that the acquisition of Hussman will significantly contribute to our ability to reach our targets. Please go to slide 4. By now you know that we've reorganized IR in four distinct sectors, fully focused on the global markets that they serve. Moving away from our previous structure of product-driven businesses, our new structure reflects a major focus that's framed in terms of four global growth areas: climate control, industrial productivity, infrastructure development, and security and safety. Please go to slide 5. Today we're going to talk primarily about one of the global growth INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE markets, climate control, and our enhanced capabilities and opportunities in that market. Since 1997, we've served climate control through ThermoKing, which is the leader in transport refrigeration equipment. Slide 6, please. As you can see from this slide, before the acquisition of Hussman, in the climate control market we only participated in the movement of perishable goods as represented in the red box. However, the cold chain includes the entire process involved in taking perishable goods from harvest to the consumer. As a result, we have aggressively focused on the opportunity in the blue areas, the storage and display of perishable goods. Slide 7, please. And here is why: By regarding the entire cold chain as the market we serve, as opposed to just the transportation of perishable goods, we dramatically increased our market opportunity from five to $25 billion. Slide 8, please. Clearly, Hussman fits the requirement of our long-term strategy in the climate control market. It has leading products for the display case segment and for refrigerated warehousing and distribution. With Hussman, we will be able to provide our customers in stationary or transportation applications with one-stop shopping for their temperature control needs. Slide 9, please. Hussman is a world leader and global provider of refrigeration products and services. Sales were $1.3 billion in 1999. The company manufactures, sells, installs and services merchandising and refrigerator systems for the world's commercial food industry and retail outlets. Slide 10, please. Hussman's major worldwide markets include supermarkets, convenience stores and food retail warehouses. Move to slide 11, please. These markets represent significant long-term growth. For the past five years, there have been several significant growth drivers in the display case market. Supermarkets and convenience stores have accelerated their expansion by opening new stores, remodeling their facilities, modernizing their equipment; partially in response to increased competition from new store formats. Refrigerated display cases are being installed to address growing consumer demand for fresh, prepared and ready-to-eat products. The popularity of the home meal replacement trend is going to continue to accelerate growth. INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE Internet-enabled electronic grocers will also require Hussman commercial refrigeration equipment for the warehouses in order to serve this new segment. This trend also fits with ThermoKing, which will provide the equipment for home delivery of perishable and frozen goods. In addition, more stringent federal and state environmental regulations on core product temperatures and sanitation are also going to fuel expansion and remodeling expenditures. Overall, display case refrigeration is expected to have an organic growth rate that's between 5% to 9%, due to ongoing grocery store consolidations and refurbishment. Slide 12, please. Hussman has historically been the leader in meeting customer needs in critical areas; first in product efficiency, which leads to low life-cycle costs. Most supermarkets operate on very tight margins, and energy related to total cooling costs is a major cost component. It's estimated that 4% of all energy consumed in the US is related to cooling foods. Other critical needs Hussman's products meet include reliability, advanced product features such as remote temperature monitoring, appealing merchandising units and flexibility of design, which is important to supermarkets and convenience store applications. Slide 13, please. Display cases are a major product line that serve supermarkets and convenience stores, including global and national chains as well as local retailers. Here are some pictures of the display case products. Hussman products are known for their visual appeal, an important point in merchandising, and solid energy-efficient technology. Slide 14, please. Hussman is a technology leader in centralized commercial refrigeration systems. These systems, which include multi-compressor, automatic flow control systems and electronic controls are generally located in the store's back room. In addition, Hussman makes systems for the large commercial industrial refrigeration market, and manufactures and installs walk-in and storage coolers and freezers used for bulk storage and the storage of non-display items. These commercial systems ensure the safe and efficient storage of food at consistent temperatures with a high degree of reliability. Slide 15, please. For convenience stores, Hussman provides a wide range of products, such as sandwich merchandisers, salad bars, ice cream displays, reach-in cases, and walk-in coolers. INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE Slide 16, please. Display cases represent the largest product grouping, accounting for approximately half of Hussman's total revenues. Refrigeration systems for stores and warehouses, about 25%. Installation and service make up the balance. Slide 17, please. This slide shows the geographic breakdown of sales, with about 71% of sales in North America; 16% in Europe; and 13% in the rest of the world. Slide 18, please. The company is located outside of St. Louis. Hussman has 25 manufacturing facilities worldwide, nine of which are owned, 16 of which are leased. It also operates 55 service facilities, 39 of them owned; and there are 100 independent agents. As you can see, Hussman is a major worldwide player in the market. Hussman has operations worldwide, is the market leader in North America, and in the two largest markets in Latin America, Mexico and Brazil. It also has significant and growing positions in Europe and China. The international markets represent a significant long-term growth opportunity, as countries develop infrastructures to meet their food distribution and preservation needs. Retailers in Mexico and other Latin American countries are expanding and remodeling their stores to compete with US and European chains entering the market. Slide 19, please. From 1997 to '99, Hussman sales have grown at a compound annual growth rate of almost 10%. Operating profit increased 18%, and they've had operating margins improve from 8.3% to 9.6%. We believe that through our corporate purchasing and cost reduction efforts, we will increase these margins to 15% by 2004. Slide 20, please. In summary, the acquisition of Hussman is consistent with our strategy in the climate control segment to expand beyond transportation, to include stationary refrigeration. The purchase of Hussman places us in the leadership position in North America where we have the No. 1 market share in the transport and the stationary food refrigeration markets. We also have a strong platform to grow, and quickly expanding overseas markets. Hussman's service network will also give us the ability to go beyond the equipment business. Our customers, mainly food retailers, can now have a single source of transport and stationary refrigeration. INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE Now I'd like to turn the presentation over to Dave Devonshire, who will review the financial aspects of the transaction. D. Devonshire Thank you, Herb. The total purchase price for the transaction was $1.83 billion, which includes the assumption of about $275 million of debt. We recognize that this is the full purchase price; however, as noted earlier, Hussman provides key strategic opportunities for our growth in the climate control market. Next slide, please. We expect to realize cumulative operating synergies of more than $100 million by 2003 from the combined operations of Hussman and ThermoKing. We have only built in about $13 million in savings for 2000. These synergies will come from cost savings from material purchases, rationalizing manufacturing facilities, and rationalizing overhead, logistics, R&D, etc. These synergies will be realized by the total climate control sector, which will have annual sales of about $2.8 billion, which I emphasize includes both Hussman and ThermoKing. Hussman's worldwide manufacturing assets will also allow ThermoKing to grow in markets like Mexico, Brazil and Spain, with minimal capital expenditures. We expect the transaction to contribute $.02 to $.05 to the 2000 EPS. This is based on about $8.3 million of synergies after tax, offset by about $20 million of goodwill amortization, and $35.1 million of after-tax interest expense. We also expect at least $.15 of additional earnings per share in 2001 as a result of this transaction. As a note, Hussman's earnings are usually back-end loaded, with about two thirds of annual earnings occurring in the second half of the year. Our earnings forecast for the second half of 2000 is based on Hussman's earnings of approximately $.98 per share, or $.04 per share above the current street estimate of $.94. However, our forecast is about $.13 below the current Hussman internal management forecast of $1.11 per share for the last two quarters of 2000, so we do have some upside potential. Slide 24, please. The transaction will temporarily take our debt to total capital to 56%. After we complete the Dresser Rand and IDP transactions, the ratio will fall to about 48%. We expect the debt to capital ratio to be about 43% by year-end 2000. Because of our strong cash flow generation capability, both of the rating agencies are leaning towards confirming our debt ratings. INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE Now I'd like to provide an update of our earnings expectation on slide 25 for 2000. The earnings for Hussman of $.02 to $.05 puts us in the $3.98 to $4.12 range, which is slightly above the range we reported during our first- quarter conference call. Now I'll turn the presentation back to Herb. H. Henkel Thanks, Dave. Please move to slide 26. As you can see, the Hussman acquisition meets all the criteria we have set. It's accretive to earnings in the first full year. It earns a cost of capital in three years, and it achieves an ROIC of 15% by year five. Slide 27, please. Similarly, Hussman, including our derived synergies, fits our long-term goals in revenue growth, operating margins, earnings growth, working capital to sales, cash flow and return on invested capital. Slide 28, please. Hussman will not only increase our growth rate, but will also change the balance of IR operations. By 2001, climate control will be our second-largest sector, representing 29% of our revenues. With the Hussman acquisition, we have significantly improved our position in the growing global market sector while strengthening IR's position as a major diversified industrial company. Slide 29. In closing, we're extremely enthusiastic about this acquisition. Hussman perfectly fits our long-term strategy and our financial goals. Thank you. Please move to slide 30, and we will be pleased to take your questions. J. Fimbianti We will begin the question and answer. Please limit yourself to one question and a follow-up. We will attempt to answer all questions. Joel, if you'd like to give them the instructions. Coordinator Thank you, sir. If you would like to ask a question, please press *1 on your touch-tone phone. You'll be introduced prior to your question. To cancel your question, press *2. Once again, that's *1 to ask a question and *2 to cancel. One moment while the questions register. The first question comes from David Raso of Lehman Brothers. D. Raso Good morning, everybody. INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE All Good morning, David. D. Raso Good morning. I like the acquisition. Obviously it fits with the strategy. I'm just curious, though: Why the premium? It just seems like a little higher premium than I would have thought you would have had to pay. Can you take us through that? And the follow-up would be, the next news we're looking for is the Dresser Rand sale. The bids we were told were due May 15th, and obviously we are close to that date. Can you just give us an update? H. Henkel Well, let me address the first one, and I'll ask Dave to go through the other updates. When it comes to purchase price, you can be assured that I tried to negotiate as favorable a transaction for IR as is possible. And I'm sure, as you can imagine, you can also be assured that the existing board of directors of Hussman managed to negotiate for what they thought was the most favorable price they could achieve relative to the stock price. We came out with $29 as to meeting those two criteria. Ours, in the sense that I realize it's a full price. I also realize that it meets our acquisition criteria, and I think the board of directors of Hussman realized that it was a very, very fair transaction for their shareholders. So I think we accomplished the goal. We have had numerous opportunities for other acquisitions which were also, quote, highly priced; but we frankly did not have the synergies nor the strategic mix that we think we have on this one right here. So although I realize it is a, quote, high price relative to the existing stock price, I would tell you that I looked at this as being an opportunity for us to really make a significant addition; and as I said before, it does meet all of the criteria we had set out. And Dave, would you speak to the other one regarding Dresser Rand? D. Devonshire Sure, I'd be glad to, Herb. We still continue to expect to review and receive bids during the course of May, and to continue to negotiate during the course of May and June. I at this point don't expect to make - or we don't expect to make an announcement during the course of May, but the process does continue; we have parties that are definitely interested. And a couple of them have asked for some additional time to review and for due diligence. So the 15th is really a date that probably will move back a little, just because we're waiting to get all the information in from the various INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE sources. D. Raso But to be clear, are we still thinking early third quarter kind of time frame on the actual - D. Devonshire Yes, that's correct. H. Henkel Yes, nothing has changed from the quarterly announcement we made two or three weeks ago, I guess it was. D. Raso Okay. And to quickly follow on that, any idea right now, are we still thinking it's sold as one piece or separate pieces as the bids come in? Have you got a feel - H. Henkel We have both alternatives to explore, and that's part of the problem. We actually have more than - let's just say there's more than one. And they involve the entire entity, and they involve pieces; so you can imagine, we're assessing what is the most attractive solution for us. D. Raso Thank you very much. H. Henkel Thank you. Coordinator The next question comes from David Bleustein of Paine Webber. D. Bleustein Good morning. All Good morning, Dave. D. Bleustein Where do you believe we are in the supermarket remodeling cycle? And I guess how long do you believe the growth rates over the last few years are sustainable? H. Henkel We believe that the growth rate, as you saw in the numbers that we put forward on the chart, are sustainable in the three- to five-year horizon. I think once you get into the fourth and fifth year, it gets a little bit grayer; but we're very comfortable on the North American side for the next three-plus years. And then we see some significant upsides coming frankly in other parts of the world. Hussman made an acquisition last year in Tosco over in Europe, and that is really just now starting to give them a significant uplift INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE as the Wal-Marts that are all over the world go into the UK. D. Bleustein And let me follow up by asking, how does Hussman do in an economic slowdown? How did they perform in the early nineties? H. Henkel The company, if you go back to the early nineties, was frankly a very, very different company than it is today; so I would tell you that I didn't see a strong correlation. But if you do go back to that time, when I checked back in the early nineties period, I would tell you it was comparable to what we talked about with the ThermoKing type. It slowed down, but did not go negative. D. Bleustein All right. And do you know why Hussman's stock dropped so significantly in December? H. Henkel Yes. It was a fourth-quarter - let's do two parts to that, Dave. Number one, as you saw, we talked at about two thirds of the earnings, just because of the construction cycles and the way that the customers place orders. Two thirds of the earnings happened in the second part of the year. And an earnings miss took place, or a forecasted miss was made, and at that time when that forecast was dropped, the stock was trading at about 181/2, and so it dropped back down into the $13 range. And since there is such a large proportion of the earnings in the back half of the year, frankly there hasn't been the kind of activity I think that would bring it back up to where it was beforehand. D. Bleustein All right. I'll let somebody else have a crack. Thanks a lot. H. Henkel Sure. Coordinator The next question comes from John Inch of Bear Stearns. J. Inch Good morning. All Good morning, John. J. Inch The cost savings on the manufacturing front, can we talk a little bit more about that; and the progression to 2004. Do you expect that to be something of a linear progression in terms of your 15% margins? INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE H. Henkel Yes; I think that when we looked at it, it - because remember, the margins we're talking about are both at Hussman as well as what goes on at ThermoKing. J. Inch Right. H. Henkel We actually see ThermoKing going up faster at the beginning as a result of them being able to leverage existing manufacturing capacities in Brazil and Mexico and so on. J. Inch Yes. H. Henkel And then we have more of a linear raise going forward, John, in the Hussman side. J. Inch And then would you, in terms of the - where the savings actually - can we talk a little bit more about the savings themselves? Are you looking to potentially shutter some facilities around the world, or what is it about these facilities that leads you to believe that you can get the kind of cost savings out that you think you can? H. Henkel Well, there are really two elements of the manufacturing cycle. One has to do with the raw materials. We have the exact same compressor component supplier. We have checked on the indented bills; we looked at our raw material cost per pound compared to theirs, and we found frankly there was between a 5% and 7% savings. They purchase approximately $650 million, so just extend that math if you would for me. We also know, John, that when we then take and leverage their volume in addition to what we have, we not only gain on the increment, but we gain on the entire base another few points. That piece is a - collectively between ThermoKing and Hussman, we wind up with 41 manufacturing locations. I think it would be fair to say that our assumption is that there are several that are in that will have some synergistic effects with the potential consolidations. J. Inch Okay. Thank you. H. Henkel Sure. Coordinator The next question comes from Lisa Shalett of Sanford Bernstein. INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE L. Shalett Hi, guys. All Hi, Lisa. L. Shalett To follow up on Dave Bleustein's questions, I think one of the things that was also going on in the fourth quarter for Hussman was that they were exiting some low-margin contracting business in the UK. Could you just kind of explain what that was about and where we are with that, and whether or not it has any place in the forecast going forward? H. Henkel You are, as usual, correct. There was also activity where they were looking at service work that was not at attractive margins; and some of that activity was outsourced to third-party people instead of doing it themselves. That activity is behind us, and as we now look at going forward for this year, we have no longer that activity in front of us. So if you do a year-over-year comparison, when you look at the number we talked about for the $.98, the $1-plus range for the second half of the year, that is taking into account that the UK operation right now is looking better. Second, we now have Wal-Mart moving in with ten significant superstores, and that will give them some good upside as well. So there were volume issues; there was the service-related activity. Both of those are now I think doing better. L. Shalett Great. And then just as a follow-up, who do you perceive, if anyone, as Hussman's key competitors? H. Henkel Well, it's someone that we know a little bit about. There's a company up in Connecticut, it's called UTC. If you look at the Carrier part, they also have a piece called Tyler, and that is the alternative to Hussman and ThermoKing. L. Shalett Great. Thanks a lot, Herb. H. Henkel Sure. Coordinator The next question comes from Barry Bannister of Lake Mason. B. Bannister Yes, hi. By the way, isn't Hobart also a competitor? INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE H. Henkel They have some equipment, but they are really more into equipment than they are a lot of the large display activity. B. Bannister Okay. Listen, on this one-stop shopping strategy, we go back in time - UTX and air conditioners and elevators and Dover when they had escalators and elevators, and American Standard with plumbing and air conditioning, nobody ever made that synergy thing work. I would think it's different purchasing managers who select the refrigerator packs for the truck and trailer versus the in-store displays, and I just don't see where the synergies are. Can you go through this whole strategic rationale? H. Henkel Well, there are - first of all, you are correct, there are different buyers that are involved in the transport side, and then there are those involved in the construction cycle part. Having said that, what I would suggest to you is that we can, however, now approach the customer with a solution, all the way from picking up the product at the manufacturing source, harvest site, all the way through. And we think that in doing so, we're able to go in to talk about reducing spoilage by being able to control and ensure quality all the way through that. You'll notice in our conversations we did not include a significant number of dollars, even in the dialogue relative to sales synergies. What we talked about were really more along the lines of manufacturing and operations synergies realized by being able to deal with this one customer. B. Bannister Okay. And on the subject of synergies, I look at slide 23, you've got $91 million of indicated net income in '01; $43 million of net savings. If I back out the taxes, you're implying an operating margin that's significantly above anything that either Hussman or similar companies have done. Where do you get that margin, and what is your margin calculation for what it would be before amortization and before the incremental interest expense on a standalone basis in '01. H. Henkel Well, I think we have to go back to - if you recall what we were very, very emphatic about is that the synergies apply to the full base of ThermoKing plus Hussman. On this, we're showing a Hussman pro forma, so the improvements you are seeing thereon reflect both the cost savings at ThermoKing plus the cost savings at Hussman. So it's really the sum of those two pieces; that's what makes the number look significantly higher than if it were just a plain standalone addition. INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE B. Bannister Okay, so you're not taking anything - you're actually taking from the ThermoKing implied and putting it into the pro forma for Hussman to get these - H. Henkel Yes; let me give you an example. We had $5 million in the budget for the next 12 months that had to do with startup costs for an operation in Brazil. We do not have those startup costs because we already have an operation in Brazil, it's called Hussman. So that synergy, for instance, would wind up now within showing of the cost saving on this pro forma, and it benefits IR overall. B. Bannister Okay, I'll give the floor up. Coordinator The next question comes from Cliff Ransom of State Street Research. C. Ransom A couple of quick questions, if I may, and bear with my laryngitis, please. Was this an auction or a negotiated deal? H. Henkel It was a negotiated transaction. C. Ransom Is there a break-up fee involved? H. Henkel There is a contract that includes a break-up fee. C. Ransom Okay. Can you tell us roughly how it's constituted? H. Henkel Yes. It involves an amount, and the amount turns out to be $58 million. C. Ransom All right, that ought to slow somebody down. And the last nitty-gritty question is: In your page 23 assumption on interest expense, what is the implied interest rate? D. Devonshire 7%. We're financing this with all short-term types of paper, including roughly half commercial paper and the other half will be extendible commercial notes. C. Ransom And what would your game plan be to take that out? H. Henkel The game plan really comes from, as we said, the divestiture proceeds from IDP INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE and Dresser Rand. Takes most of it out. And then of course as we earn more and of course the continuous opportunity to manage our portfolio. C. Ransom Sorry, I had one last nitty-gritty question and I've lost it. I'll come back to it if I find it. Thank you very much. H. Henkel Okay. Hope you're feeling better. C. Ransom Thanks. Coordinator The next question comes from Gary McManus. G. McManus Good morning. All Good morning, Gary. G. McManus I'm also looking, I've got some questions related to page 23. What's the implied revenue growth in 2001 versus 2000? For Hussman? D. Devonshire Our forecast for Hussman is in the 6% to 8% range in the first year. G. McManus Okay. So that 14.77 is about 7% growth from 2000. D. Devonshire Close. Yes. G. McManus And the same thing, the net income number, what's the implied operating profit growth out of Hussman in 2001, before the savings? Just as you show here, 50 to 91. What would be the operating profit growth in 2001? H. Henkel I would tell you that, because I'm having a little tough time counting the profits as I run Brazil where it goes; but we're running about 15%. G. McManus Do you expect 15% operating profit growth next year out of Hussman before the cost savings? H. Henkel That's correct. G. McManus Okay. And in the 2000 - you were nice in saying that your assumptions are a little bit above Street consensus for 2000. How would that look in 2001? In other words, at $91 million net income, how does that compare with the INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE Street consensus for Hussman? H. Henkel Well, for 2001, it would be higher because as we indicated, right now the internal estimates at Hussman, of which we've discounted, are higher. But Hussman on a standalone basis would be growing up a higher base, so it would be 15% roughly above what they had built into their estimates. G. McManus Okay, the reason - you're saying two thirds of the - I assume the 2000 numbers are just the second half, right? H. Henkel That's right. G. McManus So the $50 million is roughly pro forma $75 million, if you earn two thirds in the second half. So 75 go into 91 is about 22% growth. Is the math roughly correct? H. Henkel Yes, but remember, I said we're showing to you pro forma and that's why we talked - that's the increase, some of which is a result of savings that are really going to be gained at ThermoKing that we didn't count on in our own math. G. McManus Right. And what's the - the 15% margin goal for Hussman, that's after goodwill amortization, or is that before? D. Devonshire No, that includes it, at the end of year five. G. McManus Okay, and what's the - they're doing somewhere close to 10% now. What is the margin assumption for 2001 out of Hussman? D. Devonshire One point higher. G. McManus One point higher. So you would expect one point per year, roughly? D. Devonshire That's right. That's why I said about linear all the way through. G. McManus Okay, and one last question I have is just, I guess I would like a little bit more color on the synergies with ThermoKing. How much degree of integration between the two companies in terms of, could you intermingle production between the two? Do they - are you going to have similar - the same sales force between the two? I mean, how much autonomy will there be INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE between the two and how much integration or interrelationship between the two? H. Henkel We are at this time envisioning a