-----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, PwFMFP3Mqh5HaB499czsaZyK9+bJEOoMg6QHmB72NxUlYgdJ0Dh5f4RTuxekXXMS l8KxtNCzFImBQrBuvrTBqA== 0000950123-98-001287.txt : 19980212 0000950123-98-001287.hdr.sgml : 19980212 ACCESSION NUMBER: 0000950123-98-001287 CONFORMED SUBMISSION TYPE: SC 13E4 PUBLIC DOCUMENT COUNT: 14 FILED AS OF DATE: 19980211 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: LIBERTY CORP CENTRAL INDEX KEY: 0000059229 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 570507055 STATE OF INCORPORATION: SC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E4 SEC ACT: SEC FILE NUMBER: 005-12574 FILM NUMBER: 98532020 BUSINESS ADDRESS: STREET 1: P O BOX 789 STREET 2: 2000 WADE HAMPTON BLVD CITY: GREENVILLE STATE: SC ZIP: 29615 BUSINESS PHONE: 8032688283 MAIL ADDRESS: STREET 1: P O BOX 789 STREET 2: WADE HAMPTON BLVD CITY: GREENVILLE STATE: SC ZIP: 29602 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: LIBERTY CORP CENTRAL INDEX KEY: 0000059229 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 570507055 STATE OF INCORPORATION: SC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E4 BUSINESS ADDRESS: STREET 1: P O BOX 789 STREET 2: 2000 WADE HAMPTON BLVD CITY: GREENVILLE STATE: SC ZIP: 29615 BUSINESS PHONE: 8032688283 MAIL ADDRESS: STREET 1: P O BOX 789 STREET 2: WADE HAMPTON BLVD CITY: GREENVILLE STATE: SC ZIP: 29602 SC 13E4 1 SCHEDULE 13E4 1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- SCHEDULE 13E-4 ISSUER TENDER OFFER STATEMENT (PURSUANT TO SECTION 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934) --------------------- THE LIBERTY CORPORATION (Name of Issuer) THE LIBERTY CORPORATION (Name of Person(s) Filing Statement) COMMON STOCK (Title of Class of Securities) 530370 10 5 (CUSIP Number of Class of Securities) MARTHA G. WILLIAMS THE LIBERTY CORPORATION 2000 WADE HAMPTON BLVD. BOX 19043 GREENVILLE, SOUTH CAROLINA 29615 PHONE: 864-609-8300 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of the Person(s) Filing Statement) --------------------- COPY TO: DENNIS HERSH DAVIS POLK & WARDWELL 450 LEXINGTON AVENUE NEW YORK, NY 10017 --------------------- FEBRUARY 11, 1998 (Date Tender Offer First Published, Sent or Given to Security Holders) CALCULATION OF FILING FEE
================================================================================================================== TRANSACTION VALUATION* AMOUNT OF FILING FEE - ------------------------------------------------------------------------------------------------------------------ $104,000,000 $20,800 ==================================================================================================================
* Calculated solely for the purpose of determining the filing fee, based upon the purchase of 2,000,000 shares at $52.00 a share. [ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. Amount previously paid: Not applicable Filing Party: Not applicable Form or registration no.: Not applicable Date Filed: Not applicable ================================================================================ 2 ITEM 1. SECURITY AND ISSUER. (a) The name of the issuer is The Liberty Corporation, a South Carolina corporation (the "Company"), which has its principal executive offices at 2000 Wade Hampton Boulevard; Greenville, South Carolina 29602; telephone number: (864) 609-8256. (b) This schedule relates to the offer by the Company to purchase up to 2,000,000 outstanding shares of Common Stock, no par value, of the Company (such shares, together with the associated preferred stock purchase rights (the "Rights") issued pursuant to the Rights Agreement, dated as of August 7, 1990, between the Company and The Bank of New York, as Rights Agent, are hereinafter referred to as the "Shares") at prices not greater than $52.00 nor less than $45.50 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase dated February 11, 1998 (the "Offer to Purchase") and in the related Letter of Transmittal (which together constitute the "Offer"), copies of which are attached hereto as Exhibits (a)(1) and(a)(2), respectively. The information set forth in the Introduction, and in Section 1, Section 9 and Section 12 of the Offer to Purchase is incorporated herein by reference. (c) The information set forth in the Introduction and in Section 8 of the Offer to Purchase is incorporated herein by reference. (d) Not applicable. ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a) The information set forth in Section 11 of the Offer to Purchase is incorporated herein by reference. (b) Not applicable. ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE. (a)-(j) The information set forth in the Introduction and in Section 9 and Section 10 of the Offer to Purchase is incorporated herein by reference. ITEM 4. INTEREST IN SECURITIES OF THE ISSUER. The information set forth in Section 12 of the Offer to Purchase is incorporated herein by reference. ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE ISSUER'S SECURITIES. The information set forth in Section 10 and Section 12 of the Offer to Purchase is incorporated herein by reference. ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED. The information set forth in Section 16 of the Offer to Purchase is incorporated herein by reference. ITEM 7. FINANCIAL INFORMATION. (a) The financial information set forth in Section 10 of the Offer to Purchase is incorporated herein by reference. (b) The pro forma data set forth in Section 10 of the Offer to Purchase is incorporated herein by reference. ITEM 8. ADDITIONAL INFORMATION. (a) Not applicable. (b) The information set forth in Section 13 of the Offer to Purchase is incorporated herein by reference. (c) Not applicable. (d) Not applicable. 2 3 (e) The information set forth in the Offer to Purchase and Letter of Transmittal is incorporated herein by reference. ITEM 9. MATERIAL TO BE FILED AS EXHIBITS. (a)(1) Form of Offer to Purchase dated February 11, 1998. (a)(2) Form of Letter of Transmittal dated February 11, 1998, together with Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(3) Form of Notice of Guaranteed Delivery. (a)(4) Form of letter from Goldman, Sachs & Co. to brokers, dealers, commercial banks, trust companies and other nominees dated February 11, 1998. (a)(5) Form of letter from brokers, dealers, commercial banks and trust companies to their clients dated February 11, 1998. (a)(6) Form of letter to stockholders from Hayne Hipp, President of the Company, dated February 11, 1998. (a)(7) Form of letter from the Company to holders of vested options dated February 11, 1998. (a)(8) Form of letter from the Company to holders of Preferred Stock dated February 11, 1998. (a)(9) Form of Summary Advertisement dated February 11, 1998. (a)(10) Form of Communications Bulletin to Employees of the Company dated February 10, 1998. (a)(11) News Release dated February 2, 1998. (a)(12) News Release dated February 10, 1998. (b) Promissory note dated January 28, 1998 from the Company to Wachovia Bank, N.A. (c) Not applicable. (d) Not applicable. (e) Not applicable. (f) Not applicable. 3 4 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. THE LIBERTY CORPORATION By: /s/ MARTHA G. WILLIAMS ------------------------------------ Name: Martha G. Williams Title: Vice President, General Counsel and Secretary Dated: February 11, 1998 4 5 EXHIBIT INDEX
SEQUENTIALLY EXHIBIT NUMBERED NUMBER DESCRIPTION PAGE - ------- ----------- ------------ (a)(1) Form of Offer to Purchase dated February 11, 1998. ......... (a)(2) Form of Letter of Transmittal dated February 11, 1998, together with Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. .............. (a)(3) Form of Notice of Guaranteed Delivery. ..................... (a)(4) Form of letter from Goldman, Sachs & Co. to brokers, dealers, commercial banks, trust companies and other nominees dated February 11, 1998. .......................... (a)(5) Form of letter from brokers, dealers, commercial banks and trust companies to their clients dated February 11, 1998.... (a)(6) Form of letter to stockholders from Hayne Hipp, President of the Company, dated February 11, 1998. ...................... (a)(7) Form of letter from the Company to holders of vested options dated February 11, 1998. ................................... (a)(8) Form of letter from the Company to holders of Preferred Stock dated February 11, 1998. ............................. (a)(9) Form of Summary Advertisement dated February 11, 1998. ..... (a)(10) Form of Communications Bulletin to Employees of the Company dated February 10, 1998. ................................... (a)(11) News Release dated February 2, 1998. ....................... (a)(12) News Release dated February 10, 1998. ...................... (b) Promissory note dated January 28, 1998 from the Company to Wachovia Bank, N.A. ........................................ (c) Not applicable. ............................................ (d) Not applicable. ............................................ (e) Not applicable. ............................................ (f) Not applicable. ............................................
EX-99.A.1 2 FORM OF OFFER TO PURCHASE 1 Exhibit (a)(1) Offer to Purchase for Cash by THE LIBERTY CORPORATION of Up to 2,000,000 Shares of Its Common Stock (Including the Associated Preferred Stock Purchase Rights) At a Purchase Price Not Greater Than $52.00 Nor Less Than $45.50 Per Share THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, MARCH 11, 1998, UNLESS THE OFFER IS EXTENDED. The Liberty Corporation, a South Carolina corporation (the "Company"), invites its stockholders to tender shares of its Common Stock, no par value (the "Shares") (including the associated preferred stock purchase rights), at prices not greater than $52.00 nor less than $45.50 per Share, net to the seller in cash, as specified by such stockholders, upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which together constitute the "Offer"). The Company will determine a single per Share price (not greater than $52.00 nor less than $45.50 per Share) that it will pay for the Shares validly tendered pursuant to the Offer and not withdrawn (the "Purchase Price"), taking into account the number of Shares so tendered and the prices specified by tendering stockholders. The Company will select the lowest Purchase Price that will allow it to purchase 2,000,000 Shares (or such lesser number of Shares as are validly tendered at prices not greater than $52.00 nor less than $45.50 per Share) pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, including the provisions thereof relating to proration and conditional tenders, the Company will purchase all Shares validly tendered at prices at or below the Purchase Price and not withdrawn. Shares tendered at prices in excess of the Purchase Price and Shares not purchased because of proration or conditional tenders will be returned. Stockholders must complete the section of the Letter of Transmittal relating to the price at which they are tendering Shares in order to validly tender Shares. --------------------- THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 7. --------------------- NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH STOCKHOLDER MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND AT WHAT PRICE. THE COMPANY HAS BEEN ADVISED THAT NO DIRECTOR OR EXECUTIVE OFFICER OF THE COMPANY INTENDS TO TENDER SHARES PURSUANT TO THE OFFER. The Shares are listed and principally traded on the New York Stock Exchange, Inc. (the "NYSE") under the symbol "LC". On February 10, 1998, the last full day of trading prior to the announcement of the Offer, the closing per Share sales price on the NYSE Composite Tape was $46.75. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES. --------------------- THE DEALER MANAGERS FOR THE OFFER ARE: GOLDMAN, SACHS & CO. --------------------- The date of this Offer to Purchase is February 11, 1998 2 IMPORTANT Any stockholder desiring to tender all or any portion of such stockholder's Shares should either (1) request such stockholder's broker, dealer, commercial bank, trust company or nominee to effect the transaction for such stockholder or (2) complete the Letter of Transmittal, sign it in the place required, have such stockholder's signature thereon guaranteed if required by the Letter of Transmittal and forward it and any other required documents to Wachovia Bank, N.A. (the "Depositary"), and either deliver the certificates for such Shares to the Depositary along with the Letter of Transmittal or tender such Shares pursuant to the procedure for book-entry transfer set forth in Section 3 hereof. A stockholder whose Shares are registered in the name of a broker, dealer, commercial bank, trust company or nominee must contact such person if such stockholder desires to tender such Shares. Stockholders who wish to tender Shares and whose certificates for such Shares are not immediately available should tender such Shares by following the procedures for guaranteed delivery set forth in Section 3 hereof. Questions and requests for assistance or for additional copies of this Offer to Purchase, the Letter of Transmittal, Notice of Guaranteed Delivery or other tender offer materials may be directed to D. F. King & Co., Inc. (the "Information Agent") or Goldman, Sachs & Co. (the "Dealer Managers") at their respective addresses and telephone numbers set forth on the back cover of this Offer to Purchase. NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER SHARES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATION AND SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. i 3 TABLE OF CONTENTS
PAGE ---- INTRODUCTION........................................................ 1 THE OFFER........................................................... 3 1. Number of Shares; Proration................................. 3 2. Tenders by Holders of Fewer Than 100 Shares................. 5 3. Procedure for Tendering Shares.............................. 5 4. Withdrawal Rights........................................... 7 Acceptance for Payment of Shares and Payment of Purchase 5. Price....................................................... 8 6. Conditional Tender of Shares................................ 9 7. Certain Conditions of the Offer............................. 9 8. Price Range of Shares; Dividends............................ 11 9. Purpose of the Offer; Certain Effects of the Offer.......... 11 10. Certain Information Concerning the Company.................. 12 11. Source and Amount of Funds.................................. 17 Interests of Directors and Officers; Transactions and 12. Agreements Concerning the Shares............................ 18 13. Regulatory Approvals........................................ 19 14. Certain Federal Income Tax Consequences..................... 19 15. Extension of Tender Period; Termination; Amendments......... 21 16. Fees and Expenses........................................... 22 17. Miscellaneous............................................... 22
ii 4 To the Holders of Common Stock of February 11, 1998 The Liberty Corporation: INTRODUCTION The Liberty Corporation, a South Carolina corporation (the "Company"), invites its stockholders to tender shares of its Common Stock, no par value (such shares, together with the associated preferred stock purchase rights (the "Rights") issued pursuant to the Rights Agreement, dated as of August 7, 1990, between the Company and The Bank of New York, as Rights Agent, are hereinafter referred to as the "Shares"), at prices not greater than $52.00 nor less than $45.50 per Share, net to the seller in cash, as specified by such stockholders, upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which together constitute the "Offer"). The Company will determine a single per Share price (not greater than $52.00 nor less than $45.50 per Share) that it will pay for the Shares validly tendered pursuant to the Offer and not withdrawn (the "Purchase Price"), taking into account the number of Shares so tendered and the prices specified by the tendering stockholders. The Company will select the lowest Purchase Price that will allow it to purchase 2,000,000 Shares (or such lesser number of Shares as are validly tendered at prices not greater than $52.00 nor less than $45.50 per Share) pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, including the provisions relating to proration and conditional tenders described below, the Company will purchase all Shares validly tendered at prices at or below the Purchase Price and not withdrawn prior to the Expiration Date (as hereinafter defined). The Purchase Price will be paid, in cash, net to the seller, with respect to all Shares purchased. Shares tendered at prices in excess of the Purchase Price and Shares not purchased because of proration or conditional tenders will be returned. Stockholders must complete the section of the Letter of Transmittal relating to the price at which they are tendering Shares in order to validly tender Shares. Tendering stockholders will not be obligated to pay brokerage commissions, solicitation fees or, subject to the Instructions as set forth in the Letter of Transmittal, stock transfer taxes on the purchase of Shares by the Company. The Company will pay all charges and expenses of Goldman, Sachs & Co. (the "Dealer Managers"), Wachovia Bank, N.A. (the "Depositary") and D. F. King & Co., Inc. (the "Information Agent") incurred in connection with the Offer. HOWEVER, ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE, SIGN AND RETURN TO THE DEPOSITARY THE FORM W-9 THAT IS INCLUDED WITH THE LETTER OF TRANSMITTAL MAY BE SUBJECT TO REQUIRED BACKUP FEDERAL INCOME TAX WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAYABLE TO SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER AND CERTAIN NON-U.S. STOCKHOLDERS MAY BE SUBJECT TO A 30% WITHHOLDING TAX. SEE SECTIONS 3 AND 14. THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 7. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH STOCKHOLDER MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND AT WHAT PRICE. THE COMPANY HAS BEEN INFORMED THAT NO DIRECTOR OR EXECUTIVE OFFICER OF THE COMPANY INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER. Holders of vested but unexercised options outstanding under the Company's Performance Incentive Compensation Program (the "Incentive Program") may exercise such options for cash and tender some or all of the Shares issued upon such exercise. Upon the terms and subject to the conditions of the Offer, if at the expiration of the Offer more than 2,000,000 shares are properly tendered at or below the Purchase Price and not withdrawn, the Company will buy Shares first from all Odd Lot Holders (as defined in Section 1) who properly tender all their Shares at or 1 5 below the Purchase Price and then on a pro rata basis from all other stockholders who properly tender at prices at or below the Purchase Price (and do not withdraw them prior to the expiration of the Offer). See Section 1. All Shares not purchased pursuant to the Offer, including Shares tendered at prices greater than the Purchase Price and Shares not purchased because of proration or conditional tenders, will be returned at the Company's expense to the stockholders who tendered such Shares. As of February 10, 1998, the Company had issued and outstanding 20,695,140 Shares and had reserved 1,286,383 Shares for issuance upon the exercise of outstanding stock options and with respect to performance shares granted pursuant to the Incentive Program. In addition, as of such date, an aggregate of (i) 599,985 Shares were issuable upon the conversion of the Company's Series 1995-A Voting Cumulative Convertible Preferred Stock; (ii) 504,168 Shares were issuable upon the conversion of the Company's Series 1994-A Voting Cumulative Convertible Preferred Stock and (iii) 519,855 Shares were issuable upon the conversion of the Company's Series 1994-B Voting cumulative Preferred Stock (collectively, the "Preferred Stock"). The 2,000,000 Shares that the Company is offering to purchase represent approximately 9.66% percent of the Shares then outstanding or approximately 8.47% on a fully-diluted basis (assuming the exercise of all outstanding stock options and including the Shares issuable upon the conversion of the Preferred Stock). The Shares are listed and principally traded on the New York Stock Exchange (the "NYSE"). On February 10, 1998, the last full day of trading prior to announcement of the Offer, the closing per Share sales price under the symbol "LC" on the NYSE Composite Tape was $46.75. See Section 8. Stockholders are urged to obtain a current market quotation for the Shares. The Company has declared a regular quarterly dividend of $.20 per Share, payable on April 2, 1998 to stockholders of record on March 16, 1998. Stockholders who sell their Shares pursuant to the Offer will not receive the dividend. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward looking statements. Certain information contained herein or in any other written or oral statements made by, or on behalf of the Company, are or may be viewed as forward looking. Although the Company has used appropriate care in developing any such forward looking information, forward looking information involves risks and uncertainties that could significantly impact actual results. These risks and uncertainties include, but are not limited to, the following: changes in general economic conditions, including the performance of financial markets and interest rates; competitive, regulatory, or tax changes that affect the cost of or demand for the Company's products; and adverse litigation results. The Company undertakes no obligation to publicly update or revise any forward looking statements whether as a result of new information, future developments or otherwise. 2 6 THE OFFER 1. NUMBER OF SHARES; PRORATION Upon the terms and subject to the conditions described in this Offer to Purchase and in the Letter of Transmittal, the Company will purchase up to 2,000,000 Shares that are validly tendered (and not properly withdrawn in accordance with Section 4) prior to the Expiration Date at a price (determined in the manner set forth below) not greater than $52.00 nor less than $45.50 per Share. The later of 12:00 midnight, New York City time, on Wednesday, March 11, 1998 or the latest time and date to which the Offer is extended by the Company, is referred to herein as the "Expiration Date." The Company will determine the Purchase Price taking into account the number of Shares so tendered and the prices specified by tendering stockholders. The Company will select the lowest Purchase Price that will allow it to purchase 2,000,000 Shares (or such lesser number as are validly tendered and not withdrawn at prices not greater than $52.00 nor less than $45.50 per Share) pursuant to the Offer. The Offer is not conditioned upon any minimum number of Shares being tendered. The Offer is, however, subject to certain other conditions. See Section 7. In accordance with Instruction 5 of the Letter of Transmittal, each stockholder who wishes to tender Shares must specify the price (not greater than $52.00 nor less than $45.50 per Share) at which such stockholder is willing to have the Company purchase such Shares. As promptly as practicable following the Expiration Date, the Company will determine the Purchase Price (not greater than $52.00 nor less than $45.50 per Share) that it will pay for Shares validly tendered pursuant to the Offer, taking into account the number of Shares so tendered and the prices specified by tendering stockholders. All Shares purchased pursuant to the Offer will be purchased at the Purchase Price. All Shares not purchased pursuant to the Offer, including Shares tendered at prices greater than the Purchase Price and Shares not purchased because of proration or conditional tenders, will be returned to the tendering stockholder at the Company's expense as promptly as practicable following the Expiration Date. Upon the terms and subject to the conditions of the Offer, if 2,000,000 or fewer Shares have been validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date, the Company will purchase all such Shares (including fractional shares). Upon the terms and subject to the conditions of the Offer, if more than 2,000,000 Shares have been validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date, the Company will purchase Shares in the following order of priority: (a) all Shares tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date by any stockholder (an "Odd Lot Holder") who owned beneficially an aggregate of fewer than 100 Shares (including any Shares acquired pursuant to the Incentive Program) as of the close of business on February 10, 1998 and who validly tenders all of such Shares (partial tenders will not qualify for this preference) and completes the box captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery; and (b) after purchase of all of the foregoing Shares, subject to the conditional tender provisions described in Section 6, all other Shares validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date on a pro rata basis, if necessary (with appropriate adjustments to avoid purchases of fractional Shares). If proration of tendered Shares is required, because of the difficulty in determining the number of Shares validly tendered (including Shares tendered by the guaranteed delivery procedure described in Section 3) and as a result of the "odd lot" procedure described in Section 2 and the conditional tender procedure described in Section 6, the Company does not expect that it will be able to announce the final proration factor or to commence payment for any Shares purchased pursuant to the Offer until approximately seven NYSE trading days after the Expiration Date. Proration for each stockholder tendering Shares, other than Odd Lot Holders, will be based on the ratio of the number of Shares validly tendered by such stockholder at or below the Purchase Price to the total number of Shares validly tendered by all stockholders, other than Odd Lot Holders, at or below the Purchase Price. This ratio will be applied to stockholders validly tendering Shares, 3 7 other than Odd Lot Holders, to determine the number of Shares that will be purchased from each stockholder pursuant to the Offer. Preliminary results of proration will be announced by press release as promptly as practicable after the Expiration Date. Holders of Shares may obtain such preliminary information from the Dealer Managers or the Information Agent and may also be able to obtain such information from their brokers. The Company expressly reserves the right, in its sole discretion but subject to certain applicable legal requirements, to purchase additional shares pursuant to the Offer, but does not currently plan to do so. If (i) the Company increases or decreases the price to be paid for Shares, increases the number of Shares being sought and such increase in the number of Shares being sought exceeds 2% of the outstanding Shares or decreases the number of Shares being sought and (ii) the Offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that notice of such increase or decrease is first published, sent or given in the manner described in Section 15, the Offer will be extended until the expiration of ten business days from the date of the publication of such notice. The Company also expressly reserves the right, in its sole discretion, at any time or from time to time, to extend the period of time during which the Offer is open by giving oral or written notice of such extension to the Depositary. See Section 15. There can be no assurance, however, that the Company will exercise its right to extend the Offer. For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time. The Company is not offering to purchase its Preferred Stock in this Offer to Purchase. The Company will, upon the terms and subject to the conditions of the Offer, accept tenders of Shares that, in accordance with the terms of such Preferred Stock are issued upon conversion of the Preferred Stock and duly tendered pursuant to the Offer. To the extent Preferred Stock is converted into Shares but the resulting Shares are not purchased pursuant to the Offer, holders of Preferred Stock so converted will have lost all preferential rights of Preferred Stock as compared to Shares (including, among other things, the priority afforded holders of Preferred Stock with respect to the payment of dividends and the distribution of assets upon liquidation). Each holder of Preferred Stock is urged to consult his own broker, investment or tax advisor with respect to the Offer. Neither the Company nor its Board of Directors makes any recommendation to any holder of Preferred Stock as to whether to convert all or any portion of such Preferred Stock into Shares or as to whether to tender or refrain from tendering pursuant to the Offer all or any portion of the Shares issuable upon such conversion. The Company has adopted a Shareholder Rights Plan and declared a dividend of one Right for each outstanding Share. Upon becoming exercisable, each Right entitles the holder to purchase for a price of $150.00 one one-hundredth of a share of Series A Participating Cumulative Preferred Stock. All of the Rights may be redeemed by the Company at a price of $.01 per Right until ten business days (or such later date as the Board of Directors determines) after the public announcement that a person or group has acquired beneficial ownership of 20% or more of the outstanding Shares (an "Acquiring Person"). Upon the existence of an Acquiring Person, the Company may redeem the Rights only with the concurrence of a majority of the directors not affiliated with the Acquiring Person. The Rights, which do not have voting power and are not entitled to dividends, expire on August 7, 2000. The Rights are not exercisable until ten business days after the public announcement that a person has become an Acquiring Person or after the commencement of a tender offer or exchange offer if, upon consummation, such person or group would become an Acquiring Person. If, after the Rights become exercisable, the Company becomes involved in a merger or certain other major corporate transactions, each Right will entitle its holder, other than the Acquiring Person, to receive Shares with a deemed market value of twice such exercise price. The Rights are not currently exercisable and trade together with the Shares associated therewith. The Rights will not become exercisable or separately tradeable as a result of the Offer. Absent circumstances causing the Rights to become exercisable or separately tradeable prior to the Expiration Date, the tender of any Shares pursuant to the Offer will include the tender of the associated Rights. No separate consideration will be paid for such Rights. A tender of Shares pursuant to the Offer will include a tender of the associated 4 8 Rights. Upon the purchase of Shares by the Company pursuant to the Offer, the sellers of the Shares so purchased will no longer own the Rights associated with such Shares. Copies of this Offer to Purchase, the Letter of Transmittal and Notice of Guaranteed Delivery are being mailed to record holders of Shares and will be furnished to brokers, dealers, banks and similar persons whose names, or the names of whose nominees, appear on the Company's stockholder list or, if applicable, who are listed as participants in a clearing agency's security position listing for subsequent transmittal to beneficial owners of Shares. 2. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES All Shares validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date by or on behalf of Odd Lot Holders as of the close of business on February 10, 1998 will be accepted before proration, if any, of the purchase of other tendered Shares. See Section 1. Partial tenders will not qualify for this preference and it is not available to beneficial holders of 100 or more Shares, even if such holders have separate stock certificates for fewer than 100 Shares. By accepting the Offer, a stockholder owning beneficially fewer than 100 Shares will avoid the payment of brokerage commissions and any applicable odd-lot discount payable on a sale of Shares in a transaction effected on a securities exchange. As of February 10, 1998, there were approximately 1,283 holders of record of Shares. Approximately 29.5% of these holders, holding in the aggregate approximately 15,361 Shares, held fewer than 100 Shares. Because of the large number of Shares held in the names of brokers and nominees, the Company is unable to estimate the number of beneficial owners of fewer than 100 Shares or the aggregate number of Shares they own. Any beneficial owner of fewer than 100 Shares who wishes to tender all of his or her Shares pursuant to this Section should complete the box captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery. 3. PROCEDURE FOR TENDERING SHARES Proper Tender of Shares. To tender Shares validly pursuant to the Offer, either (a) a properly completed and duly executed Letter of Transmittal and any other documents required by the Letter of Transmittal must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase and either (i) certificates for the Shares to be tendered must be received by the Depositary at one of such addresses or (ii) such Shares must be delivered pursuant to the procedures for book-entry transfer described below (and a confirmation of such delivery received by the Depositary), in each case prior to the Expiration Date, or (b) the tendering stockholder must comply with the guaranteed delivery procedure described below. IN ACCORDANCE WITH INSTRUCTION 5 OF THE LETTER OF TRANSMITTAL, IN ORDER TO TENDER SHARES PURSUANT TO THE OFFER, A STOCKHOLDER MUST EITHER (A) CHECK THE BOX IN THE SECTION OF THE LETTER OF TRANSMITTAL CAPTIONED "SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION" OR (B) CHECK ONE OF THE BOXES IN THE SECTION OF THE LETTER OF TRANSMITTAL CAPTIONED "SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDER". A STOCKHOLDER WHO WISHES TO MAXIMIZE THE CHANCE THAT HIS OR HER SHARES WILL BE PURCHASED AT THE RELEVANT PURCHASE PRICE SHOULD CHECK THE BOX ON THE RELEVANT LETTER OF TRANSMITTAL MARKED, "SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION". NOTE THAT THIS ELECTION COULD RESULT IN SUCH STOCKHOLDER'S SHARES BEING PURCHASED AT THE MINIMUM PRICE OF $45.50 PER SHARE. A STOCKHOLDER WHO WISHES TO INDICATE A SPECIFIC PRICE (IN MULTIPLES OF $.125) AT WHICH SUCH STOCKHOLDER'S SHARES ARE BEING TENDERED MUST CHECK A BOX UNDER THE SECTION CAPTIONED "SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDER" ON THE LETTER OF TRANSMITTAL IN THE TABLE LABELED "PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED". A STOCKHOLDER WHO WISHES TO TENDER SHARES AT MORE THAN ONE 5 9 PRICE MUST COMPLETE SEPARATE LETTERS OF TRANSMITTAL FOR EACH PRICE AT WHICH SUCH SHARES ARE BEING TENDERED. THE SAME SHARES CANNOT BE TENDERED AT MORE THAN ONE PRICE. A TENDER OF SHARES WILL BE PROPER IF, AND ONLY IF, ON THE APPROPRIATE LETTER OF TRANSMITTAL EITHER THE BOX IN THE SECTION CAPTIONED "SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION" OR ONE OF THE BOXES IN THE SECTION CAPTIONED "SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDERS" IS CHECKED. Book-Entry Delivery. The Depositary will establish an account with respect to the Shares at The Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of the Offer within two business days after the date of this Offer to Purchase, and any financial institution that is a participant in the system of the Book-Entry Transfer Facility may make delivery of Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary's account in accordance with the procedures of the Book-Entry Transfer Facility. Although delivery of Shares may be effected through book-entry transfer, a properly completed and duly executed Letter of Transmittal or an Agent's Message (as defined below) in connection with a book-entry transfer, and any other required documents must, in any case, be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date, or the tendering holder must comply with the guaranteed delivery procedure described below. Delivery of the Letter of Transmittal and any other required documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary. The term "Agent's Message" means a message transmitted by the Book-Entry Transfer Facility to and received by the Depositary and forming a part of a book-entry confirmation which states that such Book-Entry Transfer Facility has received an express acknowledgment from the participant in such Book-Entry Transfer Facility tendering the Shares which are the subject of such book-entry confirmation that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Company may enforce such agreement against such participant. Signature Guarantees. Except as otherwise provided below, all signatures on a Letter of Transmittal must be guaranteed by a firm that is a member of a registered national securities exchange or the National Association of Securities Dealers, Inc., or by a commercial bank or trust company having an office, branch or agency in the United States, in each case which is a participant in an approved signature Guarantee Medallion Program (each of the foregoing being referred to as an "Eligible Institution"). Signatures on a Letter of Transmittal need not be guaranteed if (a) the Letter of Transmittal is signed by the registered holder of the Shares tendered therewith and such holder has not completed the box entitled "Special Payment Instructions" or "Special Delivery Instructions" on the Letter of Transmittal or (b) such Shares are tendered for the account of an Eligible Institution. See Instructions 1 and 6 of the Letter of Transmittal. Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to the Offer and cannot deliver such Shares and all other required documents to the Depositary prior to the Expiration Date or the procedure for book-entry transfer cannot be complied with in a timely manner, such Shares may nevertheless be tendered if all of the following conditions are met: (i) such tender is made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery substantially in the form provided by the Company is received by the Depositary (as provided below) prior to the Expiration Date; and (iii) the certificates for such Shares (or a confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility), together with a properly completed and duly executed Letter of Transmittal (or, in the case of book-entry transfer, an Agent's Message) and any other documents required by the Letter of Transmittal, are received by the Depositary no later than 5:00 p.m., New York city time, within three NYSE trading days after the date of execution of the Notice of Guaranteed Delivery. 6 10 The Notice of Guaranteed Delivery may be delivered by hand or transmitted by mail or facsimile to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in such Notice. THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. Employee Plans. The decision as to whether to tender Shares attributable to the accounts of participants in each of the Company's Retirement and Savings Plan and The Cosmos Broadcasting Corporation Retirement and Savings Plan and the determination as to the price at which such Shares will be tendered, if any, will be made by the Plan Committee for the relevant retirement plan. Holders of vested but unexercised options may exercise such options for cash in accordance with the terms of the Incentive Program and tender the Shares received upon such exercise in accordance with the Offer as described above. Back-up and Income Tax Withholding. To prevent the possible application of backup federal income tax withholding of 31% of the gross proceeds payable to a stockholder, each tendering stockholder must provide the Company with such stockholder's correct taxpayer identification number (in the case of an individual, such stockholder's social security number) by completing the Substitute Form W-9 included in the Letter of Transmittal. (See Instruction 11 of the Letter of Transmittal.) Certain stockholders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, such stockholders must submit a statement attesting to such stockholder's exempt status. Such statements can be obtained from the Depositary. (See Instruction 11 of the Letter of Transmittal.) Rule 14e-4. It is a violation of Rule 14e-4 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), for a person, directly or indirectly, to tender Shares for his or her own account unless at the time of the tender and at the Expiration Date the person so tendering (a) has a net long position equal to or greater than the amount of (i) Shares tendered or (ii) other securities immediately convertible into, exercisable or exchangeable for the amount of Shares tendered and, upon acceptance of his or her tender by the Company, will acquire such Shares for tender by conversion, exercise or exchange of such other securities and (b) will cause such Shares to be delivered in accordance with the terms of the Offer. Rule 14e-4 provides a similar restriction applicable to the tender or guarantee of a tender on behalf of another person. The tender of Shares pursuant to any one of the procedures described above will constitute the tendering stockholder's representation and warranty that (a) such stockholder has a net long position in the Shares being tendered within the meaning of Rule 14e-4 promulgated under the Exchange Act, and (b) the tender of such Shares complies with Rule 14e-4. The Company's acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the tendering stockholder and the Company upon the terms and subject to the conditions of the Offer. Determination of Validity; Rejection of Shares; Waiver of Defects; No Obligation to Give Notice of Defects. All questions as to the Purchase Price, the form of documents and the validity, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Company, in its sole discretion, which determination shall be final and binding. The Company reserves the absolute right to reject any or all tenders of Shares determined by it not to be in proper form or the acceptance for payment of or payment for, Shares that may, in the opinion of the Company's counsel, be unlawful. The Company also reserves the absolute right to waive any defect or irregularity in any tender of Shares. None of the Company, the Dealer Managers, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defect or irregularity in tenders or incur any liability for failure to give any such notification. 4. WITHDRAWAL RIGHTS Tenders of Shares made pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. Thereafter, such tenders are irrevocable, except that they may be withdrawn after April 8, 1998 unless 7 11 theretofore accepted for payment as provided in this Offer to Purchase. If the Company extends the period of time during which the Offer is open, is delayed in accepting for payment or paying for Shares or is unable to accept for payment or pay for Shares pursuant to the Offer for any reason, then, without prejudice to the Company's rights under the Offer, the Depositary may, on behalf of the Company, retain all Shares tendered, and such Shares may not be withdrawn except as otherwise provided in this Section 4, subject to Rule 13e-4(f)(5) under the Exchange Act, which provides that the issuer making the tender offer shall either pay the consideration offered, or return the tendered securities, promptly after the termination or withdrawal of the tender offer. To be effective, a written transmission of a notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase and must specify the name of the person who tendered the Shares to be withdrawn and the number of Shares to be withdrawn. If the Shares to be withdrawn have been delivered to the Depositary, a signed notice of withdrawal with signatures guaranteed by an Eligible Institution (except in the case of Shares tendered by an Eligible Institution) must be submitted prior to the release of such Shares. In addition, such notice must specify, in the case of Shares tendered by delivery of certificates, the name of the registered holder (if different from that of the tendering stockholder) and the serial numbers shown on the particular certificates evidencing the Shares to be withdrawn or, in the case of Shares tendered by book-entry transfer, the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares. Withdrawals may not be rescinded and Shares withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. However, withdrawn Shares may be retendered by again following one of the procedures described in Section 3 at any time prior to the Expiration Date. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by the Company, in its sole discretion, which determination shall be final and binding. None of the Company, the Dealer Managers, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defect or irregularity in any notice of withdrawal or incur any liability for failure to give any such notification. 5. ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT OF PURCHASE PRICE Upon the terms and subject to the conditions of the Offer, and as promptly as practicable after the Expiration Date, the Company will determine the Purchase Price, taking into account the number of Shares tendered and the prices specified by tendering stockholders, and will (subject to the proration and conditional tender provisions of the Offer) accept for payment (and thereby purchase) and pay for Shares validly tendered at or below the Purchase Price and not withdrawn as permitted in Section 4. As soon as practicable following the determination of the Purchase Price, the Company will announce the Purchase Price it will pay for tendered Shares. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made promptly (subject to possible delay in the event of proration or conditional tenders) but only after timely receipt by the Depositary of certificates for Shares (or of a confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility), a properly completed and duly executed Letter of Transmittal (or an Agent's Message in connection with a book-entry transfer) and any other required documents. For purposes of the Offer, the Company will be deemed to have accepted for payment (and thereby purchased), subject to the proration and conditional tender provisions of the Offer, Shares that are validly tendered and not withdrawn as, if and when it gives oral or written notice to the Depositary of its acceptance for payment of such Shares. The Company will pay for Shares that it has purchased pursuant to the Offer by depositing the Purchase Price therefor with the Depositary. The Depositary will act as agent for tendering stockholders for the purpose of receiving payment from the Company and transmitting payment to tendering stockholders. Under no circumstances will interest be paid on amounts to be paid to tendering stockholders by the Company, regardless of any delay in making such payment. 8 12 Certificates for all Shares not purchased will be returned (or, in the case of Shares tendered by book-entry transfer, such Shares will be credited to an account maintained with a Book-Entry Transfer Facility) to the tendering stockholder at the Company's expense as promptly as practicable following the Expiration Date. Payment for Shares may be delayed in the event of difficulty in determining the number of Shares validly tendered or if proration is required. See Section 1. In addition, if certain events occur, the Company may not be obligated to purchase Shares pursuant to the Offer. See Section 7. As provided in Rules 13e-4(f)(4) and (8)(ii) under the Exchange Act, the Company will pay, for each Share accepted pursuant to the Offer, the same amount per Share. The Company will pay or cause to be paid any stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the Purchase Price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder, or if tendered Shares are registered in the name of any person other than the person signing the Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder, such other person or otherwise) payable on account of the transfer to such person will be deducted from the Purchase Price unless satisfactory evidence of payment of such taxes, or exemption therefrom, is submitted. See Instruction 7 to the Letter of Transmittal. 6. CONDITIONAL TENDER OF SHARES Under certain circumstances and subject to the exceptions set forth in Section 1, the Company may prorate the number of Shares purchased pursuant to the Offer. As discussed in Section 14, the number of Shares to be purchased from a particular stockholder may affect the tax treatment of such purchase to such stockholder and such stockholder's decision whether to tender. EACH STOCKHOLDER IS URGED TO CONSULT WITH HIS OR HER OWN TAX ADVISOR. Accordingly, a stockholder may tender Shares subject to the condition that a specified minimum number of such stockholder's Shares tendered pursuant to a Letter of Transmittal or Notice of Guaranteed Delivery must be purchased if any such Shares so tendered are purchased, and any stockholder desiring to make such a conditional tender must so indicate in the box captioned "Conditional Tender" in such Letter of Transmittal or, if applicable, the Notice of Guaranteed Delivery. Any tendering stockholder wishing to make a conditional tender must calculate and appropriately indicate such minimum number of Shares. If the effect of accepting tenders on a pro rata basis would be to reduce the number of Shares to be purchased from any stockholder (tendered pursuant to a Letter of Transmittal or Notice of Guaranteed Delivery) below the minimum number so specified, such tender will automatically be regarded as withdrawn (except as provided in the next paragraph) and all Shares tendered by such stockholder pursuant to such Letter of Transmittal or Notice of Guaranteed Delivery will be returned as promptly as practicable thereafter. If conditional tenders would otherwise be so regarded as withdrawn and would cause the total number of Shares to be purchased to fall below 2,000,000, then, to the extent feasible, the Company will select enough of such conditional tenders that would otherwise have been so withdrawn to permit the Company to purchase 2,000,000 Shares. In selecting among such conditional tenders, the Company will select by lot and will limit its purchase in each case to the designated minimum number of Shares to be purchased. 7. CERTAIN CONDITIONS OF THE OFFER Notwithstanding any other provision of the Offer, the Company shall not be required to accept for payment or pay for any Shares tendered, and may terminate or amend the Offer or may postpone (subject to the requirements of the Exchange Act for prompt payment for or return of Shares) the acceptance for payment of, and payment for, Shares tendered if at any time on or after February 10, 1998 and before 9 13 acceptance for payment of or payment for any such Shares (whether or not any Shares have theretofore been accepted for payment or paid for pursuant to the Offer) any of the following shall have occurred. (a) there shall have been threatened, instituted or pending any action or proceeding by any government or governmental, regulatory or administrative agency or authority or tribunal or any other person, domestic or foreign, or before any court, authority, agency or tribunal which (i) challenges the making of the Offer, the acquisition of some or all of the Shares pursuant to the Offer or otherwise relates in any manner to the Offer; or (ii) in the Company's sole judgment, could materially affect the business, condition (financial or other), income, operations or prospects of the Company and its subsidiaries, taken as a whole, or otherwise materially impair in any way the contemplated future conduct of the business of the Company and any of its subsidiaries or materially impair the Offer's contemplated benefits to the Company; (b) there shall have been any action threatened, pending or taken, or approval withheld, or any statute, rule, regulation, judgment, order or injunction threatened, proposed, sought, promulgated, enacted, entered, amended, enforced or deemed to be applicable to the Offer or the Company or any of its subsidiaries, by any court or any authority, agency or tribunal which, in the Company's sole judgment, would or might directly or indirectly (i) make the acceptance for payment of, or payment for, some or all of the Shares illegal or otherwise restrict or prohibit consummation of the Offer; (ii) delay or restrict the ability of the Company, or render the Company unable, to accept for payment or pay for some or all of the Shares; (iii) materially impair the contemplated benefits of the Offer to the Company; or (iv) materially affect the business, condition (financial or other), income, operations or prospects of the Company and its subsidiaries, taken as a whole, or otherwise materially impair in any way the contemplated future conduct of the business of the Company or any of its subsidiaries; (c) there shall have occurred (i) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market, (ii) the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iii) the commencement of a war, armed hostilities or other international or national calamity directly or indirectly involving the United States, (iv) any limitation (whether or not mandatory) by any governmental, regulatory or administrative agency or authority on, or any event which, in the Company's sole judgment, might adversely affect, the extension of credit by banks or other lending institutions in the United States, (v) any significant decrease in the market price of the Shares or any change in the general political, market, economic or financial conditions in the United States or abroad that could, in the sole judgment of the Company, have a material adverse effect on the Company's business, operations or prospects or the trading in the Shares, (vi) in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof or (vii) any decline in either the Dow Jones Industrial Average (8296 at the close of business on February 10, 1998) or the Standard and Poor's Index of 500 Industrial Companies (1019 at the close of business on February 10, 1998) by an amount in excess of 10% measured from the close of business on February 10, 1998; (d) any tender or exchange offer with respect to some or all of the Shares (other than the Offer), or a merger, acquisition or other business combination proposal for the Company, shall have been proposed, announced or made by any person or entity; (e) there shall have occurred any event or events that have resulted, or may in the sole judgment of the Company result, in an actual or threatened change in the business, condition (financial or other), income, operations, stock ownership or prospects of the Company and its subsidiaries, taken as a whole; or (f) (i) any person, entity or "group" (as that term is used in Section 13(d)(3) of the Exchange Act) shall have acquired, or proposed to acquire, beneficial ownership of more than 5% of the outstanding Shares (other than a person, entity or group which had publicly disclosed such ownership in a Schedule 13D or 13G (or an amendment thereto) on file with the Securities and Exchange Commission (the "Commission") prior to February 9, 1998, (ii) any such person, entity or group which had publicly disclosed such ownership prior to such date shall have acquired, or proposed to acquire, beneficial 10 14 ownership of additional Shares constituting more than 2% of the outstanding Shares (options for and other rights to acquire Shares which are so acquired or proposed to be acquired being deemed for this purpose to be immediately exercisable) or (iii) any new group shall have been formed which beneficially owns more than 5% of the outstanding Shares; and, in the sole opinion of the Company, in any such case and regardless of the circumstances (including any action or omission to act by the Company) giving rise to such condition, such event makes it inadvisable to proceed with the Offer or with such acceptance for payment or payment. The foregoing conditions are for the sole benefit of the Company and may be asserted by the Company regardless of the circumstances (including any action or inaction by the Company) giving rise to any such condition and any such condition may be waived by the Company, in whole or in part, at any time and from time to time in its sole discretion. The Company's failure at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right; the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts or circumstances; and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. Any determination by the Company concerning the events described above will be final and binding on all parties. 8. PRICE RANGE OF SHARES; DIVIDENDS The Shares are listed and principally traded on the NYSE under the symbol "LC". The following table sets forth the high and low closing prices of the Shares, as reported on the NYSE Composite Tape, and the cash dividends paid per Share for the fiscal periods indicated:
FISCAL QUARTER HIGH LOW DIVIDENDS - -------------- ---- --- --------- 1996: First..................................................... $36 $33 $.17 Second.................................................... 333/8 307/8 .185 Third..................................................... 357/8 301/8 .185 Fourth.................................................... 411/4 321/4 .185 1997: First..................................................... $433/8 $373/8 $.185 Second.................................................... 42 383/8 .20 Third..................................................... 453/4 401/4 .20 Fourth.................................................... 475/16 429/16 .20 1998: First (through February 10, 1998)......................... $475/16 $451/16 $ --