facility in Brazil that manufactures product for Hussman, will also have a plant within the plant that manufactures requirements for ThermoKing. The same is true in Mexico. We need to put in something for our bus manufacturing side; they can go produce that product. We are not envisioning going beyond that in terms of, quote, combining the organizations. As we go out to Singapore, for instance, it is silly to have two sales offices, real estate-wise. There will be two sales organizations, but they will be cohabitant in one building; so those are the kinds of costs that we're looking at taking out. G. McManus Okay, but not - because about 70% is in North America, there's not going to be a lot of overlap or integration between Hussman and ThermoKing; is that correct? H. Henkel That is correct. G. McManus For manufacturing or sales standpoint? H. Henkel There are components that can be manufactured. If you were to go through the Bridgestone facility, which is over 1.6 million square feet, you would find a state-of-the-art powder paint capability. That powder paint capability has capacity. We can put - and the good news is, they are heavily loaded manufacturing-wise in the second half of the year. I will point out to you we have a facility up in the Dakotas that is very heavily loaded in the front half of the year, and a powder paint capability with the sheet metal work they do can just as well make components that will eventually show up on a piece of compact equipment, as well as showing up on the other part. So we do see manufacturing synergies that make this very attractive for us. G. McManus Okay, great. Congratulations. All Thank you. Coordinator The next question comes from Tobias Levkovich. INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE T. Levkovich Thanks. I'm going to cheat slightly and ask you a third question, and I'm going to ask that one first because it's an easy one. What's the goodwill? H. Henkel Goodwill is roughly $1.4 billion. T. Levkovich Amortized over - H. Henkel Forty years. T. Levkovich Forty years. H. Henkel Right. T. Levkovich Okay. Now the two real specific questions: One is, and maybe I'm just misunderstanding something. When you show us the chart, and I wish I could now tell you which chart it is in terms of the page number - it would be page 6 showing us the display case market of $14 billion, and the leading player has a 10% share, there's got to be a lot of fragmented competition here. H. Henkel Yes, when you - the display case - there are parts, Tobias, that they currently do not participate in. If you look, the display case would include as a for instance where they wind up selling hot pretzels and these other things - T. Levkovich Right. H. Henkel - do not manufacture. So display cases are also where they wind up making, quote, warm products. They are currently only participating in the cold side of it. T. Levkovich Then why would this be in the cold chain, $25 billion cold chain discussion? H. Henkel Because it goes into, quote, a supermarket. T. Levkovich Okay. All right, so what is the market that they're really participating in? Because the $14 billion is kind of somewhat misleading in that respect. H. Henkel Yes, but if you actually put down - if you now knocked it down to where you're talking about the, quote, refrigerated - remember, this is refrigerated display. INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE T. Levkovich Right. H. Henkel If you go back, you do the math thing, in the United States they have roughly 40% - yes, 50% market share. And they wind up doing at this point in time, oh, I could say $700 million. So you're talking about something which is basically a $2 billion type market, is what our estimates are. T. Levkovich Okay. H. Henkel The biggest opportunity for us continues to be, as we then look at what are the other, quote, non-chilled, heated, or not displayed, whatever. T. Levkovich Okay. And maybe then can you define - is there a way to define better what is a cold piece of this $25 billion cold chain is? What you participate with the combination of ThermoKing and Hussman today, and not kind of the heating end? H. Henkel I'll tell you, I don't have that piece in front of me, Tobias, but yes, we've broken that part down overall. If my memory serves me right, and it's getting old, is that we're talking about 25% to 30% of that overall number is in the, quote, refrigerated side. Then you've got another piece which is in the, let me call it the normal temperature side; then you've got the heated piece above and beyond that. T. Levkovich Okay. Second issue is, on the ROIC target of 15% by third year, given that you're going to be doing a fair amount of acquisition here, I can't believe that you're - H. Henkel That was my fifth-year target. T. Levkovich I'm sorry? H. Henkel It was 15% in the fifth year - T. Levkovich In the fifth year, right. And since part of your program for the company, Herb, is to take this company and do more transactions to build it out over the years, are we going to be in position where you're going to constantly be below that 15%, if you're constantly layering in other deals? INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE H. Henkel Well, I think you'd have to agree that this is probably one of the larger ones I would envision, or at least I can tell you that part. If you go back and you look at the other parts that had to do with the bolt-on acquisitions, those are hitting into the, frankly the 20% ROIC, at 12 to 18 months after we make the acquisition. So I think as you look at the bolt-on's, they will wind up going in excess of 15% very, very early on. A large one like this, obviously with the purchase price involved, it's going to take us the full four to five years to get to that kind of level. T. Levkovich Okay, thank you. H. Henkel Sure. Coordinator The next question comes from Michael Holton of T. Rowe Price. M. Holton Good morning. Looking out to 2001, consensus estimates are $4.44. Would you advise analysts and investors just to take the $.15 to $.20 and layer it on top of that type of estimate? H. Henkel That's a very good question. I think I'd like to leave that part until we wind up finishing up, because obviously there are all sorts of assumptions in there about the rest of the, quote, portfolio at this point in time, as to whether this is truly all incremental, or we wind up replacing some of it. M. Holton Okay, so kind of delay that until the year has played out a little bit further? H. Henkel Yes, I think so. M. Holton Okay. And the second part, which is part of the generation of savings, can you size the acquisition-related charge you guys should take at that closing for this, and what portion of that might be cash versus non-cash? D. Devonshire In terms of what we've estimated, the charge will be for the associated manufacturing rationalizations and sizing and so forth, we don't need two public companies kind of thing, is roughly $46 million. So that's the amount of the charge. Now, that cash will go out in 2000 and 2001. And I would say that probably 70/30 in terms of cash versus non-cash. M. Holton Okay. Thanks. INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE H. Henkel You're welcome. Before the next question, I'd like to go back on a - Tobias, if I just give you - you had asked a question about - Joe found this sheet for me. I had said there was somewhere around a third that was in the cold side, and our numbers that I'm looking at here show that the total cold, the refrigerated display case market, the serve market in North America overall is about $2 billion, and Europe is also $2 billion; so collectively 4 out of the 14 is the number correct, where I said about a third. Next question, please? Coordinator The next question comes from Joanna Shatney of Goldman Sachs. J. Shatney Good morning. H. Henkel Good morning, Joanna. J. Shatney Can you talk about the commonality of the technology? Is the compressor that goes into a ThermoKing the same type of compressor that goes into a Hussman product? H. Henkel Both are scroll manufactures, manufactured by our friends in St. Louis with the big "E" in the front. Same plant. J. Shatney Okay. H. Henkel And if you also look at an awful lot of the other coils that are made, they are identical; you don't know whether if you almost look at a lot of the units, I can tell you, if you put tires on one you'd call it ThermoKing; if you took it off, you'd call it Hussman. J. Shatney Okay. What type of regulatory approvals do we have to look for before this can close? H. Henkel Well, we have - we will be doing the Hart Scott filing. That's because of the size of the transaction. J. Shatney But other than that there's nothing, right? H. Henkel We also have to do the same in Europe. Because we're both present there as organizations. We don't see that as being - INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE J. Shatney Okay. And the last question, can you talk about what types of pricing you get in both the new equipment, and then also can you talk a little bit more about the service piece, how fast does it grow? Can you increase that as a percent of sales? H. Henkel Well, let me see if I can give you some overall answers. So far, on the, quote, profitability, what we've found is that when you look at the whole goods sale and the margins of those, and then you look at the service business thereafter, there really is not that much of a difference between the two. So that's an ongoing. And I also will tell you, just to get a feel for it, if you're testing the - this is the first day we're talking about it publicly - but what I know of it so far overall, the market has a cycle of about seven years. So that if you were to look at your typical display case every seven years, it would be replaced in a supermarket. So that gives you seven years of cycle, and then a recycle starting all over again with a total replacement. J. Shatney These things come with warranties? H. Henkel Yes, the kind of warranties, though, I'd say it's the same kind of thing you would have on your air conditioning unit. I mean, if you were to look at what's going to fail, it would be the mechanical part of, you know, the cold air piece being generated. It's not anything different than what we're experiencing right now when we do ThermoKing. And candidly, the environment of stationary is a heck of a lot less challenging than it is bumping up and down the roads or the highways. J. Shatney Okay. Great. Thanks. H. Henkel Sure. Coordinator The next question comes from Kent Mortenson of Robert Baird. K. Mortenson I just have a question about the extent of this strategy going forward and what it could encompass. If we look at where compressors are and we look at the cold chain, are we potentially going into the types of units that would be in a quick-serve restaurant, the types of units that would make ice, as an example? You could literally go into HVAC markets with this strategy. INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE How - what are the limits of this strategy, or aren't there any limits at this point? H. Henkel We're obviously going to spend the next few months really looking at what we know so far about the synergies available, and then what we're going to see as the next most attractive parts of the cold chain. I would tell you that if I were to prioritize for you where I am today, the priority would be to look at, for instance, our position in Europe is obviously nowhere near as strong as it is in the US, so there's also the geographic element to go after. Both ThermoKing and Hussman are initiating activities and have facilities in China, specifically, and I think now with the kind of critical mass we have there, we probably have more opportunities to pursue it. So my focus right now is not that much new additional hardware as it is frankly geographic penetration and extending the service networks that we have in both stationary and in the transport type. K. Mortenson Okay. And what, in terms of management, what's the plan in terms of bringing management along from Hussman? H. Henkel I think that the management team in place is something that I think was very professional, and somewhat frustrating to me in some ways; but what they did is all the way through, we did not finish this transaction until last night. And until that point in time both of us were on our respective sides of the table, representing our shareholders. And it really starts next week where we get a chance to meet with all the individual managers who have now had a chance to think about where this goes, and talk to them about where they would like to go going forward. So I do not have any confirmed, one way or the other, for any of the management team that is there. K. Mortenson Great. Fair enough. Thank you. Coordinator The next question comes from Peter Boysen of Mitchell Hutchins. P. Boysen Yes, hi. I'm going to do a little different; go back to slide 23 on your pro forma impact. I'm sorry, chart 25, I think we have. The bolt-on acquisitions. The different things that were going to get you to $4. H. Henkel Right. INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE P. Boysen Are there any items that were there which you mentioned on the quarterly conference call that somehow are double-counting here now that you're going to spend a load of cash - which I realize is perhaps incremental - in Hussman? H. Henkel No. That's why what you have is one additional - if you look at the chart, it is exactly the same chart you saw in the first quarter. The only thing different is there is a new line called Hussman acquisition; and that has included in it all the incremental financing required to do it from the get-go. P. Boysen And so your share buyback will be done by debt or cash, or - that's not a problem with financing, then? H. Henkel I'm sorry? P. Boysen There's a share buyback; that will continue? H. Henkel Yes. P. Boysen And why do - just checking - why did you choose 40 years amortization? Aren't a lot of people going to 20 and 30? Sounds like you sort of penciled in accretion because of that. H. Henkel We just simply felt that the business is long-lived; the Hussman enterprise is over 100 years old. The combination with ThermoKing, I just feel enhances the life. The estimated useful life is the criterion that one uses when establishing the life of the asset. P. Boysen Right. And gross cash proceeds in the two joint ventures will be what, before you have to pay taxes, which may not be for a while? H. Henkel Well, the net after-tax proceeds, after paying off the debt that we incurred, once again we set it in the five to $600 million range. P. Boysen That's after setting aside cash for tax liabilities, right? H. Henkel After tax and after paying off the debt. INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE P. Boysen What's it before tax but after paying off the special debt? H. Henkel I don't recall that off the top of my head, but it's - as we've always said, the real bottom line number is net cash. P. Boysen You have use of larger cash for some couple of quarters before that, you have to pay the debt .... Oh, okay. H. Henkel Yes; this is after paying off the debt. P. Boysen Okay, well, fair enough. Thanks. Sounds like a good approach, and a good set of slides explaining your strategy. H. Henkel Thanks, Peter. Coordinator The next question comes from Steve Volkmann of Morgan Stanley. S. Volkmann Good morning. All Good morning. S. Volkmann Most of my questions have been answered, but one real quick nit-picking one: When you say return on invested capital of 15%, does that mean I should just take the $1.8 billion and take 15% of that, which is your net income assumption, I guess, in five years? H. Henkel Yes. D. Devonshire Right. S. Volkmann Okay, good. And then sort of following up on Joanna a little bit: Can these service infrastructures sort of overlap? I mean, can a ThermoKing guy work on something in a supermarket if he had to, and is there an opportunity to sort of grab a bigger share of the service revenues from both of these businesses? H. Henkel The service - as I said, the scroll compressor does not know whether it's got wheels underneath it or not. So the technical capabilities are the same, required to do one service as it does obviously the other. And the truck does stop when they do the service, so it's in a given locale. So we are INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE very seriously going to be looking at is there the opportunity to go leverage one service organization to do both applications. S. Volkmann Do you have a sense of sort of how much of what Hussman sells that actually gets to service at some point? And the same question for ThermoKing. H. Henkel It is our guess right now that we have less than 15% of the product actually "being worked on by us." The rest goes somewhere else. And we hope if we're able to put the two together, we're able to go after that remaining part that's right now going to someone else's locations. S. Volkmann And that's higher margin business? H. Henkel Well I'll tell you, what we found so far is that there's a higher margin, especially as it relates to the transport side because of the parts that you replace and how you do that. It does not appear to be the case in the numbers we've seen so far as it relates to the stationary side. I can't tell you why yet and I wonder if you put the two together, with the same overhead costs, can you go and drive both of them to be more profitable. That's the piece that we need to still, frankly, finish up. Coordinator The next question comes from Scott Alberi of Eminence Capital. S. Alberi I was just curious, with the fact that this was not sort of a shop deal, the low break up fee and sort of the strategic benefits Hussman might provide to other people, are you concerned at all that someone else might step in here? H. Henkel Well, it isn't over till it's over. I'm always concerned at someone else, when they see something like this that's now public, will wind up assessing whether or not they would deem it to be more valuable to them. We just have to see what happens over the next couple of weeks. Coordinator The next question comes from Michael Weiss of Mentor Partners. M. Weiss One thing, is there a financing contingency in this tender offer? H. Henkel No. M. Weiss I assume due diligence is finished? H. Henkel That's correct. We have signed a definitive agreement last night. INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE M. Weiss Have you been talking a long time or is this fairly recent? H. Henkel I guess I would say it this way, the conversations with Hussman really started off end of last year when I was looking at how we could potentially, collectively, between ThermoKing and Hussman, approach the e-commerce capability. We saw them as being the stationary side, we had the transport side, and we thought that both of us collectively maybe would do better. And then that evolved as we got to obviously know more and more about the organization, that sometime this spring we then started talking about the eventual outcome being the announcement today. M. Weiss I realize you don't compete directly. I assume you don't see any Hart-Scott issues for European? H. Henkel I would really be disappointed, and frankly amazed, since we do not participate in the same product whatsoever. Coordinator The next question comes from Robert McCarthy of ABN Amro. D. Streit It's Dave Streit. Can we just go back for a moment to the return on invested capital calculation? I just want to make sure I'm understanding that. The goal in five years of 15% ROIC on a $1.8 billion or so investment base... H. Henkel That investment base over time is amortized down, of course. As you know, the goodwill gets written off over four years. The combination of goodwill and the step up associated with this transaction is roughly $40 million a year. So again, in five years the asset of $1.8 billion will be less than that. Now that will be replaced by annual cap ex, but the other beauty about this business, it's very similar to ThermoKing is that the total annual cap ex to sales is somewhere around 2%. It's not a capital intensive kind of business. And quite frankly, we think there are great opportunities in terms of where they stand relative to capacity so that we can sustain that over time. Plus, working capital is another big synergy for us in this transaction as we see it. We operate, of course, at less then 10%, at 9%, where we ended last year. They are at 21% right now. And so in our assumptions we have built some reductions comparable to the ones that we've enjoyed. But roughly one percent a year, we think we could probably do perhaps even better INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE than that. D. Streit That helps on the investment side. Taking 15% of some number, probably a little below $1.8 billion gets you a return in five years of call it $250-$275 million. If I look on Hussman's income statement for 1999, the most recent full year they had income of about $60 million and maybe you add back $20-$25 million for interest expense after taxes. So going from somewhere around, call it $80 million to $250-$275, can you just take me through how you get from here to there? H. Henkel I think the asset base will probably be lower. What you also have at the end of year three or at the end of the year five you probably have roughly $130-$140 million of synergies. Once again, though, when we talk about the 15% ROIC, we're talking about the combined incremental impact of the corporation. So it's not just Hussman in terms of where the synergies will be realized, because of the common raw materials, the manufacturing rationalization, etc., will occur between ThermoKing and Hussman. So we're looking at the total incremental 15% return on total capital at the end of the fifth year. D. Streit So between synergies and just income growth in the core business... H. Henkel And a decline in working capital and an amortization of goodwill and the assets that are being stepped up associated with the acquisition of Hussman. D. Streit Would you care to take a stab on how much working capital you think you can take out? H. Henkel Well, if you look at Hussman's sales, as I said, right now they're running at about 21. What we've computed is roughly one percent a year and that's pretty conservative. So that would take us down to 16% at the end of the year five. But we've been able to do a lot better then that ourselves. So we think that with the technology that we have, in terms of taking our working capital from 23% to 9%, we have a good opportunity of beating that at the end of the fifth year. Coordinator The next question is from Oscar Wu of Nomura Securities. O. Wu Could you repeat the estimates for Hussman, the ones that you're using as well as their own internals? INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE H. Henkel For what period of time? O. Wu I think it was 2000-2001 that you gave earlier? H. Henkel In terms of earnings per share? O. Wu Yes. H. Henkel For the second half of the year 2000, based on Hussman's estimates of $.98 is $0.04 above the current Street consensus. Our forecast is about $.13 below the Hussman internal management forecast of $1.11. O. Wu So they're using $1.11 and you're using $.98? H. Henkel Correct. O. Wu And the Street is $.94. H. Henkel That's right. O. Wu Did you also mention a number for 2001? H. Henkel No, I did not. O. Wu Secondly, I just wanted to understand in terms of the financing that you're putting on, is that all under existing facilities or do you need to go out and secure additional facilities? H. Henkel What we're doing, we have roughly $800 million coming off of our CP line. We have a total line of about $2 billion. So we're leaving some cushion in that line and using $800 million off the CP line. And we're issuing extendable commercial notes, which really at the end of the day, including the back up facility that we have for our commercial paper, the rates are not significantly different. So the combination of the two will be less than 7%. It doesn't involve any road show, etc. Extendable commercial notes are much like commercial paper. O. Wu And how much additional capacity will you have on your CP facility? INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE H. Henkel Well, we'll have roughly $400 million, $200-$400 million, but closer to $400 million. O. Wu Lastly, can you tell me what are the required regulatory approvals that you need to complete the transaction? H. Henkel As we said, we filed our Hart-Scott here in the US and we filed a comparable in Europe. But since we're not really in this business, per se, of stationary refrigeration, we don't expect to have any problems getting clearance. J. Fimbianti We have time for two more questions. Coordinator The next question is from Thomas VanBuskirk of Silverado Capital. T. VanBuskirk One more quick question on the regulatory approvals. Particularly in Europe, when do you anticipate making the filings? Are you confident that you can get through the EU process and be able to close the tender offer without having to extend and be able to get this thing wrapped up sometime in late June? H. Henkel The filing is imminent and a 30-day horizon seems to be conservative and realistic at this time, so that would coincide with what we would have on the offer. T. VanBuskirk And your Hart-Scott filing is imminent as well? H. Henkel Sooner than that. Coordinator The last question is from Cliff Ransom. C. Ransom Page 16, sales by product in 1999, that's just Hussman, right? H. Henkel Right. C. Ransom Can you drill down a little bit in this? What's the difference between service and distributor? And can you talk about how much of that is installation versus after market service and if there's a material difference in the two lines? H. Henkel What you have is the phenomena of when someone orders a unit, that's whether they ordered it installed or whether it's going to be third party installed or INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE they're going to do it themselves, so that's when you start looking at this service/distributor type. And the difference really between the two is whether you contract it out or you do it yourself. And they really do both of those. I do not have a breakdown to tell you how much is "third party" versus how much is their own organization that does that kind of work. I'm sorry, I don't have that kind of detail yet. C. Ransom I'm trying to figure out how much of it is installation of that 24% and how much of it is after market work? H. Henkel I'm sorry, I misunderstood the part. I do not know at this time. That to me is just one category. I can give you what the operating lines are today, but I cannot tell you how much of it is third party versus how much was initial installation versus how much is a residual repair work. C. Ransom The last question is, you said the margins are very similar between whole goods and services. H. Henkel And installation. See, that's the thing, that's all lumped together. That's why. C. Ransom But, there ought to be very significant differences in asset allocations on those and, therefore, the returns on capital would be very different between manufacturing and service. Right? H. Henkel Totally agree. The ROIC on that service work is very, very high. Totally right. But what I'm saying, if you look through it, what we need to pull out, yet we just haven't had access to it yet, is how much is installation driven versus how much is service driven. But you're right, the ROIC obviously on this one is very high. C. Ransom When you can give us that number, it's important because that represents obviously an annuity stream and that has a higher PE valuation then installation. So I'd love to see that number when you get it. H. Henkel I have it on my to-do list. Thank you. J. Fimbianti Okay, everyone, thank you very much for joining us. There will be an Instant Replay available probably about 2:00 this afternoon. It will be available until May 19th at 5:00 p.m. The call in number for that is 402-998-0748. Those of you who have First Call, you'll also find it on the bottom of the INGERSOLL RAND MODERATOR: JOSEPH FIMBIANTI MAY 12, 2000; 11:00 A.M. EDT PAGE First Call note. The Web audio replay and the written transcript of the conference call will be available on the Ingersoll-Rand Web site early next week. Please call me if you have any additional questions. I'm at 201-573-3113. So thank you very much and we're signing off. EX-99.(A)(11) 9 EXHIBIT 99(A)(11) Exhibit 99(a)(11) THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER TO SELL SHARES OF COMMON STOCK. THE OFFER IS MADE SOLELY BY THE OFFER TO PURCHASE DATED MAY 16, 2000 AND THE RELATED LETTER OF TRANSMITTAL AND ANY AMENDMENTS OR SUPPLEMENTS THERETO AND IS BEING MADE TO ALL HOLDERS OF SHARES OF COMMON STOCK. THE PURCHASER IS NOT AWARE OF ANY STATE OR JURISDICTION WHERE THE MAKING OF THE OFFER OR THE ACCEPTANCE OF SHARES OF COMMON STOCK IS PROHIBITED BY ANY APPLICABLE LAW. IF THE PURCHASER BECOMES AWARE OF ANY STATE OR JURISDICTION WHERE THE MAKING OF THE OFFER OR THE ACCEPTANCE OF SHARES OF COMMON STOCK IS NOT IN COMPLIANCE WITH ANY APPLICABLE LAW, THE PURCHASER WILL MAKE A GOOD FAITH EFFORT TO COMPLY WITH SUCH LAW. IF, AFTER SUCH GOOD FAITH EFFORT, THE PURCHASER CANNOT COMPLY WITH SUCH LAW, THE OFFER WILL NOT BE MADE TO (NOR WILL TENDERS BE ACCEPTED FROM OR ON BEHALF OF) THE HOLDERS OF SHARES OF COMMON STOCK IN SUCH STATE OR JURISDICTION. IN ANY STATE OR JURISDICTION WHERE THE SECURITIES, BLUE SKY OR OTHER LAWS REQUIRE THE OFFER TO BE MADE BY A LICENSED BROKER OR DEALER, THE OFFER SHALL BE DEEMED TO BE MADE ON BEHALF OF THE PURCHASER BY GOLDMAN, SACHS & CO. OR ONE OR MORE REGISTERED BROKERS OR DEALERS LICENSED UNDER THE LAWS OF SUCH STATE OR JURISDICTION. NOTICE OF OFFER TO PURCHASE FOR CASH ALL OF THE OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) OF HUSSMANN INTERNATIONAL, INC. AT $29.00 NET PER SHARE BY IR MERGER CORPORATION A WHOLLY-OWNED SUBSIDIARY OF INGERSOLL-RAND COMPANY IR Merger Corporation, a Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of Ingersoll-Rand Company, a New Jersey corporation ("Parent"), is offering to purchase all of the issued and outstanding shares of common stock (the "Common Stock"), par value $0.001 per share, of Hussmann International, Inc., a Delaware corporation (the "Company"), including the associated preferred stock purchase rights (the "Rights" and together with the Common Stock, the "Shares"), at a price of $29.00 per Share, net to the seller in cash, without interest thereon (the "Offer Price"), upon the terms and subject to the conditions set forth in the Offer to Purchase dated May 16, 2000 (the "Offer to Purchase") and in the related Letter of Transmittal (which, as they may be amended and supplemented from time to time, together constitute the "Offer"). THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JUNE 13, 2000, UNLESS THE OFFER IS EXTENDED. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PURSUANT TO THE OFFER PRIOR TO THE EXPIRATION OF THE OFFER SUCH NUMBER OF SHARES WHICH WOULD CONSTITUTE AT LEAST A MAJORITY OF THE OUTSTANDING SHARES ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE (THE "MINIMUM CONDITION") AND (II) THE EXPIRATION OR TERMINATION OF ANY APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT- RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND UNDER ANY FOREIGN STATUTES OR REGULATIONS. THE OFFER IS ALSO CONDITIONED UPON THE SATISFACTION OF CERTAIN OTHER TERMS AND CONDITIONS DESCRIBED IN SECTION 14 OF THE OFFER TO PURCHASE. The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of May 11, 2000 (the "Merger Agreement"), by and among Parent, the Purchaser and the Company. The Merger Agreement provides for, among other things, the making of the Offer by the Purchaser and that, subject to the terms and conditions set forth in the Merger Agreement, and in accordance with the General Corporation Law of the State of Delaware (the "DGCL"), the Purchaser will be merged with and into the Company (the "Merger") at the effective time of the Merger (the "Effective Time"), with the Company continuing as the surviving corporation. At the Effective Time, except for (i) Shares which are held by the Company or by Parent or any other subsidiary of Parent (other than Shares in accounts beneficially owned by third parties), all of which will automatically be canceled and will cease to exist, without any cash or other consideration being delivered or deliverable in exchange therefor, and (ii) Shares, if any, held by holders (the "Holders") who have not voted such Shares in favor of the Merger and have perfected their appraisal rights under the DGCL, each Share issued and outstanding will, by virtue of the Merger and without any action by the Holders thereof, be converted into the right to receive an amount in cash equal to $29.00, without interest. The Merger Agreement is more fully described in Section 11 of the Offer to Purchase. Under Delaware law, if the Purchaser acquires, pursuant to the Offer or otherwise, at least 90% of the issued and outstanding Shares, the Purchaser will be able to approve and effect the Merger without a vote of the Company's stockholders. If, however, the Purchaser does not acquire at least 90% of the issued and outstanding Shares, pursuant to the Offer or otherwise, a vote of the Company's stockholders to effect the Merger is required under Delaware law and a longer period of time will be required to effect the Merger as described in Section 11 of the Offer to Purchase. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY (i) DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE HOLDERS, (ii) APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER AND (iii) DECLARED THE ADVISABILITY OF THE MERGER AGREEMENT AND RECOMMENDED THAT THE HOLDERS ACCEPT THE OFFER, TENDER THEIR SHARES PURSUANT TO THE OFFER AND (IF REQUIRED BY APPLICABLE LAW) ADOPT THE MERGER AGREEMENT. Tendering Holders whose Shares are registered in their own name and who tender directly to The Bank of New York, as depositary (the "Depositary"), will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of Shares pursuant to the Offer. The Purchaser will pay all charges and expenses of Goldman, Sachs & Co., as Dealer Managers, the Depositary and Georgeson Shareholder Communications, Inc., as Information Agent, in each case incurred in connection with the Offer. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment (and thereby purchased) Shares validly tendered and not properly withdrawn if, as and when the Purchaser gives oral or written notice to the Depositary of the Purchaser's acceptance for payment of such Shares. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for tendering Holders for the purpose of receiving payments from the Purchaser and transmitting payments to Holders whose Shares have been accepted for payment. In all cases, payment for Shares purchased pursuant to the Offer will be made only after timely receipt by the Depositary of (i) the certificates evidencing such Shares and Rights, if applicable, or timely confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility (as defined in Section 2 of the Offer to Purchase), or, in the case of Shares held as direct registration shares, completion of the appropriate portion of the Letter of Transmittal, pursuant to the procedures set forth in Section 3 of the Offer to Purchase, (ii) the Letter of Transmittal (or a copy thereof), properly completed and duly executed together with any required signature guarantees (or, in the case of a book entry, an Agent's Message (as defined in Section 2 of the Offer to Purchase)) and (iii) any other documents required by the Letter of Transmittal. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID BY THE PURCHASER, REGARDLESS OF ANY DELAY IN MAKING SUCH PAYMENT OR EXTENSION OF THE EXPIRATION DATE (AS DEFINED BELOW). The term "Expiration Date" shall mean 12:00 midnight, New York City time, on Tuesday, June 13, 2000, unless and until the Purchaser (subject to the terms of the Merger Agreement), shall have extended the period of time during which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date at which the Offer, as so extended by the Purchaser, shall expire. Subject to the provisions of the Merger Agreement, the applicable rules and regulations of the Securities and Exchange Commission (the "Commission") and applicable law, the Purchaser expressly reserves the right, at any time or from time to time, to extend the period of time during which the Offer is open, including upon the occurrence of any of the events specified in Section 14 of the Offer to Purchase, by giving notice of such extension to the Depositary and by making a public announcement thereof not later than 9:00 a.m., New York City time, on the next business day after the day on which the Offer was scheduled to expire. Subject to applicable law (including, but not limited to, Rule 14d-4(d) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which requires that material changes be promptly disseminated to Holders in a manner reasonably designed to inform them of such changes) and without limiting the manner in which the Purchaser may choose to make any public announcement, the Purchaser will have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a press release to the Dow Jones News Service or as otherwise may be required by applicable law. During any such extension, all Shares previously tendered and not properly withdrawn will remain subject to the Offer, subject to the right of a tendering Holder to withdraw its Shares. Subject to the provisions of the Merger Agreement, the applicable rules and regulations of the Commission and applicable law, the Purchaser also expressly reserves the right, in its sole discretion, at any time and from time to time, (i) to delay acceptance for payment of, or, regardless of whether such Shares were theretofore accepted for payment, payment for, any Shares in order to comply in whole or in part with applicable law, (ii) to terminate the Offer on any scheduled expiration date and not accept for payment any Shares if any of the conditions referred to in Section 14 of the Offer to Purchase are not satisfied or any of the events specified in Section 14 of the Offer to Purchase have occurred and (iii) to waive any condition or otherwise amend the Offer in any respect by giving oral or written notice of such delay, termination, waiver or amendment to the Depositary and by making a public announcement thereof, provided, however, that, without the prior written consent of the Company, the Purchaser will not, among other things, waive the condition that at least a majority of the Shares outstanding have been tendered and not withdrawn, waive the condition relating to the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, reduce the maximum number of Shares to be purchased pursuant to the Offer, reduce the Offer Price, impose additional conditions or terms to the Offer, change the form of consideration payable in the Offer or make any other change to the terms of the Offer which is adverse in any manner to the Holders. The Purchaser is required under the Merger Agreement to extend the Offer from time to time (but in no event later than October 31, 2000) if and to the extent any of the conditions to the Offer have not been satisfied on the Expiration Date. Tenders of Shares made pursuant to the Offer are irrevocable except that such Shares may be withdrawn at any time prior to the Expiration Date and, unless theretofore accepted for payment by the Purchaser pursuant to the Offer, may also be withdrawn at any time after July 14, 2000. For a withdrawal to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses or the facsimile number 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 of the Shares, if different from that of the person who tendered such Shares. If certificates evidencing Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such certificates, the serial numbers shown on such certificates must be submitted to the Depositary and the signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution (as defined in Section 3 of the Offer to Purchase), unless such Shares have been tendered for the account of an Eligible Institution. Shares tendered pursuant to the procedure for book-entry transfer set forth in Section 3 of the Offer to Purchase may be withdrawn only by means of the withdrawal procedures made available by the Book-Entry Transfer Facility, must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares and must otherwise comply with the Book-Entry Transfer Facility's procedures. If direct registration shares are being withdrawn, the notice of withdrawal must make specific reference to the withdrawal of such direct registration shares. Withdrawals of tendered Shares may not be rescinded without the Purchaser's consent, and any Shares properly withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Purchaser, in its sole discretion, which determination will be final and binding. None of Parent, the Purchaser, the Company, the Depositary, the Information Agent, the Dealer Managers or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. Any Shares properly withdrawn may be re-tendered at any time prior to the Expiration Date by following any of the procedures described in Section 3 of the Offer to Purchase. The information required to be disclosed by paragraph (d)(1) of Rule 14d-6 under the Exchange Act is contained in the Offer to Purchase and is incorporated herein by reference. The Company has provided the Purchaser with the Company's stockholder lists and security position listings in respect of the Shares for the purpose of disseminating the Offer to Purchase, the Letter of Transmittal and other materials relevant to Holders. The Offer to Purchase, the Letter of Transmittal and any other relevant materials will be mailed to holders of record of Shares whose names appear on the Company's list of holders of the Shares and will be furnished, for subsequent transmittal to beneficial owners of Shares, to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the Company's list of holders of the Shares or, where applicable, who are listed as participants in the security position listing of the Depository Trust Company. THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. Additional copies of the Offer to Purchase, the related Letter of Transmittal and other related tender offer materials may be obtained from the Information Agent or from brokers, dealers, commercial banks or trust companies. Questions and requests for assistance may be directed to the Information Agent or the Dealer Managers at their respective addresses and telephone numbers as set forth below. THE INFORMATION AGENT FOR THE OFFER IS: GEORGESON SHAREHOLDER COMMUNICATIONS INC. NEW YORK OFFICE LONDON OFFICE 17 State Street, 10th Floor Crosby Court New York, NY 10004 38 Bishopgate London EC2N 4AF, England Shareholders in the U.S. and Canada Please Call: (800) 223-2064 Banks and Brokerage Firms Call Collect: (212) 440-9800 Shareholders outside the U.S. and Canada Please Call Collect: 011-44-207-335-7296 THE DEALER MANAGERS FOR THE OFFER ARE: GOLDMAN, SACHS & CO. 85 Broad Street New York, New York 10004 (212) 902-1000 (call collect) (800) 323-5678 (call toll free) May 16, 2000 EX-99.(D)(1) 10 EXHIBIT 99(D)(1) - -------------------------------------------------------------------------------- AGREEMENT AND PLAN OF MERGER among INGERSOLL-RAND COMPANY, IR MERGER CORPORATION and HUSSMANN INTERNATIONAL, INC. Dated as of May 11, 2000 - -------------------------------------------------------------------------------- TABLE OF CONTENTS
Page ---- ARTICLE I THE OFFER............................................................... 2 Section 1.1 THE OFFER.................................................. 2 Section 1.2 OFFER DOCUMENTS............................................ 3 Section 1.3 COMPANY ACTION............................................. 3 Section 1.4 DIRECTORS.................................................. 5 ARTICLE II THE MERGER.............................................................. 6 Section 2.1 THE MERGER................................................. 6 Section 2.2 CLOSING.................................................... 7 Section 2.3 EFFECTIVE TIME............................................. 7 Section 2.4 EFFECTS OF THE MERGER...................................... 7 Section 2.5 CERTIFICATE OF INCORPORATION; BY-LAWS...................... 7 Section 2.6 DIRECTORS; OFFICERS........................................ 7 ARTICLE III EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES.................................. 8 Section 3.1 EFFECT ON CAPITAL STOCK.................................... 8 Section 3.2 OPTIONS: STOCK PLANS....................................... 9 Section 3.3 PAYMENT FOR SHARES.........................................10 ARTICLE IV REPRESENTATIONS AND WARRANTIES..........................................12 Section 4.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY..............12 Section 4.2 REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.....27 ARTICLE V CONDUCT OF BUSINESS OF THE COMPANY......................................30 Section 5.1 CONDUCT OF BUSINESS OF THE COMPANY.........................30 ARTICLE VI ADDITIONAL COVENANTS....................................................33 Section 6.1 THE COMPANY STOCKHOLDERS MEETING; PREPARATION OF THE PROXY STATEMENT; SHORT-FORM MERGER.........................33 Section 6.2 ACCESS TO INFORMATION; NOTIFICATION OF CERTAIN MATTERS.....34 Section 6.3 REASONABLE BEST EFFORTS....................................34 Section 6.4 PUBLIC ANNOUNCEMENTS.......................................34 Section 6.5 NO SOLICITATION............................................35 Section 6.6 CONSENTS; APPROVALS AND FILINGS............................36 Section 6.7 EMPLOYEE BENEFIT PLANS.....................................36 Section 6.8 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE........38 Section 6.9 CERTAIN TAX MATTERS........................................39 ARTICLE VII CONDITIONS PRECEDENT....................................................40
Page ---- Section 7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.....................................................40 ARTICLE VIII TERMINATION.............................................................40 Section 8.1 TERMINATION................................................40 Section 8.2 EFFECT OF TERMINATION......................................43 ARTICLE IX GENERAL PROVISIONS......................................................43 Section 9.1 FEES AND EXPENSES..........................................43 Section 9.2 CERTAIN DEFINITIONS........................................44 Section 9.3 AMENDMENT AND MODIFICATION.................................44 Section 9.4 EXTENSION; WAIVER..........................................44 Section 9.5 NOTICES....................................................45 Section 9.6 INTERPRETATION.............................................45 Section 9.7 ENTIRE AGREEMENT: NO THIRD-PARTY BENEFICIARIES.............46 Section 9.8 GOVERNING LAW..............................................46 Section 9.9 ASSIGNMENT.................................................46 Section 9.10 ENFORCEMENT................................................46 Section 9.11 SEVERABILITY...............................................47 Section 9.12 COUNTERPARTS...............................................47
-ii- AGREEMENT AND PLAN OF MERGER AGREEMENT AND PLAN OF MERGER, dated as of May 11, 2000 (this "Agreement"), by and among INGERSOLL-RAND COMPANY, a New Jersey corporation ("Parent"), IR MERGER CORPORATION, a Delaware corporation and wholly owned subsidiary of Parent ("Purchaser"), and HUSSMANN INTERNATIONAL, INC., a Delaware corporation (the "Company"). WHEREAS, the respective Boards of Directors of Parent, Purchaser and the Company have determined that it would be advisable and in the best interests of their respective stockholders for Parent to acquire the Company upon the terms and subject to the conditions set forth in this Agreement; WHEREAS, to effectuate the acquisition, it is proposed that Purchaser commence a cash tender offer to purchase all of the issued and outstanding shares of common stock, par value $.001 per share (the "Common Stock"), of the Company, including the associated Preferred Stock Purchase Rights (the "Rights" and, together with the Common Stock, the "Shares") issued pursuant to the Amended and Restated Rights Agreement, dated as of July 15, 1999, between the Company and First Chicago Trust Company of New York (the "Rights Agreement"), on the terms and subject to the conditions set forth in this Agreement and the Offer Documents (as defined in Section 1.2 hereof); WHEREAS, to effectuate the acquisition, it is further proposed that following consummation of the Offer (as defined in Section 1.1 hereof), Purchaser will be merged with and into the Company, with the Company continuing as the surviving corporation in such merger (the "Merger"); WHEREAS, the Board of Directors of the Company has, by the unanimous vote of all directors present (i) determined that the Offer and the Merger are fair to and in the best interests of the Company and its stockholders; (ii) approved this Agreement and the transactions contemplated hereby, including the Offer and the Merger, in accordance with the General Corporation Law of the State of Delaware (the "DGCL"), and (iii) declared the advisability of this Agreement and resolved to recommend that the holders of the Shares accept the Offer and adopt this Agreement; and NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and other terms contained in this Agreement, the parties hereto, intending to be legally bound hereby, agree as follows: 5 ARTICLE I THE OFFER Section 1.1 THE OFFER. (a) Provided that this Agreement has not been terminated pursuant to Article VIII hereof and that none of the events set forth in Exhibit A hereto (the "Offer Conditions") shall have occurred and be continuing, as soon as is reasonably practicable (but no later than the fifth business day after the public announcement by Parent and the Company of the execution and delivery of this Agreement (counting the business day on which such announcement is made)), Purchaser shall commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), an offer (the "Offer") to purchase all outstanding Shares, including the associated Rights, at a price of $29.00 per share, net to the seller in cash (as paid pursuant to the Offer, the "Offer Consideration"). The obligation of Parent and Purchaser to commence the Offer, to consummate the Offer and to accept for payment and pay for Shares validly tendered in the Offer and not withdrawn shall be subject to the conditions set forth in Exhibit A hereto. Purchaser expressly reserves the right, in its sole discretion, to waive any such condition (other than the Minimum Condition as defined in the Offer Conditions) and make any other changes in the terms and conditions of the Offer, PROVIDED that, unless previously approved by the Company in writing, no change may be made which changes the Minimum Condition or decreases the Offer Consideration, changes the form of consideration payable in the Offer (other than by adding consideration), reduces the maximum number of Shares to be purchased in the Offer, or amends the terms or the conditions of the Offer in a manner which is adverse to the holders of the Shares, or which imposes conditions or terms to the Offer in addition to those set forth herein. (b) On the terms and subject to the prior satisfaction or waiver of the conditions of the Offer, Parent shall provide funds to Purchaser and Purchaser shall accept for payment and pay for any and all Shares validly tendered and not withdrawn pursuant to the Offer as soon as practicable after the expiration date thereof. (c) Without the prior written consent of the Company, Purchaser shall not (i) extend the expiration date of the Offer beyond the initial expiration date of the Offer (which shall be the 20th business day after commencement of the Offer), except (A) as required by applicable law, (B) that if, immediately prior 6 to the expiration date of the Offer (as it may be extended), the Shares tendered and not withdrawn pursuant to the Offer constitute less than 90% of the outstanding Shares, Purchaser may, in its sole discretion, extend the Offer for one or more periods not to exceed an aggregate of ten business days, notwithstanding that all conditions to the Offer are satisfied as of such expiration date of the Offer; PROVIDED that, after the initial such extension the Offer shall not be subject to any conditions that are at the time of such extension satisfied other than the Minimum Condition and the conditions set forth in paragraph (a) or (f)(ii) of Exhibit A, or (C) that if any condition to the Offer has not been satisfied or waived, Purchaser shall extend the expiration date of the Offer for one or more periods but in no event later than October 31, 2000; or (ii) waive the condition relating to the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act"); PROVIDED that the Offer may be extended in connection with an increase in the consideration to be paid pursuant to the Offer so as to comply with applicable rules and regulations of the United States Securities and Exchange Commission (the "SEC"). Section 1.2 OFFER DOCUMENTS. (a) As soon as practicable on the date of commencement of the Offer, Parent and Purchaser shall file or cause to be filed with the SEC a Tender Offer Statement on Schedule TO (the "Schedule TO") with respect to the Offer which shall contain the offer to purchase and related letter of transmittal and other ancillary documents and instruments pursuant to which the Offer will be made (collectively, and with any supplements or amendments thereto, the "Offer Documents"). The Company will promptly supply to Parent and Purchaser in writing, for inclusion in the Offer Documents, all information concerning the Company required under the Exchange Act and the rules and regulations thereunder to be included in the Offer Documents. (b) The Offer Documents will comply in all material respects with the provisions of applicable federal securities laws and, on the date filed with the SEC and on the date first published, sent or given to the Company's stockholders, shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that no representation is made by Parent or Purchaser with respect to information supplied by the Company in writing for 7 inclusion in the Offer Documents. Each of Parent and Purchaser further agrees to take all steps necessary to cause the Offer Documents to be filed with the SEC and to be disseminated to holders of Shares, in each case as and to the extent required by applicable federal securities laws. Each of Parent, Purchaser and the Company shall promptly correct any information provided by them for use in the Offer Documents if and to the extent that such information shall be or have become false or misleading in any material respect, and Parent and Purchaser shall take all lawful action necessary to cause the Offer Documents as so corrected to be filed promptly with the SEC and to be disseminated to holders of Shares as and to the extent required by applicable law. The Company and its counsel shall be given a reasonable opportunity to review and comment on the Offer Documents and any amendments thereto prior to the filing thereof with the SEC. Parent and Purchaser agree to provide the Company and its counsel any comments Parent, Purchaser or their counsel may receive from the SEC or its staff with respect to the Offer Documents promptly after the receipt of such comments. Section 1.3 COMPANY ACTION. (a) The Company hereby approves of and consents to the Offer and the Merger and represents and warrants that (i) its Board of Directors (at a meeting duly called and held) has by the unanimous vote of all directors present (A) determined that each of this Agreement, the Offer and the Merger are fair to and in the best interests of the Company's stockholders, (B) approved this Agreement and the transactions contemplated hereby, including the Offer and the Merger, and such approval is sufficient to render the restrictions on "business combinations" (as defined in Section 203 of the DGCL) set forth in Section 203 of the DGCL inapplicable to this Agreement and the transactions contemplated hereby, including the Offer and the Merger, and (C) declared the advisability of this Agreement and resolved to recommend acceptance of the Offer and adoption of this Agreement by the holders of Shares; PROVIDED, HOWEVER, that prior to the consummation of the Offer, the Board of Directors of the Company may modify, withdraw or change such recommendation to the extent that a majority of the entire Board of Directors concludes in good faith, based on (among other things) the advice of outside counsel, that failure to modify or withdraw its recommendation would constitute a breach of the Board's fiduciary duties under applicable law, and (ii) Credit Suisse First Boston Corporation (the "Financial Advisor") has delivered to the Board of Directors of the Company its written opinion dated May 11, 2000, to the effect that, based upon and subject to the matters set forth 8 therein and as of the date thereof, the Offer Consideration to be received by the holders of Shares pursuant to the Offer and the Merger is fair to such holders (other than Parent and its affiliates), from a financial point of view. The Company hereby consents to the inclusion in the Offer Documents of the recommendations of the Company's Board of Directors described in this Section 1.3(a). (b) The Company shall file with the SEC, as soon as practicable on the date of commencement of the Offer, a Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 (together with any supplements or amendments thereto, the " Schedule 14D-9") containing the recommendations of the Board of Directors of the Company in favor of the Offer and the adoption of this Agreement and the transactions contemplated hereby, including the Merger, and shall promptly mail the Schedule 14D-9 to the stockholders of the Company. Parent will promptly supply to the Company in writing, for inclusion in the Schedule 14D-9, any information concerning Parent or Purchaser required under the Exchange Act and the rules and regulations thereunder to be included in the Schedule 14D-9. The Schedule 14D-9 will comply in all material respects with the provisions of applicable federal securities laws and, on the date filed with the SEC and on the date first published, sent or given to the Company's stockholders, shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that no representation is made by the Company with respect to information supplied by Parent or Purchaser in writing for inclusion in the Schedule 14D-9. The Company further agrees to take all steps necessary to cause the Schedule 14D-9 to be filed with the SEC and to be disseminated to holders of Shares, in each case as and to the extent required by applicable federal securities laws. Each of the Company, Parent and Purchaser shall promptly correct any information provided by it for use in the Schedule 14D-9 if and to the extent that such information shall be or have become false or misleading in any material respect and the Company shall take all action necessary to cause the Schedule 14D-9 as so corrected to be filed promptly with the SEC and disseminated to the holders of Shares as and to the extent required by applicable law. Parent, Purchaser and their counsel shall be given a reasonable opportunity to review and comment on the Schedule 14D-9 and any amendments thereto prior to the filing thereof with the SEC. The Company agrees to provide Parent and its counsel any comments the Company or its 9 counsel receive from the SEC or its staff with respect to the Schedule 14D-9 promptly after receipt of such comments. (c) In connection with the Offer, the Company shall promptly furnish Parent and Purchaser with mailing labels, security position listings, any non-objecting beneficial owner lists and all available listings or computer files containing the names and addresses of the record holders of Shares as of the latest practicable date and shall furnish Parent and Purchaser with such additional information and assistance (including updated lists of stockholders, mailing labels, lists of security positions and non-objecting beneficial owner's lists) as Parent and Purchaser or their agents may reasonably request in communicating the Offer to the record and beneficial holders of Shares. Section 1.4 DIRECTORS. (a) Subject to Section 1.4(c), promptly after the purchase of and payment for the Shares by Purchaser pursuant to the Offer, Parent shall be entitled to designate such number of directors (the "Parent Designees"), rounded up to the next whole number, on the Company's Board of Directors as is equal to the product of the total number of directors on such Board (after giving effect to any increase in the size of such Board pursuant to this Section 1.4) multiplied by the percentage that the number of Shares beneficially owned by Purchaser at such time (including Shares so accepted for payment) bears to the total number of Shares then outstanding; PROVIDED that in no event shall the Parent Designees constitute less than a majority of the entire Board of Directors. In furtherance thereof, the Company shall, upon the request of Parent, use its reasonable best efforts promptly either to increase the size of its Board of Directors or to secure the resignations of such number of its incumbent directors, or both, as is necessary to enable the Parent Designees to be so elected or appointed to the Company's Board of Directors, and the Company shall take all actions available to the Company to cause the Parent Designees to be so elected or appointed. At such time, the Company shall, subject to Section 1.4(c), if requested by Parent, also take all action necessary to cause persons designated by Parent to constitute at least the same percentage (rounded up to the next whole number) as is on the Company's Board of Directors of (i) each committee of the Company's Board of Directors, (ii) each board of directors (or similar body) of each Subsidiary (as defined in Section 9.2 hereof) of the Company and (iii) each committee (or similar body) of each such board. 