On February 10, 1998, the last full day of trading prior to the announcement of the Offer, the closing per Share sales price as reported on the NYSE Composite Tape was $46.75. Stockholders are urged to obtain a current market quotation for the Shares. The Company has declared a regular quarterly cash dividend of $.20 per Share, payable on April 2, 1998, to stockholders of record on March 16, 1998. Stockholders who sell their Shares pursuant to the Offer will not receive the dividend. Although the Company currently anticipates no reduction after the Offer in the current annual cash dividend on the Shares of $.80 per Share (a quarterly rate of $.20 per Share), the determination of the amount and timing of any future dividend payments will remain in the discretion of the Board of Directors of the Company and will depend, among other things, upon the Company's earnings and cash flow, its business and prospects and applicable restrictions under South Carolina law. 9. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER The Company believes that the purchase of the Shares will benefit the Company and its stockholders over the long term by enhancing earnings per Share. The Company also believes that this is an attractive time 11 15 for the Company to make such purchases, given its financial condition and outlook and current market conditions. The Company has divested certain assets during the course of the year and expects to receive approximately $180 million from the sale of Pierce National Life Insurance Company ("Pierce"). See Section 10. Prior to the announcement of the Offer, the Company had been considering a variety of alternatives for the use of excess cash with the goal of enhancing stockholder value. The Board of Directors has determined that the Offer accomplishes this objective in an efficient manner. The Company may use any proceeds from the sale of Pierce that are in excess of the proceeds necessary to fund the Offer to pay debt, make acquisitions, repurchase stock or for other general corporate purposes. The Offer will afford to stockholders who are considering the sale of all or a portion of their Shares the opportunity to determine the price at which they are willing to sell their Shares and, in the event the Company accepts such Shares for purchase, to dispose of Shares without the usual transaction costs associated with a market sale. The Offer will also allow qualifying Odd Lot Holders to avoid the payment of brokerage commissions and any applicable odd-lot discount payable on a sale of Shares in a transaction effected on a securities exchange. The Company has no current plans to acquire additional Shares. Any such purchases may be on the same terms as, or on terms which are more or less favorable to stockholders than, the terms of the Offer. Rule 13e-4 under the Exchange Act, however, prohibits the Company and its affiliates from purchasing any Shares, other than pursuant to the Offer, until at least ten business days after the Expiration Date. Any future purchases of Shares by the Company would depend on many factors, including the market price of the Shares, the Company's business and financial position, and general economic and market conditions. Stockholders who determine not to accept the Offer will obtain a proportionate increase in their ownership interest in the Company. After consummation of the Offer, increases or decreases in net income will likely be reflected in greater increases or decreases in earnings per Share than is presently the case because of the smaller number of Shares outstanding thereafter. Shares that the Company acquires pursuant to the Offer will become authorized but unissued Shares and will be available for issuance by the Company without further stockholder action (except as may be required by applicable law or the rules of the securities exchanges on which the Shares are listed). Such Shares could be issued without stockholder approval for among other things, acquisitions, the raising of additional capital for use in the Company's business, stock dividends or in connection with employee stock option and other plans or a combination thereof. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH STOCKHOLDER MUST MAKE HIS OR HER OWN DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND AT WHAT PRICE. THE COMPANY HAS BEEN ADVISED THAT NO DIRECTOR OR EXECUTIVE OFFICER OF THE COMPANY INTENDS TO TENDER SHARES PURSUANT TO THE OFFER. 10. CERTAIN INFORMATION CONCERNING THE COMPANY The Company was incorporated in South Carolina in 1967. The Company is a holding company engaged through its subsidiaries primarily in the insurance and television broadcasting businesses. The Company's primary insurance subsidiaries are Liberty Life Insurance Company ("Liberty Life") and Pierce, which, as discussed below, the Company has agreed to sell to Fortis, Inc., the U.S. subsidiary of Fortis. In addition to Liberty Life and Pierce, Liberty Insurance Services Corporation provides home office support services for the Company's insurance operations as well as unaffiliated life and health insurance companies. Other subsidiaries of the Company provide investment advisory services to the Company's insurance subsidiaries and unaffiliated insurance companies, and property development and management services to the Company. The Company's television broadcasting subsidiary, Cosmos Broadcasting Corporation, currently owns and operates eight network affiliated television stations. The Company maintains its principal executive offices at 2000 Wade Hampton Boulevard; Greenville, South Carolina 29602; Telephone (864) 609-8256. 12 16 On November 13, 1997, the Company announced that it had agreed to sell its wholly owned, pre-need insurance subsidiary, Pierce, to Fortis, Inc. Under the terms of the stock purchase agreement Fortis, Inc. will acquire Pierce for $180 million in cash, subject to certain adjustments. In connection with the sale of Pierce, the Company will enter into a multi-year $51 million insurance administrative services contract with Fortis, Inc. The closing of the sale of Pierce is contingent among other things upon various regulatory approvals and thus Liberty is unable to state with certainty when or if the proposed transaction will be consummated. The Offer is not conditioned upon the consummation of the sale of Pierce. See Section 7. Except as disclosed in this Offer to Purchase, the Company has no other agreements or understandings as to either divestitures or acquisitions that would be material to the Company and does not have any plans or proposals which relate to or would result in: (a) the acquisition by any person of additional securities of the Company or the disposition of securities of the Company; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Company or any of its subsidiaries; (d) any change in the present Board of Directors or management of the Company; (e) any material change in the present dividend policy, indebtedness or capitalization of the Company; (f) any other material change in the Company's corporate structure or business; (g) any change in the Company's Articles of Incorporation or By-Laws or any actions which may impede the acquisition of control of the Company by any person; (h) a class of equity security of the Company being terminated from quotation on the NYSE; (i) a class of equity security of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) the suspension of the Company's obligation to file reports pursuant to Section 15(d) of the Exchange Act. SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION The following is a summary of certain historical consolidated financial information regarding the Company for the periods indicated. The summary financial information (other than the ratio of earnings to fixed charges and preferred stock dividends) provided below was derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1996 (the "Company's 1996 Annual Report") and December 31, 1995 (the "Company's 1995 Annual Report"), and from the unaudited consolidated financial statements included in the Company's Quarterly Report on Form 10-Q for the period ended September 30, 1997 (the "Company's 1997 Third Quarter 10-Q") and the period ended September 30, 1996 (the "Company's 1996 Third Quarter 10-Q"). More comprehensive financial information is included in such reports and the financial information which follows is qualified in its entirety by reference to such reports and all of the financial statements and related notes contained therein, copies of which may be obtained as set forth in Section 17. The data as of and for the nine months ended September 30, 1997 and September 30, 1996, has been derived from unaudited financial statements which, in the opinion of the Company, reflect all adjustments, consisting of normal and recurring adjustments, necessary for a fair presentation of such data. The results for the nine months ended September 30, 1997, are not necessarily indicative of the results for the full year. On February 2, 1998, the Company announced operating earnings (excluding realized investment gains) for the twelve months ended December 31, 1997 of $70.9 million or $3.16 per diluted share as compared to $66.0 million or $2.98 per diluted share for the year ended December 31, 1996. Net income for the twelve months ended December 31, 1997 was $75.0 million or $3.34 per diluted share as compared to $37.3 million or $1.66 per diluted share for the same period 1996. Revenues for the twelve months ended December 31, 1997 were $660,256,000 as compared to $619,097,000 for the same period 1996. A copy of the Company's news release announcing 1997 earnings accompanies this Offer to Purchase. 13 17 THE LIBERTY CORPORATION SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
NINE MONTHS ENDED YEAR ENDED DECEMBER 31, SEPTEMBER 30, ----------------------- ----------------------- 1996 1995 1997 1996 ---------- ---------- ---------- ---------- INCOME STATEMENT DATA Revenues........................................ $ 619,097 $ 605,681 $ 497,055 $ 455,529 Income before net realized investment gains (losses) and special charges.................. 66,032 60,833 51,169 47,111 Income after net realized investment gains (losses) and before special charges........... 64,284 59,353 56,494 46,479 Net income...................................... 37,340 59,353 56,494 19,535 Income per common and common equivalent share... $ 1.66 $ 2.76 $ 2.58 $ .84 Weighted average common and common equivalent shares outstanding used in computing earnings per share..................................... 20,903 20,572 21,130 20,880 Ratio of earnings to fixed charges and preferred stock dividends............................... 3.2x 4.5x 5.4x 2.4x
AS OF DECEMBER 31, AS OF SEPTEMBER 30, ----------------------- ----------------------- 1996 1995 1997 1996 ---------- ---------- ---------- ---------- BALANCE SHEET DATA Total assets.................................... $3,060,765 $3,034,296 $3,117,799 $3,009,428 Total debt...................................... 247,861 258,444 199,914 263,421 Redeemable preferred stock...................... 45,599 45,667 44,688 45,656 Shareholders' equity............................ 580,861 575,762 642,292 553,057 Book value per common and common equivalent share......................................... $ 27.91 $ 27.86 $ 30.43 $ 26.61
NOTES TO SUMMARY HISTORICAL FINANCIAL INFORMATION Financial information for the nine months ended September 30, 1996 and the year ended December 31, 1996, includes special charges of $26.9 million, or $1.29 per share. During the third quarter of 1996, and concurrent with a realignment of the Company's management structure, the Company completed a detailed study of its insurance product lines, including those products currently being marketed as well as those sold by the Company's subsidiaries (including recently acquired companies). This study identified several specific products, marketing programs, underwriting and service methods that were inconsistent with the Company's then current strategies and profit objectives. Based on this analysis the Company took a $26.9 million after tax charge, which principally represents the write-off of deferred acquisition costs where recovery is no longer assured due to actual experience on these products being worse than originally assumed. In addition to the product-related charges, the Company wrote-off previously deferred charges associated with acquiring and modifying an administrative system for the Company's pre-need business. All of the charges represented non-cash items. Excluding the special charges, income per common and common equivalent share would have been $2.95 and $2.13 for the year ended December 31, 1996 and the nine months ended September 30, 1996, respectively. 14 18 SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION The following summary unaudited consolidated pro forma financial information gives effect to the sale of Pierce, which was announced on November 13, 1997, and to the purchase of Shares pursuant to the Offer, in each case based on the assumptions described in the Notes to Summary Unaudited Pro Forma Consolidated Financial Information. The pro forma adjustments give effect (i) to the sale of Pierce, which is more fully described in the Company's Current Report on Form 8-K filed on November 25, 1997, as amended by the Company's Current Report on Form 8-K/A filed on February 11, 1998, (as amended, the "Pierce 8-K") and (ii) to the purchase of Shares pursuant to this Offer at $45.50 per Share and at $52.00 per Share, in each case as if the respective transactions had occurred of the first date of each of the periods presented, with respect to the income statement data, and on September 30, 1997, with respect to the balance sheet data. The summary unaudited pro forma consolidated financial information should be read in conjunction with the summary historical consolidated financial information and does not purport to be indicative of the results that would have been obtained, or the results that may be obtained in the future, or the financial condition that would have resulted had the sale of Pierce, or the purchase of the Shares pursuant to the Offer, been completed at the dates indicated. The summary unaudited pro forma consolidated financial information should be read in conjunction with the accompanying notes thereto and the financial statements and related notes set forth in the Company's 1996 Annual Report, the Company's 1997 Third Quarter 10-Q and the Pierce 8-K, as well as the summary historical financial information set forth above. Copies of such reports may be obtained as set forth in Section 17. THE LIBERTY CORPORATION SUMMARY UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET INFORMATION (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
AS OF SEPTEMBER 30, 1997 -------------------------------------------------------------- PRO FORMA AFTER PIERCE SALE AND THE OFFER ------------------------------- ASSUMED ASSUMED PRO FORMA $45.50 $52.00 HISTORICAL AFTER PIERCE PER SHARE PER SHARE (AS REPORTED) SALE PURCHASE PRICE PURCHASE PRICE ------------- ------------ -------------- -------------- Investments................................. $2,128,736 $1,419,094 $1,419,094 $1,419,094 Total assets................................ 3,117,799 2,300,316 2,300,316 2,300,316 Total debt.................................. 199,914 76,762 168,462 181,462 Policy liabilities.......................... 1,949,813 1,326,025 1,326,025 1,326,025 Total liabilities........................... 2,430,819 1,650,542 1,742,242 1,755,242 Redeemable preferred stock.................. 44,688 44,688 44,688 44,688 Common shareholders' equity................. 642,292 605,086 513,386 500,386 Total liabilities, redeemable preferred stock and common shareholders' equity..... 3,117,799 2,300,316 2,300,316 2,300,316 Book value per common and common equivalent share..................................... $ 30.43 $ 28.67 $ 26.87 $ 26.19
15 19 THE LIBERTY CORPORATION SUMMARY UNAUDITED PRO FORMA CONSOLIDATED INCOME STATEMENT INFORMATION (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
NINE MONTHS ENDED SEPTEMBER 30, 1997 -------------------------------------------------------------- PRO FORMA AFTER PIERCE SALE AND THE OFFER ------------------------------- ASSUMED ASSUMED PRO FORMA $45.50 $52.00 HISTORICAL AFTER PIERCE PER SHARE PER SHARE (AS REPORTED) SALE PURCHASE PRICE PURCHASE PRICE ------------- ------------ -------------- -------------- Revenues..................................... $497,055 $387,577 $387,577 $387,577 Income before net realized investment gains...................................... 51,169 44,527 41,845 41,464 Net income................................... 56,494 51,382 48,700 48,319 Income per common and common equivalent share...................................... $ 2.58 $ 2.34 $ 2.44 $ 2.42 Weighted average common and common equivalent shares outstanding used in computing earnings per share......................... 21,130 21,130 19,130 19,130 Ratio of earnings to fixed charges and preferred stock dividends.................. 5.4x 6.7x 5.6x 5.4x
YEAR ENDED DECEMBER 31, 1996 -------------------------------------------------------------- PRO FORMA AFTER PIERCE SALE AND THE OFFER ------------------------------- ASSUMED ASSUMED PRO FORMA $45.50 $52.00 HISTORICAL AFTER PIERCE PER SHARE PER SHARE (AS REPORTED) SALE PURCHASE PRICE PURCHASE PRICE ------------- ------------ -------------- -------------- Revenues..................................... $619,097 $474,357 $474,357 $474,357 Income before net realized investment gains (losses) and special charges............... 66,032 58,814 55,237 54,730 Income after net realized investment gains (losses) and before special charges........ 64,284 56,626 53,049 52,542 Net income................................... 37,340 34,463 30,886 30,379 Income per common and common equivalent share after net realized investment gains (losses) and before special charges........ 2.95 2.58 2.67 2.64 Income per common and common equivalent share...................................... $ 1.66 $ 1.52 $ 1.49 $ 1.47 Weighted average common and common equivalent shares outstanding used in computing earnings per share......................... 20,903 20,903 18,903 18,903 Ratio of earnings to fixed charges and preferred stock dividends.................. 3.2x 3.8x 2.7x 2.6x
16 20 NOTES TO SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION 1. Financial information for the year ended December 31, 1996, includes special charges of $26.9 million, or $1.29 per share. During the third quarter of 1996, and concurrent with a realignment of the Company's management structure, the Company completed a detailed study of its insurance product lines, including those products currently being marketed as well as those sold by the Company's subsidiaries (including recently acquired companies). This study identified several specific products, marketing programs, underwriting and service methods that were inconsistent with the Company's then current strategies and profit objectives. Based on this analysis the Company took a $26.9 million after tax charge, which principally represents the write-off of deferred acquisition costs where recovery is no longer assured due to actual experience on these products being worse than originally assumed. In addition to the product-related charges, the Company wrote-off previously deferred charges associated with acquiring and modifying an administrative system for the Company's pre-need business. All of the charges represented non-cash items. 2. The following assumptions were made in presenting the summary unaudited pro forma consolidated financial information related to the sale of Pierce. Approximately $123 million of the proceeds from the sale of Pierce will be used to repay outstanding debt of the Company. See Section 11. The remainder of the proceeds, net of income taxes payable and expenses related to sale, will be used by the Company to purchase certain assets currently held by Pierce. During 1998 it is expected that Liberty Life, a subsidiary of the Company, will acquire from the Company the assets purchased from Pierce. The funds received by the Company from the sale of the assets to Liberty Life will be available to repay debt, make acquisitions, repurchase stock or for other general corporate purposes. Additional information as to the assumptions underlying the summary pro forma financial information related to the sale of Pierce is included in the Pierce 8-K, a copy of which may be obtained as described in Section 17. 3. The following assumptions were made in presenting the summary unaudited consolidated pro forma financial information related to the purchase of the Shares: (a) The information assumes that 2,000,000 Shares are purchased and retired with pro forma information shown for both the lowest ($45.50) and the highest ($52.00) offering price. There can be no assurance that the Company will purchase 2,000,000 Shares or at what price in the offering range any Shares will be purchased. (b) Expenses directly related to the Offer are assumed to be $.7 million and have been charged against shareholders' equity. (c) The purchase price for the Shares is expected to be initially funded with debt assumed to carry an interest rate of 6%. (d) The Company's effective tax rate is assumed to be 35%. 4. Earnings per share are calculated by dividing net income less the annual dividends required on the Company's outstanding Preferred Stock by the weighted average common and common equivalent shares outstanding, or assumed to be outstanding in the case of the pro forma financial information. 11. SOURCE AND AMOUNT OF FUNDS Assuming that the Company purchases 2,000,000 Shares pursuant to the Offer at a price of $52.00 per Share, the Company estimates that the total amount required by the Company to purchase such Shares and pay related fees and expenses will be approximately $104.7 million. The Company intends to obtain a significant portion of the funds for the purchase of Shares and the payment of related fees and expenses from one or a combination of the following sources: (i) available cash 17 21 and cash equivalents, (ii) liquidation of marketable investments and (iii) short-term borrowings under a new bridge loan. The bridge loan, in an amount of up to $140 million (the "Loan"), has been extended by Wachovia Bank, N.A. (the "Lender") to the Company in return for a promissory note dated January 28, 1998 (the "Note"). The unpaid principal of any borrowings under the Loan, together with all accrued and unpaid interest and other fees thereon, is due and payable by the Company no later than March 31, 1998. Interest accrues on the outstanding principal amount of any borrowings under the Loan at a rate per annum equal to either the Base Rate or the Euro-Dollar Rate set forth in the Note, as elected by the Company prior to the commencement of each interest period. The Base Rate is a rate per annum equal to the higher, for any day, of (i) the Lender's prime rate and (ii) one-half percent above the federal funds rate for such day. The Euro-Dollar Rate is a rate per annum equal to the quotient obtained (rounded upwards, if necessary, to the next higher 1/100th of 1%) by dividing (i) the applicable London Interbank Offered Rate (as defined in the Note) for U.S. dollar deposits by (ii) 1.00 minus the Euro-Dollar Reserve Percentage (as defined in the Note), plus 0.425%. The Company has given the Lender, as collateral for the Company's obligations under the Note, a continuing lien on and security interest in all deposits and other sums credited by or due from the Lender to the Company or subject to withdrawal by the Company. The Note allows for optional prepayments by the Company and includes standard events of default as well as a cross-default provision tied to the Credit Agreement, dated March 21, 1995, between the Company and the Lender. The Company expects to repay any borrowings made under the Loan with proceeds to be received from the previously announced sale of its subsidiary, Pierce. The Offer, however, is conditioned neither upon the consummation of the sale of Pierce nor on the Company obtaining financing. See Section 7. The preceding summary of the Note is qualified in its entirety by reference to the terms of the Note, a copy of which is filed as an exhibit to the Issuer Tender Offer Statement on Schedule 13E-4 of which this Offer to Purchase forms a part. A copy of the Schedule 13E-4 may be obtained from the Commission in the manner provided in Section 17. 12. INTERESTS OF DIRECTORS AND OFFICERS; TRANSACTIONS AND AGREEMENTS CONCERNING THE SHARES As of February 10, 1998, the Company had issued and outstanding 20,695,140 Shares and had reserved 1,286,383 Shares for issuance upon the exercise of outstanding stock options and with respect to performance shares granted pursuant to the Incentive Program. The 2,000,000 Shares that the Company is offering to purchase represent approximately 9.66% of the Shares then outstanding or approximately 8.47% on a fully-diluted basis (assuming the exercise of all outstanding stock options and including the Shares issuable upon the conversion of the Preferred Stock). As of February 10, 1998, all directors and executive officers of the Company as a group owned beneficially an aggregate of 3,284,311 Shares (including an aggregate of 64,172 Shares that may be acquired pursuant to the exercise of outstanding stock options exercisable within 60 days of the date hereof) or approximately 15.87% of the Shares then outstanding. The Company has been advised that no director or executive officer intends to tender Shares pursuant to the Offer. If the Company purchases 2,000,000 Shares pursuant to the Offer and no director or executive officer of the Company tenders Shares, the percentage of outstanding Shares owned beneficially by all of the Company's directors and executive officers as a group would increase to approximately 17.57% of the Shares then outstanding (including for this purpose, Shares that may be acquired by such directors and executive officers pursuant to the exercise of outstanding stock options exercisable within 60 days of the date hereof). Based upon the Company's records and upon information provided to the Company by its directors and executive officers, and except for the purchase on December 29, 1997 by a director of the Company of 1,000 Shares for $46 7/8 a share, which transaction was effected on the open market, neither the Company nor any subsidiary of the Company nor, to the best of the Company's knowledge, any of the Company's executive officers or directors nor any affiliates of the foregoing has engaged in any transactions involving the Shares during the 40 business days preceding the date hereof. 18 22 Except for outstanding options to purchase Shares granted from time to time to certain employees (including executive officers) and non-employee directors of the Company and performance shares granted from time to time to certain employees (including executive officers), in each case pursuant to the Incentive Program, and except as otherwise described herein, neither the Company nor, to the best of the Company's knowledge, any of its affiliates, directors or executive officers, is a party to any contract, arrangement, understanding or relationship with any other person relating, directly or indirectly, to the Offer with respect to any securities of the Company, including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss or the giving or withholding or proxies, consents or authorizations. 13. REGULATORY APPROVALS The Company is not aware of any license or regulatory permit that appears to be material to its business that might be adversely affected by its acquisition of Shares as contemplated in the Offer or of any approval or other action by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for the Company's acquisition or ownership of Shares pursuant to the Offer. Should any such approval or other action be required, the Company currently contemplates that it will seek such approval or take such other action. The Company cannot predict whether it may determine that it is required 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 any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that the failure to obtain any such approval or other action might not result in adverse consequences to the Company's business. The Company intends to make all required filings under the Exchange Act. The Company's obligation under the Offer to accept Shares for payment is subject to certain conditions. See Section 7. 