10 (b) The Company's obligation to appoint Parent Designees to the Company's Board of Directors shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. The Company shall promptly take all actions required pursuant to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order to fulfill its obligations under Section 1.4(a), including mailing to stockholders the information required by such Section 14(f) and Rule 14f-1 (or including such information in the Schedule 14D-9 initially filed with the SEC and distributed to the stockholders of the Company) as is necessary to enable Parent Designees to be elected to the Company's Board of Directors. Parent or Purchaser will supply to the Company in writing and be solely responsible for any information with respect to Parent and Purchaser and their nominees, officers, directors and affiliates to the extent required by such Section 14(f) and Rule 14f-1. The provisions of this Section 1.4 are in addition to and shall not limit any rights which Purchaser, Parent or any of their affiliates may have as a holder or beneficial owner of Shares as a matter of applicable law with respect to the election of directors or otherwise. (c) Notwithstanding the provisions of this Section 1.4, the parties hereto shall use their respective reasonable best efforts to ensure that at least two of the members of the Board shall, at all times prior to the Effective Time (as defined in Section 2.3 hereof), be directors of the Company who were directors of the Company on the date hereof (the "Continuing Directors"), PROVIDED that, if there shall be in office less than two Continuing Directors for any reason, the Board of Directors shall cause the person designated by the remaining Continuing Director to fill such vacancy who shall be deemed to be a Continuing Director for all purposes of this Agreement, or if no Continuing Directors then remain, the other directors of the Company then in office shall designate two persons to fill such vacancies who will not be officers or employees or affiliates of the Company or Parent or any of their respective subsidiaries and such persons shall be deemed to be Continuing Directors for all purposes of this Agreement. From and after the time, if any, that the Parent Designees constitute a majority of the Company's Board of Directors and prior to the Effective Time, subject to the terms hereof, any amendment or modification of this Agreement, any amendment to the Company's Certificate of Incorporation or By-Laws, any termination of this Agreement by the Company, any extension of time for performance of any of the obligations of Parent or Purchaser hereunder, any waiver of any condition to the 11 Company's obligations hereunder or any of the Company's rights hereunder or other action by the Company hereunder which adversely affects the holders of Shares other than Parent or Purchaser may be effected only if there are in office one or more Continuing Directors and such action is approved by the action of unanimous vote of the entire Board of Directors of the Company. ARTICLE II THE MERGER Section 2.1 THE MERGER. On the terms and subject to the conditions set forth in this Agreement, and in accordance with the DGCL, the Merger shall be effected and Purchaser shall be merged with and into the Company at the Effective Time. At the Effective Time, the separate existence of Purchaser shall cease and the Company shall continue as the surviving corporation (as such, the "Surviving Corporation") and shall continue to be governed by the laws of the State of Delaware. At Parent's election, any direct or indirect subsidiary of Parent other than Purchaser may be merged with and into the Company instead of the Purchaser. In the event of such an election, the parties agree to execute an appropriate amendment to this Agreement in order to reflect such election. Section 2.2 CLOSING. Unless this Agreement shall have been terminated and the transactions contemplated hereby shall have been abandoned pursuant to Article VIII, and subject to the satisfaction or waiver of all of the conditions set forth in Article VII, the closing of the Merger (the "Closing") will take place as soon as practicable, but in no event later than 10:00 a.m. on the second business day (the "Closing Date") following satisfaction or waiver of all of the conditions set forth in Article VII, other than those conditions that by their nature are to be satisfied at the Closing, but subject to the fulfillment or waiver of those conditions, at the offices of Simpson Thacher & Bartlett, 425 Lexington Ave, New York, New York, 10017, unless another date, time or place is agreed to in writing by the parties hereto. Section 2.3 EFFECTIVE TIME. On the Closing Date (or on such other date as Parent and the Company may agree), the parties hereto shall file with the Secretary of State of Delaware a certificate of merger or, if applicable, a certificate of ownership and merger and any other appropriate documents, executed in accordance with the relevant provisions of the DGCL, and shall make all other filings or recordings required under the 12 DGCL and other applicable law in connection with the Merger. The Merger shall become effective upon the filing of the certificate of merger or, if applicable, the certificate of ownership and merger, with the Delaware Secretary of State, or at such later time as is mutually agreed by the parties and set forth therein (the "Effective Time"). Section 2.4 EFFECTS OF THE MERGER. The Merger shall have the effects set forth in the applicable provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all property of the Company and Purchaser shall vest in the Surviving Corporation, and all liabilities and obligations of the Company and Purchaser shall become liabilities and obligations of the Surviving Corporation. Section 2.5 CERTIFICATE OF INCORPORATION; BY-LAWS. (a) The certificate of incorporation of the Company shall be the certificate of incorporation of the Surviving Corporation until thereafter changed or amended in accordance with the provisions thereof and applicable law and (b) the by-laws of the Company shall be the bylaws of the Surviving Corporation until thereafter changed or amended in accordance with the provisions thereof and applicable law. Section 2.6 DIRECTORS; OFFICERS. From and after the Effective Time, (a) the directors of Purchaser shall be the directors of the Surviving Corporation, until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be, and (b) the officers of the Company shall be the officers of the Surviving Corporation, until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be. ARTICLE III EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES Section 3.1 EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of the Merger and without any action on the part of any holder of Shares or any other shares of capital stock of the Company or Purchaser: (a) COMMON STOCK OF PURCHASER. Each share of common stock, par value $0.01 per share, of Purchaser issued and outstanding immediately prior to the Effective Time shall be 13 converted into and become one validly issued, fully paid and nonassessable share of common stock, par value $0.001 per share, of the Surviving Corporation. (b) CANCELLATION OF TREASURY SHARES AND PARENT-OWNED SHARES. Each Share issued and outstanding immediately prior to the Effective Time that is owned by the Company or by Parent, Purchaser or any other Subsidiary of Parent (other than shares in trust accounts, managed accounts, custodial accounts and the like that are beneficially owned by third parties) shall automatically be canceled and shall cease to exist, and no cash or other consideration shall be delivered or deliverable in exchange therefor. (c) CONVERSION OF SHARES. At the Effective Time, each Share issued and outstanding immediately prior to the Effective Time (other than Shares to be canceled in accordance with Section 3.1(b) and any Dissenting Shares (as defined in Section 3.1(d)) shall be converted into the right to receive the Offer Consideration, payable to the holder thereof, without any interest thereon (the "Merger Consideration"), less any required withholding taxes, upon surrender and exchange of a Certificate (as defined in Section 3.3). (d) DISSENTING SHARES. Notwithstanding anything in this Agreement to the contrary, Shares issued and outstanding immediately prior to the Effective Time held by any person who has not voted such Shares in favor of the Merger and who has the right to demand, and who properly demands, an appraisal of such Shares ("Dissenting Shares") in accordance with Section 262 of the DGCL (or any successor provision) shall not be converted into a right to receive the Merger Consideration unless such holder fails to perfect or otherwise loses such holder's right to such appraisal, if any. If, after the Effective Time, such holder fails to perfect or loses any such right to appraisal, each such Share of such holder shall be treated as a Share that had been converted as of the Effective Time into the right to receive the Merger Consideration in accordance with Section 3.1(c). At the Effective Time, any holder of Dissenting Shares shall cease to have any rights with respect thereto, except the rights provided in Section 262 of the DGCL (or any successor provision) and as provided in the immediately preceding sentence. The Company shall give prompt notice to Parent of any demands received by the Company for appraisal of Shares, and Parent shall have the right to participate in and direct all negotiations and proceedings with respect to such demands. The Company shall not, except with 14 the prior written consent of Parent, make any payment with respect to, or offer to settle, any such demands. Section 3.2 OPTIONS: STOCK PLANS. (a) Upon consummation of the Offer, each then outstanding option to purchase Shares, whether or not otherwise vested and exercisable (a "Stock Option") shall be cancelled by the Company and in consideration of such cancellation and except to the extent that Parent and the holder of any such Stock Option otherwise agree, the Company shall pay to such holders of Stock Options an amount in respect thereof equal to the product of (A) the excess, if any, of (i) the Merger Consideration over (ii) the exercise price per Share subject to such Stock Option and (B) the number of Shares subject to such Stock Option immediately prior to its cancellation. Such payment shall be less any required withholding taxes and without interest. (b) The Company shall be entitled to draw down on any of its existing credit agreements an amount equal to the aggregate amount to be paid pursuant to Section 3.2(a), before deducting any required withholding taxes. If sufficient funding for such payment is not available under the Company's credit lines, Parent agrees to make available to the Company as a loan sufficient funds, when combined with funds available under the Company's credit lines, to make the payment required by this Section 3.2. (c) Except as otherwise permitted under the terms of this Agreement, the Company shall ensure that following the consummation of the Offer (i) no further issuance, transfer or grant of any capital stock of the Surviving Corporation or any interest in respect of any capital stock of the Surviving Corporation shall be made under the Company Stock Incentive Plan and (ii) no holder of a Stock Option or any participant in any employee incentive or benefit plans or programs or arrangements or non-employee director plans maintained by the Company shall have any right thereunder to acquire any capital stock of the Company, Parent or the Surviving Corporation. (d) Prior to the consummation of the Offer, the Company shall, if necessary, amend the terms of the Company Stock Incentive Plan to give effect to the provisions of this Section 3.2. Section 3.3 PAYMENT FOR SHARES. 15 (a) PAYMENT FUND. Concurrently with the Effective Time, Parent shall deposit, or shall cause to be deposited, with or for the account of a bank or trust company designated by Parent (the "Paying Agent"), for the benefit of the holders of Shares, cash in an amount sufficient to pay the aggregate Merger Consideration payable upon the conversion of Shares pursuant to Section 3.1 (c) (the "Payment Fund"). (b) LETTERS OF TRANSMITTAL; SURRENDER OF CERTIFICATES. (i) As soon as reasonably practicable after the Effective Time, Parent shall instruct the Paying Agent to mail to each holder of record (other than the Company or any of its Subsidiaries or Parent, Purchaser or any other Subsidiary of Parent) of a certificate or certificates that, immediately prior to the Effective Time, evidenced outstanding Shares (the "Certificates"), (x) a form of letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to the Paying Agent, and shall be in such form and have such other provisions as Parent may reasonably specify) and (y) instructions for use in effecting the surrender of the Certificates in exchange for the Merger Consideration. Upon surrender of a Certificate for cancellation to the Paying Agent together with such letter of transmittal, duly executed, and such other customary documents as may be required pursuant to such instructions, the holder of such Certificate shall be entitled to receive in exchange therefor cash in an amount equal to the product of (A) the number of Shares formerly represented by such Certificate and (B) the Merger Consideration, and the Certificate so surrendered shall forthwith be canceled. No interest shall be paid or accrued on any cash payable upon the surrender of any Certificate. If payment is to be made to a person other than the person in whose name the surrendered Certificate is registered, it shall be a condition of payment that the Certificate so surrendered shall be properly endorsed or otherwise in proper form for transfer and that the person requesting such payment shall pay any transfer or other taxes required by reason of the payment to a person other than the registered holder of the surrendered Certificate or established to the satisfaction of Parent and the Surviving Corporation that such taxes have been paid or are not applicable. (ii) In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be 16 lost, stolen or destroyed, the Paying Agent will issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration deliverable in respect thereof as determined in accordance with this Article III, PROVIDED that the person to whom the Merger Consideration is paid shall, as a condition precedent to the payment thereof, give the Surviving Corporation a bond in such sum as it may direct or otherwise indemnify the Surviving Corporation in a manner satisfactory to it against any claim that may be made against the Surviving Corporation with respect to the Certificate claimed to have been lost, stolen or destroyed. (c) CANCELLATION OF SHARES; NO FURTHER RIGHTS. As of the Effective Time, all Shares (other than Shares to be canceled in accordance with Section 3.1 (b)) issued and outstanding immediately prior to the Effective Time shall cease to be outstanding and shall automatically be canceled and shall cease to exist, and each holder of any such Shares shall cease to have any rights with respect thereto or arising therefrom (including without limitation the right to vote), except the right to receive the Merger Consideration, without interest, upon surrender of such Certificate in accordance with Section 3.3(b), and until so surrendered, each such Certificate shall represent for all purposes only the right to receive the Merger Consideration (without interest), other than in the case of Dissenting Shares. The Merger Consideration paid upon the surrender for exchange of Certificates in accordance with the terms of this Section 3.3 shall be deemed to have been paid in full satisfaction of all rights pertaining to the Shares formerly represented by such Certificates. (d) INVESTMENT OF PAYMENT FUND. The Paying Agent shall invest the Payment Fund, as directed by Parent, in (i) direct obligations of the United States of America, (ii) obligations for which the full faith and credit of the United States of America is pledged to provide for the payment of principal and interest, (iii) commercial paper rated the highest quality by either Moody's Investors Services, Inc. or Standard & Poor's Corporation, or (iv) certificates of deposit, bank repurchase agreements or bankers' acceptances of commercial banks with capital exceeding $500 million. Any net earnings with respect to the Payment Fund shall be the property of and paid over to Parent as and when requested by Parent. (e) TERMINATION OF PAYMENT FUND. Any portion of the Payment Fund which remains undistributed to the holders of 17 Certificates for 180 days after the Effective Time shall be delivered to Parent, upon demand, and any holders of Certificates that have not theretofore complied with this Section 3.3 shall thereafter look only to Parent, and only as general creditors thereof, for payment of their claim for any Merger Consideration. (f) NO LIABILITY. None of Parent, Purchaser, the Surviving Corporation or the Paying Agent shall be liable to any person in respect of any payments or distributions payable from the Payment Fund delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. Subject to applicable law and public policy, if any Certificates shall not have been surrendered immediately prior to such date on which any Merger Consideration in respect of such Certificate would otherwise escheat to or become the property of any Governmental Entity (as defined in Section 4.1 (c)), any amounts payable in respect of such Certificate shall, to the extent permitted by applicable law and public policy, become the property of the Surviving Corporation, free and clear of all claims or interest of any person previously entitled thereto. (g) WITHHOLDING RIGHTS. Parent and Purchaser shall be entitled to deduct and withhold, or cause to be deducted or withheld, from the consideration otherwise payable pursuant to this Agreement to any holder of Shares, Stock Options or Certificates such amounts as are required to be deducted and withheld with respect to the making of such payment under the Internal Revenue Code of 1986, as amended (the "Code"), or any provision of applicable state, local or foreign tax law. To the extent that amounts are so deducted and withheld, such deducted and withheld amounts shall be treated for all purposes of this Agreement as having been paid to such holders in respect of which such deduction and withholding was made. ARTICLE IV REPRESENTATIONS AND WARRANTIES Section 4.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth in the corresponding sections or subsections of the disclosure schedule delivered by the Company to Parent and Purchaser upon or prior to entering into this Agreement (the "Disclosure Schedule"), the Company represents and warrants to Parent and Purchaser as follows: (a) ORGANIZATION, STANDING AND CORPORATE POWER. Each of the Company and its Subsidiaries is duly organized, validly 18 existing and in good standing under the laws of the jurisdiction in which it is organized and has the requisite corporate or other power and authority and any necessary governmental approvals to own, lease and operate its properties and to carry on its business as now being conducted. Each of the Company and its Subsidiaries is duly qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary, other than in such jurisdictions where the failure to be so qualified would not, individually or in the aggregate, have a Material Adverse Effect on the Company. For purposes of this Agreement, a "Material Adverse Effect" with respect to any person means a material adverse effect on (i) the ability of such person to perform its obligations under this Agreement or to consummate the transactions contemplated hereby or (ii) the financial condition, business, assets or results of operations of such person and its Subsidiaries taken as a whole, other than adverse effects resulting from (x) conditions, circumstances or changes in the general economy, the capital markets or the industry in which the Company is engaged or (y) any public disclosure of this Agreement. The Company has delivered or made available to Parent true, complete and correct copies of the certificate of incorporation and by-laws of the Company, in each case as amended to the date of this Agreement. Such certificates of incorporation and by-laws are in full force and effect and no other organizational documents are applicable to or binding upon the Company. None of the Company or any of its Subsidiaries is in violation of its respective certificate of incorporation, bylaws, or comparable governing documents. Exhibit 21 to the Company's Annual Report on Form 10-K for the year ended December 31, 1999 sets forth a true, correct and complete list of all Subsidiaries of the Company required to be so reported. Except as set forth in such Exhibit 21, all Subsidiaries of the Company are wholly owned directly or indirectly by the Company. Except as set forth in Section 4.1 (a) of the Disclosure Schedule, the Company does not own, directly or indirectly, any capital stock or other equity interest in any person other than the Subsidiaries other than such capital stock and other equity interests with a carrying value, in the aggregate, not in excess of $1,000,000. (b) CORPORATE AUTHORIZATION. The Company has the requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated 19 hereby have been duly authorized, and this Agreement has been approved, by the Board of Directors of the Company, and no other corporate proceeding, other than the approval of the Company's stockholders, is necessary to authorize the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Company and, assuming that this Agreement constitutes a valid and binding obligation of Parent and Purchaser, constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to laws concerning bankruptcy and creditor's rights and the application of general principles of equity (regardless of whether enforcement is considered in proceedings at law or equity). Subject to the applicability of Section 253 of the DGCL, the affirmative vote of the holders of a majority of the outstanding Shares is the only vote required to approve the Merger and adopt this Agreement. (c) CONSENTS AND APPROVALS; NO VIOLATIONS. Except as set forth in Section 4.1(c) of the Disclosure Schedule, (i) the execution and delivery by the Company of this Agreement do not, and the consummation by the Company of the transactions contemplated hereby and compliance by the Company with the provisions hereof will not, (x) violate any of the provisions of the certificate of incorporation or by-laws of the Company or the comparable governing documents of any Subsidiary of the Company, in each case as amended to the date of this Agreement, (y) subject to the governmental filings and other matters referred to in Section 4.1 (c)(ii), violate or result in a breach of or default (with or without notice or lapse of time, or both) under, or give rise to a material obligation, right of termination, cancellation or acceleration of any obligation or loss of a material benefit under, or require the consent of any person under, any indenture, credit agreement or other agreement, permit, concession, franchise, license or other instrument or undertaking to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries or any of their respective assets is bound or affected or (z) subject to the governmental filings and other matters referred to in Section 4.1 (c)(ii), violate any domestic or foreign law, rule or regulation applicable to the Company or any of its Subsidiaries or any order, writ, judgment, injunction, decree, determination or award applicable to the Company or any of its Subsidiaries currently in effect, which, in the case of clauses (y) and (z) above, would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. 