14. CERTAIN FEDERAL INCOME TAX CONSEQUENCES The federal income tax discussion set forth below summarizes the principal federal income tax consequences to U.S. Holders (as defined below) of Shares tendered and purchased by the Company pursuant to the Offer and is included for general information only. A U.S. Holder for purposes of this discussion is (i) for United States federal income tax purposes a citizen or resident of the United States, (ii) a corporation, partnership or other entity created or organized in or under the laws of the United States or of any political subdivision thereof, (iii) an estate the income of which is subject to United States federal income taxation regardless of source or (iv) a trust which has one or more United States fiduciaries with the authority to control all substantial decisions and over whose administration a United States court has the power to exercise primary supervision. The discussion does not address all aspects of federal income tax that may be relevant to a particular stockholder or any relevant foreign, state, local or other tax laws. Certain stockholders, including foreign persons and persons who acquired their Shares upon the exercise of employee stock options or as compensation, may be subject to special rules not discussed below. EACH STOCKHOLDER CONSIDERING WHETHER TO TENDER THOSE SHARES IS URGED TO CONSULT AND RELY ON THE STOCKHOLDER'S OWN TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO THE STOCKHOLDER OF SELLING SHARES PURSUANT TO THE OFFER, INCLUDING THE APPLICATION OF FOREIGN, STATE, LOCAL OR OTHER TAX LAWS. Purchases of Shares by the Company pursuant to the Offer will generally be taxable transactions for federal income tax purposes under the United States Internal Revenue Code of 1986, as amended (the "Code"), and may also be taxable transactions under applicable state, local and foreign tax laws. The Company will file information returns with the IRS reporting gross proceeds paid to stockholders of record pursuant to the Offer. The Company cannot predict the extent to which the Offer may be oversubscribed. If the Offer is oversubscribed, proration of tenders pursuant to the Offer may cause the Company to accept fewer shares than are tendered. Therefore, there can be no assurance that a sufficient number of any particular stockholder's 19 23 Shares will be purchased pursuant to the Offer to ensure that such purchase will be treated as a sale or exchange for federal income tax purposes rather than as a dividend, pursuant to the rules discussed below. Gain or loss (rather than dividend income) will be recognized by a U.S. Holder whose disposition of Shares is treated as a sale or exchange because such disposition satisfies one of the three tests described below. Gain or loss will be equal to the difference between the cash received and the U.S. Holder's tax basis in the Shares disposed of, and will be a capital gain or loss if the Shares were held by the U.S. Holder as a capital asset. A U.S. Holder will recognize a short-term capital gain or loss on Shares held for not more than one year as of the Company's acceptance of the Shares. A U.S. Holder will recognize a long-term capital gain or loss on Shares held for more than one year. With respect to individuals and other non-corporate taxpayers, gain on Shares held for more than 18 months will be subject to a maximum tax rate of 20%, whereas gain on Shares held for more than a year but not more than 18 months will be subject to a maximum tax rate of 28%. Under the Code, gross proceeds received from the Company for Shares tendered pursuant to the Offer by any U.S. Holder who does not satisfy one of the three tests described in the following paragraph will be treated as a dividend that will be fully taxable at ordinary rates to the extent that the Company has sufficient current or accumulated earnings and profits as of the date payment is made for the Shares. In that event, the tax basis of Shares purchased by the Company pursuant to the Offer will generally be added to the tax basis of Shares that the U.S. Holder continues to own; such increase in the basis of such Shares may cause any subsequent taxable sale thereof to give rise to a loss, which may be a capital loss if such Shares are held as a capital asset. Gross proceeds in excess of the amount of the Company's current or accumulated earnings and profits will reduce the U.S. Holder's basis in its Shares, and any gross proceeds in excess of a U.S. Holder's tax basis in its Shares will be treated as gain from the sale of the Shares. In order to avoid dividend treatment of the gross proceeds received from the Company, a U.S. Holder must: (i) completely redeem his interest in the Company, (ii) satisfy a "substantially disproportionate" redemption test by reducing his percentage interest in the Company by more than 20% or (iii) otherwise demonstrate that the disposition of Shares to the Company is "not essentially equivalent to a dividend." In applying these tests a U.S. Holder must take into account Shares held by related persons that are considered constructively owned by the U.S. Holder for tax purposes under Section 318 of the Code, as well as those that are actually owned. Under Section 318 a U.S. Holder is deemed to own Shares actually owned, and in some cases constructively owned, by certain related individuals and entities. A U.S. Holder is also deemed to own Shares which the U.S. Holder has the right to acquire by exercise of an option. For example, an individual U.S. Holder is considered to own Shares owned directly or indirectly by or for his spouse and his children, grandchildren and parents ("family attribution"). In addition, a U.S. Holder is considered to own a proportionate number of Shares owned by trusts or estates in which the U.S. Holder has a beneficial interest, by partnerships in which the U.S. Holder is a partner, and by corporations in which the U.S. Holder owns, directly or indirectly, 50% or more in value of the stock. Similarly, Shares directly or indirectly owned by beneficiaries of estates or trusts, by partners of partnerships and, under certain circumstances, by stockholders of corporations may be considered owned by these entities ("entity attribution"). The disposition of Shares by a U.S. Holder pursuant to the Offer will result in a complete redemption of the U.S. Holder's interest in the Company if all of the Shares actually and constructively owned by the U.S. Holder are disposed of pursuant to the Offer. The disposition of Shares by a U.S. Holder pursuant to the Offer will also result in a complete redemption if all of the Shares actually and constructively owned by the U.S. Holder are disposed of except for Shares constructively owned by the U.S. Holder as a result of the family attribution rules (or, in some cases, as a result of a combination of the family and entity attribution rules), provided that (i) the U.S. Holder qualifies for a waiver of the family attribution rules, and (ii) the U.S. Holder and, in some cases, related entities comply with the procedures for establishing entitlement to a waiver. Qualification for a waiver of the family attribution rules is subject to several conditions, one of which is that the U.S. Holder has no interest in the Company immediately after the disposition (including an interest as an officer, director or employee), other than an interest as a creditor. The disposition of Shares by a U.S. Holder pursuant to the Offer will be "substantially disproportionate" if the percentage of the outstanding voting stock of the Company actually and constructively owned by the 20 24 U.S. Holder immediately following such disposition (treating all Shares purchased by the Company pursuant to the Offer as not outstanding) is less than 80% of the percentage of the outstanding voting stock of the Company actually and constructively owned by the U.S. Holder immediately before the purchase of Shares by the Company pursuant to the Offer (treating all Shares purchased by the Company pursuant to the Offer as outstanding). In order to be "not essentially equivalent to a dividend," a disposition of Shares pursuant to the Offer must result in a "meaningful reduction" in the U.S. Holder's proportionate interest in the Company. A U.S. Holder who intends to qualify for sale or exchange treatment by demonstrating that proceeds received from the Company are "not essentially equivalent to a dividend" is strongly urged to consult his tax advisor because this test will be met only if the reduction in his proportionate interest in the Company is "meaningful" given his particular facts and circumstances in the context of the Offer. In the case of a corporate U.S. Holder any amount treated as a dividend (i) will generally be eligible for a 70% dividends received deduction under Section 243 of the Code, subject to the limitations described in Sections 246 and 246A of the Code and (ii) will constitute an "extraordinary dividend" under Section 1059 of the Code. See Section 11 of the Letter of Transmittal with respect to the application of federal income tax withholding and backup withholding. 15. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS The Company expressly reserves the right, in its sole discretion, at any time or from time to time, to extend the period of time during which the Offer is open by giving oral or written notice of such extension to the Depositary. There can be no assurance, however, that the Company will exercise its right to extend the Offer. During any such extension, all Shares previously tendered and not purchased or withdrawn will remain subject to the Offer, except to the extent that such Shares may be withdrawn as set forth in Section 4. The Company also expressly reserves the right, in its sole discretion, to terminate the Offer and not accept for payment or pay for any Shares not theretofore accepted for payment or paid for or, subject to applicable law, to postpone payment for Shares upon the occurrence of any of the conditions specified in Section 7 hereof by giving oral or written notice of such termination or postponement to the Depositary and making a public announcement thereof. The Company's reservation of the right to delay payment for Shares which it has accepted for payment is limited by Rule 13e-4(f)(5) of the Exchange Act, which requires that the Company pay the consideration offered or return the Shares tendered promptly after termination or withdrawal of a tender offer. Subject to compliance with applicable law, the Company further reserves the right, in its sole discretion, to amend the Offer in any respect. Amendments to the Offer may be made at any time or from time to time effected by public announcement thereof, such announcement, in the case of an extension, to be issued no later than 9:00 A.M., New York City time, on the next business day after the previously scheduled Expiration Date. Any public announcement made pursuant to the Offer will be disseminated promptly to stockholders in a manner reasonably designed to inform stockholders of such change. Without limiting the manner in which the Company may choose to make a public announcement, except as required by applicable law, the Company shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by making a release to the Dow Jones News Service, except in the case of an announcement of an extension of an Offer, in which case the Company shall have no obligation to publish, advertise or otherwise communicate such announcement other than by issuing a notice of such extension by press release or other public announcement, which notice shall be issued no later than 9:00 A.M., New York City time, on the next business day after the previously scheduled Expiration Date. Material changes to information previously provided to holders of the Shares in this Offer or in documents furnished subsequent thereto will be disseminated to holders of Shares in compliance with Rule 13e-4(e)(2) of the Exchange Act. If the Company materially changes the terms of the Offer or the information concerning the Offer or if it waives a material condition of the Offer, the Company will extend the Offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(2) of the Exchange Act. These rules require that the minimum period during which an offer must remain open following material changes in the terms of the offer or information 21 25 concerning the offer (other than a change in price, change in the dealer's soliciting fee or a change in percentage of securities sought) will depend on the facts and circumstances, including the relative materiality of such terms or information. The Commission has stated that as a general rule, it is of the view that an offer should remain open for a minimum of five business days from the date that notice of such a material change is first published, sent or given. If (i) the Company increases or decreases the price to be paid for Shares, increases the number of Shares being sought and such increase in the number of Shares being sought exceeds 2% of the outstanding Shares or decreases the number of Shares being sought and (ii) the Offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that notice of such increase or decrease is first published, sent or given in the manner described in Section 15, the Offer will be extended until the expiration of ten business days from the date of the publication of such notice. 16. FEES AND EXPENSES Goldman, Sachs & Co. is acting as financial advisor and Dealer Managers for the Company in connection with the Offer and will receive a fee of $.10 per Share purchased pursuant to the Offer; provided that the fee will not be less than $50,000. The Dealer Managers also will be reimbursed by the Company for out-of-pocket expenses, including attorneys' fees, and will be indemnified against certain liabilities, including liabilities under the federal securities laws, in connection with the Offer. The Dealer Managers have rendered, are currently rendering and are expected to continue to render various investment banking and other advisory services to the Company. The Dealer Managers have received, and will continue to receive, customary compensation from the Company for such services. The Company has retained Wachovia Bank, N.A., as Depositary and D. F. King & Co., Inc., as Information Agent, in connection with the Offer. The Information Agent may contact stockholders by mail, telephone, telex, telegraph and personal interviews, and may request brokers, dealers and other nominee stockholders to forward materials relating to the Offer to beneficial owners. The Depositary and the Information Agent will receive reasonable and customary compensation for their services and will also be reimbursed for certain out-of-pocket expenses. The Company has agreed to indemnify the Depositary and the Information Agent against certain liabilities in connection with the Offer, including certain liabilities under the federal securities laws. Neither the Depositary nor the Information Agent has been retained to make solicitations or recommendations in their respective roles as Depositary and Information Agent. The Company will not pay any fees or commissions to any broker, dealer or other person for soliciting tenders of Shares pursuant to the Offer (other than the fee of the Dealer Managers). The Company will, upon request, reimburse brokers, dealers, commercial banks and trust companies for reasonable and customary handling and mailing expenses incurred by them in forwarding materials relating to the Offer to their customers. No broker, dealer, commercial bank or trust company has been authorized to act as agent for the Company for the purpose of the Offer. 17. MISCELLANEOUS The Company's 1996 Annual Report, 1995 Annual Report, 1997 Third Quarter 10-Q, 1996 Third Quarter 10-Q and the Pierce 8-K have been filed with the Commission. Copies of such documents may be obtained from The Liberty Corporation; Shareholder Relations Department; Box 789; Greenville, South Carolina 29602; Telephone: (864) 609-8256. The Company is subject to the informational filing requirements of the Exchange Act and in accordance therewith is obligated to file reports and other information with the Commission relating to its business, financial statements and other matters. Certain information as of particular dates, concerning the Company's directors and officers, their remuneration, options granted to them, the principal holders of the Company's securities and any material interest of such persons in transactions with the Company is filed with the Commission. The Company has also filed an Issuer Tender Offer Statement on Schedule 13E-4 with the Commission, which includes certain additional information with respect to the Offering. Such reports, as well as such other material, may be inspected and copies obtained at prescribed rates at the Commission's public 22 26 reference facilities at 450 Fifth Street, N.W., Washington, D.C. 20549; and should also be available for inspection and copying at the Regional Offices of the Commission at 7 World Trade Center, 13th Floor, New York, New York 10048, and Suite 1400, Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of such material may be obtained by mail, upon payment of the Commission's customary fees, from the Commission's Public Reference Section at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission maintains a World Wide Web site on the Internet at http://www.sec.gov that contains reports, proxy and other information related to registrants that file electronically with the Commission. Such reports, proxy statements and other information also should be available for inspection at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York. The Company's Schedule 13E-4 may not be available at the Commission's regional offices. The Offer is not being made to, nor will the Company accept tenders from or on behalf of, holders of Shares in any state of the United States or any foreign jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such state or foreign jurisdiction. The Company is not aware of any state or foreign jurisdiction the laws of which would prohibit the Offer or such acceptance. If the Company becomes aware of any jurisdiction where the making of the Offer or the tender of Shares is not in compliance with any applicable law, the Company will make a good faith effort to comply with such law. If, after such good faith effort, the Company 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 residing in such jurisdiction. THE LIBERTY CORPORATION February 11, 1998 23 27 The Depositary for the Offer is: WACHOVIA BANK, N.A. Delivering by Registered Mail Personally Delivering Delivering by Overnight Courier Wachovia Bank, Wachovia Bank, Wachovia Bank, N.A. -- Depositary N.A. -- Depositary N.A. -- Depositary Corporate Reorganizations Shareholder Services Department Corporate Reorganizations P.O. Box 9061 Wachovia East Building, 2nd 70 Campanelli Drive Floor Boston, MA 02205 301 North Church Street Braintree, MA 02184 Winston-Salem, NC 27101
New York Drop Wachovia Bank, N.A. -- Depositary c/o Boston EquiServe L.P. Corporate Reorganizations, 3rd Floor 55 Broadway New York, NY 10006 Please contact the Information Agent at the telephone numbers and address below with any questions or requests for assistance or additional copies of the Offer to Purchase, Letter of Transmittal and Notice of Guaranteed Delivery. The Information Agent for the Offer is: D. F. KING & CO., INC. 77 Water Street New York, New York 10005 TOLL-FREE 1-800-290-6427 OR CALL COLLECT: (212) 269-5550 The Dealer Managers for the Offer are: GOLDMAN, SACHS & CO. 85 Broad Street New York, New York 10004 IN NEW YORK STATE: (212) 902-1000 (COLLECT) OTHER AREAS: (800) 323-5678 (TOLL-FREE) EX-99.A.2 3 FORM OF LETTER OF TRANSMITTAL AND W-9 1 Exhibit (a)(2) LETTER OF TRANSMITTAL TO TENDER SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) OF THE LIBERTY CORPORATION PURSUANT TO ITS OFFER TO PURCHASE DATED FEBRUARY 11, 1998 - -------------------------------------------------------------------------------- THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, MARCH 11, 1998, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- TO: WACHOVIA BANK, N.A., DEPOSITARY For information, telephone (800) 633-4236 Delivering by Registered Mail Personally Delivering Delivering by Overnight Courier Wachovia Bank, N.A. -- Depositary Wachovia Bank, N.A. -- Depositary Wachovia Bank, N.A. -- Depositary Corporate Reorganizations Shareholder Services Department Corporate Reorganizations P.O. Box 9061 Wachovia East Building, 2nd Floor 70 Campanelli Drive Boston, MA 02205 301 North Church Street Braintree, MA 02184 Winston-Salem, NC 27101
New York Drop Wachovia Bank, N.A. -- Depositary c/o Boston EquiServe L.P. Corporate Reorganizations, 3rd Floor 55 Broadway New York, NY 10006 DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. This Letter of Transmittal is to be used if certificates are to be forwarded herewith or if delivery of Shares (as defined below) is to be made by book-entry transfer to the Depositary's account at The Depository Trust Company ("DTC" or the "Book-Entry Transfer Facility") pursuant to the procedures set forth in Section 3 of the Offer to Purchase. Stockholders who cannot deliver their Shares and all other documents required hereby to the Depositary prior to the Expiration Date (as defined in the Offer to Purchase) must tender their Shares pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2. Delivery of any required documents to the Company or to the Book Entry Transfer Facility does not constitute a valid delivery. 2 - --------------------------------------------------------------------------------------------------- DESCRIPTION OF SHARES TENDERED (See Instructions 3 and 4) - --------------------------------------------------------------------------------------------------- NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) (PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ON SHARE SHARES TENDERED CERTIFICATES) (ATTACH ADDITIONAL LIST IF NECESSARY) - --------------------------------------------------------------------------------------------------- TOTAL NUMBER OF SHARES REPRESENTED NUMBER CERTIFICATE BY OF SHARES NUMBER(S)* CERTIFICATE(S)* TENDERED** -------------------------------------- -------------------------------------- -------------------------------------- -------------------------------------- -------------------------------------- TOTAL SHARES - --------------------------------------------------------------------------------------------------- * Need not be completed by stockholders tendering by book-entry transfer. ** Unless otherwise indicated, it will be assumed that all Shares represented by any certificates delivered to the Depositary are being tendered. See Instruction 4. - ---------------------------------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution - -------------------------------------------------------------------------------- DTC Account No. ----------------------------------------------------------------------------- Transaction Code No. ----------------------------------------------------------------------------- [ ]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Tendering Stockholder(s) ------------------------------------------------------------------------ Date of Execution of Notice of Guaranteed Delivery --------------------------------------------------------- Name of Institution which Guaranteed Delivery -------------------------------------------------------------- If delivery is by book-entry transfer: -------------------------------------------------------------------------- Name of Tendering Institution ------------------------------------------------------------------------------ DTC Account No. ----------------------------------------------------------------------------- Transaction Code No. ----------------------------------------------------------------------------- [ ]CHECK HERE IF TENDER OF SHARES IS CONDITIONAL ON THE COMPANY PURCHASING ALL OR A MINIMUM NUMBER OF THE TENDERED SHARES AND COMPLETE THE FOLLOWING (SEE INSTRUCTION 9): Minimum Number of Shares to Be Sold: -------------------------------------------------------------------- NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY 2 3 Ladies and Gentlemen: The undersigned hereby tenders to The Liberty Corporation, a South Carolina corporation (the "Company"), the above-described shares of Common Stock, no par value (such shares together with the associated preferred stock purchase rights (the "Rights") issued pursuant to the Rights Agreement, dated as of August 7, 1990, between the Company and The Bank of New York, as Rights Agent, are hereinafter referred to as the "Shares"), pursuant to the Company's offer to purchase up to 2,000,000 Shares at a price per Share hereinafter set forth, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase dated February 11, 1998 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which together constitute the "Offer"). The Company reserves the right to transfer or assign, in whole or from time to time in part, to one or more of its affiliates the right to purchase Shares tendered pursuant to the Offer. Subject to and effective upon acceptance for payment of and payment for the Shares tendered herewith, the undersigned hereby sells, assigns and transfers to or upon the order of the Company all right, title and interest in and to all the Shares that are being tendered hereby (and any and all other Shares or other securities issued or issuable in respect thereof on or after February 11, 1998 (collectively, "Distributions")) and 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 certificates for such Shares and all Distributions or transfer ownership of such Shares and all Distributions on the account books maintained by the Book-Entry Transfer Facility, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of the Company, (b) present certificates for such Shares and all Distributions for cancellation and 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 of the Offer. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and all Distributions and that, when and to the extent the same are accepted for payment by the Company, the Company will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges, encumbrances, conditional sales agreements or other obligations relating to the sale or transfer thereof, and the same will not be subject to any adverse claims. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or the Company to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby and all Distributions. All authority herein conferred or agreed to be conferred shall not be affected by and shall survive the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as stated in the Offer, this tender is irrevocable. The undersigned understands that the Company will determine a single per Share price (not greater than $52.00 nor less than $45.50 per Share) (the "Purchase Price") that it will pay for Shares validly tendered and not withdrawn pursuant to the Offer taking into account the number of Shares so tendered and the prices specified by tendering stockholders. The undersigned understands that the Company will select the lowest Purchase Price that will allow it to purchase 2,000,000 Shares (or such lesser number of Shares as are validly tendered and not withdrawn at prices not greater than $52.00 nor less than $45.50 per Share) pursuant to the Offer. The undersigned understands that tenders of Shares pursuant to any one of the procedures described in Section 2 or 3 of the Offer to Purchase and in the instructions hereto will constitute an agreement between the undersigned and the Company upon the terms and subject to the conditions of the Offer. The undersigned also understands that unless the Rights are redeemed or become separately transferable in accordance with their terms, by tendering Shares the undersigned will also be tendering the associated Rights and that no separate consideration will be paid for such Rights. 3 4 Unless otherwise indicated under "Special Payment Instructions", please issue the check for the Purchase Price of any Shares purchased (less the amount of any federal income or backup withholding tax required to be withheld) and return any Shares not tendered or not purchased, in the name(s) of the undersigned (and, in the case of Shares tendered by book-entry transfer, by credit to the account at the Book-Entry Transfer Facility). Similarly, unless otherwise indicated under "Special Delivery Instructions", please mail the check for the Purchase Price of any Shares purchased (less the amount of any federal income or backup withholding tax required to be withheld) and any certificates for Shares not tendered or not purchased (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned's signature(s). In the event that both "Special Payment Instructions" and "Special Delivery Instructions" are completed, please issue the check for the Purchase Price of any Shares purchased (less the amount of any federal income or backup withholding tax required to be withheld) and return any Shares not tendered or not purchased in the name(s) of, and mail said check and any certificates to, the person(s) so indicated. The undersigned recognizes that the Company has no obligation, pursuant to the "Special Payment Instructions", to transfer any Shares from the name of the registered holder(s) thereof if the Company does not accept for payment any of the Shares so tendered. 4 5 PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED (SEE INSTRUCTION 5) CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED, THERE IS NO VALID TENDER OF SHARES. --------------------- SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION [ ] The undersigned wants to maximize the chance of having The Liberty Corporation purchase all the Shares the undersigned is tendering (subject to the possibility of proration). Accordingly, by checking this ONE box INSTEAD OF ONE OF THE PRICE BOXES BELOW, the undersigned hereby tenders Shares and is willing to accept the Purchase Price resulting from the Dutch auction tender process. This action will result in receiving a price per Share of as low as $45.50 or as high as $52.00. --------------------- OR SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDER By checking ONE of the boxes below INSTEAD OF THE BOX ABOVE, the undersigned hereby tenders Shares at the price checked. This action could result in none of the Shares being purchased if the Purchase Price for the Shares is less than the price checked. A stockholder who desires to tender Shares at more than one price must complete a separate Letter of Transmittal for each price at which Shares are tendered. The same Shares cannot be tendered at more than one price. Price (in dollars) per Share at which Shares are being tendered: $45.500 [ ] $46.000 [ ] $47.000 [ ] $48.000 [ ] $49.000 [ ] $50.000 [ ] $51.000 [ ] $52.000 [ ] $45.750 [ ] $46.125 [ ] $47.125 [ ] $48.125 [ ] $49.125 [ ] $50.125 [ ] $51.125 [ ] $45.625 [ ] $46.250 [ ] $47.250 [ ] $48.250 [ ] $49.250 [ ] $50.250 [ ] $51.250 [ ] $45.875 [ ] $46.375 [ ] $47.375 [ ] $48.375 [ ] $49.375 [ ] $50.375 [ ] $51.375 [ ] $46.500 [ ] $47.500 [ ] $48.500 [ ] $49.500 [ ] $50.500 [ ] $51.500 [ ] $46.625 [ ] $47.625 [ ] $48.625 [ ] $49.625 [ ] $50.625 [ ] $51.625 [ ] $46.750 [ ] $47.750 [ ] $48.750 [ ] $49.750 [ ] $50.750 [ ] $51.750 [ ] $46.875 [ ] $47.875 [ ] $48.875 [ ] $49.875 [ ] $50.875 [ ] $51.875 [ ]
5 6 --------------------------------------------------------- SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 4, 6, 7 AND 8) --------------------------------------------------------- To be completed ONLY if the check for the Purchase Price of Shares purchased (less the amount of any federal income and backup withholding tax required to be withheld) or certificates for Shares not tendered or not purchased are to be issued in the name of someone other than the undersigned. Issue [ ] check [ ] certificates to: Name -------------------------------------------------------------------- (PLEASE PRINT) Address -------------------------------------------------------------------- - --------------------------------------------------------------------- (ZIP CODE) - --------------------------------------------------------------------- (TAXPAYER IDENTIFICATION NO.) - --------------------------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 6, 7 AND 8) ---------------------------------------------------------- To be completed ONLY if the check for the Purchase Price of Shares purchased (less the amount of any federal income and backup withholding tax required to be withheld) or certificates for Shares not tendered or not purchased are to be mailed to someone other than the undersigned or to the undersigned at an address other than that shown below the undersigned's signature(s). Mail [ ] check [ ] certificates to: Name ---------------------------------------------------------------------- (PLEASE PRINT) Address ---------------------------------------------------------------------- ---------------------------------------------------------------------- (ZIP CODE) ---------------------------------------------------------------------- ---------------------------------------------------------------------- ODD LOTS (SEE INSTRUCTION 10) --------------------------------------------------------- This section is to be completed ONLY if Shares are being tendered by or on behalf of a person owning beneficially as of the close of business on February 10, 1998 an aggregate of fewer than 100 Shares. The undersigned either (check one box): [ ] was the beneficial owner as of the close of business on February 10, 1998 of an aggregate of fewer than 100 Shares (including any Shares acquired pursuant to the Company's Performance Incentive Compensation Program), all of which are being tendered, or [ ] is a broker, dealer, commercial bank, trust company or other nominee that (i) is tendering, for the beneficial owners thereof, Shares with respect to which it is the record owner, and (ii) believes, based upon representations made to it by each such beneficial owner, that such beneficial owner owned beneficially as of the close of business on February 10, 1998 an aggregate of fewer than 100 Shares (including any Shares acquired pursuant to the Company's Performance Incentive Compensation Program) and is tendering all of such Shares. --------------------------------------------------------- --------------------------------------------------------- CONDITIONAL TENDERS (SEE INSTRUCTION 9) --------------------------------------------------------- A tendering stockholder may condition the tender of Shares upon the purchase by the Company of a specified minimum number of the Shares tendered hereby, all as described in the Offer to Purchase, particularly in Section 6 thereof. Unless at least such minimum number of Shares is purchased by the Company pursuant to the terms of the Offer, none of the Shares tendered hereby will be purchased. It is the tendering stockholder's responsibility to calculate and appropriately indicate such minimum number of Shares, and each stockholder is urged to consult a tax advisor. Unless this box has been completed and a minimum number specified, the tender will be deemed unconditional. Minimum number of Shares that must be purchased, if any are purchased. Shares ----------------------- --------------------------------------------------------- 6 7 SIGN HERE (PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE SIDE) - -------------------------------------------------------------------------------- SIGNATURE(S) OF OWNERS Name(s) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (PLEASE PRINT) Capacity (full title) - -------------------------------------------------------------------------------- Address: - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) Area Code and Day Time Telephone Number - -------------------------------------------------------------------------------- Dated - -------------------------------------------------------------------------------- Must be signed by registered holder(s) exactly as name(s) appear(s) on stock certificate(s) or on a security position listing or by the person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 6. GUARANTEE OF SIGNATURE(S), IF REQUIRED (SEE INSTRUCTIONS 1 AND 6) Name of Firm - -------------------------------------------------------------------------------- Authorized Signature - -------------------------------------------------------------------------------- Dated - -------------------------------------------------------------------------------- 7 8 PAYER'S NAME: WACHOVIA BANK, N.A. - ------------------------------------------------------------------------------------------------------------------------ PART I -- TAXPAYER IDENTIFICATION NO. -- FOR ALL PART II -- FOR PAYEES EXEMPT SUBSTITUTE ACCOUNTS FROM BACKUP WITHHOLDING (SEE FORMW-9 ENCLOSED GUIDELINES) ---------------------------------------------------------------------------------------- DEPARTMENT OF THE TREASURY ENTER YOUR TAXPAYER IDENTIFICATION NUMBER IN THE INTERNAL REVENUE SERVICE APPROPRIATE BOX. FOR MOST INDIVIDUALS AND SOLE SOCIAL SECURITY NUMBER PROPRIETORS, THIS IS YOUR SOCIAL SECURITY NUMBER. FOR OTHER ENTITIES, IT IS YOUR EMPLOYER OR IDENTIFICATION NUMBER. IF YOU DO NOT HAVE A NUMBER, SEE "HOW TO OBTAIN A TIN" IN THE ENCLOSED GUIDELINES EMPLOYEE IDENTIFICATION NUMBER NOTE: IF THE ACCOUNT IS IN MORE THAN ONE NAME, SEE THE CHART ON PAGE 2 OF THE ENCLOSED GUIDELINES TO DETERMINE WHAT NUMBER TO ENTER. ---------------------------------------------------------------------------------------- PAYER'S REQUEST FOR CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY TAXPAYER IDENTIFICATION THAT: NO. (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 EITHER (A) 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 (B) I INTEND TO MAIL OR DELIVER AN APPLICATION IN THE NEAR FUTURE. I UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER WITHIN (60) DAYS, 31% OF ALL REPORTABLE PAYMENTS MADE TO ME THEREAFTER WILL BE WITHHELD UNTIL I PROVIDE A NUMBER; (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 ("IRS") THAT I AM SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR (C) THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING; AND (3) ANY INFORMATION PROVIDED ON THIS FORM IS TRUE AND CORRECT AND COMPLETE. 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. 8 9 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Guarantee of Signatures. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a firm that is a member of a registered national securities exchange or the National Association of Securities Dealers, Inc., or by a commercial bank or trust company having an office, branch or agency in the United States, in each case which is a participant in an approved signature Guarantee Medallion Program (an "Eligible Institution"). Signatures on this Letter of Transmittal need not be guaranteed if (a) this Letter of Transmittal is signed by the registered holder(s) of the Shares (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) tendered herewith and such holder(s) has not completed the box entitled "Special Payment Instructions" or "Special Delivery Instructions" on this Letter of Transmittal or (b) such Shares are tendered for the account of an Eligible Institution. See Instruction 6. 2. Delivery of Letter of Transmittal and Shares. This Letter of Transmittal is to be used either if certificates are to be forwarded herewith or, unless an Agent's Message (as defined in the Offer to Purchase) is used, if delivery of Shares is to be made by book-entry transfer pursuant to the procedures set forth in Section 3 of the Offer to Purchase. Certificates for all physically delivered Shares, or a confirmation of a book-entry transfer of all Shares delivered electronically into the Depositary's account at the Book-Entry Transfer Facility, as well as a properly completed and duly executed Letter of Transmittal and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the front page of this Letter of Transmittal by the Expiration Date (as defined in the Offer to Purchase). Stockholders who cannot deliver their Shares and all other required documents to the Depositary prior to the Expiration Date must tender their Shares pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to such procedure: (a) such tender must be made by or through an Eligible Institution, (b) a properly completed and duly executed Notice of Guaranteed Delivery substantially in the form provided by the Company must be received by the Depositary prior to the Expiration Date and (c) the certificates for such Shares (or a confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility) together with a properly completed and duly executed Letter of Transmittal (or, in the case of a book-entry delivery, an Agent's Message) and any other documents required by this Letter of Transmittal, must be received by the Depositary no later than 5:00 p.m., New York City time, within three New York Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided in Section 3 of the Offer to Purchase. THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF CERTIFICATES FOR SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. Except as specifically permitted by Section 6 of the Offer to Purchase, no alternative, conditional or contingent tenders will be accepted. Fractional Shares will be purchased unless proration of tendered Shares is required. See Section 1 of the Offer to Purchase. By executing this Letter of Transmittal, the tendering stockholder waives any right to receive any notice of the acceptance for payment of the Shares. 3. Inadequate Space. If the space provided herein is inadequate, the certificate numbers and the number of Shares should be listed on a separate schedule attached hereto. 4. Partial Tenders (not applicable to stockholders who tender by book-entry transfer.) If fewer than all the Shares represented by any certificate delivered to the Depositary are to be tendered, fill in the number of Shares which are to be tendered in the box entitled "Number of Shares Tendered". If such Shares are purchased, a new certificate for the remainder of the Shares represented by the old certificate will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the appropriate box on this Letter of Transmittal, as promptly as practicable following the expiration or termination of the Offer. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 9 10 5. Indication of Price at Which Shares Are Being Tendered. For Shares to be validly tendered by this Letter of Transmittal, the stockholder must either: (a) check the box under "Shares Tendered at Price Determined by Dutch Auction"; OR (b) check the box indicating the price per Share at which the stockholder is tendering Shares under "Shares Tendered at Price Determined by Stockholder". By checking the box under "Shares Tendered at Price Determined by Dutch Auction" you agree to accept the Purchase Price resulting from the Dutch auction tender process, which may be as low as $45.50 or as high as $52.00 per Share. By checking a box under "Shares Tendered at Price Determined by Stockholder", you acknowledge that doing so could result in none of the Shares being purchased if the Purchase Price for the Shares is less than the price checked. Only one box may be checked. If more than one box is checked or if no box is checked, there is no valid tender of Shares. A stockholder wishing to tender portions of Share holdings at different prices must complete a separate Letter of Transmittal for each price at which such stockholder wishes to tender each such portion of such stockholder's Shares. The same Shares cannot be tendered (unless previously validly withdrawn as provided in Section 4 of the Offer to Purchase) at more than one price. 6. 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 certificates without alteration, enlargement or any change whatsoever. If any of the Shares tendered hereby are held of record by two or more persons, all such persons must sign this Letter of Transmittal. If any of the Shares tendered hereby are registered in different names on different certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of certificates or separate stock powers are required unless payment of the Purchase Price is to be made, or Shares not tendered or not purchased are to be returned, in the name of any person other than the registered holder(s). Signatures on any such certificates or stock powers must be medallion guaranteed by an Eligible Institution. See Instruction 1. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, certificates must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered holder(s) appear(s) on the certificates for such Shares. Signature(s) on any such certificates or stock powers must be medallion guaranteed by an Eligible Institution. See Instruction 1. If this Letter of Transmittal or any certificate or stock power is signed by a trustee, executor, administrator, guardian, 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 proper evidence satisfactory to the Company of the authority of such person so to act must be submitted. 7. Stock Transfer Taxes. The Company will pay or cause to be paid any stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the Purchase Price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder(s), or if tendered Shares are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) payable on account of the transfer to such person will be deducted from the Purchase Price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted. See Section 5 of the Offer to Purchase. EXCEPT AS PROVIDED IN THIS INSTRUCTION 7, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY. 10 11 8. Special Payment and Delivery Instructions. If the check for the Purchase Price of any Shares purchased is to be issued, or any Shares not tendered or not purchased are to be returned, in the name of a person other than the person(s) signing this Letter of Transmittal or if the check or any certificates for Shares not tendered or not purchased are to be mailed to someone other than the person(s) signing this Letter of Transmittal or to the person(s) signing this Letter of Transmittal at an address other than that shown above, then the boxes captioned "Description of Shares Tendered" and "Special Delivery Instructions" on this Letter of Transmittal should be completed. Stockholders tendering Shares by book-entry transfer will have any Shares not accepted for payment returned by crediting the account maintained by such stockholder at the Book-Entry Transfer Facility. 9. Conditional Tenders. As described in Section 6 of the Offer to Purchase, a stockholder may tender Shares subject to the condition that a specified minimum number of such stockholder's Shares tendered must be purchased if any such Shares so tendered are purchased. Under certain circumstances and subject to the exceptions set forth in Section 1, the Company may prorate the number of Shares purchased pursuant to the Offer. In such a case, the Depositary will perform a preliminary proration, and any Shares tendered at or below the Purchase Price pursuant to a conditional tender for which the condition was not satisfied will automatically be regarded as withdrawn, subject to reinstatement if such conditionally tendered Shares are subsequently selected by lot for purchase subject to Section 6 of the Offer to Purchase. If conditional tenders would otherwise be so regarded as withdrawn and would cause the total number of Shares to be purchased to fall below 2,000,000, then, to the extent feasible, the Company will select enough of such conditional tenders that would otherwise have been so withdrawn to permit the Company to purchase 2,000,000 Shares. In selecting among such conditional tenders, the Company will select by lot and will limit its purchase in each case to the designated minimum number of Shares to be purchased. All tendered Shares will be deemed unconditionally tendered unless the "Conditional Tenders" box is completed. As discussed in Section 14 of the Offer to Purchase, the number of Shares to be purchased from a particular stockholder may affect the tax treatment of such purchase to such stockholder and such stockholder's decision whether to tender. EACH STOCKHOLDER IS URGED TO CONSULT WITH HIS OR HER OWN TAX ADVISOR. Odd Lot Shares, which will not be subject to proration, cannot be conditionally tendered. Any tendering stockholder wishing to make a conditional tender must calculate and appropriately indicate such minimum number of Shares. 10. Odd Lots. As described in Section 1 of the Offer to Purchase, if fewer than all Shares validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date are to be purchased, the Shares purchased first will consist of all Shares tendered by any stockholder who owned beneficially an aggregate of fewer than 100 Shares (including Shares held in the Company's Performance Incentive Compensation Program) as of the close of business on February 10, 1998 who validly tendered all such Shares at or below the Purchase Price (partial tenders will not qualify for this preference) and completes the box captioned "Odd Lots" in this Letter of Transmittal and, if applicable, in the Notice of Guaranteed Delivery. 11. Federal Income Tax Withholding. To prevent the possible application of backup federal income tax withholding of 31% of the gross proceeds payable to a stockholder, each tendering stockholder must provide the Depositary with such stockholder's correct taxpayer identification number (generally, in the case of an individual, his or her social security number) by completing the Substitute Form W-9 set forth above. If the Depositary is not provided with the correct taxpayer identification number, the stockholder may be subject to a $500 penalty imposed by the IRS and payments that are made to such stockholder pursuant to the Offer may be subject to backup withholding. Certain stockholders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, such stockholder must submit a statement, signed under penalties of perjury, attesting to that individual's exempt status. Such statements can be obtained from the Depositary. For further information concerning backup withholding and instructions for completing the Substitute Form W-9 (including how to obtain a taxpayer identification number if you do not have one and how to complete the Substitute Form W-9 if Shares are held in more than one name), consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. 11 12 Failure to complete the Substitute Form W-9 will not, by itself, cause Shares to be deemed invalidly tendered, but may require the Depositary to withhold 31% of the amount of any payments made pursuant to the Offer. Backup withholding is not an additional federal income tax. Rather, the federal income tax liability of a person 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. The Company will withhold federal income tax at a rate of 30% from gross proceeds payable pursuant to the Offer to a foreign stockholder or his agent, unless the Company determines that a reduced rate of withholding is applicable pursuant to a tax treaty or that an exemption from withholding is applicable because such gross proceeds payable are effectively connected with the conduct of a trade or business within the United States. For this purpose, a foreign stockholder is any stockholder that is not (i) a citizen or resident of the United States, (ii) a corporation, partnership or other entity created or organized in or under the laws of the United States, (iii) an estate the income of which is subject to United States federal income taxation regardless of source or (iv) a trust which has one or more United States fiduciaries with the authority to control all substantial decisions and over whose administration a United States Court has the power to exercise primary supervision. The Company will determine the applicable rate of withholding by reference to a stockholder's address, unless the facts and circumstances indicate such reliance is not warranted or if applicable law (for example, a tax treaty or Treasury regulations thereunder) requires some other method for determining a stockholder's residence. A foreign stockholder may be eligible to file for a refund of such tax or a portion of such tax if such stockholder meets one of the tests described in Section 14 of the Offer to Purchase or if such stockholder is entitled to a reduced rate of withholding pursuant to a treaty and the Company withheld at a higher rate. In order to claim an exemption from withholding on the grounds that gross proceeds paid pursuant to the Offer are effectively connected with the conduct of a trade or business within the United States, a foreign stockholder must deliver to the Depositary a properly executed Form 4224 claiming exemption. Such Forms can be obtained from the Depositary. FOREIGN STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OF FEDERAL INCOME TAX WITHHOLDING, INCLUDING ELIGIBILITY FOR A WITHHOLDING TAX REDUCTION OR EXEMPTION AND THE REFUND PROCEDURE. 12. Requests for Assistance or Additional Copies. Any questions or requests for assistance may be directed to the Information Agent or the Dealer Managers at their respective addresses or telephone numbers set forth below. Requests for additional copies of the Offer to Purchase, this Letter of Transmittal or other tender offer materials may also be directed to the Information Agent or the Dealer Managers and such copies will be furnished promptly at the Company's expense. Stockholders may also contact their local broker, dealer, commercial bank or trust company for assistance concerning the Offer. 13. Irregularities. All questions as to the Purchase Price, the form of documents and the validity, eligibility (including time of receipt) and acceptance of any tender of Shares will be determined by the Company, in its sole discretion, and its determination shall be final and binding. The Company reserves the absolute right to reject any or all tenders of Shares that it determines are not in proper form or the acceptance for payment of or payment for Shares that may, in the opinion of the Company's counsel, be unlawful. The Company also reserves the absolute right to waive any of the conditions to the Offer or any defect or irregularity in any tender of Shares and the Company's interpretation of the terms and conditions of the Offer (including these instructions) shall be final and binding. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as the Company shall determine. None of the Company, the Dealer Managers, the Depositary, the Information Agent or any other person shall be under any duty to give notice of any defect or irregularity in tenders, nor shall any of them incur any liability for failure to give any such notice. Tenders will not be deemed to have been made until all defects and irregularities have been cured or waived. 14. Lost or Destroyed Certificate(s). If any Share certificate has been lost, stolen or destroyed, immediately notify the Depositary in writing. Your letter should be forwarded along with your properly completed Letter of Transmittal, all other required documentation and any Share certificates you may have in your possession. Once written notification of the loss is received by the Depositary an affidavit of loss and indemnity agreement, along with instructions which include the cost of replacing the certificate, will be sent to the shareholder. The tender of Shares cannot be processed until any missing Share certificates have been replaced. 12 13 THE INFORMATION AGENT IS: D. F. KING & CO., INC. 77 Water Street New York, New York 10005 TOLL FREE 1-800-290-6427 OR CALL COLLECT: (212) 269-5550 THE DEALER MANAGERS FOR THE OFFER ARE: GOLDMAN, SACHS & CO. 85 Broad Street New York, New York 10004 IN NEW YORK STATE: (212) 902-1000 (COLLECT) OTHER AREAS: (800) 323-5678 (TOLL-FREE) 14 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER. -- Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payer. ------------------------------------------------------------------ FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL SECURITY NUMBER OF -- - -------------------------------------------------------------- 1. An individual's account The individual 2. Two or more individuals The actual owner of the (joint account) account or, if combined funds, the first individual on the account(1) 3. Custodian account of a The minor(2) minor (Uniform Gift to Minors Act) 4. a. The usual revocable The grantor-trustee(1) savings trust account (grantor is also trustee) The actual owner(1) b. So-called trust account that is not a legal or valid trust under State law - -------------------------------------------------------------- GIVE THE EMPLOYER FOR THIS TYPE OF ACCOUNT: IDENTIFICATION NUMBER OF -- - -------------------------------------------------------------- 5. Sole proprietorship The owner(3) account 6. A valid trust, estate, or The legal entity.(4) pension trust 7. Corporate account The corporation 8. Religious, charitable, or The organization educational organization account 9. Partnership The partnership 10. Association, club or The organization other tax-exempt organization 11. A broker or registered The broker or nominee nominee 12. Account with the Depart- The public entity ment 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) Show the name of the owner. You may also enter your business or "doing business as" name. You may use either your Social Security number or 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 TIN 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, the number will be considered to be that of the first name listed. 15 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 or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding on ALL payments include the following: - - An organization exempt from tax under section 501(a), or an individual retirement plan. - - The United States, or any agency or instrumentality thereof. - - A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. - - A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. - - An international organization or any agency, or instrumentality thereof. Other payees that may be exempt from backup withholding include: - - A corporation. - - A financial institution. - - A registered dealer in securities or commodities registered in the U.S., or a possession of the U.S. - - A real estate investment trust. - - A common trust fund operated by a bank under section 584(a). - - A trust exempt from tax under Section 664 or described in section 4947. - - An entity registered at all time under the Investment Company Act of 1940. - - A foreign central bank of issue. - - A nominee. - - A Futures commission merchant registered with the Commodity Futures Trading Commission. Payments of interest not generally subject to backup withholding include the following: - - Payments of interest on obligations issued by individuals. NOTE: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. - - Payments of tax-exempt interest (including exempt-interest dividends under section 852). - - Payments described in section 6049(b)(5) to non-resident aliens. - - Payments on tax-free covenant bonds under section 1451. - - Payments made by certain foreign organizations. Exempt payees described above should file Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE EXEMPT ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM. Certain payments, other than interest, dividends, and patronage dividends that are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under sections 6041, 6041A(a), 6045 and 6050A. PRIVACY ACT NOTICE. -- Section 6109 requires most recipients of dividend, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to the IRS. The IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 31% of taxable interest, dividends, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. EX-99.A.3 4 FORM OF NOTICE OF GUARANTEED DELIVERY 1 Exhibit (a)(3) THE LIBERTY CORPORATION NOTICE OF GUARANTEED DELIVERY (NOT TO BE USED FOR SIGNATURE GUARANTEE) OFFER TO PURCHASE FOR CASH UP TO 2,000,000 SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) PURSUANT TO THE OFFER TO PURCHASE DATED FEBRUARY 11, 1998 The attached form, or a form substantially equivalent to the attached form, must be used to accept the Offer (as defined below) if certificates for shares of Common Stock of The Liberty Corporation and all other documents required by the Letter of Transmittal cannot be delivered to the Depositary prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase dated February 11, 1998 (the "Offer to Purchase")) or the procedure for book-entry transfer cannot be complied with in a timely manner. Such form may be delivered by hand or transmitted by mail or facsimile to the Depositary. See Section 3 of the Offer to Purchase. TO: WACHOVIA BANK, N.A., DEPOSITARY For information, telephone (800) 633-4236 Delivering by Registered Mail Personally Delivering Delivering by Overnight Courier Wachovia Bank, N.A. -- Depositary Wachovia Bank, N.A. -- Depositary Wachovia Bank, N.A. -- Depositary Corporate Reorganizations Shareholder Services Department Corporate Reorganizations P.O. Box 9061 Wachovia East Building, 2nd Floor 70 Campanelli Drive Boston, MA 02205 301 North Church Street Braintree, MA 02184 Winston-Salem, NC 27101 Delivering by Facsimile Transmission New York Drop Facsimile: (781) 794-6333 Wachovia Bank, N.A. -- Depositary Confirm by telephone: (781) 794-6388 c/o Boston EquiServe L.P. Corporate Reorganizations, 3rd Floor 55 Broadway New York, NY 10006