20 (ii) No consent, approval, order or authorization of, or declaration, registration or filing with, or notice to, any domestic or foreign court, arbitral tribunal, administrative agency or commission or other governmental agency or regulatory authority (a "Governmental Entity"), which has not been received or made, is required by or with respect to the Company or any of its Subsidiaries in connection with the execution and delivery of this Agreement by the Company or the consummation by the Company of the transactions contemplated hereby, except for (i) the filing of premerger notification and report forms under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") or under any foreign statutes or regulations, (ii) the filing with the SEC of (A) the Schedule 14D-9 and, if required by applicable law, the Proxy Statement (as defined in Section 6.1 (b)), (B) such reports under the Exchange Act as may be required in connection with this Agreement and the transactions contemplated hereby, (iii) the filing of the certificate of merger or the certificate of ownership and merger, as the case may be, with the Delaware Secretary of State and appropriate documents with the relevant authorities of other states in which the Company is qualified to do business, (iv) as required under the rules and regulations of the New York Stock Exchange and (v) any other consents, approvals, authorizations, filings or notices the failure to make or obtain which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company. (d) CAPITAL STRUCTURE. As of the date of this Agreement, the authorized capital stock of the Company consists solely of (A) 150,000,000 shares of Common Stock and (B) 20,000,000 shares of preferred stock, par value $0.001 per share ("Preferred Stock"), of which no shares were outstanding but of which 1,500,000 shares have been reserved for issuance upon exercise of the Rights distributed to the holders of Common Stock pursuant to the Rights Agreement. At the close of business on May 8, 2000, 50,593,522 shares of Common Stock were outstanding, and 721,408 shares of capital stock of the Company were held in the treasury of the Company. There were outstanding as of May 8, 2000 no options, warrants or other rights to acquire capital stock from the Company other than (x) the Rights and (y) options representing in the aggregate the right to purchase up to 5,755,817 shares of Common Stock (collectively, the "Company Stock Options") under the Hussmann International Stock Incentive Plan (the "Company Stock Incentive Plan"). Since May 8, 2000, no options to purchase shares of Common Stock have been 21 granted and no shares of Common Stock have been issued except for shares issued pursuant to the exercise of Company Stock Options outstanding as of May 8, 2000. Except (i) as set forth above or in Section 4.1(d) of the Disclosure Schedule or (ii) as a result of the exercise of Company Stock Options outstanding as of May 8, 2000, there are outstanding (a) no shares of capital stock or other voting securities of the Company, (b) no securities of the Company convertible into or exchangeable for shares of capital stock or voting securities of the Company, (c) no options or other rights to acquire from the Company, and no obligation of the Company to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of the Company and (d) no equity equivalents, interests in the ownership or earnings of the Company or other similar rights. All outstanding shares of capital stock of the Company and its Subsidiaries are duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive or similar rights, and, in the case of the Subsidiaries, are owned by the Company, by one or more Subsidiaries of the Company or by the Company and one or more such Subsidiaries (except as disclosed in Section 4.1(a) or in Section 4.1(d) of the Disclosure Schedule), free and clear of all pledges, claims, liens, charges, mortgages, conditional sale or title retention agreements, hypothecations, collateral assignments, security interests, easements and other encumbrances of any kind or nature whatsoever (collectively, "Liens"). Except as described above, neither the Company nor any Subsidiary of the Company has or is subject to or bound by or, at or after the Effective Time will have or be subject to or bound by, any outstanding option, warrant, call, subscription or other right (including any preemptive or similar right), agreement or commitment which (i) obligates the Company or any Subsidiary of the Company to issue, sell or transfer, or repurchase, redeem or otherwise acquire, any shares of the capital stock of the Company or any Subsidiary of the Company, (ii) obligates the Company or any of its Subsidiaries to provide funds or make any investment (in the form of a loan, capital contribution or otherwise) in any such Subsidiary or any other entity, (iii) restricts the transfer of any shares of capital stock of the Company or any of its Subsidiaries, or (iv) relates to the holding, voting or disposition of any shares of capital stock of the Company or any of its Subsidiaries. No bonds, debentures, notes or other indebtedness of the Company or any Subsidiary of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which the stockholders of the Company or any Subsidiary of the Company 22 may vote are issued or outstanding. Section 4.1(d) of the Disclosure Schedule accurately sets forth information as of May 8, 2000 regarding the exercise price, date of grant and number of granted Stock Options for each holder of Stock Options pursuant to any stock option plan. Except as described above, there are no other stock appreciation, phantom stock or other equity-based awards outstanding under any employee incentive or benefit plan or program or arrangement or non-employee director plan maintained by the Company. (e) SEC DOCUMENTS. The Company has filed all required reports, schedules, forms, statements and other documents with the SEC relating to periods commencing on or after January 1, 1997 (such reports, schedules, forms, statements and other documents being hereinafter referred to as the "SEC Documents"). As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to such SEC Documents, and none of the SEC Documents as of such dates contained any untrue statements of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The consolidated financial statements of the Company included in the SEC Documents comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") (except, in the case of unaudited consolidated quarterly statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis during the periods involved (except as may otherwise be indicated in the notes thereto) and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited quarterly statements, to normal year-end audit adjustments). (f) ABSENCE OF CERTAIN CHANGES OR EVENTS. (i) Except as set forth in Section 4.1(f) of the Disclosure Schedule, since December 31, 1999, the Company and its Subsidiaries have conducted their businesses only in the ordinary course consistent with past practice, and there has not been: (A) 23 any event, change, occurrence, or development of a state of facts or circumstances having, or which would reasonably be expected to have, a Material Adverse Effect on the Company; (B) any declaration, setting aside or payment of any dividend (other than regular quarterly cash dividends) or other distribution in respect of shares of the Company's capital stock, or any redemption or other acquisition by the Company or any of its Subsidiaries of any shares of its capital stock; (C) any (i) grant of any severance or termination pay to (or amendment to any such existing arrangement with) any director or officer of the Company or any of its Subsidiaries or, other than in the ordinary course of business consistent with past practice, any employee (other than employees who receive less than $200,000 in total annual cash compensation from the Company or any of its Subsidiaries) of the Company or any of its Subsidiaries, (ii) entering into of any employment, severance, change of control, deferred compensation or other similar arrangement (or any amendment to any such existing agreement) with any director or officer of the Company or any of its Subsidiaries or, other than in the ordinary course of business consistent with past practice, any employee (other than employees who receive less than $200,000 in total annual cash compensation from the Company or any of its Subsidiaries) of the Company or any of its Subsidiaries, (iii) any increase in benefits payable under any existing severance, change of control or termination pay policies or employment, severance or change of control agreements with respect to any director or officer of the Company or any of its Subsidiaries or, other than in the ordinary course of business consistent with past practice, any employee (other than employees who receive less than $200,000 in total annual cash compensation from the Company or any of its Subsidiaries) of the Company or any of its Subsidiaries, (iv) increase in (or amendments to the terms of) compensation, bonus or other benefits payable to directors, officers or employees (other than employees who receive less than $200,000 in total annual cash compensation from the Company or any of its Subsidiaries) of the Company or any of its Subsidiaries, other than in the ordinary course of business consistent with past practice, (v) any adoption or agreement to adopt any collective bargaining agreement or any Company Plan or (vi) grant of stock options or stock-based rights under any Company Plan; (D) any change by the Company or any of its Subsidiaries in accounting methods, principles or practices, except as required by generally accepted accounting principles ; (E) any damage, destruction or loss (whether or not covered by insurance) with respect to any assets of the Company or any of its Subsidiaries which is reasonably likely, individually or in the aggregate, to have a Material Adverse Effect; (F) any entry 24 by the Company or any of its Subsidiaries into any commitment or transactions material to the Company and its Subsidiaries taken as a whole (other than commitments or transactions entered into in the ordinary course of business); (G) as of the date hereof, any revaluation by the Company or any of its Subsidiaries of any of their respective material assets, including but not limited to writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business; or (H) any agreement or commitment by the Company or any of its Subsidiaries to do any of the things described in the preceding clauses (A) through (G) otherwise than as expressly provided for herein. (g) NO UNDISCLOSED LIABILITIES. Except to the extent accrued or reserved in the Company's financial statements (including the notes thereto) included in the SEC Documents filed and publicly available prior to the date of this Agreement (the "Filed SEC Documents") and as set forth in Section 4.1(g) of the Disclosure Schedule, neither the Company nor any of its Subsidiaries has any liabilities or obligations of any nature, whether accrued, contingent, absolute or otherwise, except for those arising in the ordinary course of business consistent with past practice and that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company. (h) CERTAIN INFORMATION. The Schedule 14D-9 and the Proxy Statement will contain all information which is required to be included therein in accordance with the Exchange Act and the rules and regulations thereunder and any other applicable law and will conform in all material respects with the requirements of the Exchange Act and any other applicable law, and neither the Schedule 14D-9 nor the Proxy Statement will, at the respective times they are filed with the SEC or published, sent or given to the Company's stockholders, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading; PROVIDED, HOWEVER, that no representation or warranty is hereby made by the Company with respect to any information supplied by Parent or Purchaser in writing for inclusion in, or with respect to Parent or Purchaser information derived from Parent's public SEC filings which is included or incorporated by reference in, the Schedule 14D-9 or the Proxy Statement. None of the information supplied or to be supplied by the Company in writing for inclusion or incorporation by 25 reference in, or which may be deemed to be incorporated by reference in, any of the Offer Documents will, at the respective times the Offer Documents are filed with the SEC or published, sent or given to the Company's stockholders, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading. If at any time prior to the Effective Time any event with respect to the Company, or with respect to any information supplied by the Company in writing for inclusion in any of the Offer Documents, shall occur which is required to be described in an amendment of, or a supplement to, any of the Offer Documents, the Company shall so describe the event to Parent. (i) REAL PROPERTY. (i) The real property owned by the Company and its Subsidiaries and all property leased by the Company and its Subsidiaries are referred to herein as the "Real Property". (ii) The Company or one of its Subsidiaries has good and marketable title to each parcel of Real Property owned by the Company or its Subsidiaries and a valid leasehold interest in all Real Property leased by the Company and its Subsidiaries free and clear of all Liens except (A) those reflected or reserved against in the latest balance sheet of the Company included in the Filed SEC Documents, (B) taxes and general and special assessments not in default and payable without penalty and interest, and (C) other Liens that individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect on the Company. (iii) Except to the extent that the inaccuracy of any of the following (or the circumstances giving rise to such inaccuracy), individually or in the aggregate, are not reasonably likely to have a Material Adverse Effect: (A) each of the agreements by which the Company has obtained a leasehold interest in all Real Property leased by the Company (individually, a "LEASE" and collectively, the "LEASES") is in full force and effect in accordance with its respective terms and the Company or one of its Subsidiaries is the holder of the lessee's or tenant's interest thereunder; (B) to the knowledge of the Company, there exists no default under any Lease and no circumstance exists which, with the giving of notice, the passage of time or both, is reasonably likely to result in such a default; (C) the Company and its Subsidiaries have complied with and timely performed all 26 conditions, covenants, undertakings and obligations on their parts to be complied with or performed under each of the Leases; (D) the Company and its Subsidiaries have paid all rents and other charges to the extent due and payable under the Leases; and (E) there are no leases, subleases, licenses, concessions or any other contracts or agreements granting to any person or entity other than the Company or any of its Subsidiaries any right to the possession, use, occupancy or enjoyment of any Real Property or any portion thereof. (j) INTELLECTUAL PROPERTY. Except in each case where the failure would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company, (A) the Company owns or has rights to use and, except for Intellectual Property licensed to the Company to the extent the terms of the applicable licenses restrict transfer, transfer all Intellectual Property that is reasonably necessary to conduct the Company's business as it is conducted on the date hereof, in each case free and clear of all Liens, and (B) to the Company's knowledge, the conduct of the Company's and its Subsidiaries' business does not (x) infringe on any patent, trademark, copyright or other intellectual property right of any other person, or (y) constitute a misuse or misappropriation of any trade secret, know-how, process, proprietary information or other similar right of any other person. For purposes of this Agreement, "Intellectual Property" shall mean all intellectual property material to the operation or the conduct of business of the Company or its Subsidiaries, including copyrights, trademarks, trade names, service marks, domain names, trade dress, letters patent (including registrations or applications for registration in any jurisdiction, and any renewals or extensions thereof), the goodwill associated with the foregoing; confidential or proprietary technical and business information, know-how and trade secrets, in any jurisdiction, and any claims or causes of action arising out of or relating to any infringement or misappropriation of any of the foregoing. (k) CERTAIN CONTRACTS AND ARRANGEMENTS. (i) Except as disclosed in Section 4.1(k) of the Disclosure Schedule or in the Filed SEC Documents, neither the Company nor any of its Subsidiaries is a party to or bound by any contracts, agreements, instruments or understandings ("contracts") of the following nature (collectively, the "Material Contracts"): (i) contracts pursuant to which the Company or any of its Subsidiaries licenses other persons to use any material Intellectual Property (other than contracts entered into for the licensing of data or software 27 in the ordinary course of business); (ii) contracts which restrict the Company or any of its affiliates from competing in any line of business or with any person in any geographical area; (iii) contracts involving (A) the acquisition, merger or purchase of all or substantially all of the assets or business of a third party involving aggregate consideration of $10.0 million or more or (B) the purchase or sale of assets, or a series of purchases and sales of assets, involving aggregate consideration of $10.0 million or more or (C) the grant to any person of any preferential rights to purchase any material amount of its assets; (iv) material contracts which contain a "change in control" or similar provision; (v) contracts, including mortgages or other grants of security interests, guarantees and notes, relating to the borrowing of money in an amount in excess of $10.0 million in the aggregate; (vi) any contract or other agreement to indemnify for any Environmental Claim (as defined herein) or any other liability or cost with respect to any Environmental Law (as defined herein); and (vii) any contract or other agreement which would prohibit or materially delay the consummation of the Merger or any of the transactions contemplated by this Agreement. Except as would not reasonably be expected to have a Material Adverse Effect on the Company, neither the Company nor any of its Subsidiaries is in breach or default under any Material Contract nor, to the knowledge of the Company, is any other party to any Material Contract in breach or default thereunder. (ii) With respect to each of the Company's joint ventures, the Company has disclosed and made available to Parent and Purchaser correct and complete copies (or descriptions of oral agreements, if any) of all agreements to which the Company or any of its subsidiaries or joint ventures is a party which (i) contain any change of control provisions, put options or call options related to the interests in the joint venture, rights of first refusal or other similar provisions or any provisions that are reasonably likely to affect the ability of Parent or Purchaser together with the remaining co-owners of each such entity, to direct and control such entity's business operations as a result of the consummation of the Offer or the Merger or (ii) evidence any commitment (whether or not contingent) for future investment of capital or otherwise to be directly or indirectly made by Parent or Purchaser, the Company or any of their respective subsidiaries. (l) LITIGATION; COMPLIANCE WITH LAWS. (i) Except as set forth in Section 4.1(1) of the Disclosure Schedule or in the 28 Filed SEC Documents, (A) there is no suit, claim, action, proceeding (at law or in equity) or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries or any of their respective properties before any arbitrator, court or other Governmental Entity, and (B) neither the Company nor any of its Subsidiaries is subject to any outstanding order, writ, judgment, injunction, decree or arbitration order or award that, in any such case described in clauses (A) and (B), has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. As of the date hereof, there are no suits, claims, actions, proceedings or investigations pending or, to the knowledge of the Company, threatened, seeking to prevent, hinder, modify or challenge the transactions contemplated by this Agreement. (ii) Except as would not reasonably be expected to have a Material Adverse Effect on the Company, the Company and its Subsidiaries are in compliance with all applicable statutes, laws, ordinances, rules, orders and regulations of any Governmental Entity and have not received notification of any asserted present or past failure to so comply. All federal, state, local and foreign governmental approvals, authorizations, certificates, filings, franchises, licenses, notices, permits and rights ("Permits") necessary for each of the Company and its Subsidiaries to own, lease or operate its properties and assets and to carry on its business as now conducted have been obtained or made, and there has occurred no default under any such Permit, except for the lack of Permits and for defaults under Permits which lack or default would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company. (m) ENVIRONMENTAL LAWS. Except as disclosed in the Filed SEC Reports and to the extent that the inaccuracy of any of the following (or the circumstances giving rise to such inaccuracy), individually or in the aggregate, is not reasonably likely to have a Material Adverse Effect: (i) (A) the Company and its Subsidiaries are, and within the period of all applicable statutes of limitation have been, in compliance with all applicable Environmental Laws; and (B) the Company and each of its Subsidiaries believes that each of them will, and will not incur material expense to, timely attain or maintain compliance with any Environmental Laws applicable to any of their current operations or properties or to 29 any of their planned operations with respect to properties currently or formerly owned or leased by the Company or any of its Subsidiaries; (ii) (A) the Company and its Subsidiaries hold all Environmental Permits (each of which is in full force and effect) required for any of their current operations and for any property owned, leased, or otherwise operated by any of them, and are, and within the period of all applicable statutes of limitation have been, in compliance with all such Environmental Permits; and (B) neither the Company nor any of its Subsidiaries has knowledge that over the next three years: any of their Environmental Permits will not be, or will entail material expense to be, timely renewed or complied with; any additional Environmental Permits required of any of them for current operations or for any property owned, leased, or otherwise operated by any of them, or for any of their planned operations with respect to properties currently or formerly owned or leased by the Company or any of its Subsidiaries, will not be timely granted or complied with; or any transfer or renewal of, or reapplication for, any Environmental Permit required as a result of the Merger will not be, timely effected; and (iii) neither the Company nor any of its Subsidiaries has received any Environmental Claim (as hereinafter defined) against any of them, and neither the Company nor any of its Subsidiaries has knowledge of any such Environmental Claim being threatened; and to the knowledge of the Company, no Hazardous Materials or other conditions are present on any property owned, leased, or operated by the Company or any of its Subsidiaries, or at any other location, that are reasonably likely to form the basis of any Environmental Claim against any of them or against any person or entity (including without limitation any predecessor of the Company or any of its Subsidiaries) whose liability the Company or any of its Subsidiaries retained or assumed either contractually or by operation of law. For purposes of this Agreement, the terms below shall have the following meanings: "ENVIRONMENTAL CLAIM" means any claim, demand, action, suit, complaint, proceeding, directive, investigation, lien, demand letter, or notice (written or oral) of noncompliance, violation, or liability, by any person or entity asserting liability or potential liability (including without 30 limitation liability or potential liability for enforcement, investigatory costs, cleanup costs, governmental response costs, natural resource damages, property damage, personal injury, fines or penalties) arising out of, based on or resulting from (i) the presence, discharge, emission, release or threatened release of any Hazardous Materials at any location, (ii) circumstances forming the basis of any violation or alleged violation of any Environmental Laws or Environmental Permits, or (iii) otherwise relating to obligations or liabilities under any Environmental Law. "ENVIRONMENTAL LAWS" means any and all laws, rules, orders, regulations, statutes, ordinances, guidelines, codes, decrees, or other legally enforceable requirement (including, without limitation, common law) of any foreign government, the United States, or any state, local, municipal or other governmental authority, regulating, relating to or imposing liability or standards of conduct concerning protection of the environment (including without limitation indoor air, ambient air, surface water, groundwater, land surface, subsurface strata, or plant or animal species) or human health as affected by the environment or Hazardous Materials (including without limitation employee health and safety). "ENVIRONMENTAL PERMITS" means all permits, licenses, registrations, approvals, exemptions and other filings with or authorizations by any Governmental Authority under any Environmental Law. "ENVIRONMENTAL REPORT" means any report, study, assessment, audit, or other similar document that addresses any issue of actual or potential noncompliance with, actual or potential liability under or cost arising out of, or actual or potential impact on business in connection with, any Environmental Law or any proposed or anticipated change in or addition to Environmental Law, that may affect the Company or any of its Subsidiaries. "GOVERNMENTAL AUTHORITY" means any nation or government, any state or other political subdivision thereof and any entity (including, without limitation, a court) exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "HAZARDOUS MATERIALS" means all hazardous or toxic 31 substances, wastes, materials or chemicals, petroleum (including crude oil or any fraction thereof), petroleum products, asbestos, asbestos-containing materials, pollutants, contaminants, radioactivity and all other materials, whether or not defined as such, that are regulated pursuant to or that could result in liability under any applicable Environmental Laws. (n) TAXES. Except as would not have a Material Adverse Effect, the Company and each of its Subsidiaries, and any consolidated, combined, unitary or aggregate group for tax purposes of which the Company or any of its Subsidiaries is or has been a member has timely filed, taking into account extensions, all Tax Returns required to be filed by it in the manner provided by law, has paid all Taxes (including interest and penalties) shown as due on any Tax Returns. All such Tax Returns were true, correct and complete in all material respects. Except as would not have a Material Adverse Effect, no claim has been made in writing by any Taxing authority in a jurisdiction where any of the Company or its Subsidiaries does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. Except as would not have a Material Adverse Effect: (i) no material claim for unpaid Taxes has become a lien or encumbrance of any kind against the property of the Company or any of its Subsidiaries or is being asserted in writing against the Company or any of its Subsidiaries other than liens for Taxes not yet due, or Taxes being contested in good faith for which adequate reserves have been established; (ii) neither the Company nor any of its Subsidiaries has made a material disclosure on a federal income Tax Return pursuant to Section 6662 of the Code; (iii) neither the Company nor any of its Subsidiaries has requested or received a revenue ruling from any taxing authority, or signed any binding agreement with any taxing authority (including any advance pricing agreement), that would materially affect the amount of Taxes to which it is subject after the Effective Time; (iv) neither the Company nor any of its Subsidiaries has made any elections with respect to Taxes affecting the Company and its Subsidiaries that are effective as of the date hereof; (v) (A) there are no deficiencies for Taxes claimed, proposed or assessed by any taxing or other governmental authority that have not been fully paid or settled, (B) there are no current, pending or, to the best knowledge of the Company and its Subsidiaries, threatened (in writing) audits, investigations, disputes or claims for or relating to Taxes, and there are no matters under discussion with any governmental authorities with respect to Taxes that, in the reasonable judgment of the Company and its Subsidiaries, are likely to result in additional Taxes 32 and (C) there are no extensions of any statutes of limitations in effect relating to Taxes to which the Company or its Subsidiaries is subject; and (vi) neither the Company nor any of its Subsidiaries has any liability arising from its obligations under either (A) the Tax Sharing Agreement dated as of December 31, 1997, by and among Whitman Corporation, the Company and Hussmann Corporation, a wholly owned subsidiary of the Company or (B) the Distribution and Indemnity Agreement of even date therewith, by and among the parties listed in the immediately preceding clause (A). Except as would not have a Material Adverse Effect, the Company and each of its Subsidiaries (and any affiliated or unitary group of which such person was a member) has timely withheld and paid over to the proper taxing authorities all Taxes and other amounts required to be so withheld and paid over. None of the Company and its Subsidiaries has filed a consent under Code Section 341(f) concerning collapsible corporations. None of the Company and its Subsidiaries has been required to include in income any material adjustment pursuant to Code Section 481 (or any similar provision of state, local or foreign tax law) by reason of a voluntary change in accounting method initiated by the Company or any of its Subsidiaries, and, to the Company's best knowledge, the IRS