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN THOSE SHOWN ABOVE OR TRANSMISSION OF INSTRUCTIONS TO A FACSIMILE NUMBER OTHER THAN THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES. 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. Ladies and Gentlemen: The undersigned hereby tenders to The Liberty Corporation, a South Carolina corporation (the Company), upon the terms and subject to the conditions set forth in the Offer to Purchase dated February 11, 1998 and the related Letter of Transmittal (which together constitute the Offer), receipt of which is hereby acknowledged, the following number of shares of Common Stock of the Company, no par value (such shares together with the associated preferred stock purchase rights (the Rights) issued pursuant to the Rights Agreement, dated as of August 7, 1990, between the Company and The Bank of New York, as Rights Agent, are herein referred to as the Shares), of the Company, pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. NUMBER OF SHARES BEING TENDERED HEREBY: ---------- 2 PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED --------------------- CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED, THERE IS NO VALID TENDER OF SHARES. --------------------- SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION [ ] The undersigned wants to maximize the chance of having The Liberty Corporation purchase all the Shares the undersigned is tendering (subject to the possibility of proration). Accordingly, by checking this ONE box INSTEAD OF ONE OF THE PRICE BOXES BELOW, the undersigned hereby tenders Shares and is willing to accept the Purchase Price resulting from the Dutch auction tender process. This action will result in receiving a price per Share of as low as $45.50 or as high as $52.00. ----------------------- OR SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDER By checking ONE of the boxes below INSTEAD OF THE BOX ABOVE, the undersigned hereby tenders Shares at the price checked. This action could result in none of the Shares being purchased if the Purchase Price for the Shares is less than the price checked. A stockholder who desires to tender Shares at more than one price must complete a separate Notice of Guaranteed Delivery for each price at which Shares are tendered. The same Shares cannot be tendered at more than one price. $45.500 [ ] $46.000 [ ] $47.000 [ ] $48.000 [ ] $49.000 [ ] $50.000 [ ] $51.000 [ ] $52.000 [ ] $45.625 [ ] $46.125 [ ] $47.125 [ ] $48.125 [ ] $49.125 [ ] $50.125 [ ] $51.125 [ ] $45.750 [ ] $46.250 [ ] $47.250 [ ] $48.250 [ ] $49.250 [ ] $50.250 [ ] $51.250 [ ] $45.875 [ ] $46.375 [ ] $47.375 [ ] $48.375 [ ] $49.375 [ ] $50.375 [ ] $51.375 [ ] $46.500 [ ] $47.500 [ ] $48.500 [ ] $49.500 [ ] $50.500 [ ] $51.500 [ ] $46.625 [ ] $47.625 [ ] $48.625 [ ] $49.625 [ ] $50.625 [ ] $51.625 [ ] $46.750 [ ] $47.750 [ ] $48.750 [ ] $49.750 [ ] $50.750 [ ] $51.750 [ ] $46.875 [ ] $47.875 [ ] $48.875 [ ] $49.875 [ ] $50.875 [ ] $51.875 [ ]
2 3 - -------------------------------------------------------------------------------- CONDITIONAL TENDERS (SEE INSTRUCTION 9 OF THE LETTER OF TRANSMITTAL) A tendering stockholder may condition the tender of Shares upon the purchase by the Company of a specified minimum number of the Shares tendered hereby, all as described in the Offer to Purchase, particularly in Section 6 thereof. Unless at least such minimum number of Shares is purchased by the Company pursuant to the terms of the Offer, none of the Shares tendered hereby will be purchased. It is the tendering stockholders responsibility to calculate and appropriately indicate such minimum number of Shares, and each stockholder is urged to consult a tax advisor. Unless this box has been completed and a minimum number specified, the tender will be deemed unconditional. Minimum number of Shares that must be purchased, if any are purchased: ____ Shares - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ODD LOTS (SEE INSTRUCTION 10 OF THE LETTER OF TRANSMITTAL) The undersigned either (check one box): [ ] was the beneficial owner as of the close of business on February 10, 1998 of an aggregate of fewer than 100 Shares (including any Shares acquired pursuant to the Company's Performance Incentive Compensation Program), all of which are being tendered, or [ ] is a broker, dealer, commercial bank, trust company or other nominee that (i) is tendering, for the beneficial owners thereof, Shares with respect to which it is the record owner, and (ii) believes, based upon representations made to it by each such beneficial owner that such beneficial owner owned beneficially as of the close of business on February 10, 1998 an aggregate of fewer than 100 Shares (including any Shares acquired pursuant to the Company's Performance Incentive Compensation Program) and is tendering all of such Shares. - -------------------------------------------------------------------------------- 3 4 Certificate Nos. (if available) - ------------------------------------------------ - ------------------------------------------------ If Shares will be tendered by book-entry transfer: Name of Tendering Institution: - ------------------------------------------------ - ------------------------------------------------ Account No. at - --------------------------------------------- The Depository Trust Company SIGN HERE - ------------------------------------------------ - ------------------------------------------------ (Signature(s)) - ------------------------------------------------ (Name(s)) (Please Print) - ------------------------------------------------ (Address) - ------------------------------------------------ (Zip Code) - ------------------------------------------------ (Area Code and Telephone No.) 4 5 GUARANTEE (Not to be used for signature guarantee) The undersigned, a firm that is a member of a registered national securities exchange or the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office, branch or agency in the United States, guarantees (a) that the above named person(s) own(s) the Shares tendered hereby within the meaning of Rule 14e-4 under the Securities Exchange Act of 1934, as amended, (b) that such tender of Shares complies with Rule 14e-4 and (c) to deliver to the Depositary the Shares tendered hereby, together with a properly completed and duly executed Letter(s) of Transmittal, unless an Agent's Message (as defined in the Offer to Purchase) is utilized in the case of a book-entry transfer, and any other required documents, all within three New York Stock Exchange, Inc. trading days of the date hereof. --------------------------------------------------- (Name of Firm) --------------------------------------------------- (Authorized Signature) --------------------------------------------------- (Name) --------------------------------------------------- (Address) --------------------------------------------------- (Zip Code) Dated: --------------------------------------------- --------------------------------------------------- (Area Code and Telephone No.)
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL. 5 EX-99.A.4 5 FORM OF BROKER DEALER LETTER 1 Exhibit (a)(4) THE LIBERTY CORPORATION OFFER TO PURCHASE FOR CASH UP TO 2,000,000 SHARES OF ITS COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) - -------------------------------------------------------------------------------- THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, MARCH 11, 1998, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- To Brokers, Dealers, Commercial February 11, 1998 Banks, Trust Companies and Other Nominees: We have been appointed by The Liberty Corporation, a South Carolina corporation (the "Company"), to act as Dealer Managers in connection with the Company's offer to purchase up to 2,000,000 shares of its Common Stock, no par value (such shares together with the associated preferred stock purchase rights (the "Rights") issued pursuant to the Rights Agreement, dated as of August 7, 1990, between the Company and The Bank of New York, as Rights Agent, are hereinafter referred to as the "Shares"), at prices not greater than $52.00 nor less than $45.50 per Share, net to the seller in cash, as specified by such stockholders, upon the terms and subject to the conditions set forth in the Company's Offer to Purchase dated February 11, 1998 (the "Offer to Purchase") and the related Letter of Transmittal (which together constitute the "Offer"). The Company will determine a single per Share price (not greater than $52.00 nor less than $45.50 per Share) that it will pay for the Shares validly tendered pursuant to the Offer and not withdrawn (the "Purchase Price"), taking into account the number of Shares so tendered and the prices specified by tendering stockholders. The Company will select the lowest Purchase Price that will allow it to purchase 2,000,000 Shares (or such lesser number as are validly tendered and not withdrawn at prices not greater than $52.00 nor less than $45.50 per Share) pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, including the provisions thereof relating to proration and conditional tenders, the Company will purchase all Shares validly tendered at prices at or below the Purchase Price and not withdrawn prior to the Expiration Date (as defined in the Offer to Purchase). For your information and for forwarding to your clients for whom you hold Shares registered in your name or in the name of your nominee, we are enclosing the following documents: 1. Offer to Purchase dated February 11, 1998; 2. Letter of Transmittal for your use and for the information of your clients, together with Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 providing information relating to backup federal income tax withholding; 3. Notice of Guaranteed Delivery to be used to accept the Offer if the Share certificates and all other required documents cannot be delivered to the Depositary by the Expiration Date (as defined in the Offer to Purchase) or if the procedures for book-entry transfer cannot be completed on a timely basis; 4. A form of letter that 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; 5. Letter from Hayne Hipp, President of the Company to stockholders of the Company; and 6. Return envelope addressed to Wachovia Bank, N.A., the Depositary. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. 2 THE OFFER, THE PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, MARCH 11, 1998, UNLESS THE OFFER IS EXTENDED. The Company will not pay any fees or commissions to any broker, dealer or other person for soliciting tenders of Shares pursuant to the Offer (other than the fee of the Dealer Managers as described in the Offer to Purchase). The Company will, upon request, reimburse brokers, dealers, commercial banks and trust companies for reasonable and customary handling and mailing expenses incurred by them in forwarding materials relating to the Offer to their customers. The Company will pay all stock transfer taxes applicable to its purchase of Shares pursuant to the Offer, subject to Instruction 7 of the Letter of Transmittal. Any inquiries you may have with respect to the Offer should be addressed to, and additional copies of the enclosed materials may be obtained from, the Information Agent or the undersigned at the addresses and telephone numbers set forth on the back cover of the Offer to Purchase. Very truly yours, GOLDMAN, SACHS & CO NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU THE AGENT OF THE COMPANY, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN. 2 EX-99.A.5 6 FORM OF CLIENT LETTER 1 Exhibit (a)(5) THE LIBERTY CORPORATION OFFER TO PURCHASE FOR CASH UP TO 2,000,000 SHARES OF ITS COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) - -------------------------------------------------------------------------------- THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, MARCH 11, 1998, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- To Our Clients: Enclosed for your consideration are the Offer to Purchase dated February 11, 1998 and the related Letter of Transmittal (which together constitute the "Offer") in connection with the Offer by The Liberty Corporation, a South Carolina corporation (the "Company"), to purchase for cash up to 2,000,000 shares of its Common Stock, no par value (such shares together with the associated preferred stock purchase rights (the "Rights") issued pursuant to the Rights Agreement, dated as of August 7, 1990, between the Company and The Bank of New York, as Rights Agent, are hereinafter referred to as the "Shares"), at prices not greater than $52.00 nor less than $45.50 per Share, net to the seller in cash, as specified by such stockholders, upon the terms and subject to the conditions of the Offer. The Company will determine a single per Share price (not greater than $52.00 nor less than $45.50 per Share) that it will pay for the Shares validly tendered pursuant to the Offer and not withdrawn (the "Purchase Price"), taking into account the number of Shares so tendered and the prices specified by tendering stockholders. The Company will select the lowest Purchase Price that will allow it to purchase 2,000,000 Shares (or such lesser number as are validly tendered and not withdrawn at prices not greater than $52.00 nor less than $45.50 per Share) pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, including the provisions thereof relating to proration and conditional tenders, the Company will purchase all Shares validly tendered at prices at or below the Purchase Price and not withdrawn prior to the expiration of the Offer. Shares tendered at prices in excess of the Purchase Price and Shares not purchased because of proration or conditional tenders will be returned to the tendering stockholder at the Company's expense. We are 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. We request instructions as to whether you wish us to tender any or all of the Shares held by us for your account, upon the terms and subject to the conditions set forth in the Offer to Purchase and the Letter of Transmittal. Your attention is invited to the following: 1. You may tender Shares at either the price determined by you (in multiples of $.125), not greater than $52.00 nor less than $45.50 per Share, or the price determined by "Dutch auction" as indicated in the attached instruction form, net to you in cash. 2. The Offer, the proration period and withdrawal rights expire at 12:00 Midnight, New York City time, on Wednesday, March 11, 1998, unless the Offer is extended. Your instructions to us should be forwarded to us in ample time to permit us to submit a tender on your behalf. 3. The Offer is for up to 2,000,000 Shares. Although it has no present intention of so doing, the Company reserves the right, in its sole discretion but subject to certain applicable legal requirements, to purchase more than 2,000,000 Shares pursuant to the Offer. The Offer is not conditioned upon any minimum number of Shares being tendered but is subject to certain other conditions described in Section 7 of the Offer to Purchase. 2 4. Any stock transfer taxes applicable to the sale of Shares to the Company pursuant to the Offer will be paid by the Company, except as otherwise provided in Instruction 7 of the Letter of Transmittal. 5. If you owned beneficially as of the close of business on February 10, 1998 an aggregate of fewer than 100 Shares (including any Shares acquired pursuant to the Company's Performance Incentive Compensation Program) and you instruct us to tender at or below the Purchase Price on your behalf all such Shares (partial tenders will not qualify for this preference) prior to the expiration of the Offer and you complete the box captioned "Odd Lots" in the instruction form, all such Shares will be accepted for purchase before proration, if any, of the purchase of other Shares properly tendered at or below the Purchase Price. 6. You may instruct us to tender Shares on your behalf subject to the condition that a specified minimum number of your tendered Shares must be purchased if any such tendered Shares are purchased, as described in Section 6 of the Offer to Purchase. It is your responsibility to calculate such minimum number and you are urged to consult a tax advisor. If you wish us to make a conditional tender on your behalf, you must complete the box captioned "Conditional Tenders" in the instruction form. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH STOCKHOLDER MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND AT WHAT PRICE. THE COMPANY HAS BEEN ADVISED THAT NO DIRECTOR OR EXECUTIVE OFFICER OF THE COMPANY INTENDS TO TENDER SHARES PURSUANT TO THE OFFER. If you wish to have us tender any or all of your Shares, please so instruct us by completing, executing, detaching and returning to us the instruction form on the detachable part hereof. An envelope to return your instructions to us is enclosed. If you authorize tender of your Shares, all such Shares will be tendered unless otherwise specified on the detachable part hereof. Your instructions should be forwarded to us in ample time to permit us to submit a tender on your behalf by the expiration of the Offer. As described in the Offer to Purchase, if fewer than all Shares validly tendered at or below the Purchase Price prior to the expiration of the Offer are to be purchased by the Company, the Company will purchase Shares in the following order of priority: (a) all Shares tendered at or below the Purchase Price and not withdrawn prior to the expiration of the Offer by any stockholder who owned beneficially an aggregate of fewer than 100 Shares (including any Shares acquired pursuant to the Company's Performance Incentive Compensation Program), as of the close of business on February 10, 1998 and who validly tenders all of such Shares (partial tenders will not qualify for this preference) and completes the box captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery; and (b) then, after purchase of all of the foregoing Shares, subject to the conditional tender provisions described in Section 6 of the Offer to Purchase, all other Shares validly tendered at or below the Purchase Price and not withdrawn prior to the expiration of the Offer on a pro rata basis, if necessary (with appropriate adjustments to avoid purchases of fractional Shares). The Offer is not being made to, nor will the Company accept tenders from or on behalf of, holders of Shares in any state of the United States or any foreign jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such state or foreign jurisdiction. In those states or foreign jurisdictions the laws of which require that the Offer be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Company by Goldman, Sachs & Co. or one or more registered brokers or dealers licensed under the laws of such jurisdictions. 2 3 INSTRUCTIONS WITH RESPECT TO OFFER TO PURCHASE FOR CASH UP TO 2,000,000 SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) OF THE LIBERTY CORPORATION The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase dated February 11, 1988 and the related Letter of Transmittal (which together constitute the "Offer"), in connection with the Offer by The Liberty Corporation (the "Company") to purchase up to 2,000,000 shares of its Common Stock, no par value (such shares together with the associated preferred stock purchase rights (the "Rights") issued pursuant to the Rights Agreement, dated as of August 7, 1990, between the Company and The Bank of New York, as Rights Agent, are hereinafter referred to as the "Shares"), at prices not greater than $52.00 nor less than $45.50 per Share, net to the undersigned in cash. The Company will determine a single per Share price (not greater than $52.00 nor less than $45.50 per Share) that it will pay for the Shares validly tendered pursuant to the Offer and not withdrawn (the "Purchase Price"), taking into account the number of Shares so tendered and the prices specified by tendering stockholders. The Company will select the lowest Purchase Price that will allow it to purchase 2,000,000 Shares (or such lesser number as are validly tendered at prices not greater than $52.00 nor less than $45.50 per Share) pursuant to the Offer. The undersigned hereby instruct(s) you to tender to the Company the number of Shares indicated below or, if no number is indicated, all Shares held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer to Purchase and the related Letter of Transmittal. [ ] By checking this box, all Shares held by us for your account, including fractional Shares, will be tendered. If fewer than all Shares are to be tendered, please check the box and indicate below the aggregate number of Shares to be tendered by us. __________ Shares* * Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered. ODD LOTS [ ] By checking this box, the undersigned represents that the undersigned owned beneficially as of the close of business on February 10, 1998 an aggregate of fewer than 100 Shares (including any Shares acquired pursuant to the Company's Performance Incentive Compensation Program) and is tendering all of such Shares. 3 4 PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED --------------------- CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED, THERE IS NO VALID TENDER OF SHARES. --------------------- SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION [ ] The undersigned wants to maximize the chance of having The Liberty Corporation purchase all the Shares the undersigned is tendering (subject to the possibility of proration). Accordingly, by checking this ONE box INSTEAD OF ONE OF THE PRICE BOXES BELOW, the undersigned hereby tenders Shares and is willing to accept the Purchase Price resulting from the Dutch auction tender process. This action will result in receiving a price per Share of as low as $45.50 or as high as $52.00. ----------------------- OR SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDER By checking ONE of the boxes below INSTEAD OF THE BOX ABOVE, the undersigned hereby tenders Shares at the price checked. This action could result in none of the Shares being purchased if the Purchase Price for the Shares is less than the price checked. A stockholder who desires to tender Shares at more than one price must complete a separate instruction form for each price at which Shares are tendered. The same Shares cannot be tendered at more than one price. Price (in dollars) per Share at which Shares are being tendered: $45.500 [ ] $46.000 [ ] $47.000 [ ] $48.000 [ ] $49.000 [ ] $50.000 [ ] $51.000 [ ] $52.000 [ ] $45.625 [ ] $46.125 [ ] $47.125 [ ] $48.125 [ ] $49.125 [ ] $50.125 [ ] $51.125 [ ] $45.750 [ ] $46.250 [ ] $47.250 [ ] $48.250 [ ] $49.250 [ ] $50.250 [ ] $51.250 [ ] $45.875 [ ] $46.375 [ ] $47.375 [ ] $48.375 [ ] $49.375 [ ] $50.375 [ ] $51.375 [ ] $46.500 [ ] $47.500 [ ] $48.500 [ ] $49.500 [ ] $50.500 [ ] $51.500 [ ] $46.625 [ ] $47.625 [ ] $48.625 [ ] $49.625 [ ] $50.625 [ ] $51.625 [ ] $46.750 [ ] $47.750 [ ] $48.750 [ ] $49.750 [ ] $50.750 [ ] $51.750 [ ] $46.875 [ ] $47.875 [ ] $48.875 [ ] $49.875 [ ] $50.875 [ ] $51.875 [ ]