has not initiated or proposed any such adjustment or change in accounting method. Except as would not have a Material Adverse Effect, neither the Company nor any of its Subsidiaries (i) has been a member of an affiliated group filing a consolidated federal income tax return (other than a group the common parent of which was the Company or Whitman Corporation) or (ii) is a party to a Tax allocation or Tax sharing agreement (other than an agreement solely among members of a group the common parent of which is the Company). Except as would have, individually or in the aggregate, a Material Adverse Effect on the Company, neither the Company nor any of its Subsidiaries has any liability for the Taxes of any person (other than any of the Company or its Subsidiaries) under Treasury Regulation section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract or otherwise. The Company is not a "foreign person" as defined in section 1445(f)(3) of the Code. As used herein, "TAXES" shall mean any taxes of any kind, including but not limited to those on or measured by or referred to as income, gross receipts, capital, sales, use, ad valorem, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, value added, property or windfall profits taxes, customs, duties or similar fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any 33 governmental authority, domestic or foreign. As used herein, "TAX RETURN" shall mean any return, report or statement required to be filed with any governmental authority with respect to Taxes, including any schedule or attachment thereto or amendment thereof. (o) BENEFIT PLANS. (i) The Company will provide to the Parent with respect to each U.S. Plan (as defined below) within five (5) business days after the execution hereof and with respect to each Non-U.S. Plan (as defined below) within fifteen (15) business days before the Closing, a true and complete list of each "employee benefit plan" (within the meaning of section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), including, without limitation, multiemployer plans within the meaning of ERISA section 3(37)), and all stock purchase, stock option, severance, employment, change-in-control, fringe benefit, collective bargaining, bonus, incentive, deferred compensation and all other employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA (including any funding mechanism therefor now in effect or required in the future as a result of the transaction contemplated by this Agreement or otherwise), whether formal or informal, written, legally binding or not, under which any employee or former employee of the Company or its Subsidiaries (the "Company Employees") has any present or future right to benefits or the Company or its Subsidiaries has had or has any present or future liability. All such plans, agreements, programs, policies and arrangements shall be collectively referred to as the "Company Plans". All Company Plans which are maintained and sponsored for any Company Employees residing in the United States of America are referred to as "U.S. Plans". All Company Plans which are not U.S. Plans shall be referred to as "Non-U.S. Plans." With respect to each U.S. Plan within ten (10) business days from the execution hereof, with respect to each Non-U.S. Plan, and within ten (10) business days before the Closing, the Company will furnish or make available to the Parent a current, accurate and complete copy thereof and, to the extent applicable: (w) any related trust agreement or other funding instrument; (x) the most recent determination letters, if applicable; (y) any summary plan description and other written communications (or a description of any oral communications) by the Company or its Subsidiaries to their employees concerning the extent of the benefits provided under a Company Plan; and (z) for the two most recent years (A) the Form 5500 and attached schedules, (B) audited financial statements, (C) actuarial valuation reports and (D) attorney's response to an auditor's 34 request for information. (ii) Except as set forth in the Filed SEC Documents or would individually or in the aggregate not reasonably be expected to have a Material Adverse Effect: (A) each Company Plan has been established and administered in accordance with its terms and in compliance with the applicable provisions of ERISA, the Code and all other applicable laws, and no reportable event, as defined in Section 4043 of ERISA, no prohibited transaction described in Section 406 of ERISA or Section 4975 of the Code or accumulated funding deficiency, as defined in Section 302 of ERISA and 402 of the Code, has occurred with respect to any Company Plan; (B) each Company Plan intended to be qualified under Section 401(a) of the Code has received a favorable determination notification, advisory and/or opinion letter, as applicable, from the Internal Revenue Service that it is so qualified and nothing has occurred since the date of such letter that would reasonably be expected to cause the loss of such qualified status of such Company Plan; (C) the aggregate accumulated benefit obligations of the Company Plans subject to Title IV of ERISA (as of the date of the most recent Actuarial valuation prepared for such Company Plan and based on the discount rate and other actuarial assumptions used in such valuation) do not exceed the fair market value of the assets of such Company Plans in the aggregate (as of the date of such valuation); (D) the Company is not aware of any (w) pending or threatened actions, suits or claims relating to the Company Plans, other than routine claims for benefits; (x) facts or circumstances that exist that could give rise to any such actions, suits or claims, (y) written or oral communication received from the Pension Benefit Guaranty Corporation (the "PBGC") in respect of any Company Plan subject to Title IV of ERISA concerning the funded status of any such plan, or (z) administrative investigation, audit or other administrative proceeding by the Department of Labor, the PBGC, the Internal Revenue Service or the governmental agencies which are pending, threatened or in progress; (E) with respect to any multiemployer plan (within the 35 meaning of ERISA section 3(37)) to which the Company, its Subsidiaries or any member of their Controlled Group (defined as any organization which is a member of a controlled group of organizations within the meaning of Code sections 414(b), (c), (m) or (o)) has any liability or contributed (or had at any time contributed or had an obligation to contribute): (A) none of the Company, its Subsidiaries or any member of their Controlled Group has incurred any withdrawal liability in the past six years under Title IV of ERISA or to the Company's Knowledge would be subject to such liability if, as of the Effective Time, the Company, its Subsidiaries or any member of their Controlled Group were to engage in a complete withdrawal (as defined in ERISA section 4203) or partial withdrawal (as defined in ERISA section 4205) from any such multiemployer plan; and (B) no such multiemployer plan is in reorganization or insolvent (as those terms are defined in ERISA sections 4241 and 4245, respectively); (F) with respect to any Company Plan that provides retiree welfare benefits, the FAS 106 liabilities of the Company or its Subsidiaries and the assumptions used therefor accurately reflect the costs associated with the rights and benefit of all Parent employees; (G) neither the Company nor any of its Subsidiaries or members of their Controlled Group has incurred any direct or indirect liability under ERISA or the Code in connection with the termination of, withdrawal from or failure to fund, any Company Plan or other retirement plan or arrangement, and no fact or event exists that would reasonably be expected to give rise to any such liability; (H) none of the Company Plans provides for payment of a benefit, the increase of a benefit amount, the payment of a contingent benefit or the acceleration of the payment or vesting of a benefit determined or occasioned, in whole or in part, by reason of the execution of this Agreement or the consummation of the transactions contemplated by this Agreement; and (I) (A) neither the Company nor any Subsidiary is a party to any agreement, contract, arrangement or plan that has resulted, or would result, separately or in the aggregate, in the payment of any "excess parachute payments" within the meaning of Section 280G of the Code as a result of any transaction or event contemplated by this Agreement 36 and (B) none of the payments required by this Agreement would be non-deductible under Code Section 162(m) or 280(G). (p) LABOR MATTERS. Except as set forth on Section 4.1(p) of the Disclosure Schedule, neither the Company nor any of its Subsidiaries is a party to any labor or collective bargaining agreement which pertain to employees of the Company or any of its Subsidiaries. As of the date hereof, to the knowledge of the Company, there are no organizing activities involving the Company or any of its Subsidiaries pending with any labor organization or group of employees of the Company or any of its Subsidiaries. (q) OPINION OF FINANCIAL ADVISOR. The Company has received the written opinion of Credit Suisse First Boston Corporation, dated May 11, 2000 (a true, correct and complete copy of which will be promptly delivered to Parent by the Company), to the effect that, based upon and subject to the matters set forth therein and as of the date thereof, the Offer Consideration to be received by the holders of Shares (other than Parent and affiliates) in the Offer and the Merger, respectively, is fair, from a financial point of view. (r) VOTING REQUIREMENTS. In the event that Section 253 of the DGCL is inapplicable and unavailable to effectuate the Merger, the affirmative vote of the holders of a majority of the outstanding Shares entitled to vote at the Stockholders Meeting (as defined in Section 6.1 (a)) with respect to the adoption of this Agreement is the only vote of the holders of any class or series of the Company's capital stock or other securities required in connection with the consummation by the Company of the Merger and the other transactions contemplated hereby to be consummated by the Company. The Board of Directors has taken all necessary actions so that the restrictions on "business combinations" (as defined in Section 203 of the DGCL) set forth in Section 203 of the DGCL are not applicable to this Agreement and the transactions contemplated hereby, including the Offer and the Merger. (s) RIGHTS AGREEMENT. The Company has amended its Rights Agreement (the "Rights Amendment") to ensure that (a) neither a "Triggering Event" nor a "Stock Acquisition Date" or a "Distribution Date" (in each case as defined in the Rights Agreement) will occur, and none of Parent or Purchaser or any of their "Affiliates" or "Associates" will be deemed to be an "Acquiring Person" or "Beneficial Owner" of shares of Common Stock (in each case as defined in the Rights Agreement), by reason 37 of the execution and delivery of this Agreement or the consummation of the transactions to be effected pursuant to this Agreement, and (b) the Rights will expire immediately prior to the consummation of the Offer. The Rights Amendment is sufficient to render the Rights inoperative with respect to (i) the acquisition of Shares by Parent, Purchaser or their affiliates pursuant to this Agreement and the Offer and (ii) the Merger. A true and correct copy of the Rights Amendment has been delivered or made available to Parent. (t) BROKERS. No broker, investment banker, financial advisor or other person, other than Credit Suisse First Boston Corporation, the fees and expenses of which will be paid by the Company, is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of the Company or any of its Subsidiaries. A complete and accurate copy of Credit Suisse First Boston Corporation's engagement letter has been provided or made available to Parent and will not be amended, without the consent of Parent, to (i) increase the fees payable thereunder or (ii) extend the period for which services are to be performed beyond the Effective Time. Section 4.2 REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER. Parent and Purchaser represent and warrant to the Company as follows: (a) ORGANIZATION, STANDING AND CORPORATE POWER. Each of Parent and Purchaser is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated and has all requisite corporate power and authority and any necessary governmental approvals to own, lease and operate its properties and to carry on its business as now being conducted and is duly qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary other than in such jurisdictions where the failure to be so qualified would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Parent or Purchaser, taken as a whole. Parent has delivered or made available to the Company complete and correct copies of the Certificate of Incorporation and By-laws of Parent and Purchaser, in each case as in effect on the date hereof. 38 (b) AUTHORIZATION. Each of Parent and Purchaser have the requisite corporate power and authority to enter into this Agreement. The execution and delivery of this Agreement by Parent and Purchaser and the consummation by Parent and Purchaser of the transactions contemplated hereby have been duly authorized by all corporate action on the part of each of Parent and Purchaser, and no other corporate proceedings on the part of Parent or Purchaser are necessary to authorize this Agreement, or to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by each of Parent and Purchaser and, assuming this Agreement constitutes a valid and binding obligation of the Company, constitutes a valid and binding obligation of each of Parent and Purchaser, enforceable against each such party in accordance with its terms. (c) CONSENTS AND APPROVALS; NO VIOLATIONS. (i) The execution and delivery of this Agreement by Parent and Purchaser do not, and the consummation of the transactions contemplated hereby and compliance with the provisions hereof will not (x) violate any of the provisions of the certificate of incorporation or by-laws of Parent, Purchaser or any of their respective Subsidiaries, in each case as amended to the date of this Agreement, (y) subject to the governmental filings and other makers referred to in Section 4.2(c)(ii), violate, result in a breach of or default (with or without notice or lapse of time, or both) under, or give rise to a material obligation, a right of termination, cancellation or acceleration of any obligation or loss of a material benefit under, or require the consent of any person under, any indenture, or other agreement, permit, concession, franchise, license or other instrument or undertaking to which Parent, Purchaser or any of their respective Subsidiaries is a party or by which Parent, Purchaser or any of their respective Subsidiaries or any of their respective assets is bound or affected, or (z) subject to the governmental filings and other makers referred to in Section 4.2(c)(ii), violate any law, rule or regulation applicable to Parent and Purchaser, or any order, writ, judgment, injunc tion, decree, determination or award applicable to Parent and Purchaser currently in effect, which, in the case of clauses (y) and (z) above, could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Parent or Purchaser taken as a whole. (ii) No consent, approval, order or authorization of, or declaration, registration or filing with, or notice to, any Governmental Entity which has not been received or made is required by or with respect to Parent or Purchaser or any of their respective Subsidiaries in connection with the execution 39 and delivery of this Agreement by Parent or Purchaser or the consummation by Parent, Purchaser of any of the transactions contemplated hereby, except for (i) the filing of premerger notification and report forms under the HSR Act, (ii) the filing with the SEC of (A) the Schedule TO and (B) such reports under the Exchange Act as may be required in connection with this Agreement and the transactions contemplated hereby, (iii) the filing of the certificate of merger or the certificate of ownership and merger, as the case may be, with the Secretary of State of the State of Delaware and appropriate documents with the relevant authorities of other states in which the Company is qualified to do business, and (iv) any other consents, approvals, authorizations, filings or notices the failure to make or obtain which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Parent or Purchaser, taken as a whole. (d) CERTAIN INFORMATION. Subject to the Company's fulfillment of its obligations hereunder with respect thereto, the Offer Documents will contain (or will be amended in a timely manner so as to contain) all information which is required to be included therein in accordance with the Exchange Act and the rules and regulations thereunder and any other applicable law and will conform in all material respects with the requirements of the Exchange Act and any other applicable law, and the Offer Documents will not, at the respective times they are filed with the SEC or published, sent or given to the Company's stockholders, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading; PROVIDED, HOWEVER, that no representation or warranty is hereby made by Parent or Purchaser with respect to any information supplied by the Company in writing for inclusion in, or with respect to the Company information derived from the Company's public SEC filings which is included or incorporated by reference in the Offer Documents. None of the information supplied or to be supplied by Parent or Purchaser for inclusion or incorporation by reference in, or which may be deemed to be incorporated by reference in, the Schedule 14D-9 or the Proxy Statement will, at the respective times the Schedule 14D-9 and the Proxy Statement are filed with the SEC or published, sent or given to the Company's stockholders, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading. If at any time prior to the Effective Time any event 40 with respect to Parent or Purchaser, or with respect to any information supplied by Parent or Purchaser for inclusion in the Schedule 14D-9 or the Proxy Statement, shall occur which is required to be described in an amendment of, or a supplement to, such document, Parent or Purchaser shall so describe the event to the Company. (e) VOTE REQUIRED. No vote of the holders of any class or series of capital stock of Parent is necessary to approve this Agreement, the Merger, the Offer or the other transactions contemplated hereby. (f) NO BUSINESS ACTIVITIES. Purchaser has not conducted any activities other than in connection with its organization, the negotiation and execution of this Agreement and the consummation of the transactions contemplated hereby. (g) SUFFICIENT FUNDS. At the Closing, Purchaser will have sufficient funds to enable Purchaser to pay in full (i) the Offer Consideration, (ii) the Merger Consideration, (iii) any existing indebtedness that is required to be repaid as a result of the transactions contemplated hereby, including the financing thereof, and (iv) all fees and expenses payable by Parent and Purchaser in connection with this Agreement and the transactions contemplated hereby. ARTICLE V CONDUCT OF BUSINESS OF THE COMPANY Section 5.1 CONDUCT OF BUSINESS OF THE COMPANY. Except as expressly provided for herein or as set forth in Section 5.1 of the Disclosure Schedule, during the period from the date of this Agreement to the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, act and carry on its business in the ordinary course of business consistent with past practice and, to the extent consistent therewith, use its reasonable best efforts to preserve intact its current business organizations, keep available the services of its current key officers and employees and preserve the goodwill of those engaged in material business relationships with the Company. Without limiting the generality of the foregoing, except as expressly provided herein, the Company shall not, and shall not permit any of its Subsidiaries to, without the prior consent of Parent: (i) (A) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, securities or other property) in respect of, any of its outstanding capital 41 stock (other than, with respect to a Subsidiary of the Company, to its corporate parent), except regular quarterly dividends with respect to the Shares on the regular quarterly record date and at a rate less than or equal to the rate paid on the last quarterly dividend date, (B) split, combine or reclassify any of its outstanding capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its outstanding capital stock, or (C) purchase, redeem or otherwise acquire any shares of outstanding capital stock or any rights, warrants or options to acquire any such shares, except, in the case of this clause (C), for the acquisition of Shares from holders of Options in full or partial payment of the exercise price payable by such holder upon exercise of Options to the extent required under the terms of such Options as in effect on the date hereof; (ii) issue, sell, grant, pledge or otherwise encumber any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities, other than upon the exercise of vested Options outstanding on the date of this Agreement; (iii) amend its certificate of incorporation, by-laws or other comparable charter or organizational documents; (iv) directly or indirectly acquire, make any investment (other than investments not exceeding $5.0 million in the aggregate) in, or make any capital contributions to, any person (other than a Subsidiary of the Company) other than in the ordinary course of business consistent with past practice; (v) make any new capital expenditure or expenditures in excess of $10.0 million in the aggregate; (vi) enter into, amend or terminate any Material Contract or any contract involving amounts in excess of $2.0 million per year other than in the ordinary course of business consistent with past practice; (vii) directly or indirectly sell, pledge or otherwise dispose of or encumber any of its properties or assets, except for sales, pledges or other dispositions or encumbrances in the ordinary course of business consistent with past practice; (viii) (A) other than in connection with any 42 action permitted by Section 3.2 or this Section 5.1, incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, other than indebtedness owing to or guarantees of indebtedness owing to the Company or any direct or indirect wholly owned Subsidiary of the Company or (B) make any loans or advances to any other person, other than to the Company or to any direct or indirect wholly owned Subsidiary of the Company and other than routine advances to employees consistent with past practice, except, in the case of clause (A), for borrowings under the Credit Agreement dated as of January 23, 1998, among the Company, Bank of America National Trust and Savings Association and the lenders named therein or under other credit facilities described in the Company's Form 10-K for the fiscal year ended December 31, 1999 in the ordinary course of business consistent with past practice; (ix) grant or agree to grant to any director or officer or, other than in the ordinary course of business consistent with past practice, to any employee (other than employees who receive less than $200,000 in total annual cash compensation from the Company or any of its Subsidiaries), any increase in wages or bonus, severance, profit sharing, retirement (including any discretionary Company Contribution Amounts under the ERP), deferred compensation, insurance or other compensation or benefits to such officers and employees, or establish any new compensation or benefit plans or arrangements, or amend or agree to amend any existing Company Plans, except as may be required under this Agreement, existing agreements or by law or other than in the ordinary course of business consistent with past practice; (x) except as set forth in this Agreement and except as required under the existing Company Plans and existing collective bargaining agreements, accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits; (xi) enter into or amend any employment, severance or similar agreement with any existing officers or, other than in the ordinary course of business consistent with past practice, employees (other than employees who receive less than $200,000 in total annual cash compensation from the Company or any of its Subsidiaries), except for severance agreements entered into to the extent required pursuant to severance plans existing on the date hereof; 43 (xii) make or rescind any material tax election or settle or compromise any material income tax liability of the Company or of any of its Subsidiaries with any Governmental Entity or settle any action, suit, claim, investigation or proceeding with any Government Entity (legal, administrative or arbitrative) in an amount in excess of $1.0 million; (xiii) pay, discharge or satisfy any claims, liabilities or obligations, other than the payment, discharge or satisfaction (x) of any such claims, liabilities or obligations in the ordinary course of business or (y) of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries or (z) other than settlements which involve solely the payment of money that would not result in an uninsured or underinsured payment by or liability of the Company in excess of $2.0 million in the aggregate above reserves established therefor on the books of the Company; (xiv) except as disclosed in the Filed SEC Documents or required by a Governmental Entity, make any change in any method of accounting or accounting practice or policy, except as required by generally accepted accounting principles; (xv) enter into any agreement, understanding or commitment that restrains, limits or impedes the Company's ability to compete with or conduct any line of business, including, but not limited to, geographic limitations on the Company's activities; (xvi) plan, announce, implement or effect any reduction in force, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of the Company or its Subsidiaries, PROVIDED, HOWEVER, that routine employee terminations shall not be considered subject to this clause (xvi); (xvii) take any action, engage in any transaction or enter into any agreement which would cause any of the representations or warranties set forth in Section 4.1 to be untrue as of the Closing Date; (xviii) revalue any material assets of the Company or any of its Subsidiaries, including but not limited to writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business, except for any revaluation resulting from a change in circumstances or 44 conditions from those prevailing as of March 31, 2000; or (xix) authorize any of, or commit or agree to take any of, the foregoing actions in respect of which it is restricted by the provisions of this Section 5.1 except to the extent such action is otherwise expressly contemplated by this Agreement. ARTICLE VI ADDITIONAL COVENANTS Section 6.1 THE COMPANY STOCKHOLDERS MEETING; PREPARATION OF THE PROXY STATEMENT; SHORT-FORM MERGER. (a) As soon as practicable following the acceptance for payment of and payment for Shares by Purchaser in the Offer, if required by law to consummate the Merger, the Company shall with the cooperation of Parent take all action necessary, in accordance with the DGCL, the Exchange Act and other applicable law and its certificate of incorporation and by-laws to convene and hold a special meeting of the stockholders of the Company (the "Stockholders Meeting") for the purpose of considering and voting upon the adoption of this Agreement and to solicit proxies pursuant to the Proxy Statement in connection therewith. Subject to the Board of Directors' fiduciary duties under applicable law, the Board of Directors of the Company shall recommend that the holders of Shares vote in favor of the adoption of this Agreement at the Stockholders Meeting and shall cause such recommendation to be included in the Proxy Statement. At the Stockholders Meeting, Parent and Purchaser shall cause all of the Shares owned by them to be voted in favor of the adoption of this Agreement. (b) The Company, if requested by Parent, shall promptly prepare and file with the SEC a proxy statement or information statement (together with any supplement or amendment thereto, the "Proxy Statement") relating to the Stockholders Meeting in accordance with the Exchange Act and the rules and regulations thereunder. Parent, Purchaser and the Company will cooperate with each other in the preparation of the Proxy Statement. Without limiting the generality or effect of the foregoing, the Company shall use its best efforts to respond to all SEC comments with respect to the Proxy Statement and, subject to compliance with SEC rules and regulations, to cause the Proxy Statement to be mailed to the Company's stockholders at the earliest practicable date. Each of Parent and Purchaser shall promptly supply to the Company in writing, for inclusion in the 45 Proxy Statement, all information concerning Parent and Purchaser required under the Exchange Act and the rules and regulations thereunder to be included in the Proxy Statement. (c) Notwithstanding the