CONDITIONAL TENDERS A tendering stockholder may condition the tender of Shares upon the purchase by the Company of a specified minimum number of the Shares tendered hereby, all as described in the Offer to Purchase, particularly in Section 6 thereof. Unless at least such minimum number of Shares is purchased by the Company pursuant to the terms of the Offer, none of the Shares tendered hereby will be purchased. It is the tendering stockholder's responsibility to calculate and appropriately indicate such minimum number of Shares, and each stockholder is urged to consult a tax advisor. Unless this box has been completed and a minimum number specified, the tender will be deemed unconditional. Minimum number of Shares that must be purchased, if any are purchased: __________ Shares SIGN HERE - ------------------------------------------------------ - ------------------------------------------------------ Signature(s) Dated - ---------------------------------------------- - ------------------------------------------------------ - ------------------------------------------------------ - ------------------------------------------------------ Please print names(s) and addresses here 4 EX-99.A.6 7 FORM OF LETTER TO STOCKHOLDERS 1 Exhibit (a)(6) LIBERTY - -------------------------------------------------------------------------------- The Liberty Corporation Box 789 Greenville, SC 29602-0789 February 11, 1998 To Our Stockholders: The Liberty Corporation is offering to purchase up to 2,000,000 shares of its Common Stock, no par value (including the associated preferred stock purchase rights), from its stockholders at prices not greater than $52.00 nor less than $45.50 per share. The Company is conducting the Offer through a procedure commonly referred to as a "Dutch auction". This procedure allows you to select the price within the $45.50 to $52.00 price range at which you are willing to sell your shares to the Company. Alternatively, this procedure allows you to sell all or a portion of your shares to the Company at a price determined by the "Dutch auction" process. Based upon the number of shares tendered and the prices specified by tendering stockholders, The Liberty Corporation will determine a single per share price within that price range (the "Purchase Price") that will allow it to buy 2,000,000 shares (or such lesser number of shares as are validly tendered and not withdrawn at prices within that price range). All of the shares that are validly tendered at prices at or below the Purchase Price and not withdrawn will, subject to possible proration, conditional tenders and provisions relating to the tender of "odd lots", be purchased for cash at the Purchase Price, net to the selling stockholder. All shares which are tendered and not purchased will be returned to the tendering stockholders at the Company's expense. If you do not wish to participate in the Offer, you do not need to take any action. The Offer is explained in detail in the enclosed Offer to Purchase and Letter of Transmittal. If you want to tender your shares, the instructions for tendering are also set forth in detail in the enclosed materials. I encourage you to read these materials carefully before making any decision with respect to the Offer. Each stockholder considering whether to tender all or any shares is urged to consult and rely on the stockholders own tax advisor as to the particular tax consequences to the stockholder of selling shares pursuant to the Offer, including the application of foreign, state, local or other tax laws. The Company believes that the purchase of shares of its Common Stock will benefit Liberty and its stockholders over the long term by enhancing earnings per share. The Company also believes that this is an attractive time to make such purchases, given its financial condition and outlook and current market conditions. However, neither the Company nor its Board of Directors makes any recommendation to any stockholder as to whether to tender all or any shares. The Company has been advised that no director or executive officer of the Company intends to tender shares pursuant to the Offer. Any questions or requests for assistance may be directed to the Information Agent or the Dealer Managers at their respective addresses or telephone numbers set forth in the Letter of Transmittal. Very truly yours, /s/ HAYNE HIPP Hayne Hipp President EX-99.A.7 8 FORM OF LETTER TO VESTED OPTIONS HOLDERS 1 Exhibit (a)(7) [NOTICE FROM THE LIBERTY CORPORATION] February 11, 1998 OFFER TO PURCHASE COMMON STOCK OF THE LIBERTY CORPORATION Notice to Holders of Vested Stock Options: Enclosed for your consideration are materials (the "Tender Offer Documents") being sent to all stockholders of The Liberty Corporation (the "Company") in connection with its recently announced offer to purchase up to 2,000,000 shares of the Company's common stock, no par value (such shares, together with the associated preferred stock purchase rights (the "Rights") issued pursuant to the Rights Agreement dated as of August 7, 1990, between the Company and The Bank of New York, as Rights Agent, are herein referred to as the "Shares"), at prices not greater than $52.00 nor less than $45.50 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase dated February 11, 1998 and in the related Letter of Transmittal, which together constitute the "Offer". As a holder of vested stock options, you may wish to exercise any or all of your vested options, and then tender the Shares so acquired to the Company pursuant to the terms of the Offer. To assist you, attached is a summary of your stock option grants, including the grant date, exercise price, and the number of shares from each grant that are currently available for you to exercise. You will need to evaluate the Offer and Tender Offer Documents to determine if participation would be advantageous to you, based on your stock option exercise prices, the date of your stock option grants and the years left yet to exercise, the tender price, and the provisions for pro rata purchases by the Company outlined in the Offer. We strongly encourage you to discuss the Offer with your tax advisor or broker. Martha Williams at the Company is also available to assist in answering any questions you may have. Martha Williams can be reached at (864) 609-8300. If you decide to exercise any of your vested stock options, please send instructions to Martha Williams at the Company as to the number of options you wish to exercise and a check in payment for the option exercise. The Offer expires Wednesday, March 11, 1998, unless extended by the Company. In order to tender Shares purchased pursuant to an option exercise, the Company must have received your instructions and your check by February 26, 1998 in order for you to receive Shares to tender by March 11, 1998. 2 As described in the Offer to Purchase, if more than 2,000,000 Shares have been validly tendered at or below the Purchase Price (as defined in the Offer to Purchase) and not withdrawn prior to the Expiration Date (as defined in the Offer to Purchase), the Company will purchase Shares in the following order of priority: (a) all shares tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date by any stockholder who owned beneficially an aggregate of fewer than 100 Shares as of the close of business on February 10, 1998 and who validly tenders all of such Shares (partial tenders will not qualify for this preference) and completes the box captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery; and (b) after purchase of all of the foregoing Shares, subject to the conditional tender provisions described in Section 6 of the Offer to Purchase, all other Shares validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date on a pro rata basis, if necessary (with appropriate adjustments to avoid purchases of fractional Shares). The Offer is not being made to, nor will the Company accept tenders from or on behalf of holders of Shares in any state of the United States or any foreign jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such state or foreign jurisdiction. In those states or foreign jurisdictions the laws of which require that the Offer be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Company by Goldman, Sachs & Co. or one or more registered brokers or dealers licensed under the laws of such jurisdiction. Very truly yours, Hayne Hipp President 2 EX-99.A.8 9 FORM OF LETTER TO PREFERRED STOCKHOLDERS 1 Exhibit (a)(8) LIBERTY - -------------------------------------------------------------------------------- The Liberty Corporation Box 789 Greenville, SC 29602-0789 February 11, 1998 OFFER TO PURCHASE COMMON STOCK OF THE LIBERTY CORPORATION Notice to Holders of Preferred Stock: The Liberty Corporation (the "Company") has announced an offer to purchase up to 2,000,000 shares of the Company's common stock, no par value (such shares, together with the associated preferred stock purchase rights (the "Rights") issued pursuant to the Rights Agreement dated as of August 7, 1990, between the Company and The Bank of New York, as Rights Agent, are herein referred to as the "Shares"), at prices not greater than $52.00 nor less than $45.50 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase dated February 11, 1998 and in the related Letter of Transmittal, which together constitute the "Offer". The Company is not offering to purchase its Preferred Stock in the Offer to Purchase. The Company will, upon the terms and subject to the conditions of the Offer, accept tenders of Shares that, in accordance with the terms of such Preferred Stock are issued upon conversion of the Preferred Stock and duly tendered pursuant to the Offer. To the extent Preferred Stock is converted into Shares but the resulting Shares are not purchased pursuant to the Offer, holders of Preferred Stock so converted will have lost all preferential rights of Preferred Stock as compared to Shares (including, among other things, the priority afforded holders of Preferred Stock with respect to the payment of dividends and the distribution of assets upon liquidation). We urge you to discuss the Offer with your broker, investment or tax advisor. Neither the Company nor its Board of Directors makes any recommendations to any holder of Preferred Stock as to whether to convert all or any portion of such Preferred Stock into Shares or as to whether to tender or refrain from tendering pursuant to the Offer all or any portion of the Shares issuable upon such conversion. If you decide to convert any or all of your Preferred Stock in accordance with the terms of such Preferred Stock, please contact Wachovia Bank, N.A., the Company's transfer agent (the "Transfer Agent"), at 1-800-633-4236. If you wish to have materials relating to the Offer sent to you, please call D. F. King & Co., Inc., the Company's Information Agent, at 1-800-290-6427. The Offer expires on Wednesday, March 11, 1998, unless extended by the Company. In order for you to receive and tender by March 11, 1998 Shares issued upon the conversion of Preferred Stock, the Transfer Agent should have received your conversion instructions no later than February 26, 1998. As described in the Offer to Purchase, if more than 2,000,000 Shares have been validly tendered at or below the Purchase Price (as defined in the Offer to Purchase) and not withdrawn prior to the Expiration Date (as defined in the Offer to Purchase), the Company will purchase Shares in the following order of priority: (a) all Shares tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date by any stockholder who owned beneficially an aggregate of fewer than 100 Shares as of the close of business on February 10, 1998 and who validly tenders all of such Shares (partial tenders will not qualify for this preference) and completes the box captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery; and 2 (b) after purchase of all of the foregoing Shares, subject to the conditional tender provisions described in Section 6 of the Offer to Purchase, all other Shares validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date on a pro rata basis, if necessary (with appropriate adjustments to avoid purchases of fractional Shares). The Offer is not being made to, nor will the Company accept tenders from or on behalf of holders of Shares in any state of the United States or any foreign jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such state or foreign jurisdiction. In those states or foreign jurisdictions the laws of which require that the Offer be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Company by Goldman, Sachs & Co. or one or more registered brokers or dealers licensed under the laws of such jurisdiction. Very truly yours, /s/ HAYNE HIPP Hayne Hipp President 2 EX-99.A.9 10 FORM OF SUMMARY ADVERTISEMENT 1 Exhibit (a)(9) This advertisement is neither an offer to purchase nor a solicitation of an offer to sell securities. The Offer is made only by the Offer to Purchase dated February 11, 1998 and the related Letter of Transmittal that are being mailed to holders of Common Stock of The Liberty Corporation and is not being made to, nor will the Company accept tenders from or on behalf of, such holders in any state of the United States or any foreign jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such state or foreign jurisdiction. In those states or foreign jurisdictions where 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 Company by Goldman, Sachs & Co. or one or more registered brokers or dealers licensed under the laws of such jurisdictions. Notice of Offer to Purchase for Cash By THE LIBERTY CORPORATION of Up to 2,000,000 Shares of Its Common Stock (Including the Associated Preferred Stock Purchase Rights) The Liberty Corporation, a South Carolina corporation (the "Company"), invites its stockholders to tender shares of its Common Stock, no par value (including the associated preferred stock purchase rights), at prices not greater than $52.00 nor less than $45.50 per Share, net to the seller in cash, as specified by such stockholders, upon the terms and subject to the conditions set forth in the Offer to Purchase dated February 11, 1998 and in the related Letter of Transmittal (which together constitute the "Offer"). The Offer is not conditioned upon any minimum number of Shares being tendered but is subject to certain other conditions set forth in Section 7 of the Offer to Purchase. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, MARCH 11, 1998 (THE "EXPIRATION DATE"), UNLESS THE OFFER IS EXTENDED. The Company will determine a single per Share price (not greater than $52.00 nor less than $45.50 per Share) that it will pay for the Shares validly tendered 2 pursuant to the Offer and not withdrawn (the "Purchase Price"), taking into account the number of Shares so tendered and the prices specified by tendering stockholders. The Company will select the lowest Purchase Price that will allow it to purchase 2,000,000 Shares (or such lesser number of Shares as are validly tendered at prices not greater than $52.00 nor less than $45.50 per Share) pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, including the provisions thereof relating to proration and conditional tenders, the Company will purchase all Shares validly tendered at prices at or below the Purchase Price and not withdrawn prior to the Expiration Date. The Company reserves the right to extend the Offer at any time or from time to time by oral or written notice to Wachovia Bank, N.A. (the "Depositary"), in which event the term "Expiration Date" shall mean the latest time and date to which the Offer is so extended. Upon the terms and subject to the conditions of the Offer, if more than 2,000,000 Shares have been validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date, the Company will purchase Shares in the following order of priority: a. all Shares tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date by any stockholder who owned beneficially an aggregate of fewer than 100 Shares (including any Shares acquired pursuant to the Company's Performance Incentive Compensation Program) as of the close of business on February 10, 1998 and who validly tenders all of such Shares (partial tenders will not qualify for this preference) and completes the box captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery; and b. after purchase of all of the foregoing Shares, subject to the conditional tender provisions described in Section 6 of the Offer to Purchase, all other Shares validly tendered at or below the Purchase Price and not withdrawn prior to the Expiration Date on a pro rata basis, if necessary (with appropriate adjustments to avoid purchases of fractional Shares). Tenders of Shares made pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. Thereafter, such tenders are irrevocable, except that they may be withdrawn after April 8, 1998 unless theretofore accepted for payment as provided in the Offer to Purchase. To be effective, a written notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase and must specify the name of the person who tendered the Shares to be withdrawn and the number of Shares to be withdrawn. If the Shares to be withdrawn have been delivered to the Depositary, a signed notice of withdrawal with signatures guaranteed by an Eligible Institution, as defined in the Offer to Purchase (except in the case of Shares 2 3 tendered by an Eligible Institution) must be submitted prior to the release of such Shares. In addition, such notice must specify, in the case of Shares tendered by delivery of certificates, the name of the registered holder (if different from that of the tendering stockholder) and the serial numbers shown on the particular certificates evidencing the Shares to be withdrawn or, in the case of Shares tendered by book-entry transfer, the name and number of the account at the Book-Entry Transfer Facility, as defined in the Offer to Purchase, to be credited with the withdrawn Shares. Withdrawals may not be rescinded and Shares withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. However, withdrawn Shares may be retendered by again following one of the procedures described in Section 3 of the Offer to Purchase at any time prior to the Expiration Date. The Company will be deemed to have accepted for payment (and thereby purchased) subject to the proration and conditional tender provisions of the Offer, Shares that are validly tendered and not withdrawn, as, if and when it gives oral or written notice to the Depositary of its acceptance for payment of Shares. The Company believes that the purchase of the Shares will benefit the Company and its stockholders over the long term by enhancing earnings per Share. The Company also believes that this is an attractive time for the Company to make such purchases, given its financial condition and outlook and current market conditions. The Company has divested certain assets and expects to receive approximately $180 million from the sale of Pierce National Life Insurance Company. Prior to the announcement of the Offer, the Company had been considering a variety of alternatives for the use of excess cash with the goal of enhancing stockholder value. The Board of Directors has determined that the Offer accomplishes this objective in an efficient manner. The Company may use any proceeds from the sale of Pierce that are in excess of the proceeds necessary to fund the Offer to repay debts, make acquisitions, repurchase stock or for other general corporate purposes. The Offer will afford to stockholders who are considering the sale of all or a portion of their Shares the opportunity to determine the price at which they are willing to sell their Shares and, in the event the Company accepts such Shares for purchase, to dispose of Shares without the usual transaction costs associated with a market sale. The Offer will also allow qualifying stockholders owning beneficially fewer than 100 Shares to avoid the payment of brokerage commissions and any applicable odd-lot discount payable on a sale of Shares in a transaction effected on a securities exchange. Neither the Company nor its Board of Directors makes any recommendation to any stockholder whether to tender all or any Shares. Each stockholder must make his or her own decision whether to tender Shares and, if so, how many Shares to tender and at what price. The Company has been 3 4 advised that no director or executive officer of the Company intends to tender Shares pursuant to the Offer. The information required by Rule 13e-4(d)(1) of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated herein by reference. The Offer to Purchase and the related Letter of Transmittal contain important information that should be read before any decision is made with respect to the Offer. Copies of the Offer to Purchase and the related Letter of Transmittal are being mailed to record holders of Shares and may be obtained at the expense of the Company from the Information Agent or the Dealer Managers at the addresses set forth below. The Information Agent is: D.F. KING & CO., INC. 77 Water Street New York, New York 10005 Toll Free 1-800-290-6427 The Dealer Managers for the Offer are: GOLDMAN, SACHS & CO. 85 Broad Street New York, New York 10004 February 11, 1998. Toll Free 1-800-323-5678 4 EX-99.A.10 11 FORM OF COMMUNICATIONS BULLETIN 1 Exhibit (a)(10) [LIBERTY COMMUNICATIONS BULLETIN LETTERHEAD] TO: All Employees DATE: Feb. 10, 1998 SUBJECT: Liberty announces self-tender offer for up to 2 million shares Liberty Corporation today announced a self-tender offer, authorized by the board of directors, to repurchase up to 2 million shares of Liberty common stock (and associated preferred stock purchase rights) at a price to be set between $45.50 and $52.00 per share. This "Dutch auction" offer expires at midnight on Wednesday, March 11, 1998. WHAT'S A "DUTCH AUCTION" AND HOW DOES IT WORK? This type of self-tender offer is called a "Dutch auction" because it is similar to the way Dutch flower dealers set the prices for their bulbs. Rather than set a fixed price for its shares, a company involved in such an offer asks sellers to offer their own price within the specified range at which they would be willing to sell their shares. At the end of the tender period, the company decides the lowest price that will allow it to purchase 2 million shares or a lesser amount if fewer than 2 million shares are tendered. The company then accepts all shares validly tendered at or below that price and not withdrawn (all accepted shares get the same price). In this way the company can let the market set the price, rather than risk offering too much. Liberty is tendering for its own shares because management views the stock as an excellent investment. A stock repurchase is an effective way for Liberty to use proceeds from the sale of Pierce National Life. And management feels such a stock repurchase will result in a stronger and more efficient capital structure. HOW MAY I PARTICIPATE? Any employee who holds Liberty stock may participate in the tender offer. Liberty's directors and executive officers have informed us that they do not intend to tender any shares. For those employees who have invested in Liberty stock in either the Liberty or the Cosmos retirement and savings plans, the relevant plan committee will decide whether to participate in the tender offer. Specifically, the plan committee will determine whether to tender shares and, if so, at what price. A benefits bulletin addressing this issue will be sent to employees this week. If you hold Liberty stock outside of Liberty retirement plans or have vested stock options, you will receive materials that more fully describe the self-tender offer and the mechanics. If you have questions after you receive these materials, you should call the information agent at the toll-free number provided in the materials. You may also call Sophie Vergas, Legal, at (864) 609-8398. Please note that Liberty and its board of directors will not make any recommendation to any shareholder, including employees, about whether to tender all or any shares. Each stockholder must make his or her own decision. In addition, each stockholder considering whether to tender should consult a tax advisor regarding the particular consequences of selling shares under the offer, including the application of foreign, state, local or other tax laws. /s/ Michael Attachment: News release on tender offer EX-99.A.11 12 NEWS RELEASE 1 Exhibit (a)(11) FOR FURTHER INFORMATION: (Analyst calls) Ken Jones (864) 609-3496 (News media calls) Michael Fanning (864) 609-3594 THE LIBERTY CORP. REPORTS FOURTH-QUARTER RESULTS INSURANCE AND BROADCASTING OPERATIONS POST INCREASE IN OPERATING EARNINGS, NET INCOME GREENVILLE, S.C., FEB. 2, 1998 - The Liberty Corp. (NYSE: LC) today reported increases in operating earnings and net income, driven by fourth-quarter improvements in both its insurance and broadcasting operations. For the fourth quarter ended Dec. 31, 1997, revenues were $163.2 million, level with the same period in 1996. Operating earnings of $19.7 million rose 4 percent over the previous fourth quarter. Operating earnings per diluted share were 87 cents compared with 85 cents for the fourth quarter of 1996. Net income of $18.5 million, which rose 4 percent from the fourth quarter of 1996, was 81 cents per diluted share compared with 80 cents per diluted share for the previous period. Net income included realized investment losses of $1.3 million for the quarter. Operating earnings from insurance operations for the fourth quarter were $16.5 million, a 7 percent increase over the prior year quarter. Liberty's FamilySide pre-need operation, which is being sold to Fortis, Inc. during the first quarter of 1998 as previously announced, led the increase with a $2.4 million improvement over the prior year. The increase was due to favorable mortality, higher investment income and lower expenses. Liberty Life's mortgage protection division reported a modest increase for the quarter, while the agency division was down slightly. -- more -- 2 2 Cosmos Broadcasting, which owns and operates eight television stations in the Southeast and Midwest, reported fourth-quarter operating earnings of $7.2 million, a 7 percent increase over the prior year quarter. Revenues for the quarter declined $1.8 million from the prior year period due to the expected reduction in political advertising. Local and national revenues increased over the fourth quarter of 1996 but did not offset the political revenue decline. Cosmos operations also included a $1.3 million benefit from a favorable adjustment to income tax expense during the fourth quarter. For the year ended Dec. 31, 1997, operating earnings increased 7 percent to $70.9 million. Diluted operating earnings per share were $3.16 compared with $2.98 in 1996. Revenues grew to $660.3 million, an increase of 7 percent over the prior year. Net income for the year was $75.0 million or $3.34 per diluted share compared with $37.3 million for 1996. Net income for 1996 included a $26.9 million special charge related principally to provisions for losses on unprofitable insurance products. Insurance operating earnings increased 11 percent for the year and broadcasting operations reported a 7 percent increase. "Overall, we are pleased with the results for both the fourth quarter and the year," said Hayne Hipp, Liberty's president. "Cosmos turned in a good performance in what normally would be a down year in both revenues and operating earnings, due to the absence of Olympics and major political elections. We also made substantial progress against strategic goals in our insurance operations." The Liberty Corporation is a holding company with operations in insurance and broadcasting. Company head quarters is in Greenville, S.C. ### 3 THE LIBERTY CORPORATION CONSOLIDATED FINANCIAL HIGHLIGHTS (In $000s except per share amounts)
Three months ended Twelve Months ended December 31 December 31 ------------------------- % ------------------------ % 1997 1996 Change 1997 1996 Change ---------- ---------- ------ ---------- ---------- ------ (Unaudited) (Unaudited) Revenues Insurance $ 128,670 $ 122,439 5% $ 509,093 $ 482,500 6% Broadcasting 37,145 38,964 (5%) 137,898 137,336 0% Corporate and other, Net (2,614) 2,165 N/A 13,265 (739) N/A ---------- ---------- ---------- ---------- TOTAL REVENUES $ 163,201 $ 163,568 0% $ 660,256 $ 619,097 7% ========== ========== ========== ========== Income Insurance $ 16,507 $ 15,379 7% $ 62,974 $ 56,508 11% Broadcasting 7,235 6,789 7% 21,725 20,284 7% Corporate and other (4,002) (3,247) (23%) (13,763) (10,760) (28%) ---------- ---------- ---------- ---------- OPERATING EARNINGS 19,740 18,921 4% 70,909 66,032 7% Realized investment gains (1,283) (1,116) N/A 4,042 (1,748) N/A Non-recurring special charges N/A (26,944) N/A ---------- ---------- ---------- ---------- NET INCOME $ 18,457 $ 17,805 4% $ 74,951 $ 37,340 N/A ========== ========== ========== ========== Diluted Earnings Per Share Operating Earnings Per Share $ 0.87 $ 0.85 2% $ 3.16 $ 2.98 6% Realized investment gains (0.06) (0.05) (20%) 0.18 (0.09) N/A Non-recurring special charges (1.23) N/A ---------- ---------- ---------- ---------- DILUTED EARNINGS PER SHARE $ 0.81 $ 0.80 1% $ 3.34 $ 1.66 201% ========== ========== ========== ========== As of December 31, ------------------------- 1997 1996 % Change ---------- ---------- -------- BOOK VALUE PER COMMON EQUIVALENT SHARE Including the effect of SFAS 115 $ 31.65 $ 27.91 13% Excluding the effects of SFAS 115 $ 28.76 $ 26.00 11%
EX-99.A.12 13 NEWS RELEASE 1 Exhibit (a)(12) For Further Information: (Analyst calls) Ken Jones (864) 609-3496 (News Media Calls) Michael Flanning (864) 609-3594 THE LIBERTY CORP. ANNOUNCES SELF-TENDER FOR UP TO 2 MILLION SHARES Greenville, S.C., Feb. 10, 1998 - The Liberty Corp. (NYSE: LC) announced that its board of directors today has authorized the company to repurchase up to 2 million shares of its common stock (including the associated preferred stock purchase rights) pursuant to a "Dutch auction" self-tender offer. The offer is expected to commence Wednesday, February 11, 1998 and will expire at midnight, New York City time, Wednesday, March 11, 1998, unless extended by Liberty. On February 10, 1998, Liberty shares closed at $46.75. The tender offer will be subject to various terms and conditions described in offering materials to be distributed to shareholders this week. Under the terms of the tender offer, Liberty shareholders will be given the opportunity to specify prices between $45.50 and $52.00 at which they are willing to tender their shares. Upon receipt of tenders, Liberty will determine a final price that enables it to purchase up to 2 million shares from those shareholders who agreed to sell at or below the determined price. All shares purchased will be at the determined price. If more than 2 million shares are tendered at or below the purchase price, there will be a proration. The tender offer will not be contingent upon any minimum number of shares being tendered. Liberty currently has 20,695,140 shares of common stock outstanding. Liberty intends to finance the tender offer with a new bridge loan. The company expects to repay the bridge loan with proceeds to be received from the previously announced sale of its subsidiary, Pierce National Life Insurance Co. Neither Liberty nor its board of directors makes any recommendation to any shareholder as to whether to tender all or any shares. Liberty has been advised that no director or executive officer of the company intends to tender shares pursuant to the tender offer. "Using cash and borrowings to fund the tender offer will result in a strong and efficient capital structure for Liberty and is consistent with our goal of increasing shareholder value," said Hayne Hipp, president of Liberty. Goldman, Sachs & Co. will act as the dealer managers for the tender offer, D.F. King & Co., Inc. will act as the information agent and Wachovia Bank, N.A. will act as the depositary. The Liberty Corporation is a holding company with operations in insurance and broadcasting. Annual revenues in 1997 were $660 million. Company headquarters is in Greenville, S.C. EX-99.B 14 PROMISSORY NOTE 1 Exhibit (b) PROMISSORY NOTE $140,000,000 January 28, 1998 FOR VALUE RECEIVED, THE LIBERTY CORPORATION (hereinafter referred to as the "Borrower") promises to pay to the order of WACHOVIA BANK, N.A., (hereinafter, referred to as the "Lender"), at its office in Charlotte, North Carolina, the principal sum of One Hundred Forty Million and NO/100 Dollars ($140,000,000), or so much thereof as shall have been disbursed from time to time and remain unpaid together with interest thereon as hereinafter provided. The Borrower shall give the Lender notice prior to 11:00 a.m. (Charlotte, North Carolina time) on the Domestic Business Day of each borrowing of a Base Rate Loan and at least three (3) Euro-Dollar Business Days before each borrowing of a Euro-Dollar Loan hereunder specifying: (i) the date of such borrowing, which shall be a Domestic Business Day in the case of a Base Rate Loan or a Euro-Dollar Business Day in the case of a Euro-Dollar Loan; (ii) the amount of the borrowing; and (iii) whether the borrowing is to be a Base Rate Loan or a Euro-Dollar Loan and the duration of the Interest Period applicable thereto. If such notice fails to state whether the borrowing is to be a Base Rate Loan or a Euro-Dollar Loan, such borrowing shall be a Euro-Dollar Loan with an Interest Period of seven (7) days. Each borrowing under this Note shall be in an aggregate principal amount of $10,000,000 or any larger multiple of $5,000,000. There shall not at any time be more than seven (7) Loans outstanding hereunder at any time. DEFINITIONS As used in this Note, the following terms shall have the following meanings: "Adjusted London Interbank Offered Rate" applicable to any Interest Period shall mean a rate per annum equal to the quotient obtained (rounded upwards, if necessary, to the next higher 1/100th of 1%) by dividing (i) the applicable London Interbank Offered Rate for such Interest Period by (ii) 1.00 minus the Euro-Dollar Reserve Percentage. "Applicable Margin" means (i) for any Base Rate Loan, 0%; and (ii) for any Euro-Dollar Loan, 0.425%. "Base Rate" means for any Base Rate Loan for any day, the rate per annum equal to the higher as of such day of (i) the Prime Rate, and (ii) one-half of one percent above the Federal Funds Rate for such day. For purposes of determining the Base Rate for any day, changes in the Prime Rate and the Federal Funds Rate shall be effective on the date of each such change. 2 "Base Rate Loan" shall mean the indebtedness evidenced by this Note during Interest Periods when the applicable interest rate is calculated by reference to the Base Rate. "Code" means the Internal Revenue Code of 1986, as amended. "Consolidated Subsidiary" means at any time any Subsidiary of the Borrower or other entity the accounts of which, in accordance with generally accepted accounting principles applied on a consistent basis, would be consolidated with those of the Borrower in its consolidated financial statements as of such date. "Controlled Group" means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower, are treated as a single employer under Section 414 of the Code. "Debt" of any Person means at any date, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (iv) all obligations of such Person as lessee under capital leases, (v) all obligations of such Person to reimburse any bank or other Person in respect of amounts payable under a banker's acceptance, (vi) all Redeemable Preferred Stock of such Person (in the event such Person is a corporation), (vii) all obligations (absolute or contingent) of such Person to reimburse any bank or other Person in respect of amounts paid under a letter of credit or similar instrument with an expiration date more than one year from such date, (viii) all Debt of others secured by a lien or encumbrance on any asset of such Person, whether or not such Debt is assumed by such Person, and (ix) all Debt of others Guaranteed by such Person. "Dollars" and "$" shall mean lawful money of the United States of America. "Domestic Business Day" means any day except a Saturday, Sunday or other day on which commercial banks in North Carolina are authorized by law to close. "Lending Office" means the Lender's office located in Charlotte, North Carolina or such other office as the Lender may hereafter designate from time to time as its Lending Office by notice to the Borrower. "Due Date" means March 31, 1998. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. 2 3 "Euro-Dollar Business Day" means any Domestic Business Day on which dealings in Dollar deposits are carried out in the London interbank market. "Euro-Dollar Loan" shall mean the indebtedness evidenced by this Note during Interest Periods when the applicable interest rate is calculated by reference to the Euro-Dollar Rate. "Euro-Dollar Rate" applicable to any Euro-Dollar Loan for any Interest Period means a rate per annum equal to the Applicable Margin plus the Adjusted London Interbank Offered Rate applicable to such Interest Period. "Euro-Dollar Reserve Percentage" means for any day that percentage (expressed as a decimal) which is in effect on such day, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement for a member bank of the Federal Reserve System in respect of "Eurocurrency liabilities" (or in respect of any other category of liabilities which includes deposits by reference to which the interest rate on Euro-Dollar Loans is determined or any category of extension of credit or other assets which includes loans by a non-United States office of the Lender to United States residents). The Euro-Dollar Rate shall be adjusted automatically on and as of the effective date of any change in the Euro-Dollar Reserve Percentage. "Event of Default" or "Events of Default" shall have the meaning ascribed to such term in the paragraph captioned "Default; Acceleration". "Existing Syndicated Credit Agreement" shall mean that certain Credit Agreement dated March 21, 1995, by and among the Borrower, the banks party thereto and Wachovia Bank, N.A., as Agent, as amended by a First Amendment to Credit Agreement dated March 17, 1997, and a Second Amendment to Credit Agreement dated January 9, 1998, as in effect on the date hereof without regard and without giving effect to any waivers (other than the waiver dated May 20, 1997) given by the Banks (as defined in the Existing Syndicated Credit Agreement) or amendments agreed to by the Borrower and the Banks (as defined in the Existing Syndicated Credit Agreement). Any definitions, terms, covenants or other provisions of the Existing Syndicated Credit Agreement that are incorporated herein will continue to be effective for purposes of this Note, not withstanding that the indebtedness under the Existing Syndicated Credit Agreement has been or hereafter may be partially or fully repaid or the fact that the Existing Syndicated Credit Agreement otherwise might be terminated. "Federal Funds Rate" means, for any day, the rate per annum (rounded upward, if necessary, to the next higher 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve Bank of New York on the Domestic Business Day next succeeding such day, provided that (i) if the day for which such 3 4 rate is to be determined is not a Domestic Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Domestic Business Day as so published on the next succeeding Domestic Business Day, and (ii) if such rate is not so published for any day, the Federal Funds Rate for such day shall be the average rate charged to Lender on such day on such transactions as determined by the Lender. "Guarantee" by any Person means any obligation, contingent or otherwise of such Person directly or indirectly guaranteeing any Debt or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to secure, purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to provide collateral security, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for the purpose of assuring in any other manner the obligee of such Debt or other obligation of the payment hereof or to protect such obligee against loss in respect thereof (in whole or in part), provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. The term "Guarantee" used as a verb has a corresponding meaning. "Interest Payment Dates" means the last day of each Interest Period. "Interest Period" means: (1) with respect to each Euro-Dollar Loan, the period commencing on the date the Loan is first made as a Euro-Dollar Loan, is continued from the preceding Interest Period as a Euro-Dollar Loan, or is converted to a Euro-Dollar Loan from another Type of Loan, as the case may be, and ending on the seventh Euro-Dollar Business Day or the numerically corresponding day in the first month thereafter, as the Borrower may elect in accordance with the terms of this Note; provided that: (a) any Interest Period (other than an Interest Period determined pursuant to clause (c) below), which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Euro-Dollar Business Day; (b) any Interest Period which begins on the last Euro-Dollar Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall, in the case of an Interest Period of one month and subject to clause (c) below, end on the last Euro-Dollar Business Day of the appropriate subsequent calendar month; and 4 5 (c) any Interest Period which begins before the Due Date and would otherwise end after the Due Date shall end on the Due Date. (2) with respect to each Base Rate Loan, the period commencing on the date the Loan is first made as a Base Rate Loan, is continued from the preceding Interest Period as a Base Rate Loan, or is converted to a Base Rate Loan from another Type of Loan, as the case may be, and ending 30 days thereafter; provided that: (a) any Interest Period (other than an Interest Period determined pursuant to clause (b) below) which would otherwise end on a day which is not a Domestic Business Day shall be extended to the next succeeding Domestic Business Day; and (b) any Interest Period which begins before the Due Date and would otherwise end after the Due Date shall end on the Due Date. "Loan" means a Base Rate Loan or a Euro-Dollar Loan and "Loans" means Base Rate Loans or Euro-Dollar Loans or both. "Loan Documents" shall mean this Note, and all other documents or instruments now or hereafter executed in connection with the Loan or securing the Loan, all as the same may be modified, supplemented or amended from time to time. "London Interbank Offered Rate" applicable to any Euro-Dollar Loan for any Interest Period means the rate per annum determined on the basis of the rate for deposits in Dollars of amounts equal or comparable to the principal amount of such Euro-Dollar Loan offered for a term comparable to such Interest Period, which rate appears on the display designated as a Page "3750" of the Telerate Service (or such other page as may replace page 3750 of that service or such other service or services as may be nominated by the British Banker's Association for the purpose of displaying London Interbank Offered Rates for U.S. dollar, deposits) determined as of 1:00 p.m. New York City time, two (2) Euro-Dollar Business Days prior to the first day of such Interest Period. "PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA. "Person" means an individual, a corporation, a partnership, a limited liability company, an unincorporated association, a trust or any other entity or organization, including, but not limited to, a government or political subdivision or an agency or instrumentality thereof. "Plan" means at any time an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and is 5 6 either (i) maintained by a member of the Controlled Group for employees of any member of the Controlled Group or (ii) maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which a member of the Controlled Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions. "Prime Rate" means that interest rate so denominated and set by the Lender from time to time as an interest rate basis for borrowings. The Prime Rate is but one of several interest rate bases used by the Lender. The Lender lends at interest rates above and below the Prime Rate. "Redeemable Preferred Stock" of any Person means any preferred stock issued by such Person which is at any time prior to the Due Date either (i) mandatorily redeemable (by sinking fund or similar payments or otherwise) or (ii) redeemable at the option of the holder thereof. "Regulation D" means Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time. "Subsidiary" of any Person, means any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person. "Type" as to a Loan shall mean its nature as a Euro-Dollar Loan or Base Rate Loan. INTEREST AND PAYMENT PROVISIONS (a) Repayment of Principal. The unpaid principal of the Loans and all accrued and unpaid interest and other fees thereon, if not sooner paid, shall be due and payable in full on the Due Date. (b) Interest. (i) Each Loan shall at all times be either a Euro-Dollar Loan or a Base Rate Loan and bear interest as provided in this Section, provided that at any time a Loan may be only one Type of Loan and there may be in effect only one Interest Period. Prior to the commencement of each Interest Period, the Borrower may elect, and shall give the Lender notice of its election, whether the Loan shall be a Euro-Dollar Loan or a Base Rate Loan during such Interest Period, provided that 6 7 (1) such notice shall be delivered to the Lender (A) not later than 11:00 A.M. (Charlotte, North Carolina time) on the third Euro-Dollar Business Day prior to the first day of such Interest Period if the Borrower elects for a Loan to be a Euro-Dollar Loan during such Interest Period, or (B) not later than 11:00 A.M. (Charlotte, North Carolina time) on the Domestic Business Day of the first day of such Interest Period if the Borrower elects for a Loan to be a Base Rate Loan during such Interest Period, (2) if the Borrower shall fail to deliver such notice to the Lender in timely manner as a set forth in clause (1) of this sentence, then during such Interest Period a Loan shall be a Euro-Dollar Loan with an Interest Period of seven (7) days, and (3) at any time in which there exists an Event of Default which has not been waived by the Lender, the Borrower may not so elect for a Loan to be a Euro-Dollar Loan. (ii) Each Base Rate Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Loan is made until it becomes due, at a rate per annum equal to the Base Rate for such day plus the Applicable Margin. Such interest shall be payable on each Interest Payment Date. Any overdue principal of and, to the extent permitted by law, overdue interest on any Base Rate Loan shall bear interest, payable on demand for each day until paid at a rate per anum equal to the sum of 2% plus the rate otherwise applicable to Base Rate Loans for such day. (iii) Each Euro-Dollar Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the Euro-Dollar Rate for such Interest Period; provided that if any Euro-Dollar Loan shall, as a result of clause (1)(c) of the definition of Interest Period, have an Interest Period of less than 7 days, such Euro-Dollar Loan shall bear interest during such Interest Period at the rate applicable to Base Rate Loans during such period. Such interest shall be payable on each Interest Payment Date. Any overdue principal of and, to the extend permitted by law, overdue interest on any Euro-Dollar Loan shall bear interest, payable on demand, for each day from and including the date payment thereof was due to but excluding the date of actual payment, at a rate per annum equal to the sum of 2% plus the rate otherwise applicable to Base Rate Loans for such day 7 8 (iv) The Lender shall determine each interest rate applicable to the Loans hereunder. The Lender shall give prompt notice to the Borrower of each rate of interest so determined, and its determination thereof shall be conclusive in the absence of manifest error. (c) Optional Prepayments. (i) The Borrower may, upon at least one Domestic Business Days' notice to the Lender, prepay any Base Rate Loan in whole at any time, by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment. Each such prepayment shall be applied to installments of principal in their inverse order of maturity. Except as provided in Section (f), the Borrower may not prepay all or any portion of the principal amount of any Euro-Dollar Loan prior to the end of the then applicable Interest Period. (ii) Upon receipt of a notice of prepayment pursuant to this paragraph, such notice shall not thereafter be revocable by the Borrower. (d) General Provisions as a to Payments. (i) The Borrower shall make each payment of principal of, and interest on, the Loans and of commitment fees hereunder, not later than 11:00 A.M. (Charlotte, North Carolina time) on the date when due, in Federal or other funds immediately available in Charlotte, North Carolina, to the Lender at its address referred to herein. (ii) Whenever any payment of principal of, or interest on, a Base Rate Loan or of commitment fees shall be due on a day which is not a Domestic Business Day, the date for payment thereof shall be extended to the next succeeding Domestic Business Day. Whenever any payment of principal of, or interest on, a Euro-Dollar Loan shall be due on a day which is not a Euro-Dollar Business Day, the date for payment thereof shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case the date for payment thereof shall be the next preceding Euro-Dollar Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon shall be payable for such extended time. 8 9 (e) Computation of Interest and Fees. Interest on Loans shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed, calculated as to each Interest Period or period fixed pursuant to paragraph (b)(iii) from and including the first day thereof to but excluding the last day thereof. (f) Illegality. If, after the date hereof, the adoption of any applicable law, rule or regulation, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof (any such agency being referred to as an "Authority" and any such event being referred to as a "Change of Law"), or compliance by the Lender (or its Lending Office) with any request or directive (whether or not having the force of law) of any Authority shall make it unlawful or impossible for the Lender (or its Lending Office) to make, maintain or fund its Euro-Dollar Loans, the Lender shall forthwith give notice thereof to the Borrower, whereupon until the Lender notifies the Borrower that the circumstances giving rise to such suspension no longer exist, the obligation of the Lender to make or maintain Euro-Dollar Loans shall be suspended. Before giving any notice to the Borrower, pursuant to this paragraph, the Lender shall designate a different Lending Office if such designation will avoid the need for giving such notice and will not, in the judgment of the Lender, be otherwise disadvantageous to the Lender. If the Lender shall determine that it may not lawfully continue to maintain and fund any of its outstanding Euro-Dollar Loans to the maturity of the applicable Interest Period and shall so specify in such notice, such Loan shall immediately be converted to a Base Rate Loan and concurrently with such conversion, the Borrower shall pay all accrued and unpaid interest on such Loan. (g) Prime Loans Substituted for Affected Euro-Dollar Loans. If the obligation of the Lender to make Euro-Dollar Loan has been suspended pursuant to paragraph (f) and the Borrower shall, by at least five Euro-dollar Business Days' prior notice to the Lender have elected that the provisions of this paragraph (g) shall apply to the Lender, then, unless and until the Lender notifies the Borrower that the circumstances giving rise to such suspension or demand for compensation no longer apply all Loans which would otherwise be made by the Lender as Euro-Dollar Loans, shall be made or maintained instead as Base Rate Loans. SET OFF The Borrower hereby grants to the Lender, as security for the full and punctual payment and performance of the indebtedness and obligations of the Borrower under this Note, a continuing lien on and security interest in all deposits and other sums credited by or due from the Lender to the Borrower or subject to withdrawal by the Borrower; and regardless of the adequacy of any collateral or other means of obtaining repayment or performance of such indebtedness and obligations, at any time from and after the occurrence of an Event of Default the Lender may, without notice to the 9 10 Borrower, set off the whole or any portion or portions of any or all such deposits and other sums against such indebtedness and obligations, whether or not any other person (or persons) or entity (or entities) could also withdraw money therefrom. DEFAULT; ACCELERATION If one or more of the following events ("Events of Default") shall have occurred and be continuing: (a) the Borrower shall fail to pay when due any payment of principal on any of the Loans or shall fail to pay any interest on any of the Loans within five (5) Domestic Business Days after such interest shall become due, or shall fail to pay any fee or other amount payable hereunder within five (5) Domestic Business Days after such fee or other amount becomes due; or (b) Borrower shall fail to observe or perform any covenant or agreement contained in the Loan Documents (other than those covered by clause (a) above) or if any default or event of default shall occur under the terms of the Loan Documents; or (c) any representation, warranty, certification or statement made or deemed made by the Borrower in the Loan Documents or in any certificate, financial statement or other document delivered pursuant to the Loan Documents shall prove to have been incorrect in any material respect when made (or deemed made); or (d) the occurrence of a Default (as defined in the Existing Syndicated Credit Agreement) or an Event of Default (as defined in the Existing Syndicated Credit Agreement) under the Existing Syndicated Credit Agreement, then, and in every such event, the Lender may, at its option, by notice to the Borrower declare this Note (together with accrued interest thereon) to be, and this Note shall thereupon become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. In the event this Note is placed with an attorney at law for collection or enforcement, the Borrower agrees to pay all costs of collection or enforcement, including, without limitation, court costs and reasonable attorneys' fees. REMEDIES CUMULATIVE, NO WAIVER, ETC. Each right, power and remedy of the Lender as provided for in this Note or in the other Loan Documents or now or hereafter existing at law or in equity or by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power or remedy provided 10 11 for in this Note or in the other Loan Documents or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by the Lender of any one or more of such rights, powers, or remedies shall not preclude the simultaneous or later exercise by the Lender of any or all such other rights, powers, or remedies. No failure or delay by the Lender to insist upon the strict performance of any term, condition, covenant, or agreement of this Note or of any of the other Loan Documents, or to exercise any right, power or remedy consequent upon a breach thereof, shall constitute a waiver of any such term, condition, covenant, or agreement or of any such breach, or preclude the Lender from exercising any such right, power, or remedy at any later time or times. By accepting payment after the due date of any amount payable under this Note or under any of the other Loan Documents, the Lender shall not be deemed to waive the right either to require prompt payment when due of all other amounts payable under this Note or any of the other Loan Documents or to declare an Event of Default for failure to effect such prompt payment of any such other amount. GOVERNING LAW This Note shall be governed by and construed in accordance with the laws of the State of North Carolina without regard to principles of conflicts of laws. PAYMENTS NOT TO VIOLATE APPLICABLE LAW Nothing herein contained nor any transaction related thereto shall be construed or so operate as to require the Borrower to pay interest at a rate greater than permitted by applicable law, or to make any payment or to do any act contrary to law, and the Lender shall reimburse the Borrower for any payment which may inadvertently be required to be paid contrary to law; and if any clauses or provisions herein contained operate or would prospectively operate to invalidate this Note in whole or in part, then such clauses and provisions only shall be held for naught, as though not herein contained, and the remainder of this Note shall remain operative and in full force and effect. WAIVERS All parties to this Note, including endorsers, sureties and guarantors, if any, hereby waive presentment for payment, demand, protest, notice of non-payment or dishonor, and of protest, and any and all other notices and demands whatsoever and agree to remain bound hereunder until the interest and principal are paid in full notwithstanding any (a) release, surrender, waiver, addition, substitution, exchange, compromise, modification of or to or indulgence granted with respect to this Note or all or any part of any collateral or security for this Note, (b) extension or extension of time for payment which may be granted, even though the period of extension may be indefinite, and (c) inaction by, or failure to assert any legal right available to the holder of this Note. 11 12 OBSERVANCE OF OTHER COVENANTS; REPRESENTATIONS (a) The Borrower covenants and agrees that from the date hereof and until payment in full of all amounts due under this Note, the Borrower shall observe, perform and fulfill, for the benefit of the Lender, all of those covenants and agreements, as the same are in effect on the date hereof, contained in the Existing Syndicated Credit Agreement, as in effect on the date hereof, the provisions of which (including, where pertinent, the defined terms used, and other Sections of the Existing Syndicated Credit Agreement referenced, in such Sections) are incorporated herein by reference, without regard and without giving effect to any waivers given by the Banks (as defined in the Existing Syndicated Credit Agreement) with respect to, or amendments agreed to by the Borrower and the Banks (as defined in the Existing Syndicated Credit Agreement) of any of such covenants and agreements, which covenants and agreements the Borrower will continue to observe, perform and fulfill for the benefit of the Lender notwithstanding that the indebtedness under the Existing Syndicated Credit Agreement has been or hereafter may be partially or fully repaid or the fact that the Existing Syndicated Credit Agreement otherwise might be terminated (b) The Borrower hereby represents and warrants to the Lender as follows: (i) The representations and warranties contained in the Existing Syndicated Credit Agreement are true on and as of the date of this Note; and (ii) No Default (as defined in the Existing Syndicated Credit Agreement) or Event of Default (as defined in the Existing Syndicated Credit Agreement), nor any act, event, condition or circumstance, which with the passage of time or the giving of notice, or both, would constitute an Event of Default (as defined in the Existing Syndicated Credit Agreement) under the Existing Credit Agreement or any other Loan Document (as defined in the Existing Syndicated Credit Agreement) has occurred and is continuing unwaived on the date hereof. 12 13 IN WITNESS WHEREOF, the undersigned has executed this instrument under seal, the day and year first above written. THE LIBERTY CORPORATION By:____________________________ Name:__________________________ Title:_________________________ ATTEST: _____________________ Its:_________________ [Corporate Seal] 13 -----END PRIVACY-ENHANCED MESSAGE-----