foregoing clauses (a) and (b), in the event that Purchaser shall acquire at least 90% of the outstanding Shares in the Offer, Purchaser and Parent shall take all necessary actions to cause the Merger to become effective, as soon as practicable after the expiration of the Offer, without a meeting of stockholders of the Company, in accordance with Section 253 of the DGCL. Section 6.2 ACCESS TO INFORMATION; NOTIFICATION OF CERTAIN MATTERS. (a) The Company shall, and shall cause each of its Subsidiaries to, afford to Parent and its officers, employees, counsel, financial advisors and other representatives prompt, reasonable access during normal business hours prior to the Effective Time to all of the Company's and its Subsidiaries' properties, books, contracts, commitments, personnel and records and, during such period, the Company shall, and shall cause each of its Subsidiaries to, furnish as promptly as practicable to Parent such information concerning the Company's and its Subsidiaries businesses, properties, financial condition, operations and personnel as Parent may from time to time reasonably request; PROVIDED that the Company may restrict the foregoing access to the extent that (i) it would unreasonably interfere with the conduct of the Company's business or (ii) any law, rule or regulation of any Governmental Entity applicable to the Company or its Subsidiaries requires that the Company or its Subsidiaries restrict access to any properties or information. Any such investigation by Parent shall not affect the representations or warranties of the Company contained in this Agreement. Parent will hold any information provided under this Section 6.2 that is non-public in confidence to the extent required by, and in accordance with, the provisions of the letter dated April 18, 2000 (the "Letter Agreement"), between the Company and Parent. (b) The Company shall give prompt notice to Parent of (i) the occurrence or non-occurrence of any event which would cause any representation or warranty contained in this Agreement to be untrue or inaccurate in any material respect at or prior to the Effective Time and (ii) any material failure of the Company to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder, in either case which would reasonably be expected to cause any of the conditions set forth in clause (v)(b), (v)(c) or (v)(e) of Exhibit A hereto 46 to fail to be satisfied; PROVIDED, HOWEVER, that the delivery of any notice pursuant to this Section 6.2(b) shall not limit or otherwise affect the rights or remedies available hereunder to Parent. Section 6.3 REASONABLE BEST EFFORTS. On the terms and subject to the conditions set forth in this Agreement, each of the parties shall use its reasonable best efforts to take, or cause to be taken, all actions, and do, or cause to be done, and assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Offer, the Merger and the other transactions contemplated hereby, including the satisfaction of the respective conditions set forth in Article VII. Section 6.4 PUBLIC ANNOUNCEMENTS. Parent and Purchaser, on the one hand, and the Company, on the other hand, shall attempt in good faith to consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release, SEC filing (including without limitation the Offer Documents, the Schedule 14D-9 and the Proxy Statement) or other public statements with respect to the transactions contemplated hereby, including the Offer and Merger, and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law, by court process or by obligations pursuant to any listing agreement with any securities exchange. Section 6.5 NO SOLICITATION. From the date hereof, the Company shall not (whether directly or indirectly through advisors, agents, representatives or other intermediaries), and the Company shall use its reasonable best efforts to cause its respective officers, directors, advisors, representatives and other agents of the Company not to, directly or indirectly, (a) continue any discussions or negotiations, if any, with any parties, other than Parent and Purchaser, conducted heretofore with respect to any Acquisition Proposal (as hereinafter defined) or which could reasonably be expected to lead to an Acquisition Proposal, (b) solicit, initiate or knowingly encourage any inquiries relating to, or the submission of, any Acquisition Proposal, (c) participate in any discussions or negotiations regarding any Acquisition Proposal, or, in connec tion with any Acquisition Proposal, furnish to any person any information or data with respect to or access to the properties of the Company or any of its Subsidiaries, or take any other action to facilitate the making of any proposal that constitutes or may 47 reasonably be expected to lead to, any Acquisition Proposal or (d) enter into any agreement with respect to any Acquisition Proposal or approve or resolve to approve any Acquisition Proposal. Notwithstanding the foregoing, the Company or its Board of Directors shall be permitted to furnish information with respect to the Company and its Subsidiaries and participate in discussions or negotiations regarding an unsolicited bonafide written Acquisition Proposal if, and only to the extent that, a majority of the entire Board of Directors of the Company determines in good faith that such Acquisition Proposal could reasonably be expected to constitute a Superior Proposal, in which case the Company will not disclose any information to such person without entering into a confidentiality agreement substantially identical to the Letter Agreement; PROVIDED such confidentiality agreement shall not prohibit the presentation of an Acquisition Proposal to the Company's Board of Directors. The Company shall promptly (but in no case later than 24 hours after receipt) provide Parent with a copy of any written Acquisition Proposal received and a written statement with respect to any non-written Acquisition Proposal received, which statement shall include the identity of the parties making the Acquisition Proposal and the material terms thereof. The Company shall keep Parent informed on a reasonably current basis of the status and content of any discussions regarding any Acquisition Proposal with a third party. For purposes of this Agreement, "Acquisition Proposal" means any offer or proposal for a merger, consolidation, share exchange, recapitalization, liquidation or other business combination involving the Company or any of its Subsidiaries or the acquisition or purchase of 15% or more of any class of equity securities of the Company or any of its Subsidiaries, or any tender offer (including self-tenders) or exchange offer that if consummated would result in any person beneficially owning 15% or more of any class of equity securities of the Company or any of its Subsidiaries, or a substantial portion of the assets of, the Company or any of its Subsidiaries, other than the transactions contemplated by this Agreement. As used herein, a "Superior Proposal" shall mean a bona fide written Acquisition Proposal to acquire directly or indirectly all the Shares then outstanding or all or substantially all of the assets of the Company which the Board of Directors concludes in good faith (based on, among other things, the advice of its independent financial advisors and outside counsel), taking into account all legal, financial, regulatory and other aspects of the proposal and the person making such proposal, (i) would if consummated, be more favorable to the Company's shareholders, from a financial point of view, than the Offer and the Merger and 48 (ii) is reasonably likely to be consummated without undue delay. Nothing contained in this Section 6.5 shall prohibit the Company or the Company's Board of Directors from taking and disclosing to the Company's stockholders a position contemplated by Rules 14d- 9 and 14e-2(a) promulgated under the Exchange Act (or any similar communications in connection with the making or amendment of a tender offer or exchange offer) or from making any disclosure required by applicable law, provided that the Board of Directors of the Company shall not recommend that the stockholders of the Company tender their Shares in connection with any such tender or exchange offer unless the Board of Directors, by majority vote of the entire board, shall have determined in good faith, based upon (among other things) the advice of its independent financial advisors and outside counsel, that the relevant Acquisition Proposal constitutes a Superior Proposal. Section 6.6 CONSENTS; APPROVALS AND FILINGS. Upon the terms and subject to the conditions hereof, each of the parties hereto shall (i) make promptly its respective filings, and thereafter make any other required submissions, under the HSR Act, the Exchange Act and any other relevant statute, rule or regulation, with respect to the Offer, the Merger and the other transactions contemplated hereby and (ii) use reasonable best efforts to take, or cause to be taken, all appropriate action, and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the Offer, the Merger and the other transactions contemplated hereby, including without limitation using reasonable best efforts to obtain all licenses, permits, consents, approvals, authorizations, qualifications and orders of Governmental Entities and cooperate to obtain all consents, approvals and authorizations of parties to contracts with the Company and its Subsidiaries as are necessary for the consummation of the Offer, the Merger and the other transactions contemplated hereby and to fulfill the conditions to the Offer and the Merger. In case at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement, the proper officers and directors of each party to this Agreement shall use their reasonable best efforts to take all such action. Section 6.7 EMPLOYEE BENEFIT PLANS. (a) Parent shall cause the Surviving Corporation to use reasonable efforts to have those individuals who are employed by the Company or any of its Subsidiaries immediately prior to the Effective Time continue to be employed with the Surviving 49 Corporation as of the Effective Time (each such employee, an "Affected Employee"); PROVIDED, HOWEVER, that this Section 6.7 shall not be construed to limit the ability of the applicable employer to terminate the employment of any Affected Employee at any time. (b) Until at least December 31, 2001, Parent shall cause the Surviving Corporation to, provide each Affected Employee (other than those employees whose terms and conditions of employment are subject to a collective bargaining agreement) with employee benefits (other than stock-based programs) that are no less favorable in the aggregate than those provided to such Affected Employees immediately prior to the Effective Time. Parent shall, until at least December 31, 2000 maintain (or cause its Subsidiaries to maintain) a severance pay practice, program or arrangement for the benefit of each Affected Employee that is no less favorable than such practice, program or arrangement in effect immediately prior to the Effective Time with respect to such Affected Employee; PROVIDED, HOWEVER, that in no event shall anything contained in this Agreement (i) prohibit Parent from amending or terminating any or all Company Plans and establishing any new employee benefit plans for the benefit of the Affected Employees, or (ii) require Parent or the Surviving Corporation to continue or establish any equity-based program for Affected Employees. (c) Parent shall, or shall cause the Surviving Corporation to, recognize each Affected Employee's service with the Company for all purposes under each employee benefit plan or arrangement maintained by Parent or the Surviving Corporation in which such Affected Employees are or become eligible to participate (with such eligibility determined taking into account such service), but only to the extent that such service was recognized for such purposes under the corresponding Company Plan; PROVIDED, HOWEVER, in no event shall any credit be given to the extent it would result in duplicate benefits for the same period of service. (d) To the extent that Affected Employees become eligible to participate in new plans after the Closing Date, Parent shall, or shall cause the Surviving Corporation to, (i) waive all limitations as to preexisting conditions exclusions and waiting periods with respect to participation and coverage requirements applicable to the Affected Employees under any welfare benefit plans in which such Affected Employees may be eligible to participate after the Effective Time, other than 50 limitations or waiting periods that are already in effect with respect to such Affected Employees and that have not been satisfied as of the Effective Time under any welfare plan maintained for the Affected Employees immediately prior to the Effective Time, and (ii) provide each Affected Employee with credit for any co-payments and deductibles paid prior to the Effective Time in satisfying any applicable deductible or out-of-pocket requirements under any welfare plans that such Affected Employees are eligible to participate in after the Effective Time. Section 6.8 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE. (a) For a period of six years after the Effective Time, the provisions with respect to indemnification, exculpation and advancement of expenses set forth in the certificate of incorporation and by-laws of the Company as in effect on the date of this Agreement (true, correct and complete copies of which have been made available to Parent) shall not be amended, repealed or otherwise modified in any manner that would adversely affect the rights thereunder of individuals who at any time prior to the Effective Time were directors or officers of the Company in respect of actions or omissions occurring at or prior to the Effective Time (including without limitation the transactions contemplated by this Agreement), unless such modification is required by law. (b) From and after the Effective Time, Parent shall indemnify, defend and hold harmless each person who is now, or has been at any time prior to the date hereof or who becomes prior to the Effective Time, an officer or director of the Company (the "Covered Parties") against all losses, claims, damages, costs, expenses (including reasonable attorneys' fees and expenses), liabilities or judgments or amounts that are paid in settlement with the approval of the indemnifying party (which approval shall not be unreasonably withheld or delayed) incurred in connection with any threatened or actual action, suit or proceeding based in whole or in part on or arising in whole or in part out of the fact that such person is or was a director or officer of the Company ("Indemnified Liabilities"), including all Indemnified Liabilities based in whole or in part on, or arising in whole or in part out of, this Agreement or the transactions contemplated hereby, in each case, to the full extent that Parent or the Company is permitted under applicable law to so indemnify. In the event any such claim, action, suit, proceeding or investigation is brought against any Covered Party, the 51 indemnifying party shall assume and direct all aspects of the defense thereof, including settlement, and the Covered Party shall cooperate in the vigorous defense of any such matter. The Covered Party shall have a right to participate in (but not control) the defense of any such matter with its own counsel and at its own expense. Notwithstanding the right of the indemnifying party to assume and control the defense of such litigation, claim or proceeding, such Covered Party shall have the right to employ separate counsel and to participate in the defense of such litigation, claim or proceeding, and the indemnifying party shall bear the fees, costs and expenses of such separate counsel and shall pay such fees, costs and expenses promptly after receipt of an invoice from such Covered Party if (i) the use of counsel chosen by the indemnifying party to represent such Covered Party would present such counsel with a conflict of interest, (ii) the defendants in, or targets of, any such litigation, claim or proceeding shall have been advised by counsel that there may be legal defenses available to it or to other Covered Parties which are different from or in addition to those available to the indemnifying party, or (iii) the indemnifying party shall not have employed counsel satisfactory to such Covered Party, in the exercise of the Covered Party's reasonable judgment, to represent such Covered Party within a reasonable time after notice of the institution of such litigation, claim or proceeding. The indemnifying party shall not settle any such matter unless (i) the Covered Party gives prior written consent, which shall not be unreasonably withheld or delayed, or (ii) the terms of the settlement provide that the Covered Party shall have no responsibility for the discharge of any settlement amount and impose no other obligations or duties on the Covered Party and the settlement discharges all rights against Covered Party with respect to such matter. In no event shall the indemnifying party be liable for any settlement effected without its prior written consent. Any Covered Party wishing to claim indemnification under this Section 6.8(b), upon learning of any such claim, action, suit, proceeding or investigation, shall promptly notify Parent and the Surviving Corporation (but the failure so to notify shall not relieve the indemnifying party from any liability which it may have under this Section 6.8(b) except to the extent such failure materially prejudices such indemnifying party), and shall deliver to Parent and the Surviving Corporation all undertakings required under applicable law. The Covered Parties as a group will be represented by a single law firm (plus no more than one local counsel in any jurisdiction) with respect to each such matter unless there is, under applicable standards of professional conduct, a conflict on any significant issue between the positions of any two or more Covered Parties. The rights to 52 indemnification under this Section 6.8(b) shall continue in full force and effect for a period of six years from the Effective Time; PROVIDED, HOWEVER, that all rights to indemnification in respect of any Indemnified Liabilities asserted or made within such period shall continue until the disposition of such Indemnified Liabilities. (c) For a period of six years after the Effective Time, Parent shall cause to be maintained in effect policies of directors' and officers' insurance, for the benefit of those persons who are covered by the Company's directors' and officers' liability insurance policies at the Effective Time, providing coverage with respect to matters occurring prior to the Effective Time that is at least equal to the coverage provided under the Company's current directors' and officers' liability insurance policies, to the extent that such liability insurance can be maintained at an annual cost to Parent not greater than 150 percent of the premium for the current Company directors' and officers' liability insurance (which the Company represents and warrants to be not more than $242,000); PROVIDED that if such insurance cannot be so maintained at such cost, Parent shall maintain as much of such insurance as can be so maintained at a cost equal to 150 percent of the current annual premiums of the Company for such insurance. (d) In the event that Parent or the Surviving Corporation or any of its successors or assigns (i) consolidates with or merges into any other person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any person, then, and in each such case, proper provision shall be made so that the successors or assigns of Parent or the Surviving Corporation shall succeed to the obligations set forth in Section 6.7 and this Section 6.8. Section 6.9 CERTAIN TAX MATTERS. The Company will act in good faith and use its reasonable best efforts (i) to obtain the opinion of Wachtell, Lipton, Rosen & Katz referred to in clause (iii) of Exhibit A. Parent and the Company will cause the appropriate officers of Parent and the Company to deliver the representation letters addressed to counsel to Parent and counsel to the Company in the form agreed upon by Parent, the Company and counsel to the Company on or prior to the date hereof which counsel may rely upon in connection with issuing such opinion. 53 ARTICLE VII CONDITIONS PRECEDENT Section 7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The respective obligation of each party to effect the Merger shall be subject to the satisfaction or written waiver on or prior to the Closing Date of the following conditions: (a) COMPLETION OF THE OFFER. Purchaser shall have accepted for payment and paid for all Shares validly tendered in the Offer and not withdrawn. (b) STOCKHOLDER APPROVAL. This Agreement shall have been adopted by the affirmative vote of the holders of the requisite number of shares of capital stock of the Company if such vote is required pursuant to the Company's certificate of incorporation, the DGCL or other applicable law. (c) NO INJUNCTIONS OR RESTRAINTS. No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Merger shall be in effect; PROVIDED, HOWEVER, that prior to invoking this condition, the party so invoking this condition shall have complied with its obligations under Section 6.3 and Section 6.6. (d) HSR ACT. All necessary waiting periods under the HSR Act applicable to the Merger shall have expired or been earlier terminated. ARTICLE VIII TERMINATION Section 8.1 TERMINATION. This Agreement may be terminated and the Merger contemplated herein may be abandoned at any time prior to the Effective Time, whether before or after approval of matters presented in connection with the Merger by the stockholders of Purchaser or, subject to the terms hereof, of the Company: (a) By the mutual written consent of Parent and the Company; PROVIDED, HOWEVER that if Parent shall have nominated a majority of the directors pursuant to Section 1.4, such consent of the Company may only be given if approved by the Board of Directors of the Company in accordance with Section 1.4(c). 54 (b) By either of Parent or the Company if (i) a statute, rule or executive order shall have been enacted, entered or promulgated prohibiting the transactions contemplated hereby on the terms contemplated by this Agreement or (ii) any Governmental Entity shall have issued an order, decree or ruling or taken any other action, in each case permanently restraining, enjoining or otherwise prohibiting the transactions contemplated hereby and such order, decree, ruling or other action shall have become final and non-appealable. (c) By either of Parent or the Company if the consummation of the Offer shall not have occurred on or before October 31, 2000 (the "Termination Date"); PROVIDED, HOWEVER, that the party seeking to terminate this Agreement pursuant to this Section 8.1(c) shall not have breached in any material respect its obligations under this Agreement; (d) By the Company: (i) if, prior to the purchase of the Shares pursuant to the Offer, (A) the Board of Directors of the Company, by majority vote of the entire board, determines in good faith, based upon (among other things) the advice of outside financial advisors and outside counsel to the Company, that an Acquisition Proposal constitutes a Superior Proposal, (B) the Board of Directors of the Company directs the Company to notify Parent in writing that it intends to enter into an agreement with respect to such Superior Proposal, attaching the most current version of such agreement (or a description of all material terms and conditions thereof) to such notice, (C) Parent does not make, within four business days of receipt of the Company's written notification of its intention to enter into a binding agreement for a Superior Proposal, an offer that the Board of Directors of the Company determines, in good faith after consultation with its financial advisors, is at least as favorable to the stockholders of the Company as such Superior Proposal, it being understood that the Company shall not enter into any such binding agreement during such four-day period and (D) the Company concurrently with such termination pursuant to this clause (d)(i) pays to Parent in immediately available funds the Termination Fee (as such term is defined in Section 9.1). The Company agrees to notify Parent promptly if its intention to enter into a written agreement referred to in its notification shall change at any time after giving 55 effect to such notification; or (ii) prior to the consummation of the Offer, if (A) there shall be a breach of any representation or warranty of Parent or Purchaser in this Agreement that is qualified as to Material Adverse Effect, (B) there shall be a breach in any material respect of any representation or warranty of Parent or Purchaser in this Agreement that is not so qualified, other than any such breaches which, in the aggregate, have not had or would not reasonably be likely to have a Material Adverse Effect on Parent and Purchaser, taken as a whole, or (C) there shall be a material breach by Parent or Purchaser of any of its covenants or agreements contained in this Agreement, which breach, in the case of clause (A), (B) or (C), either is not capable of being cured or, if it is capable of being cured, has not been cured by the earlier of (x) 10 business days following written notice to Parent from the Company of such breach and (y) the expiration of the Offer, PROVIDED that the Company may not terminate this Agreement pursuant to this Section 8.1(d)(ii) if the Company is in material breach of this Agreement. (e) By Parent or Purchaser: (i) if, prior to the purchase of the Shares pursuant to the Offer, the Board of Directors of the Company shall have withdrawn, or modified or changed in a manner adverse to Parent or Purchaser, its approval or recommendation of the Offer, this Agreement or the Merger or shall have recommended or approved an Acquisition Proposal; or (ii) any Person or "group" (as defined in Section 13(d)(3) of the Exchange Act), other than Parent, Purchaser or their affiliates or any group of which any of them is a member shall have acquired beneficial ownership (as determined pursuant to Rule 13d-3 under the Exchange Act) of 15% or more of the Shares; or (iii) if there shall have been a material breach by the Company of any provision of Section 6.5; or (iv) if the Company shall have (i) exempted for purposes of Section 203 of the DGCL any acquisition of Shares by any person or "group" (as defined in Section 13(d)(3) of the Exchange Act), other than Parent, Purchaser or their affiliates, or (ii) amended (or agreed to amend) 56 its Rights Agreement or redeemed (or agreed to redeem) its outstanding Rights thereunder for the purpose of exempting an acquisition of Shares (other than pursuant to this Agreement) from such Rights Agreement and Rights; or (v) prior to the consummation of the Offer if (i) there shall be a breach of any representation or warranty of the Company in this Agreement that is qualified as to Material Adverse Effect, (ii) there shall be a breach in any material respect of any representation or warranty of the Company in this Agreement that is not so qualified other than any such breaches which, in the aggregate, have not had or would not reasonably be likely to have a Material Adverse Effect on the Company, or (iii) there shall be a material breach by the Company of any of its covenants or agreements contained in this Agreement, which breach, in the case of clause (i), (ii) or (iii), either is not capable of being cured or, if it is capable of being cured, has not been cured by the earlier of (x) 10 business days following written notice to the Company from Parent or Purchaser of such breach and (y) the expiration of the Offer; PROVIDED that Parent or Purchaser may not terminate this Agreement pursuant to this Section 8.1 (e)(v) if Parent or Purchaser is in material breach of this Agreement. Section 8.2 EFFECT OF TERMINATION. In the event of termination of this Agreement by either the Company or Parent or Purchaser as provided in Section 8.1, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of Parent, Purchaser or the Company, other than the provisions of Section 6.2(a), this Section 8.2 and Article IX; provided that nothing herein shall relieve any party from liability for any wilful breach hereof. ARTICLE IX GENERAL PROVISIONS Section 9.1 FEES AND EXPENSES. (a) Except as provided in Section 9.1(b) below, all fees and expenses incurred in connection with the Offer, the Merger, this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees or expenses, whether or not the Offer or the Merger is consummated. (b) If (x) Parent or Purchaser terminates this Agreement pursuant to Section 8.1 (e)(i), (iii) or (iv), or (y) the Company terminates this Agreement pursuant to Section 57 8.1(d)(i), then in each case, the Company shall pay, or cause to be paid, to Parent, concurrently with the time of termination in the case of a termination pursuant to Section 8.1 (d)(i) or as promptly as is reasonably practicable (but in no event later than two business days) in the case of a termination pursuant to Section 8.1(e)(i), (iii) or (iv), an amount (the "Termination Fee") equal to $58.0 million. In addition, if: (i)(x) this Agreement is terminated pursuant to Section 8.1(c) (by the Company), or 8.1(e)(v) (where the breach by the Company is willful), (y) prior to such termination an Acquisition Proposal has been publicly announced, disclosed or communicated and (z) on the date of such termination, Parent is not in material breach of this Agreement and the Minimum Condition has not been satisfied and (ii) within fifteen months after such termination pursuant to clause (i), the Company shall consummate or enter into an agreement with respect to any Acquisition Proposal, then the Company shall pay the Termination Fee concurrently with the earlier of entering into any such agreement or consummating such transaction. Section 9.2 CERTAIN DEFINITIONS. For purposes of this Agreement: (a) an "affiliate" of any person means another person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person; (b) "business day" means any day other than Saturday, Sunday or any other day on which banks in the City of New York are required or permitted to close; (c) "counsel to Parent" means Simpson Thacher & Bartlett; (d) "including" means including without limitation; (e) "knowledge" means the actual knowledge of any officer of the Company identified on Schedule A; (f) a "person" means an individual, corporation, partnership, joint venture, association, trust, unincorporated organization or other entity; and (g) a "Subsidiary" of any person means any other person of which (i) such person or any Subsidiary thereof is a general 58 partner, (ii) such person and/or one or more of its Subsidiaries holds voting power to elect a majority of the board of directors or others performing similar functions, or (iii) such person, directly or indirectly, owns or controls more than 50% of the equity interests of such other person. Section 9.3 AMENDMENT AND MODIFICATION. This Agreement may be amended, modified and supplemented in any and all respects, whether before or after any vote of Purchaser or the stockholders of the Company contemplated hereby, by written agreement of the parties hereto (which in the case of the Company shall include approvals as contemplated in Section 1.4(c)), at any time prior to the Closing Date with respect to any of the terms contained herein; PROVIDED, HOWEVER, that after any such stockholder approvals shall have been obtained, no amendment shall be made which, under applicable law, requires the further approval of such stockholders without such approval. Section 9.4 EXTENSION; WAIVER. Subject to Section 1.4 hereof, at any time prior to the Effective Time, the parties may (a) extend the time for the performance of any of the obligations or other acts of the other parties, (b) waive any inaccuracies in the representations and warranties of the other parties contained in this Agreement or in any document delivered pursuant to this Agreement, or (c) subject to applicable law, waive compliance with any of the agreements or conditions of the other parties contained in this Agreement. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights. Section 9.5 NOTICES. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be deemed given if delivered personally or sent by overnight courier (providing proof of delivery) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice) on the date of delivery, or if by facsimile, upon confirmation of receipt: (i) if to Parent or to Purchaser, to: Ingersoll-Rand Company 200 Chestnut Ridge Road Woodcliff Lake, New Jersey 07675 Attention: Patricia Nachtigal, Esq. Facsimile: (201) 573-3400 Page> 59 with a copy (which shall not constitute notice) to: Simpson Thacher & Bartlett 425 Lexington Avenue New York, New York 10017 Attention: James M. Cotter Mario A. Ponce Facsimile: (212) 455-2502 (ii) if to the Company, to: Hussmann International, Inc. 12999 St. Charles Rock Road Bridgeton, Missouri 63044 Attention: Burton Halpern, Esq. Facsimile: (314) 298-5762 with a copy (which shall not constitute notice) to: Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019 Attention: Richard D. Katcher Facsimile: (212) 403-2000 Section 9.6 INTERPRETATION. When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for convenience of reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." The inclusion of any matter in the Company's Disclosure Schedule in connection with any representation, warranty, covenant or agreement that is qualified as to materiality or "Material Adverse Effect" shall not be an admission by the Company that such matter is material or would have a Material Adverse Effect. Matters disclosed in any section of the Company's Disclosure Schedule shall be considered disclosed for all purposes 60 under Section 4.1 to the extent that such matter on its face would reasonably be expected to be pertinent in light of the disclosure made. Section 9.7 ENTIRE AGREEMENT: NO THIRD-PARTY BENEFICIARIES. This Agreement constitutes the entire agreement, and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter of this Agreement (except for the letter agreement referenced in the last sentence of Section 6.2(a)). Other than the provisions of Section 6.8, this Agreement is not intended to confer upon any person (including, without limitation, any current or former employees of the Company), other than the parties hereto, any rights or remedies. Section 9.8 GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. Section 9.9 ASSIGNMENT. Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise by any of the parties without the prior written consent of the other parties, and any such assignment without such prior written consent shall be null and void, except that Parent and/or Purchaser may assign this Agreement to any direct or indirect wholly owned Subsidiary of Parent without the prior consent of the Company; PROVIDED that Parent and/or Purchaser, as the case may be, shall remain liable for all of its obligations under this Agreement. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns. Section 9.10 ENFORCEMENT. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in the Court of Chancery in and for New Castle County in the State of Delaware (or, if such court lacks subject matter jurisdiction, any appropriate state or federal court in New Castle County in the State of Delaware), this being in addition to any other remedy to which they are entitled at law or in equity. Each of the parties 61 hereto (i) shall submit itself to the personal jurisdiction of the Court of Chancery in and for New Castle County in the State of Delaware (or, if such court lacks subject matter jurisdiction, any appropriate state or federal court in New Castle County in the State of Delaware) with respect to any dispute that arises out of this Agreement or any of the transactions contemplated hereby, (ii) shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, and (iii) shall not bring any action relating to this Agreement or any of the transactions contemplated hereby in any court other than the Court of Chancery in and for New Castle County in the State of Delaware (or, if such court lacks subject matter jurisdiction, any appropriate state or federal court in New Castle County in the State of Delaware). By execution and delivery of this Agreement, Parent appoints The Corporation Trust Company at 1209 Orange Street, Wilmington, Delaware 19801 as its agent upon which process may be served in any such legal action or proceeding. Section 9.11 SEVERABILITY. Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein. Section 9.12 COUNTERPARTS. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. 62 IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this Agreement to be signed by their respective officers hereunto duly authorized, all as of the date first written above. INGERSOLL-RAND COMPANY By: /s/ Herbert L. Henkel ------------------------------ Name: Herbert L. Henkel Title: Chairman, President and Chief Executive Officer IR MERGER CORPORATION By: /s/ David W. Devonshire ---------------------------------- Name: David W. Devonshire Title: Vice President and Treasurer HUSSMANN INTERNATIONAL, INC. By: /s/ J. Larry Vowell -------------------------------------------- Name: J. Larry Vowell Title: President and Chief Executive Officer EXHIBIT A CONDITIONS TO THE OFFER Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement and Plan of Merger (the "Agreement") of which this Exhibit A is a part. Notwithstanding any other provision of the Offer and subject to the terms of the Merger Agreement, Purchaser shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-l(c) under the Exchange Act (relating to Purchaser's obligation to pay for or return tendered Shares promptly after termination or withdrawal of the Offer), pay for, and may delay the acceptance for payment of or, subject to the restriction referred to above, the payment for, any tendered Shares, and may amend the Offer or terminate the Offer, in each case, consistent with the terms of the Agreement and not accept for payment any tendered Shares, if (i) there shall not have been validly tendered and not withdrawn prior to the expiration of the Offer such number of Shares which would constitute at least a majority of the Shares outstanding on a fully diluted basis on the date of purchase ("on a fully-diluted basis" meaning the number of Shares outstanding, together with the Shares which the Company may be required to issue pursuant to warrants, options or obligations outstanding at that date under employee stock or similar benefit plans or otherwise whether or not vested or then exercisable) (the "Minimum Condition"), (ii) (x) any applicable waiting period under the HSR Act or any applicable waiting periods under any foreign statutes or regulations shall not have expired or been terminated, or (y) any necessary material approval, permit, authorization or consent of any domestic or foreign governmental, administrative or regulatory agency (federal, state, local, provincial or otherwise) shall not have been obtained, (iii) there shall not have been delivered to the Company and Parent an opinion of Wachtell, Lipton, Rosen & Katz, counsel to the Company, to the effect that the transactions contemplated by this Agreement will not result in (A) the January 30, 1998 spin-off of the Company (the "Spinoff") failing to qualify under Section 355(a) of the Internal Revenue Code (the "Code") or (B) the shares of common stock of the Company failing to qualify as qualified property for purposes of Section 355(c)(2) of the Code by reason of Section 355(e) of the Code, (iv) the Agreement shall have been terminated in accordance with its terms, or (v) at any time on or after the date of the Agreement and prior to the expiration date of the Offer, any of the following events shall occur and be continuing and shall not have resulted from the breach by Parent or Purchaser of any of their obligations under the Agreement: 64 (a) there shall be any statute, rule, regulation, judgment, order or injunction enacted, entered, enforced, promulgated or deemed applicable to the Offer or the Merger that shall (i) prohibit or impose any material limitations on Parent's or Purchaser's ownership or operation (or that of any of their respective Subsidiaries or affiliates) of all or a material portion of their or the Company's businesses or assets or compel Parent or Purchaser to dispose of or hold separate all or any portion of the business or assets of the Company or any of its subsidiaries or Parent or any of its subsidiaries, which in any such case referred to in this clause (i) accounted, in the aggregate, for more than $75.0 million in sales of Parent or the Company, as the case may be, in the most recently fiscal year completed, (ii) prohibit the making or consummation of the Offer or the Merger, (iii) impose material limitations on the ability of Purchaser, or render Purchaser unable, to accept for payment, pay for or purchase some or all of the Shares pursuant to the Offer and the Merger, or effectively to exercise full rights of ownership of the Shares, including, without limitation, the right to vote the Shares purchased by Purchaser or Parent on all matters properly presented to the Company's stockholders or (iv) require the divestiture by Parent or Purchaser of any Shares; or (b) (i) any representation or warranty of the Company contained in the Agreement that is qualified as to Material Adverse Effect or materiality shall not be true and correct; or (ii) any representation or warranty of the Company in the Agreement that is not so qualified shall not be true and correct in all material respects, in each case as of the date of consummation of the Offer as though made on or as of such date (other than representations and warranties that by their terms address matters only as of another specified date, which shall be true and correct only as of such other specified date); or (c) the Company shall have breached or failed in any material respect to perform any material obligation or to comply with any material agreement or covenant of the Company to be performed by or complied with by it under the Agreement; or (d) except as disclosed in the Filed SEC Documents or in Section 4.1(f) of the Disclosure Schedule, there shall have occurred an event, change, occurrence, or development 65 of a state of facts or circumstances having, or which would reasonably be expected to have, a Material Adverse Effect on the Company; or (e) (i) it shall have been publicly disclosed or Purchaser shall have otherwise learned that beneficial ownership (determined for the purposes of this paragraph as set forth in Rule 13d-3 promulgated under the Exchange Act) of more than 15% of the outstanding Shares has been acquired by any corporation (including the Company or any of its subsidiaries or affiliates), partnership, person or other entity or group (as defined in Section 13(d)(3) of the Exchange Act), other than Parent or any of its affiliates or (ii) (A) the Board of Directors of the Company or any committee thereof shall have withdrawn or modified in a manner adverse to Parent or Purchaser the approval or recommendation of the Offer, the Merger or the Agreement, or approved or recommended any takeover proposal or any other acquisition of Shares other than the Offer and the Merger, (B) any corporation, partnership, person or other entity or group shall have entered into a definitive agreement or an agreement in principle with the Company with respect to an Acquisition Proposal, (C) the Board of Directors of the Company or any committee thereof shall have resolved to do any of the foregoing or (D) upon request of Purchaser, the Board of Directors of the Company shall fail to reaffirm its approval or recommendation of the Offer, the Agreement or the Merger; which, in the reasonable judgment of Parent or Purchaser, in any such case set forth in clauses (a) - (e), and regardless of the circumstances (including any action or inaction by Parent or Purchaser) giving rise to such condition makes it inadvisable to proceed with the Offer and/or with such acceptance for payment or, of payment for, Shares. Subject to the terms of the Agreement, the foregoing conditions are for the sole benefit of Parent and Purchaser and may be waived by Parent or Purchaser, in whole or in part, at any time and from time to time, in the sole discretion of Parent or Purchaser. The failure by Parent or Purchaser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. Schedule A [J. Larry Vowel - President and CEO Michel D. Newman - Senior Vice President and Chief Financial Officer John S. Gleason - Executive Vice President - North American Operations Burton Halpern - Vice President and General Counsel Dennis G. Gipson - Senior Vice President - International Lawrence A. Rauzon - Vice President - Asia Pacific EX-99.(D)(2) 11 EXHIBIT 99(D)(2) EXHIBIT 99(d)(2) [HUSSMANN INTERNATIONAL INC. LETTERHEAD] April 18, 2000 STRICTLY CONFIDENTIAL - --------------------- Ingersoll-Rand Company 200 Chestnut Ridge Road Woodcliff Lake, New Jersey 07675 Attention: Herbert L. Henkel Gentlemen: You have indicated an interest in a potential transaction with Hussmann International, Inc. (the "Company"). In connection with your analysis of a possible transaction with the Company, you have been or will be provided certain oral and written information concerning the Company from directors, officers, employees, representatives, advisors and/or agents of the Company and its affiliates (collectively, the "Disclosing Parties"). In consideration of the Disclosing Parties furnishing you with such information, the Company requests your agreement to the following (it being understood that you are agreeing to cause your Representatives (as defined below) to comply with the provisions hereof): 1. The Evaluation Material (as defined below) will be used solely for the purpose of evaluating a possible transaction between the Company and you. Until the end of a two-year period commencing on the date of this agreement, all the Evaluation Material will be kept confidential by you and your Representatives and shall not be disclosed directly or indirectly, in whole or in part, by you or your Representatives, to any other person or entity, except that you may disclose the Evaluation Material or portions thereof to those of your directors, officers, employees, representatives, advisors and agents (the persons to whom such disclosure is permissible being collectively called "Representatives") who need to know such information for the purpose of evaluating a possible transaction unless otherwise restricted by paragraph 2 hereof. 2. The Company and you agree that, in the event that you receive Evaluation Material containing or otherwise reflecting information concerning pending proposals by the Company, such Evaluation Material will not be provided to employees of your company who are directly responsible for activities by you that are competitive with the Company. -1- 3. You agree that you will inform each of your Representatives who have, or will have, access to any or all of the Evaluation Materials, of the existence and content of this agreement, and will take all reasonable action necessary to cause such Representatives to observe the requirements of this agreement. In any event, you agree to be responsible to the Company for any breach of this agreement by any of the Representatives. In the event that you or any of the Representatives are legally compelled to disclose any of the Evaluation Material, you or such Representative, as the case may be, shall provide prompt prior written notice of such compulsion to General Counsel of the Company, so that the Company may seek a protective order or other appropriate remedy or, if appropriate, waive compliance with the terms of this agreement. In the event that such protective order or other remedy is not obtained, or that the Company waives compliance with the provisions hereof, you or such Representative, as the case may be, may disclose to any tribunal only that portion of the Evaluation Material that you are advised by counsel is legally required to be disclosed and you shall exercise reasonable efforts to obtain reliable assurance that confidential treatment required hereby will be accorded such Evaluation Material; and you shall not be liable for such disclosure unless such disclosure to such tribunal was caused by or resulted from a previous disclosure by you or any Representative not permitted by this agreement. 4. You recognize and acknowledge the competitive value and confidential nature of the Evaluation Material and the irreparable damage that could result to the Company if information contained therein is used or disclosed to any third party in violation of this agreement. Notwithstanding the other provisions hereof, you agree that the Evaluation Material will not be used by you or any of your Representatives in any way detrimental to the Company, including, without limitation, to the competitive disadvantage of the Company. 5. The term "Evaluation Material" as used in this agreement shall mean all information and documents, whether in written or oral form, that any Disclosing Party furnishes or otherwise discloses to you or any of the Representatives, whether furnished or otherwise disclosed before, on or after the date of this agreement, together with all analyses, compilations, studies or other documents, records or data prepared by you or any of the Representatives which contain or otherwise reflect or are generated from such information and documents. The term "Evaluation Material" does not include any information that (i) at the time of disclosure or thereafter is generally available to and known by the public (other than as a result of a disclosure directly or indirectly by you or any of your Representatives) or (ii) at the time of disclosure or thereafter is available to you on a nonconfidential basis from a source other than a Disclosing Party, that is not and would not be bound by an obligation of confidentiality with any Disclosing Party or otherwise prohibited from transmitting the information to you on a nonconfidential basis by a contractual, legal or fiduciary obligation or (iii) has been or is independently acquired or developed by you without violation of any obligations under this agreement or (iv) has been or is disclosed to you by the Company in pursuing a business relationship regarding internet home delivery or any other business opportunities of mutual interest, it being understood that obligations with respect to information furnished in any such pursuit shall be governed by other agreements between us. 6. If a transaction with the Company is not consummated by you or if the Company so requests at any time, you will promptly destroy all copies of the Evaluation -2- Material whether or not then in your possession or in the possession of any the Representatives, and any copies, notes, extracts or other reproduction thereof, without retaining any copy thereof. An executive officer of your company will certify to us in writing that the materials have been destroyed. 7. You will not, and will direct and cause the Representatives not to, without the prior written consent of the Company, disclose to any person either the fact that any investigations, discussions or negotiations are taking place concerning a possible transaction between the Company and you, or that you have requested or received Evaluation Material from any Disclosing Party, or any of the terms, conditions or other facts with respect to any such possible transaction, including the status thereof. 8. It is understood that all communications regarding this possible transaction and requests for additional information will be submitted or directed to J. Larry Vowell or his designee. You further agree that, without the prior written consent of the Company, for a period of one year from the date hereof, you and/or any of your Representatives will not solicit to employ any of the employees of the Company or any of its subsidiaries and with whom you have contact by reason of your investigation of the Company other than any such employee who has been terminated by the Company or its subsidiaries prior to the commencement of employment discussions between you and such employee; provided that you shall not be restricted in any general solicitation of employees or public advertising of employment opportunities (including the use of employment agencies) and you shall not be restricted in hiring any person who responds to such general solicitation or public advertising. 9. You understand and acknowledge that none of the Company nor any of its respective directors, officers, stockholders, employees, owners, affiliates, representatives, advisors or agents is making any representation or warranty, express or implied, as to the accuracy or completeness of the Evaluation Material, and none of the Company nor any of its respective directors, officers, stockholders, employees, owners, affiliates, representatives, advisors, or agents will have any liability to you or any other person resulting from use of the Evaluation Material by you and any of your Representatives. 10. For a period of two years from the date of this Agreement, you and your Representatives and affiliates shall not, directly or indirectly, and you shall cause any person or entity controlled by you not to, without prior written consent of the Board of Directors of the Company, (i) in any manner acquire, agree to acquire or make any proposal to acquire, directly or indirectly, any securities or property of the Company or any of its affiliates, (ii) propose to enter into, directly or indirectly, any merger, consolidation, recapitalization, business combination or other similar transaction involving the Company or any of its affiliates, (iii) make, or in any way participate in any "solicitation" of "proxies" (as such terms are used in the proxy rules of the Securities and Exchange Commission) to vote, to advise or influence any person with respect to the voting of any voting securities of the Company or any of its affiliates, (iv) form, join or in any way participate in a "group" (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934 with respect to any voting securities of the Company or any of its affiliates, (v) otherwise act, alone or in concert with others, to seek to control or influence the management, Board of Directors or policies of the Company, (vi) disclose any intention, plan -3- or arrangement inconsistent with the foregoing, or (vii) advise, assist or encourage any other persons in connection with any of the foregoing. You also agree during such period not to (a) request the Company (or its representatives), directly or indirectly, to amend or waive any provision of this paragraph (including this sentence), (b) take any action which might require the Company or any of its affiliates to make a public announcement with respect to any matters covered by this Agreement or (c) communicate with the Company's shareholders. The provisions of this paragraph 10 shall not be operative in the event that the Company enters into a definitive agreement the consummation of which would result in a third party owning 50% or more of the outstanding common stock of the Company or any successor to the Company. You further agree that you will not purchase any of our securities in violation of the federal securities laws. 11. You also understand and agree that no contract or agreement providing for a transaction shall be deemed to exist between you and the Company and/or any affiliate of the Company unless and until a definitive agreement has been executed and delivered by you and each of the other parties thereto, and you hereby waive, in advance, any claims (including, without limitation, breach or contract) in connection with a transaction unless and until a definitive agreement has been executed and delivered by you and each of the other parties thereto. For purposes of this agreement, the term "definitive agreement" does not include an executed letter of intent or any other preliminary written agreement, nor does it include any written or oral acceptance of an offer or bid. You further understand that (i) the Company shall be free to terminate you and/or your Representatives' access to the Evaluation Material at any time and to conduct the process for a transaction as they in their sole discretion shall determine (including, without limitation, negotiating with any third party and entering into a definitive agreement without prior written notice to you or any other person), (ii) any procedures relating to such transaction may be changed at any time without notice to you or any other person and (iii) you shall not have any claims whatsoever against the Company or any of its directors, officers, stockholders, employees, owners, affiliates, representatives, advisors or agents arising out of or relating to the transaction (other than those against the parties to an Agreement with you in accordance with the terms thereof). Neither this paragraph nor any other provision in this agreement can be waived or amended except by written consent of the Company. 12. You agree that money damages would not be a sufficient remedy for any breach of this agreement and, accordingly, that the company shall be entitled to equitable relief, including injunction and specific performance, in the event of any breach of the provisions of this agreement, in addition to all other remedies available to the Company at law or in equity. 13. It is further understood and agreed that no failure or delay in exercising any right, power or privilege hereunder will operate as a waiver thereof, nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder. This agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successor and assigns. -4- THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. If you agree with the foregoing, please sign both copies of this agreement and return one to the Company, which will constitute our agreement with respect to the subject matter of this letter. Very truly yours, HUSSMANN INTERNATIONAL, INC. By: /s/ J. Larry Vowell ------------------------ J. Larry Vowell President and Chief Executive Officer Accepted and Agreed as of the date first written above INGERSOLL-RAND COMPANY By: /s/ Herbert L. Henkel ----------------------- Name: Herbert L. Henkel Title: Chairman, President and Chief Executive Officer -5- -----END PRIVACY-ENHANCED MESSAGE-----